<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO ___________________
COMMISSION FILE NUMBER 000-28160
WESTERN WIRELESS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1638901
- -------------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
2001 NW SAMMAMISH ROAD
ISSAQUAH, WASHINGTON 98027
- -------------------------------------- ---------------------------------
(Address of principal executive offices) (Zip Code)
(425) 313-5200
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Title Shares Outstanding as of April 30, 1998
----- ---------------------------------------
<S> <C>
Class A Common Stock, no par value 22,876,600
Class B Common Stock, no par value 52,944,762
</TABLE>
<PAGE> 2
WESTERN WIRELESS CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
as of March 31, 1998, and December 31, 1997................................................ 3
Consolidated Statements of Operations
for the Three Months Ended March 31, 1998, and March 31, 1997.............................. 4
Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 1998, and March 31, 1997.............................. 5
Notes to Consolidated Financial Statements................................................. 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS ............................................. 10
PART II - OTHER INFORMATION.......................................................................... 15
ITEM 1. LEGAL PROCEEDINGS.......................................................................... 15
ITEM 2. CHANGES IN SECURITIES...................................................................... 15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES............................................................ 15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........................................ 15
ITEM 5. OTHER INFORMATION.......................................................................... 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................................................... 15
</TABLE>
2
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WESTERN WIRELESS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 132,532 $ 15,459
Accounts receivable, net of allowance for doubtful accounts of
$12,505 and $9,931, respectively 50,351 55,652
Inventory 21,791 36,425
Prepaid expenses and other current assets 19,662 31,216
----------- -----------
Total current assets 224,336 138,752
Property and equipment, net of accumulated depreciation
of $253,958 and $221,031, respectively 687,440 699,129
Licensing costs and other intangible assets, net of accumulated
amortization of $78,443 and $73,049, respectively 809,448 807,409
Investments in and advances to unconsolidated affiliates 71,700 64,156
Other assets 10,693 10,527
----------- -----------
$ 1,803,617 $ 1,719,973
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 12,634 $ 11,519
Accrued liabilities 96,303 104,595
Construction accounts payable 10,178 14,431
----------- -----------
Total current liabilities 119,115 130,545
----------- -----------
Long-term debt 1,315,000 1,395,000
----------- -----------
Commitments (Note 4)
Minority interest in consolidated subsidiary 114,742
-----------
Shareholders' equity:
Preferred stock, no par value, 50,000,000 shares authorized;
no shares issued and outstanding
Common stock, no par value, 300,000,000 shares authorized;
Class A, 22,871,401 and 22,201,336 shares issued and outstanding,
respectively, and; Class B, 52,946,763 and 53,431,163 shares issued
and outstanding, respectively 801,227 675,036
Deferred compensation (2,554) (845)
Deficit (543,913) (479,763)
----------- -----------
Total shareholders' equity 254,760 194,428
----------- -----------
$ 1,803,617 $ 1,719,973
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
3
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WESTERN WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
---------------------------------
1998 1997
------------ ------------
<S> <C> <C>
Revenues:
Subscriber revenues $ 98,246 $ 56,685
Roamer revenues 11,131 6,694
Equipment sales and other revenues 11,136 8,181
------------ ------------
Total revenues 120,513 71,560
------------ ------------
Operating expenses:
Cost of service 23,009 20,237
Cost of equipment sales 21,929 13,065
General and administrative 38,439 24,703
Sales and marketing 31,832 24,525
Depreciation and amortization 37,549 26,421
------------ ------------
Total operating expenses 152,758 108,951
------------ ------------
Operating loss (32,245) (37,391)
------------ ------------
Other income (expense):
Interest and financing expense, net (31,188) (17,360)
Equity in net loss of unconsolidated affiliates (9,159) (1,087)
Other, net 2,689 665
------------ ------------
Total other income (expense) (37,658) (17,782)
------------ ------------
Minority interest in net loss of consolidated subsidiary 5,753
------------
Net loss $ (64,150) $ (55,173)
============ ============
Basic loss per common share $ (0.85) $ (0.79)
============ ============
Weighted average common shares used in computing
basic loss per common share 75,776,000 69,934,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements
4
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WESTERN WIRELESS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
----------------------------
1998 1997
--------- ----------
<S> <C> <C>
Operating Activities:
Net loss $ (64,150) $ (55,173)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 37,549 26,421
Employee equity compensation 861 296
Equity in net loss of unconsolidated affiliates 9,159 1,087
Minority interest in net loss of consolidated subsidiary (5,753)
Other, net 995 1,172
Changes in operating assets and liabilities, net of effects
from consolidating acquired interests:
Accounts receivable, net 5,301 1,274
Inventory 14,634 2,415
Prepaid expenses and other current assets (3,540) (905)
Accounts payable 1,115 17,424
Accrued liabilities 2,003 7,838
--------- ---------
Net cash provided by (used in) operating activities (1,826) 1,849
--------- ---------
Investing activities:
Purchase of property and equipment (25,438) (139,270)
Additions to licensing costs and other intangible assets (13,550) (2,750)
Acquisition of wireless properties, net of cash acquired (1,350) (849)
Investments in and advances to unconsolidated affiliates (4,624) (16,276)
Refund of deposit held by FCC 7,749
Other assets (255)
--------- ----------
Net cash used in investing activities (45,217) (151,396)
--------- ---------
Financing activities:
Proceeds from issuance of common stock, net 407 507
Additions to long term debt 30,000 130,000
Payment of debt (110,000)
Proceeds from sale of minority interest in consolidated
subsidiary, net 243,709
--------- ---------
Net cash provided by financing activities 164,116 130,507
--------- ---------
Change in cash and cash equivalents 117,073 (19,040)
Cash and cash equivalents, beginning of period 15,459 54,885
--------- ---------
Cash and cash equivalents, end of period $ 132,532 $ 35,845
========= =========
</TABLE>
See accompanying notes to consolidated financial statements
5
<PAGE> 6
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION:
Western Wireless Corporation (the "Company") provides wireless
communications services in the western United States principally through the
ownership and operation of cellular and personal communications services ("PCS")
systems. The cellular operations are primarily in rural areas and the PCS
operations are primarily in urban areas due to the Company's belief that there
are certain strategic advantages to operating each technology in these
respective areas. As of March 31, 1998, the Company provides cellular services
in 72 Rural Service Areas ("RSA") and 16 Metropolitan Statistical Areas and
through its 80.1% ownership in Western PCS Corporation ("Western PCS") provides
PCS services in seven Major Trading Areas. Western PCS holds limited partnership
interests in joint ventures which own PCS licenses in 25 Basic Trading Areas
("BTA"), one of which is operational and managed by the Company under the
Company's PCS brand name. In addition, Western PCS manages another BTA under the
Company's PCS brand name.
The Company expects to incur significant operating losses and to
generate negative cash flows from operating activities during the next several
years while it develops and constructs its PCS systems and builds a PCS customer
base.
The accompanying interim consolidated financial statements and the
financial information included herein are unaudited, but reflect all adjustments
which are, in the opinion of management, necessary for a fair presentation of
the financial position, results of operations and cash flows for the periods
presented. All such adjustments are of a normal, recurring nature. Results of
operations for interim periods presented herein are not necessarily indicative
of results of operations for the entire year. For further information, refer to
the Company's annual audited financial statements and footnotes thereto for the
year ended December 31, 1997, contained in the Company's Form 10-K dated March
27, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Loss per common share:
Loss per common share is calculated using the weighted average number of
shares of outstanding common stock during the period. The number of shares
outstanding has been calculated based on the requirements of Statement of
Financial Accounting Standards No. 128, "Earnings Per Share." Due to the net
loss incurred during the periods presented, all options outstanding are
anti-dilutive, thus basic and diluted loss per share are equal.
Supplemental cash flow disclosure:
Non-cash operating activities consisted of a $15.0 million reduction in
other current assets due to the release of restricted cash from escrow for the
final payment on the acquisition of Triad Cellular L.P. and certain of its
affiliates. Non-cash investing activities consisted of the contribution of
wireless licenses to a joint venture of approximately $12.3 million.
Cash paid for interest (net of amounts capitalized) was $34.1 million
and $12.7 million for the three months ended March 31, 1998 and 1997,
respectively. There was no interest capitalized for the three months ended March
31, 1998. Interest capitalized for the three months ended March 31, 1997, was
$3.0 million.
Reclassifications:
Certain amounts in prior year's financial statements have been
reclassified to conform to the 1998 presentation.
6
<PAGE> 7
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. LONG-TERM DEBT:
<TABLE>
<CAPTION>
(Dollars in thousands) MARCH 31, DECEMBER 31,
1998 1997
---------- ----------
<S> <C> <C>
Credit Facility:
Revolver ................................... $ 415,000 $ 495,000
Term Loan .................................. 200,000 200,000
10-1/2% Senior Subordinated Notes Due 2006 ....... 200,000 200,000
10-1/2% Senior Subordinated Notes Due 2007 ....... 200,000 200,000
PCS Vendor Facility .............................. 300,000 300,000
---------- ----------
$1,315,000 $1,395,000
========== ==========
</TABLE>
The Company has a $950 million credit facility with a consortium of
lenders (the "Credit Facility"), in the form of a $750 million revolving credit
loan (the "Revolver") and a $200 million term loan (the "Term Loan"). In
addition, a wholly owned subsidiary of Western PCS has a $300 million credit
facility (the "PCS Vendor Facility").
The aggregate amounts of principal maturities of the Company's debt are
as follows (dollars in thousands):
<TABLE>
<S> <C>
Nine months ending December 31, 1998 ...... $ 0
Year ending December 31,
1999 ...................................... 0
2000 ...................................... 30,000
2001 ...................................... 115,000
2002 ...................................... 158,270
Thereafter ................................ 1,011,730
==========
$1,315,000
==========
</TABLE>
4. COMMITMENTS:
Future minimum payments required under operating leases and agreements
that have initial or remaining noncancellable terms in excess of one year as
of March 31, 1998, are summarized below (dollars in thousands):
<TABLE>
<S> <C>
Nine months ending December 31, 1998 .... $ 19,024
Year ending December 31,
1999 .................................... 23,285
2000 .................................... 21,277
2001 .................................... 16,170
2002 .................................... 8,487
Thereafter .............................. 27,648
========
$115,891
========
</TABLE>
Aggregate rental expense for all operating leases was approximately $6.8
million and $6.4 million for the three months ended March 31, 1998 and 1997,
respectively.
7
<PAGE> 8
WESTERN WIRELESS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. COMMITMENTS - (CONTINUED):
In order to ensure adequate supply and availability of certain inventory
requirements and service needs, the Company has committed to purchase from
various suppliers wireless communications equipment, handsets, and services.
These agreements expire at various dates through the year 2003. The aggregate
amount of these commitments total approximately $576.3 million. At March 31,
1998, the Company has ordered approximately $273.9 million under all of these
agreements, of which approximately $32.8 million is outstanding.
The Company has various other purchase commitments for materials,
supplies and other items incidental to the ordinary course of business which are
neither significant individually nor in the aggregate. Such commitments are not
at prices in excess of current market value.
5. MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY:
In February 1998, the Company and its subsidiary, Western PCS,
consummated an agreement with Hutchison Telecommunications Limited ("HTL") and a
subsidiary of HTL (the "HTL Sub") pursuant to which the HTL Sub purchased 19.9%
of Western PCS for an aggregate purchase price of $248.4 million. The Company
and Western PCS have amended certain outstanding financing agreements to which
they are subject, and unless otherwise agreed to by HTL Sub and the Company,
neither the Company nor Western PCS shall have any liability regarding any
indebtedness of the other. The HTL Sub has designated two directors to a ten
person Board of Directors of Western PCS who have certain rights with respect to
certain transactions and actions of Western PCS. As of March 31, 1998, HTL Sub's
portion of Western PCS's net loss was $5.8 million.
6. SHAREHOLDERS' EQUITY:
During the three months ended March 31, 1998, the Company issued 85,665
shares of its Class A Common Stock as a result of employee stock options that
were exercised.
In January 1998, the Company issued 100,000 Class A Common Stock shares
to certain key executives pursuant to an Executive Restricted Stock Plan.
In February 1998, the Company received additional paid in capital of
approximately $123.2 million related to the sale of a 19.9% interest in Western
PCS. This represents the amount in excess of the book value of Western PCS for
the 19.9% interest purchased by the HTL Sub.
7. ACQUISITIONS AND OTHER TRANSACTIONS:
In the first quarter of 1998, the Company entered into an agreement to
purchase the Nebraska 5 RSA for approximately $15.5 million. The agreement is
awaiting Federal Communications Commission ("FCC") approval and is expected to
close in the third quarter of 1998. The Company is currently operating this
market under an Interim Operating Authority from the FCC.
Also, during the first quarter of 1998, the Company was the high bidder
on 52 Local Multipoint Distribution Service (LMDS) licenses in an FCC auction.
The Company's high bids totaled approximately $14.9 million.
8
<PAGE> 9
8. RECENT DEVELOPMENTS:
In May 1998, the Company completed a secondary offering on form S-3 (the
"Secondary Offering") of 13,915,000 Class A Common Stock shares (including on
over-allotment exercised by the underwriters). The Company did not issue any new
primary shares and received no proceeds from the Secondary Offering. The shares
were offered by certain shareholders of the Company who elected to convert a
portion of their Class B Common Stock into publicly traded Class A Common Stock
for sale pursuant to a registration statement. No member of management of the
Company sold any shares in the Secondary Offering.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
LITIGATION REFORM ACT OF 1995. Statements contained or incorporated by reference
in this document that are not based on historical fact are "forward-looking
statements" within the meaning of the Private Securities Reform Act of 1995.
Forward-looking statements may be identified by use of forward-looking
terminology such as "believe," "intends," "may," "will," "expect," "estimate,"
"anticipate," "continue," or similar terms, variations of those terms or the
negative of those terms.
The following is a discussion and analysis of the consolidated financial
condition and results of operations of the Company and should be read in
conjunction with the Company's consolidated financial statements and notes
thereto and other financial information included herein and in the Company's
annual report on Form 10-K for the year ended December 31, 1997. As a result of
acquisitions and due to the phase of the business cycle of the Company's PCS
operations, the Company's operating results for prior periods may not be
indicative of future performance.
OVERVIEW
The Company provides wireless communications services in the western
United States through the ownership and operation of cellular and personal
communication services ("PCS") systems. The Company owns and operates cellular
communications systems in 88 markets. Through its 80.1% ownership of Western PCS
Corporation ("Western PCS"), the Company owns and operates PCS systems in seven
Major Trading Areas ("MTA"). Western PCS owns an additional 104 PCS Basic
Trading Areas ("BTA") licenses which are not operational. Western PCS holds
limited partnership interests in joint ventures which own PCS licenses in 25
BTAs, one of which is operational and managed by the Company under the Company's
PCS brand name. The results of operations of these joint ventures are not
included in the following discussion of PCS operations. In addition, Western PCS
manages another BTA under the Company's PCS brand name.
In the comparisons that follow, the Company has separately set forth
certain information relating to cellular operations (including paging) and PCS
operations. The Company believes that this is appropriate because its cellular
systems have been operating for a number of years and operate in rural markets
while its PCS systems did not commence operations until 1996 and operate in
urban markets.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
CELLULAR OPERATIONS
The Company had 547,100 cellular subscribers at March 31, 1998,
representing an increase of 27,100 or 5.2 % from December 31, 1997. At March 31,
1997, the Company had 351,200 cellular subscribers representing an increase of
27,000 or 8.3% from December 31, 1996.
During the fourth quarter of 1997, the Company purchased from Triad
Cellular L.P. and certain of its affiliates (collectively "Triad"), the cellular
business and assets of 12 Rural Service Areas ("RSA") in Texas, Utah, Oklahoma
and Minnesota. Therefore, the operating results of the Company's cellular
business compared to the periods prior to this purchase may not be indicative of
future performance.
10
<PAGE> 11
The following table sets forth certain financial data as it relates to
the Company's cellular operations:
<TABLE>
<CAPTION>
(Dollars in thousands) THREE MONTHS ENDED MARCH 31,
-----------------------------------------------
1998 % CHANGE 1997
--------- -------- ---------
<S> <C> <C> <C>
Cellular revenues:
Subscriber revenues ......... $ 76,103 54.1% $ 49,382
Roamer revenues ............. 10,487 56.7% 6,694
Equipment sales and other
revenues .................. 4,040 (3.4)% 4,182
--------- ---------
Total revenues .......... $ 90,630 $ 60,258
========= =========
Cellular operating expenses:
Cost of service ............. $ 11,887 7.4% $ 11,066
Cost of equipment sales ..... 7,452 25.4% 5,943
General and administrative .. 20,262 49.1% 13,587
Sales and marketing ......... 17,491 45.1% 12,055
Depreciation and amortization 17,550 10.2% 15,924
--------- ---------
Total operating expenses $ 74,642 $ 58,575
========= =========
</TABLE>
CELLULAR REVENUES
The increase in subscriber revenues is primarily due to the growth in
the number of subscribers offset slightly by a decrease in the average monthly
cellular subscriber revenue per subscriber. Average monthly cellular subscriber
revenue per subscriber was $47.53 for the three months ended March 31, 1998, a
2.5% decline from $48.75 for the three months ended March 31, 1997. The Company
anticipates this downward trend will continue in 1998. Over the past few years
the cellular industry as a whole has also shown a decline in the average monthly
cellular subscriber revenue per subscriber.
The increase in roamer revenues is attributed to an increase in roaming
traffic and partially offset by a decrease in the rates charged between
carriers. A significant portion of the increase in roaming traffic is a result
of the acquisition of the Triad RSAs. Removing the effect of the markets
acquired from Triad, roamer revenues would have increased by 17.6% for the three
months ended March 31, 1998, compared to the three months ended March 31, 1997.
While the Company expects total roamer minutes to continue increasing, the
decline in the rates charged between carriers will limit the growth of roamer
revenues.
Cellular equipment sales, which consist primarily of handset sales,
decreased primarily due to the decrease in the average cellular handset sales
price, offset by the increase in the number of handsets sold. The decrease in
the average cellular handset sales price is the result of reduced handset costs
passed onto the customer as well as other competitive strategies chosen by the
Company.
CELLULAR OPERATING EXPENSES
The increase in cost of service is primarily attributable to the
increased costs of maintaining the Company's expanding wireless network to
support the larger subscriber base, offset by a reduction in the rates paid by
the Company to access local exchange and long distance carrier facilities. While
cost of service dollars increased slightly, it decreased as a percentage of
service revenues to 13.5% for the three months ended March 31, 1998, from 19.3%
for the three months ended March 31, 1997, which is due primarily to
efficiencies gained from the growing subscriber base.
Cost of equipment sales increased primarily due to the increase in
handsets sold, offset by a decrease in the cost of handsets, for the three
months ended March 31, 1998, compared to the three months ended March 31,
1997.
The Company's general and administrative costs are principally
considered to be variable costs, that is costs that will vary with the level of
subscribers. The increases in total dollars are primarily attributable to the
increase in costs associated with supporting the increased subscriber base.
However, the general and administrative cost per average subscriber continues to
decrease as a result of efficiencies gained from the growing subscriber base.
The general and administrative cost per average subscriber decreased to $12.66
for the three months ended March 31, 1998, compared to $13.41 for the three
months ended March 31, 1997.
11
<PAGE> 12
The increase in sales and marketing costs is primarily due to the
increase in subscribers added during the three months ended March 31, 1998,
compared to the three months ended March 31, 1997. Sales and marketing cost per
net subscriber added, including the loss on equipment sales, increased to $828
for the three months ended March 31, 1998, from $559 for the three months ended
March 31, 1997. This increase is largely a result of an increase in the churn
rate (representing customer attrition) in the first quarter of 1998.
The increase in depreciation and amortization expenses is attributable
to the continued expansion of the Company's cellular systems including the
acquisition of the Triad properties.
PCS OPERATIONS
The Company's PCS business commenced operations in its first MTA in
February 1996. Since that time, the Company has commenced operations in its six
remaining MTAs on various dates through May of 1997. Due to the various dates at
which each of the MTAs became operational, the revenues and expenses incurred
may not be representative of future operations. Additionally, during each period
being discussed, a portion of the operating expenses incurred in the Company's
PCS operations were related to start-up costs incurred prior to the commencement
of operations in each of the systems. Exclusive of depreciation and amortization
expense, which was not material, approximately $0.6 million of start-up costs
were incurred for the three months ended March 31, 1998, compared to $2.7
million for the three months ended March 31, 1997.
The Company had 164,600 PCS subscribers at March 31, 1998, representing
an increase of 36,000 or 28.0% from December 31, 1997. At March 31, 1997, the
Company had 49,000 PCS subscribers, representing an increase of 13,500 or 38.0%
from December 31, 1996.
The following table sets forth certain financial data as it relates to
the Company's PCS operations:
<TABLE>
<CAPTION>
(Dollars in thousands) THREE MONTHS ENDED MARCH 31,
----------------------------------------------
1998 % CHANGE 1997
--------- -------- ---------
<S> <C> <C> <C>
PCS revenues:
Service revenues .................... $ 22,787 212.0% $ 7,303
Equipment revenues .................. 7,096 77.4% 3,999
--------- ---------
Total revenues .................. $ 29,883 $ 11,302
========= =========
PCS operating expenses:
Cost of service ..................... $ 11,122 21.3% $ 9,171
Cost of equipment sales ............. 14,477 103.3% 7,122
General and administrative .......... 18,177 63.5% 11,116
Sales and marketing ................. 14,341 15.0% 12,470
Depreciation and amortization ....... 19,999 90.5% 10,497
--------- ---------
Total operating expenses ........ $ 78,116 $ 50,376
========= =========
</TABLE>
PCS REVENUES
The increase in PCS service revenues is due to the increase in the
number of subscribers offset by a decrease in the average monthly PCS subscriber
revenue per subscriber. The increase in subscribers is due to the relative
maturity of the seven MTAs operating in the first quarter of 1998 compared to
the six MTAs operating in the first quarter of 1997. Average monthly PCS
subscriber revenue per subscriber was $50.35 for the three months ended March
31, 1998, compared to $58.33 for the three months ended March 31, 1997.
PCS equipment sales increased primarily as a result of increased sales
of handsets, offset by a decrease in the average handset selling price. While
the Company expects total equipment sales to continue to increase, the decline
in the average handset selling price will limit the growth of equipment sales.
PCS OPERATING EXPENSES
Cost of service expenses, cost of equipment sales, and depreciation and
amortization expenses largely represent the expenses incurred by the operational
PCS systems. Seven MTAs were operational during the first quarter of 1998 while
six MTAs were operational during the first quarter of 1997. Accordingly, cost of
service expenses, cost of equipment sales, and depreciation and amortization
expenses increased for the three months
12
<PAGE> 13
ended March 31, 1998, compared to the three months ended March 31, 1997. General
and administrative costs increased due to the costs associated with supporting
the additional operating markets and larger subscriber base. Sales and marketing
costs increased as a result of the increase in net subscriber additions and the
effort to promote the Company's PCS brand name in a greater number of markets.
OTHER INCOME (EXPENSE)
Interest and financing expense increased to $31.2 million for the three
months ended March 31, 1998, compared to $17.4 million for the three months
ended March 31, 1997, due to the increase in long-term debt. Long-term debt was
incurred primarily to fund the Company's capital expenditures associated with
the build-out of the Company's PCS systems. Interest expense will continue to
increase in 1998 as a result of increased borrowings the Company has incurred,
and will continue to incur, to fund this expansion. The weighted average
interest rate, before the effect of capitalized interest, was 9.1% and 10.3% for
the three months ended March 31, 1998 and 1997, respectively.
EBITDA
"EBITDA" represents operating loss before depreciation and
amortization. EBITDA is a measure commonly used in the industry and should not
be construed as an alternative to operating income (loss) (as determined in
accordance with United States generally accepted accounting principles, "GAAP"),
as an alternative to cash flows from operating activities (as determined in
accordance with GAAP), or as a measure of liquidity. Cellular EBITDA represents
EBITDA from the Company's cellular operations and PCS EBITDA represents EBITDA
from the Company's PCS operations.
Consolidated EBITDA for the Company increased to $5.3 million for the
three months ended March 31, 1998, from negative $11.0 for the three months
ended March 31, 1997. This increase is primarily due to the $33.5 million and
$17.6 million cellular EBITDA for the three months ended March 31, 1998 and
1997, respectively, offset by a negative $28.2 million and negative $28.6
million PCS EBITDA for the three months ended March 31, 1998 and 1997,
respectively. The increase in cellular EBITDA is primarily a result of increased
revenues due to the increased subscriber base and the related cost efficiencies
gained. As a result, cellular operating margin (cellular EBITDA as a percentage
of cellular service revenues) increased to 38.2% for the three months ended
March 31, 1998, from 30.7% for the three months ended March 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a credit facility (the "Credit Facility") with a
consortium of lenders providing for $750 million of revolving credit and a $200
million term loan. A subsidiary of Western PCS also has a credit facility (the
"PCS Vendor Facility" ) with a consortium of lenders providing for $300 million
of revolving credit. As of March 31, 1998, $615 million and $300 million were
outstanding under the Credit Facility and the PCS Vendor Facility, respectively.
Amounts available for borrowing under the Credit Facility, which is limited by
certain financial covenants, was the remaining amount under the revolving credit
of $335 million. Indebtedness under the Credit Facility and the PCS Vendor
Facility matures on March 31, 2006, and December 31, 2003, respectively, and
bears interest at variable rates. Substantially all the assets of the Company,
other than PCS licenses acquired in the Federal Communications Commission's
("FCC") D and E auctions, certain licenses acquired in the FCC's A and B
auctions and certain other assets, are pledged as security for such
indebtedness. The terms of the PCS Vendor Facility restrict, among other things,
the sale of assets, distribution of dividends or other distributions and loans
by the subsidiary of Western PCS.
In February 1998, a subsidiary of Hutchison Telecommunications Limited
("HTL") purchased 19.9% of the outstanding capital stock of Western PCS for an
aggregate purchase price of $248.4 million. Approximately $135 million of the
proceeds are to be used by Western PCS for the continued build-out of its PCS
systems during 1998. The remainder of the proceeds was paid to the Company as a
repayment of advances made to Western PCS and was used by the Company to reduce
amounts outstanding under the Credit Facility.
13
<PAGE> 14
During the remainder of 1998, the Company anticipates spending
approximately $260 million to complete construction of the build-out of the
Seattle-Tacoma, Phoenix and Tucson BTA systems, to provide funds to Cook Inlet
Western Wireless PV/SS PCS, LP ("Cook Inlet PCS") for the build-out of certain
BTA markets and to expand the build-out of its PCS MTA systems. The Company will
utilize the net proceeds of the HTL investment, other cash on hand, and other
sources of funding, for such purposes. In addition, further funds (which may be
significant) will be required to finance the continued growth of its cellular
and PCS operations, provide for working capital and service debt. The Company
believes such sources will be sufficient for the operations of the business. The
Company continues to consider and expects to pursue additional sources of
funding to enable the further development of the PCS business. Such sources may
included the issuance of additional indebtedness and/or the sale of additional
equity at the parent or subsidiary level. There can be no assurance that such
funds will be available to the Company on acceptable or favorable terms.
Net cash used in operating activities was $1.8 million for the three
months ended March 31, 1998. Adjustments to the $64.1 million net loss to
reconcile to net cash used in operating activities included $37.5 million of
depreciation and amortization and a $14.6 million decrease in inventory as a
result of a conscious effort to reduce inventory levels. Net cash provided by
operating activities was $1.8 million for the three months ended March 31, 1997.
Net cash used in investing activities was $45.2 million for the three
months ended March 31, 1998. Investing activities for such period consisted
primarily of purchases of property and equipment of $25.4 million, of which
$15.2 million was attributable to PCS capital expenditures, and $13.6 million of
additions to licensing costs and other intangible assets, primarily attributable
to 52 Local Multipoint Distribution Service (LMDS) licenses that the Company
was the high bidder on in an FCC auction. Net cash used in investing activities
was $151.4 million for the three months ended March 31, 1997.
Net cash provided by financing activities was $164.1 million for the
three months ended March 31, 1998. Financing activities for such period
consisted primarily of net proceeds from the sale of a minority interest in a
consolidated subsidiary of $243.7 million, and the net reduction of long-term
debt of $80.0 million. Net cash provided by financing activities was $130.5
million for the three months ended March 31, 1997.
In the ordinary course of business, the Company continues to evaluate
acquisition opportunities, joint ventures and other potential business
transactions. Such acquisitions, joint ventures and business transactions may be
material. Such transactions may also require the Company to seek additional
sources of funding through the issuance of additional debt and/or additional
equity at the parent or subsidiary level. There can be no assurance that such
funds will be available to the Company on acceptable or favorable terms.
Through its ownership in Western PCS, the Company holds a 49.9% interest
in Cook Inlet PCS. Cook Inlet PCS is subject to the FCC's build-out requirements
and will require significant additional amounts to complete the build-out of its
PCS systems and to meet the government debt service requirements on the C and F
Block license purchase prices. The potential sources of such additional funding
include vendor loans, loans or capital contributions by the partners of Cook
Inlet PCS or other third party financing. To date, the Company has funded the
operations of Cook Inlet PCS through the issuance of promissory notes. At March
31, 1998, the Company had advanced funds totaling $37.7 million to Cook Inlet
PCS under such promissory notes.
YEAR 2000 ISSUES
The Company, like most owners of computer software, will be required to
modify significant portions of its software so that it will function properly in
the year 2000. Any of the Company's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities. The Company is in the planning phase of its year 2000 compliance
project and does not, as of yet, have a determinable estimate of the costs to be
incurred. The Company expects to incur internal staff costs as well as
consulting and other expenses related to infrastructure and facilities
enhancements necessary to prepare the systems for the year 2000. The Company
expects its year 2000 compliance project to be completed on a timely basis.
14
<PAGE> 15
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A subsidiary of the Company received a Civil Investigative Demand (the
"Demand") from the U.S. Department of Justice Antitrust Division (the "Antitrust
Division") requiring the Company to produce certain documents and answer certain
interrogatories in connection with the Antitrust Division's investigation of
possible bid rigging and market allocation for licenses auctioned by the FCC for
broadband PCS frequency blocks. The Company has cooperated with the Antitrust
Division's requests. On March 16, 1998, the same subsidiary of the Company
received a Notice of Apparent Liability for Forfeiture ("NALF") from the FCC in
the amount of $1.2 million. This NALF was issued by the FCC in connection with
its investigation of compliance by auction participants with FCC PCS auction
rules. The Company has thoroughly cooperated with the FCC investigation and will
continue to do so. The Company believes its conduct was consistent with FCC
rules and regulations pertaining to the auction. The Company filed its
opposition to the NALF and believes the Company will prevail. The amount of the
NALF, if upheld, is not material to the financial position of the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(a) Exhibit Description
------- -----------
<S> <C>
10.67 Second Amendment to Loan Agreement by and among Western
Wireless Corporation, TD Securities (USA) Inc., Barclays
Capital, and J.P. Morgan Securities Inc., as Managing
Agents for the Various Lenders, dated February 17, 1998.
10.68 Employment Agreement by and between Timothy Wong and
Western Wireless Corporation, dated February 10, 1998.
10.69 Employment Agreement by and between Robert Dotson and
Western Wireless Corporation, dated February 10, 1998.
27.1 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
A Form 8-K was filed on February 18, 1998, reporting the close of the
investment by a subsidiary of Hutchison Telecommunications Limited in
Western PCS Corporation.
15
<PAGE> 16
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.
Western Wireless Corporation
By s:\ Donald Guthrie
-------------------------
Donald Guthrie
Chief Financial Officer
By s:\ Patricia L. Miller
-------------------------
Patricia L. Miller
Controller (Principal
Accounting Officer)
Dated: May 11, 1998
16
<PAGE> 17
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
10.67 Second Amendment to Loan Agreement by and among Western Wireless
Corporation, TD Securities (USA) Inc., Barclays Capital, and J.P.
Morgan Securities Inc., as Managing Agents for the Various Lenders,
dated February 17, 1998.
10.68 Employment Agreement by and between Timothy Wong and Western Wireless
Corporation, dated February 10, 1998.
10.69 Employment Agreement by and between Robert Dotson and Western
Wireless Corporation, dated February 10, 1998.
27.1 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.67
SECOND
AMENDED AND RESTATED
LOAN AGREEMENT
AMONG WESTERN WIRELESS CORPORATION;
THE FINANCIAL INSTITUTIONS WHOSE NAMES APPEAR AS LENDERS ON
THE SIGNATURE PAGES HEREOF;
TD SECURITIES (USA) INC., BARCLAYS CAPITAL
AND J.P. MORGAN SECURITIES INC., AS
MANAGING AGENTS;
CHEMICAL BANK, CIBC INC., FLEET NATIONAL BANK,
ING (U.S.) CAPITAL CORPORATION,
PNC BANK, NATIONAL ASSOCIATION AND SOCIETE GENERALE,
AS AGENTS;
UNION BANK OF CALIFORNIA, N.A., CORESTATES BANK, N.A.,
BANK OF HAWAII, PEARL STREET L.P.,
AND CREDIT LYONNAIS NEW YORK BRANCH AS CO-AGENTS;
BARCLAYS CAPITAL, AS DOCUMENTATION AGENT;
J.P. MORGAN SECURITIES INC., AS SYNDICATION AGENT;
AND
TORONTO DOMINION (TEXAS), INC., AS
ADMINISTRATIVE AGENT;
DATED AS OF
FEBRUARY 17, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE 1 Definitions..........................................................3
ARTICLE 2 Loans...............................................................29
Section 2.1 The Loans......................................................29
Section 2.2 Manner of Borrowing and Disbursement...........................30
Section 2.3 Interest.......................................................35
Section 2.4 Repayment......................................................37
Section 2.5 Fees...........................................................39
Section 2.6 Prepayments....................................................39
Section 2.7 Borrower's Optional Cancellation of the Revolving
Loan Commitment..............................................40
Section 2.8 Mandatory Prepayments..........................................41
Section 2.9 Notes; Loan Accounts...........................................42
Section 2.10 Manner of Payment..............................................43
Section 2.11 Reimbursement..................................................44
Section 2.12 Pro Rata Treatment.............................................45
Section 2.13 Capital Adequacy...............................................46
Section 2.14 Lender Tax Forms...............................................47
ARTICLE 3 Conditions Precedent................................................48
Section 3.1 Conditions Precedent to Initial Advance........................48
Section 3.2 Conditions Precedent to Each Advance...........................51
ARTICLE 4 Representations and Warranties......................................52
Section 4.1 Representations and Warranties.................................52
Section 4.2 Survival of Representations and Warranties, etc................61
ARTICLE 5 General Covenants...................................................62
Section 5.1 Preservation of Existence and Similar Matters..................62
Section 5.2 Business; Compliance with Applicable Law.......................62
Section 5.3 Maintenance of Properties......................................62
Section 5.4 Accounting Methods and Financial Records.......................63
Section 5.5 Insurance......................................................63
Section 5.6 Payment of Taxes and Claims....................................64
Section 5.7 Visits and Inspections.........................................65
Section 5.8 Payment of Indebtedness; Loans.................................65
Section 5.9 Use of Proceeds................................................65
Section 5.10 Real Estate....................................................65
Section 5.11 Indemnity......................................................66
Section 5.12 Interest Rate Hedging..........................................67
Section 5.13 Covenants Regarding Formation of
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Restricted Subsidiaries and the Making of
Investments and Acquisitions............................67
Section 5.14 Designation of Unrestricted
Subsidiaries as Restricted
Subsidiaries; Designation of
Restricted Subsidiaries as
Consolidated Subsidiaries...............................68
Section 5.15 Payment of Wages...............................................70
ARTICLE 6 Information Covenants...............................................70
Section 6.1 Quarterly Financial Statements and Information.................70
Section 6.2 Annual Financial Statements and Information....................71
Section 6.3 Performance Certificates.......................................71
Section 6.4 Copies of Other Reports........................................72
Section 6.5 Notice of Litigation and Other Matters.........................73
ARTICLE 7 Negative Covenants..................................................74
Section 7.1 Indebtedness of the Borrower and its Restricted
Subsidiaries.................................................74
Section 7.2 Limitation on Liens............................................75
Section 7.3 Amendment and Waiver...........................................75
Section 7.4 Liquidation, Merger, Disposition of Assets.....................75
Section 7.5 Limitation on Guaranties.......................................76
Section 7.6 Investments and Acquisitions...................................77
Section 7.7 Restricted Payments and Purchases..............................80
Section 7.8 Ratio of Operating Cash Flow to Cash Interest Expense..........81
Section 7.9 Fixed Charge Coverage Ratio....................................81
Section 7.10 Leverage Ratios................................................81
Section 7.11 Annualized Operating Cash Flow to Pro Forma Debt
Service Ratio.................................................82
Section 7.12 Affiliate Transactions.........................................82
Section 7.13 Real Estate....................................................83
Section 7.14 ERISA Liabilities..............................................83
Section 7.15 Limitation on Leases...........................................83
Section 7.16 New Unrestricted Subsidiaries..................................83
Section 7.17 Limitation on Preferred Stock of Restricted Subsidiaries.......83
Section 7.18 New Mexico Bond................................................84
ARTICLE 8 Default.............................................................85
Section 8.1 Events of Default..............................................85
Section 8.2 Remedies.......................................................89
Section 8.3 Payments Subsequent to Declaration of Event of Default.........90
ARTICLE 9 The Administrative Agent............................................91
Section 9.1 Appointment and Authorization..................................91
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 9.2 Interest Holders...............................................91
Section 9.3 Consultation with Counsel......................................92
Section 9.4 Documents......................................................92
Section 9.5 Administrative Agent and Affiliates............................92
Section 9.6 Responsibility of the Administrative Agent.....................92
Section 9.7 Security Documents.............................................93
Section 9.8 Action by the Administrative Agent.............................93
Section 9.9 Notice of Default or Event of Default..........................94
Section 9.10 Responsibility Disclaimed......................................94
Section 9.11 Indemnification................................................95
Section 9.12 Credit Decision................................................95
Section 9.13 Successor Administrative Agent.................................96
Section 9.14 Delegation of Duties...........................................97
ARTICLE 10 Change in Circumstances Affecting Fixed Rate Advances...............97
Section 10.1 Fixed Rate Basis Determination Inadequate or Unfair............97
Section 10.2 Illegality.....................................................98
Section 10.3 Increased Costs................................................99
Section 10.4 Effect On Other Advances......................................100
ARTICLE 11 Miscellaneous......................................................101
Section 11.1 Notices.......................................................101
Section 11.2 Expenses......................................................102
Section 11.3 Waivers.......................................................103
Section 11.4 Set-Off.......................................................103
Section 11.5 Assignment....................................................104
Section 11.6 Accounting Principles.........................................106
Section 11.7 Counterparts..................................................106
Section 11.8 Governing Law.................................................106
Section 11.9 Severability..................................................107
Section 11.10 Interest......................................................107
Section 11.11 Table of Contents and Headings................................108
Section 11.12 Amendment and Waiver..........................................108
Section 11.13 Entire Agreement..............................................109
Section 11.14 Other Relationships...........................................109
Section 11.15 Directly or Indirectly........................................109
Section 11.16 Reliance on and Survival of Various Provisions................109
Section 11.17 Senior Debt...................................................109
Section 11.18 Obligations Several...........................................110
Section 11.19 Confidentiality...............................................110
ARTICLE 12 Waiver of Jury Trial...............................................110
Section 12.1 Waiver of Jury Trial..........................................110
</TABLE>
-iii-
<PAGE> 5
EXHIBITS
Exhibit A - Form of Assignment of Rights by Partner
Exhibit B - Form of Borrower's Pledge Agreement
Exhibit C - Form of Certificate of Financial Condition
Exhibit D Form of Performance Certificate
Exhibit E - Form of Request for Advance
Exhibit F - Form of Revolving Note
Exhibit G - Form of Security Agreement
Exhibit H - Form of Subordination Agreement
Exhibit I - Form of Subsidiary Guaranty
Exhibit J - Form of Subsidiary Pledge Agreement
Exhibit K - Form of Subsidiary Security Agreement
Exhibit L - Form of Term Note
Exhibit M - Form of Use of Proceeds Letter
Exhibit N - Form of Borrower's Loan Certificate
Exhibit O - Form of Subsidiary Loan Certificate (Corporation)
Exhibit P - Form of Subsidiary Loan Certificate (Partnership)
Exhibit Q - Form of Assignment and Assumption Agreement
-iv-
<PAGE> 6
SCHEDULES
<TABLE>
<S> <C>
Schedule 1 - Proposed Acquisitions and Swaps of Allowable Wireless Systems
Schedule 2-A - Allocation of Revolving Loan Commitment among certain of the Lenders,
Commitment Ratios, and such Lenders' Addresses for Notice
Schedule 2-B - Allocation of Term Loans among certain of the Lenders and such
Lenders' Addresses for Notice
Schedule 3 - Subsidiaries (including designation of Subsidiaries as Consolidated,
Restricted and Unrestricted Subsidiaries) and Investments of the
Borrower
Schedule 4 - Description of Designated Target Area
Schedule 5 - Licenses and IOAs
Schedule 6 - Liens of Record as of the Agreement Date
Schedule 7 - Listing and Description of Seller Subordinated Debt
Schedule 8 - Shareholders of the Borrower as of the Agreement Date
Schedule 9 - Compliance with Other Loan Documents and Contemplated Transactions
Schedule 10 - Issues Pertaining to Necessary Authorizations and Licenses
Schedule 11 - Litigation
Schedule 12 - Liabilities and Losses
Schedule 13 - Agreements with Affiliates, etc.
Schedule 14 - Real Estate
Schedule 15 - Guaranties of Obligations of Unrestricted Subsidiaries in effect on
the Agreement Date
</TABLE>
-i-
<PAGE> 7
SECOND
AMENDED AND RESTATED
LOAN AGREEMENT
AMONG WESTERN WIRELESS CORPORATION; THE FINANCIAL INSTITUTIONS WHOSE NAMES
APPEAR AS LENDERS ON THE SIGNATURE PAGES HEREOF; TD SECURITIES (USA) INC.,
BARCLAYS CAPITAL AND J.P. MORGAN SECURITIES INC., AS MANAGING AGENTS;
CHEMICAL BANK, CIBC INC., FLEET NATIONAL BANK, ING (U.S.) CAPITAL CORPORATION,
PNC BANK, NATIONAL ASSOCIATION, AND SOCIETE GENERALE, AS AGENTS;
UNION BANK OF CALIFORNIA, N.A., CORESTATES BANK, N.A., BANK OF HAWAII,
PEARL STREET L.P., AND CREDIT LYONNAIS NEW YORK BRANCH, AS CO-AGENTS;
BARCLAYS CAPITAL, AS DOCUMENTATION AGENT; J.P. MORGAN SECURITIES INC.,
AS SYNDICATION AGENT; AND TORONTO DOMINION (TEXAS), INC.,
AS ADMINISTRATIVE AGENT
WHEREAS, Western Wireless Corporation, a Washington corporation (the
"Borrower"), Toronto Dominion (Texas), Inc. (the "Administrative Agent"), the
lenders named therein and the other agents named therein are parties to a
certain Loan Agreement dated as of May 6, 1996, as modified and amended by that
certain First Amendment to Loan Agreement dated as of March 27, 1997, as further
modified and amended by that certain Second Amendment to Loan Agreement dated as
of May 28, 1997, and as further modified and amended by that certain Third
Amendment to Loan Agreement dated as of October 27, 1997 (as amended, the
"Existing Loan Agreement"); and
WHEREAS, the Administrative Agent and the Lenders have agreed to permit
the Revolving Loan Commitment and the Term Loans to remain in place, all
pursuant to the terms and conditions set forth herein, and such parties and the
Borrower have also agreed in connection therewith to amend and restate the
Existing Loan Agreement in its entirety, as set forth herein; and
WHEREAS, the Borrower acknowledges and agrees that the Security Interest
(as defined in the Existing Loan Agreement) granted to the Administrative Agent
for the benefit of the Lenders pursuant to the Existing Loan Agreement and the
Security Documents (as defined in the Existing Loan Agreement), shall remain
outstanding and in full force and effect in accordance with the Existing Loan
Agreement and shall continue to secure the Obligations (as defined herein),
except that effective as of the Agreement Date, certain Liens against
Unrestricted Subsidiaries (which
1
<PAGE> 8
were Restricted Subsidiaries under the Existing Loan Agreement) shall be
released; and
WHEREAS, the Borrower and all other parties hereto acknowledge and agree
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 Existing Loan Agreement) arising in
connection with the Existing Loan Agreement and the other Loan Documents (as
defined in the Existing Loan Agreement) executed in connection therewith; (ii)
the parties hereto intend that the Existing Loan Agreement and the other Loan
Documents (as defined in the Existing 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
Existing Loan Agreement and the other Loan Documents (as defined in the Existing
Loan Agreement) executed in connection therewith as so amended, restated,
renewed, extended, consolidated and modified hereunder, together with all other
obligations hereunder; (iii) all Loans evidenced by the Existing Loan Agreement
and the other Loan Documents (as defined in the Existing Loan Agreement)
executed in connection therewith are hereby ratified, confirmed and continued;
and (iv) the Loan Documents (as defined herein) are intended to restate, renew,
extend, consolidate, amend and modify the Existing Loan Agreement and the other
Loan Documents (as defined in the Existing Loan Agreement) executed in
connection therewith; and
WHEREAS, the parties hereto intend that (i) the provisions of the
Existing Loan Agreement and the other Loan Documents (as defined in the Existing
Loan Agreement) executed in connection therewith, to the extent restated,
renewed, extended, consolidated, amended and modified hereby, be hereby
superseded and replaced by the provisions hereof and of the Loan Documents (as
defined herein); (ii) the Notes (as hereinafter defined) amend, renew, extend,
modify, replace, be substituted for and supersede in their entirety, but do not
extinguish, the Indebtedness arising under, the promissory notes issued pursuant
to the Existing Loan Agreement; and (iii) entering into, and performing their
respective obligations under, this transaction not constitute a novation;
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 in its entirety the Existing Loan Agreement as
follows as of the ____ day of February, 1998:
2
<PAGE> 9
ARTICLE 1
Definitions
For the purposes of this Agreement:
"Acquisition" shall mean (whether by purchase, 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 amount of the
assets of any other Person. For purposes of the preceding sentence, an amount of
assets shall be deemed to be "substantial" if such assets have a fair market
value in excess of $1,000,000; provided, however, that the purchase of equipment
and other goods and services in the ordinary course of business shall not be
deemed to be "Acquisitions."
"Additional Facility Indebtedness" shall mean additional Indebtedness
for Money Borrowed (as to which no commitment has been issued by any Lender as
of the Agreement Date) in a principal amount not to exceed $250,000,000 incurred
by the Borrower in accordance with this Agreement.
"Administrative Agent" shall mean Toronto Dominion (Texas), Inc., as
Administrative Agent for the Lenders, together with any successor Administrative
Agent hereunder.
"Administrative Agent's Office" shall mean the office of Toronto
Dominion (Texas), Inc., as Administrative Agent hereunder, 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 of this Agreement.
"Advance" shall mean the aggregate amount advanced by the Lenders to the
Borrower pursuant to Article 2 hereof on the occasion of any borrowing.
"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
3
<PAGE> 10
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. Unless otherwise specified, "Affiliate" shall mean an
Affiliate of the Borrower, and shall include the Unrestricted Subsidiaries.
"Agents" shall mean Chemical Bank, CIBC Inc., Fleet National Bank, ING
(U.S.) Capital Corporation, PNC Bank, National Association, and Societe
Generale; and "Agent" shall mean any one of the foregoing Agents.
"Agreement" shall mean this Second Amended and Restated Loan Agreement.
"Agreement Date" shall mean the date as of which this Agreement is
dated.
"Allowable Wireless System" shall mean any Cellular System (i) the
geographical boundaries for any portion of which are contiguous to or within 50
miles from the geographical boundaries of (A) a Cellular System owned by the
Borrower or any Subsidiary of the Borrower or (B) a PCS System owned by the
Borrower or any of its Subsidiaries, (ii) which is located in whole or in
substantial part within any state in which is located (A) a Cellular System
owned by the Borrower or any Subsidiary of the Borrower, or (B) a PCS System
owned by the Borrower or any of its Subsidiaries,(iii) which is otherwise
located in the Designated Target Area, or (iv) described on Schedule 1 attached
hereto. In addition, "Allowable Wireless System" shall include any Cellular
System acquired by the Borrower or any of its Restricted Subsidiaries as part of
a single transaction, or a series of related transactions, in which the Borrower
or any of its Restricted Subsidiaries acquires an 'Allowable Wireless System,'
as defined in the immediately preceding sentence, provided that the fair market
value of the latter Cellular System equals or exceeds the fair market value of
the former.
"Annualized Operating Cash Flow" shall mean, as of any calculation date,
the product of (i) Operating Cash Flow for the most recently-completed fiscal
two-quarter period, multiplied by (ii) two (2).
"Applicable Law" shall mean, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, including, without
4
<PAGE> 11
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
Advances hereunder as determined in accordance with Section 2.3(g) hereof.
"Assessment Rate" shall mean, for any Interest Period for a CD Rate
Advance, the maximum current annual assessment rate (rounded up to the nearest
one-hundredth (1/100th) of one percent) payable by The Toronto-Dominion Bank to
the Federal Deposit Insurance Corporation (or any successor) for insuring time
deposits in Dollars at the offices of The Toronto-Dominion Bank in the United
States, as determined on the first day of such Interest Period.
"Assignment of Rights By Partner" shall mean that certain Assignment of
Rights by Partner dated as of June 30, 1995 between the Borrower and certain
Restricted Subsidiaries of the Borrower which are general or limited partners of
any partnership, on the one hand, and the Administrative Agent, on the other
hand, as modified and amended by that certain First Amendment to Assignment of
Rights by Partner dated as of May 6, 1996, and as further modified and amended
by that certain Second Amendment to Assignment of Rights by Partner of even date
herewith, substantially in the form of Exhibit A attached hereto.
"Authorized Signatory" shall mean such senior officers of the Borrower
as may be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower.
"Available Equity" shall mean cash proceeds from public or private
offerings of the capital stock of the Borrower received after September 30,
1997.
"Base Rate" shall mean, at any time, the higher of (a) the rate of
interest adopted by the Administrative Agent as the reference rate for the
determination of interest rates for loans of varying maturities in Dollars to
United States residents of varying degrees of creditworthiness and being quoted
at such time by The Toronto-Dominion Bank, New York Branch as its "base rate" or
"prime rate," or (b) the Federal Funds Rate plus five-eighths of one percent
(5/8%). The Base Rate is not necessarily the lowest rate of
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interest charged to borrowers of the Administrative Agent or its Affiliates.
"Base Rate Advance" shall mean an Advance which the Borrower requests to
be made as a Base Rate Advance or is reborrowed as a Base Rate Advance, and
which bears interest at the Base Rate Basis, in accordance with the provisions
of Section 2.2 hereof, and which shall be in a principal amount of at least
$5,000,000 and in an integral multiple of $1,000,000.
"Base Rate Basis" shall mean a simple interest rate equal to the sum of
(i) the Base Rate and (ii) the Applicable Margin. The Base Rate Basis shall be
adjusted automatically as of the opening of business on the effective date of
each change in the Base Rate to account for such change and shall also be
changed to reflect adjustments in the Applicable Margin.
"Basket" shall mean $15,000,000, and shall be the limitation at all
times on the aggregate dollar amount of Specified Transactions outstanding or in
effect at any time, entered into by the Borrower or any of its Restricted
Subsidiaries.
"Borrower" shall mean Western Wireless Corporation, a Washington
corporation.
"Borrower's Pledge Agreement" shall mean that certain Borrower's Pledge
Agreement dated as of June 30, 1995 between the Borrower and the Administrative
Agent as modified and amended by that certain First Amendment to Borrower"s
Pledge Agreement dated as of May 6, 1996, and as further modified and amended by
that certain Second Amendment to Borrower's Pledge Agreement of even date
herewith, substantially in the form of Exhibit B attached hereto, pursuant to
which the Borrower has pledged to the Administrative Agent all stock owned by
it.
"BTA" means the unit of division (of which there are 493) for the United
States of America, devised by Rand McNally based upon geography, population and
other factors, which units form the basis for the auction by the FCC of a
portion of the Licenses for PCS Systems for Basic Trading Areas, as defined by
the FCC.
"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
London, Houston, and
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New York, as relevant to the determination to be made or the action to be taken.
"Capital Expenditures" shall mean, in respect of any Person,
expenditures for the purchase of tangible assets of long-term use which are
capitalized in accordance with GAAP.
"Capitalized Lease Obligation" shall mean that portion of any obligation
of a Person as lessee under a lease which is required to be capitalized on the
balance sheet of such lessee in accordance with GAAP.
"Cash Interest Expense" shall mean, for any period, for the Borrower and
its Consolidated Subsidiaries, on a consolidated basis, cash interest paid or
accrued in respect of Total Debt, together with fees associated therewith (other
than fees payable on or prior to the Agreement Date), all as determined in
accordance with GAAP and shall also include the interest component of payments
for such period in respect of Capitalized Lease Obligations.
"CD Rate" shall mean, for any Interest Period, the interest rate per
annum (rounded upward to the nearest hundredth (1/100th) of one percent)
determined by the Administrative Agent to be the average of prevailing rates bid
at 10:00 a.m. (New York time) or as soon thereafter as practicable, on the
Business Day on which the relevant Interest Period commences, by two or more New
York certificate of deposit dealers of recognized standing for the purchase at
face value from the New York Branch of The Toronto-Dominion Bank of its
certificates of deposit having a maturity comparable to the duration of the
Interest Period sought, and in an amount comparable to the amount requested, by
the Borrower.
"CD Rate Advance" shall mean an Advance which the Borrower requests to
be made as a CD Rate Advance or which is reborrowed as a CD Rate Advance, and
which bears interest at the CD Rate Basis, in accordance with the provisions of
Section 2.2 hereof, and which shall be in a principal amount of at least
$5,000,000 and in an integral multiple of $1,000,000.
"CD Rate Basis" shall mean a simple per annum interest rate (rounded
upward to the nearest one-hundredth (1/100th) of one percent) equal to the sum
of (a) the quotient of (i) the CD Rate divided by (ii) one minus the Domestic
Reserve Percentage, stated as a decimal, plus (b) the Assessment Rate, plus (c)
the Applicable Margin. The CD Rate Basis shall apply to Interest Periods of
thirty (30), sixty (60), ninety (90), and one hundred eighty (180) days,
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<PAGE> 14
and, subject to the final sentence of this paragraph, three hundred and sixty
(360) days, shall be subject to Article 10 hereof, and, once determined, shall
remain unchanged during the applicable Interest Period, except for changes to
reflect adjustments in the Domestic Reserve Percentage or the Assessment Rate,
or in the Applicable Margin pursuant to Section 2.3(g)(i) hereof. The Borrower
may elect an Interest Period for a CD Rate Advance of three hundred sixty (360)
days unless the Administrative Agent has been notified by at least one Lender
that (i) such Lender does not have available to it funds for such Lender's share
of the proposed Advance which are not required for other purposes, or (ii) such
funds are not available to such Lender at a rate (exclusive of reserves and
other adjustments) at or below the CD Rate for such proposed Advance and
Interest Period.
"Cellular System" means a cellular mobile radio telephone system
constructed and operated in an MSA or an RSA (or any successor territorial
designation) pursuant to a License therefor issued by the FCC.
"Certificate of Financial Condition" shall mean a certificate,
substantially in the form of Exhibit C attached hereto, signed by the chief
financial officer of the Borrower, together with any schedules, exhibits or
annexes appended thereto.
"Change of Control" shall mean (i) directly or indirectly a sale,
transfer, or other conveyance of all or substantially all of the assets of the
Borrower, on a consolidated basis, to any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable), excluding transfers or conveyances to or among the Borrower's
Restricted Subsidiaries, as an entirety or substantially as an entirety in one
transaction or series of related transactions, in each case with the effect that
the Person or group of Persons that, as of the date of this Agreement, are not
shareholders of the Borrower (or any Person or group of Persons that, as of the
Agreement Date, are Affiliates of such shareholders) own more than 50% of the
aggregate number of votes of all classes of capital stock of the Borrower which
ordinarily have voting power for the election of directors, managers or trustees
of the transferee entity immediately after such transaction, (ii) any "person"
or "group" (as such terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act, whether or not applicable), other than the shareholders of the
Borrower as of the Agreement Date (or any Person or group of Persons
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<PAGE> 15
that, as of the Agreement Date, are Affiliates of such shareholders), is or
becomes the "beneficial owner" (as that term is used in Rules 13d-3 and 13d-5
under the Exchange Act, whether or not applicable, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such Person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the aggregate
number of votes of all classes of capital stock of the Borrower which ordinarily
have voting power for the election of directors of the Borrower, or (iii) during
any period of twenty-four (24) consecutive months, individuals who at the
beginning of such period constituted the board of directors of the Borrower,
together with any new directors whose election by such board or whose nomination
for election by the shareholders of the Borrower was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
board of directors of the Borrower then in office.
"Co-Agents" shall mean Union Bank of California, N.A., CoreStates Bank,
N.A., Bank of Hawaii, Pearl Street L.P., and Credit Lyonnais New York Branch;
and "Co-Agent" shall mean any one of the foregoing Co-Agents.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property of any kind provided as collateral
for the Obligations under any of the Security Documents.
"Commitment Ratios" shall mean the percentages in which certain of the
Lenders are severally bound to make Advances to the Borrower under the Revolving
Loan Commitment, which percentages are set forth (together with dollar amounts)
on Schedule 2-A attached hereto as of the Agreement Date.
"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 amended and as the same may be in effect from time to time.
"Consolidated Subsidiaries" shall mean the Subsidiaries of the Borrower
whose assets and capital stock are pledged as security for the Obligations which
are designated as Consolidated Subsidiaries on Schedule 3 attached hereto, each
of which is a Restricted Subsidiary and all of which
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<PAGE> 16
are involved, as of the Agreement Date, in the business of operating Cellular
Systems or businesses ancillary thereto. "Consolidated Subsidiaries" shall also
include Restricted Subsidiaries of the Borrower designated by the Borrower as
Consolidated Subsidiaries after the Agreement Date, pursuant to the provisions
of Section 5.14(b) hereof.
"Conversion Date" shall mean December 31, 2000.
"Core Properties" shall mean any Cellular System owned by the Borrower
or any of its Restricted Subsidiaries which is proposed to be sold, assigned or
otherwise transferred in a transaction in which such Cellular System would
generate Net Proceeds in excess of $10,000,000.
"Debt Service" shall mean, for any period, the amount of Cash Interest
Expense, together with scheduled principal repayments (excluding any repayments
made or required to be made in accordance with Section 2.8 hereof) in respect of
Indebtedness for Money Borrowed, of the Borrower and its Consolidated
Subsidiaries on a consolidated basis. For purposes of this definition,
'principal' shall include the principal component of payments for such period in
respect of Capitalized Lease Obligations.
"Default" shall mean any Event of Default, and any of the events
specified in Section 8.1, regardless of whether there shall have occurred any
passage of time or giving of notice, or both, that would be necessary in order
to constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to the
sum of the otherwise applicable Interest Rate Basis plus two percent (2%). With
respect to amounts (other than principal) bearing interest at the Default Rate,
for purposes of the foregoing sentence, the words "otherwise applicable Interest
Rate Basis," shall be deemed to mean the Base Rate Basis.
"Designated Target Area" shall mean any Cellular Systems and the areas
in which they are located, designated by reference to MSA and RSA territories,
in the case of Cellular Systems, and designated by reference to MTA and BTA
territories in the case of PCS Systems, which constitute the Borrower's target
area for Allowable Wireless Systems to be acquired as permitted by this
Agreement. As of the Agreement Date, the Designated Target Area is set forth on
Schedule 4 to this Agreement.
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"Dollars" or "$" shall mean the basic unit of the lawful currency of the
United States of America.
"Domestic Reserve Percentage" shall mean, for any day, the percentage
which is in effect on such day (rounded up to the nearest one-hundredth
(1/100th) of one percent) as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any basic, supplemental, emergency
or marginal reserves) for a member bank of the Federal Reserve System with
deposits exceeding five (5) billion Dollars in respect of new, non-personal,
time deposits in Dollars in the United States having a maturity comparable to
the duration of the Interest Period requested and in an amount of $5,000,000 or
more. The CD Rate Basis for any CD Rate Advance shall be adjusted automatically
on and as of the effective date of any change in the Domestic Reserve
Percentage.
"Environmental Laws" shall mean, with respect to any Person, all
applicable federal, state and local laws, statutes, rules, regulations and
ordinances, codes, common law, consent agreements to which such Person is a
party or by which it is bound, orders, decrees, judgments and injunctions
issued, promulgated, approved or entered thereunder affecting such Person or its
property and 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, on, or in air, water,
land or ground water, to the withdrawal or use of ground water, to the use,
handling or disposal of polychlorinated biphenyls, asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure to
toxic, hazardous or other controlled, prohibited, or regulated substances,
including, without limitation, any such provisions under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.), or the Resource Conservation and Recovery Act of
1976, as amended (42 U.S.C. Section 6901 et seq.).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect from time to time.
"ERISA Affiliate" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is a member of any group of organizations
(within the meaning of Code
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Sections 414(b), 414(c), 414(m), or 414(o)) of which the Borrower is a member.
"Eurodollar Advance" shall mean an Advance which the Borrower requests
to be made as a Eurodollar Advance or which is reborrowed as a Eurodollar
Advance, and which bears interest at the Eurodollar Basis, in accordance with
the provisions of Section 2.2 hereof, and which shall be in a principal amount
of at least $5,000,000 and in an integral multiple of $1,000,000.
"Eurodollar Basis" shall mean a simple per annum interest rate (rounded
upward, if necessary, to the nearest one-hundredth (1/100th) of one percent)
equal to the sum of (a) the quotient of (i) the Eurodollar Rate divided by (ii)
one minus the Eurodollar Reserve Percentage, stated as a decimal, plus (b) the
Applicable Margin. The Eurodollar Basis shall apply to Interest Periods of one
(1), two (2), three (3), six (6), and, subject to availability, 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 pursuant to Section 2.3(g) hereof.
The Borrower may elect an Interest Period of twelve (12) months for a Eurodollar
Advance unless the Administrative Agent has been notified by at least one Lender
that (i) such Lender does not have available to it funds for its portion of the
proposed Advance which are not required for other purposes, or (ii) such funds
are not available to such Lender at a rate at or below the Eurodollar Rate for
such proposed Advance and Interest Period.
"Eurodollar Rate" shall mean, for any Interest Period, the average of
the interest rates per annum (rounded upward to the nearest one-sixteenth of one
percent (1/16%)) which appear on Telerate Page 3750 as of 11:00 a.m. (London
time), or, if unavailable, any generally accepted successor rate selected by the
Administrative Agent, two (2) Business Days before the first day of such
Interest Period, in an amount approximately equal to the principal amount of,
and for a length of time approximately equal to the Interest Period for, the
Eurodollar Advance sought by the Borrower.
"Eurodollar Reserve Percentage" shall mean the percentage which is in
effect from time to time under Regulation D of the Board of Governors of the
Federal Reserve System, as such regulation may be amended from time to time, as
the maximum reserve requirement applicable with respect to Eurocurrency
liabilities (as that term is defined in Regulation D), whether or not any Lender
has any such
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Eurocurrency liabilities subject to such reserve requirement at that time. The
Eurodollar Basis for any Eurodollar Advance shall be adjusted as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the events specified in Section
8.1, provided that any requirement for notice or lapse of time or both has been
satisfied.
"Excess Cash Flow" shall mean, with respect to the Borrower and its
Consolidated Subsidiaries on a consolidated basis, as of the end of any fiscal
year of the Borrower and based on the audited financial statements required to
be provided under Section 6.2 hereof, the remainder of (a) Operating Cash Flow
for such fiscal year minus (b) the sum of the following items for such fiscal
year multiplied by 1.10 (provided that the use of such multiplication factor
shall not increase the sum of the items listed below for any fiscal year by more
than $10,000,000): (i) Capital Expenditures; (ii) cash income taxes paid; (iii)
Cash Interest Expense; and (iv) scheduled principal repayments on any
Indebtedness for Money Borrowed (including the principal component of any
Capitalized Lease Obligation, but not including any repayments required under
Section 2.8(a)) and permanent, voluntary prepayments of the Loans (accompanied
by permanent reduction in a like amount of the Revolving Loan Commitment, in the
case of such prepayment of the Revolving Loans) hereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as it may
be amended, and any successor act thereto.
"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 or its Affiliate from
three (3) federal funds brokers of recognized standing selected by the
Administrative Agent or its Affiliate.
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"Fee Letters" shall mean, collectively, those certain agreements dated
as of the Agreement Date setting forth the applicable fees to be paid by the
Borrower to the other parties to this Agreement in connection with the Loans and
the Revolving Loan Commitment created hereunder.
"Fixed Charge Coverage Ratio" shall mean on any calculation date, for
the Borrower and its Consolidated Subsidiaries on a consolidated basis, the
ratio of (a) the sum (without double-counting) of (i) Operating Cash Flow for
the most recently-completed four fiscal quarter period, plus (ii) the unused
portion of the Revolving Loan Commitment which is available for borrowing as of
the calculation date without causing a Default hereunder, plus (iii) cash on
hand at the beginning of such fiscal period, plus (iv) the amount of any
increase in net borrowings hereunder for such fiscal period, to (b) Fixed
Charges.
"Fixed Charges" shall mean on any calculation date, for the Borrower and
its Consolidated Subsidiaries on a consolidated basis for the most recently
completed fiscal four-quarter period, the sum of (a) Debt Service, plus (b)
Capital Expenditures, plus (c) cash income taxes paid, plus (d) the amount of
any principal repaid under Section 2.8(a) hereof.
"Fixed Rate Advances" shall mean Eurodollar Advances and CD Rate
Advances.
"GAAP" shall mean 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 with respect to outstanding letters of credit.
"Indebtedness" shall mean, with respect to any Person, and without
duplication, (a) all items, except items of 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,
secured non-recourse
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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 lower of (i) the face amount of such
obligations or (ii) the higher of the fair market value or the book value of the
property or asset subject to such Lien if the obligation secured thereby shall
not have been assumed, (c) 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, and (d) all reimbursement obligations with
respect to outstanding letters of credit.
"Indebtedness for Money Borrowed" shall mean, with respect to any
Person, Indebtedness for money borrowed and Indebtedness represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments, all
Indebtedness upon which interest charges are customarily paid, all Capitalized
Lease Obligations, all reimbursement obligations with respect to outstanding
letters of credit, all Indebtedness issued or assumed as full or partial payment
for property or services (other than trade payables arising in the ordinary
course of business, but only if and so long as such accounts are payable on
customary trade terms), whether or not any such notes, drafts, obligations or
Indebtedness represent Indebtedness for money borrowed, and, without
duplication, Guaranties of any of the foregoing. For purposes of this
definition, interest which is accrued but not paid on the scheduled due date for
such interest shall be deemed Indebtedness for Money Borrowed.
"Indemnitee" shall have the meaning ascribed to it in Section 5.11
hereof.
"Interest Hedge Agreements" shall mean any interest rate swap, cap,
collar, floor, caption or swaption agreements, or any similar arrangements
designed to hedge the risk of variable interest rate volatility or to reduce
interest costs, arising at any time between the Borrower, on the one hand, and
any one or more of the Lenders, or any other Person (other than an Affiliate of
the Borrower), on the other hand, as such agreement or arrangement may be
modified, supplemented and in effect from time to time.
"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 Business Day of the calendar quarter in which such Advance is made,
provided,
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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 Fixed Rate 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 Eurodollar Advances only, such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day, (ii) any applicable Interest Period, with
respect to Eurodollar 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) no Interest Period shall extend beyond the Revolving
Loan Maturity Date with respect to Interest Periods applicable to Revolving
Loans, the Maturity Date with respect to Interest Periods applicable to the Term
Loans, or such earlier date as would interfere with the Borrower's repayment
obligations hereunder. 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, the Eurodollar
Basis, or the CD Rate Basis, as appropriate.
"Investment" shall mean, with respect to any Person, 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. "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.
"IOA" shall mean any Interim Operations Authorization issued to the
Borrower or any of its Subsidiaries by the FCC, as listed on Schedule 5 hereto.
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"Lenders" shall mean the financial institutions 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.
"Leverage Ratio (Senior Debt)" shall mean, as of the end of any fiscal
quarter, the ratio of Senior Debt to Annualized Operating Cash Flow.
"Leverage Ratio (Total Debt)" shall mean, as of the end of any fiscal
quarter, the ratio of Total Debt to Annualized Operating Cash Flow.
"Licenses" shall mean any mobile telephone, cellular telephone,
microwave, paging, personal communications service, or other license,
authorization, certificate of compliance, franchise, approval or permit, other
than any IOA 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 Restricted
Subsidiaries, or by any Person in which the Borrower or any of its Restricted
Subsidiaries has an Investment, all of which are listed (together with IOAs so
designated) as of the Agreement Date on Schedule 5 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 similar 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, any Assignment of
Rights by Partner, the Borrower's Pledge Agreement, the Security Agreement, the
Subsidiary Security Agreement, the Subsidiary Guaranty, the Subsidiary Pledge
Agreement, any Subordination Agreement, all legal opinions issued by counsel to
the Borrower or any of its Subsidiaries, any reliance letters issued with
respect to legal opinions, the Fee Letters, all Requests for Advance, all
Interest Hedge Agreements between the Borrower, on the one hand, and the
Administrative Agent or its Affiliate and the Lenders, or any of them, on the
other hand, including any Interest Hedge Agreements entered into prior to the
Agreement Date, and all other material documents and agreements executed or
delivered in connection with or contemplated by this Agreement.
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"Loans" shall mean, collectively, the Revolving Loans and the Term
Loans, which are evidenced by the Notes.
"Majority Lenders" shall mean (i) at any time that there exists no
Default hereunder, Lenders the sum of whose Revolving Loan Commitment amounts
plus Term Loans outstanding, as applicable, equals or exceeds fifty-one percent
(51%) of the sum of the then existing Revolving Loan Commitment amounts plus the
Term Loans outstanding on the date thereof, or (ii) at any time that there
exists a Default hereunder, Lenders the total of whose Loans outstanding equals
or exceeds fifty-one percent (51%) of the total principal amount of the Loans
then outstanding hereunder.
"Managing Agents" shall mean TD Securities (USA) Inc., Barclays Capital
and J.P. Morgan Securities, Inc., as managing agents for the Lenders hereunder.
"Materially Adverse Effect" shall mean (i) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties, or business prospects of the Borrower and its
Consolidated Subsidiaries taken as a whole, or (ii) a material adverse effect
upon the binding nature, validity, or enforceability of this Agreement, and the
Notes, and the other Loan Documents or upon the ability of the Borrower and its
Consolidated 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, taken as a whole 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 taken as a whole; in either case, whether
resulting from any single act, omission, situation, status, event or
undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.
"Maturity Date" shall mean the earlier of (a) March 31, 2006, or (b)
such earlier date on which the payment of all outstanding Obligations shall be
due (whether by acceleration or otherwise).
"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.
"MTA" shall mean any of the 51 "major trading areas" into which the
United States of America is organized, as set
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forth in the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123d Edition,
at pages 38-39.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Necessary Authorizations" shall mean all approvals and licenses from,
and all filings and registrations with, any governmental or other regulatory
authority, including, without limiting the foregoing, the Licenses and all
grants, approvals, licenses, filings and registrations under the Communications
Act, necessary in order to enable the Borrower or any of its Consolidated
Subsidiaries to own, construct, maintain and operate Cellular Systems and to
make and hold Investments in other Persons who own, construct, maintain, and
operate Cellular Systems.
"Net Income" shall mean, for the Borrower and its Consolidated
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 or securities by the Borrower or any of its
Restricted Subsidiaries, the aggregate amount of cash received for such assets
or securities (including, without limitation, any payments received for
non-competition covenants, consulting or management fees, and any portion of the
amount received evidenced by a buyer promissory note or other evidence of
Indebtedness), net of (i) amounts reserved, if any, for taxes payable with
respect to any such sale (after application of any available losses, credits or
other offsets), (ii) reasonable and customary transaction costs properly
attributable to such transaction and payable by the Borrower or any of its
Restricted Subsidiaries (other than to an Affiliate if not on an arms length
basis) in connection with such sale, lease, transfer or other disposition of
assets or securities, (iii) until actually received by the Borrower or any of
its Restricted Subsidiaries, any portion of the amount received held in escrow
or evidenced by a buyer promissory note, or a non-compete agreement or covenant,
management agreement or consulting agreement, for which compensation is paid
over time, and (iv) any portion of the amount received which is used to
discharge or otherwise satisfy any Seller Subordinated Debt incurred in
connection with the initial acquisition of such assets or securities by the
Borrower or any of its Restricted Subsidiaries. Upon receipt by the Borrower or
any of its Restricted Subsidiaries of amounts
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referred to in item (iii) of the preceding sentence, such amounts shall then be
deemed to be "Net Proceeds."
"Net Proceeds Trust" shall have the meaning ascribed to such term in
Section 2.8(b)(ii) hereof.
"New Mexico Bond" shall have the meaning ascribed to such term in
Section 7.18 hereof.
"Notes" shall mean, collectively, the Revolving Notes and the Term
Notes.
"Obligations" shall mean (i) all payment and performance obligations of
every kind, nature and description of the Borrower, its Restricted Subsidiaries,
and any other obligors to the Lenders, the Administrative Agent, or any of them,
under this Agreement and the other Loan Documents (including any interest, fees
and other charges on the Loans or otherwise under the Loan Documents that would
accrue but for the filing of a bankruptcy action with respect to the Borrower,
any such Restricted Subsidiary, or any such other obligor, whether or not such
claim is allowed in such bankruptcy action), 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, and (ii) the obligation to pay an amount equal to
the amount of any and all damage which the Lenders, the Administrative Agent, or
any of them, may suffer by reason of a breach by the Borrower, any of its
Restricted Subsidiaries, or any other obligor, of any obligation, covenant or
undertaking with respect to this Agreement or any other Loan Document.
"Operating Cash Flow" shall mean, for any fiscal quarter, for the
Borrower and its Consolidated Subsidiaries on a consolidated basis, Net Income
for such quarter (after eliminating any extraordinary gains and losses,
including gains and losses from the sale of assets, and minority interests, and
equity in earnings (losses) of non-consolidated entities), plus, to the extent
deducted or accrued in determining Net Income, the sum of each of the following
for such quarter: (i) depreciation, amortization, and other non-cash charges,
(ii) income tax expense, and (iii) interest expense.
"Payment Date" shall mean the last day of any Interest Period.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PCS System" shall mean a mobile communications system constructed and
operated in a BTA or an MTA (or any successor territorial designations) pursuant
to a License therefor issued by the FCC.
"Performance Certificate" shall mean 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 D.
"Permitted Asset Sale" shall mean the sale by the Borrower or any of its
Restricted Subsidiaries of all or any substantial part of its or their assets as
and to the extent permitted under Section 7.4(a) hereof.
"Permitted Debt" shall mean Indebtedness for Money Borrowed permitted to
be incurred and to remain outstanding by the Borrower and its Restricted
Subsidiaries, pursuant to Section 7.1 hereof.
"Permitted Investments" shall mean Investments described in and
permitted to be made under Section 7.6 hereof.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien in favor of the Administrative Agent (for itself
and for the ratable benefit of the Lenders) given to secure the Obligations;
(b) (i) Liens on real estate for real estate taxes 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 and remain unstayed for a period of thirty (30) days after their
commencement;
(c) Liens of landlords, 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;
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(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) Restrictions on the transfer of assets imposed by any of the
Licenses as now in effect or by the Communications Act, any state laws, and any
regulations thereunder;
(f) Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not incurred in connection with Indebtedness or other extensions of
credit and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the business
of such Person;
(g) Purchase money security interests, which are perfected
automatically by operation of law, only for the period (not to exceed twenty
(20) days) of automatic perfection under the law of the applicable jurisdiction,
and limited to Liens on assets so purchased;
(h) Liens reflected by Uniform Commercial Code financing
statements filed in respect of true leases; and
(i) Any Liens of record which secure Indebtedness in an aggregate
amount outstanding at any time not to exceed, in the aggregate with other
Specified Transactions, the Basket. Permitted Liens described in this subsection
(i) are listed as of the Agreement Date on Schedule 6 attached hereto.
"Person" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, a government or any agency or political subdivision
thereof, or any other entity.
"Plan" shall mean, with respect to any Person, an employee benefit plan
within the meaning of Section 3(3) of ERISA or any other employee benefit plan
maintained for employees of such Person.
"Pro Forma Debt Service" shall mean projected Debt Service for the
Borrower and its Consolidated Subsidiaries on a consolidated basis with respect
to the next succeeding
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fiscal four-quarter period following the calculation date, and after giving
effect to any Interest Hedge Agreements and all Fixed Rate Advances. For
purposes of this definition, (i) it shall be assumed that the Indebtedness for
Money Borrowed with respect to which Debt Service is being calculated shall
remain at the level outstanding on the calculation date for the entire
succeeding four fiscal-quarter period except to the extent of principal
repayments required during such period, and (ii) where interest payments on
Indebtedness for Money Borrowed for the fiscal four-quarter period immediately
succeeding the calculation date are not fixed by way of Interest Hedge
Agreements, Fixed Rate Advances, or otherwise for the entire period, interest
shall be calculated on such Indebtedness for Money Borrowed for periods for
which interest payments are not so fixed at the lower of (y) the Base Rate Basis
on the calculation date, or (z) the Eurodollar Basis which would be in effect on
the calculation date for a Eurodollar Advance having a twelve-month Interest
Period.
"Reportable Event" shall have the meaning set forth in Title IV of
ERISA.
"Request for Advance" shall mean a certificate designated as a "Request
for Advance," signed by an Authorized Signatory requesting an Advance hereunder,
which shall be in substantially the form of Exhibit E 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, and, with respect
to a Fixed Rate Advance, the Interest Period selected by the Borrower, (ii)
state that there shall not exist, on the date of the requested Advance both
before and after giving effect thereto, a Default, and (iii) as to an Advance
which will increase the principal amount of the Loans then outstanding, specify
the use of the proceeds of the Advance being requested.
"Restricted Payment" shall mean (i) any direct or indirect distribution,
dividend or other cash payment by the Borrower or any of its Restricted
Subsidiaries to any Person (other than to the Borrower or any other Restricted
Subsidiary of the Borrower) on account of any general or limited partnership
interest in, or ownership of any shares of capital stock or other securities of,
the Borrower or any of its Restricted Subsidiaries; (ii) any payment in respect
of Subordinated Debt of the Borrower or any Restricted Subsidiary; or (iii) any
payment by the Borrower or any of its Restricted Subsidiaries to a Person other
than the Borrower or any of its Restricted Subsidiaries under any
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management or consulting agreement or other similar agreement or arrangement not
entered into in the ordinary course of business.
"Restricted Purchase" shall mean any payment by the Borrower or any of
its Restricted Subsidiaries on account of the purchase, redemption or other
acquisition or retirement of any general or limited partnership interest in, or
shares of capital stock or other securities of, the Borrower or any of the
Borrower's Restricted Subsidiaries, including, without limitation, any warrants
or other rights or options to acquire shares of capital stock or partnership
interests of the Borrower or any of the Borrower's Restricted Subsidiaries.
"Restricted Subsidiaries" shall mean the Subsidiaries of the Borrower
whose assets and capital stock are pledged as security for the Obligations which
are designated as of the Agreement Date as Restricted Subsidiaries on Schedule 3
attached hereto, each of which shall be a signatory to the Subsidiary Guaranty
and the Subsidiary Security Agreement. Each "Consolidated Subsidiary" is also a
"Restricted Subsidiary" hereunder. "Restricted Subsidiaries" shall also include
Subsidiaries of the Borrower designated by the Borrower as Restricted
Subsidiaries after the Agreement Date, pursuant to the provisions of Section
5.14(a) hereof.
"Revolving Loan Commitment" shall mean the several obligations of
certain of the Lenders to advance the sum of up to $750,000,000 to the Borrower
on or after the Agreement Date, in accordance with their respective Commitment
Ratios and as such amount may be reduced from time to time, all pursuant to the
terms hereof.
"Revolving Loan Maturity Date" shall mean the earlier of (a) December
31, 2005, or (b) such earlier date on which the payment of all outstanding
Obligations shall be due (whether by acceleration or otherwise).
"Revolving Loans" shall mean, collectively, the amount advanced by
certain of the Lenders to the Borrower under the Revolving Loan Commitment, not
to exceed the amount of the Revolving Loan Commitment, and evidenced by the
Revolving Notes.
"Revolving Notes" shall mean those certain revolving promissory notes in
the aggregate original principal amount of $750,000,000, one issued by the
Borrower to each of the Lenders issuing a Revolving Loan Commitment in
accordance with each such Lender's Commitment Ratio for the Revolving Loan
Commitment, each one substantially in the form of
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Exhibit F attached hereto, and any extensions, modifications, renewals or
replacements of or amendments to any of the foregoing.
"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.
"Security Agreement" shall mean that certain Security Agreement dated as
of June 30, 1995 between the Borrower and the Administrative Agent, as modified
and amended by that certain First Amendment to Security Agreement dated May 6,
1996, and as further modified and amended by that certain Second Amendment to
Security Agreement of even date herewith, substantially in the form of Exhibit G
attached hereto.
"Security Documents" shall mean the Borrower's Pledge Agreement, the
Subsidiary Guaranty, the Subsidiary Pledge Agreement, the Security Agreement,
the Subsidiary Security Agreement, the Assignment of Rights by Partner, any
other agreement or instrument providing collateral for the Obligations whether
now or hereafter in existence, and any filings, instruments, agreements, and
documents related thereto or to this Agreement, and providing the Administrative
Agent, for itself and for the ratable benefit of the Lenders, with Collateral
for the Obligations.
"Security Interest" shall mean all Liens in favor of the Administrative
Agent, for itself and for the ratable benefit of the Lenders, created hereunder
or under any of the Security Documents to secure the Obligations.
"Seller Subordinated Debt" shall mean any Indebtedness for Money
Borrowed of the Borrower or any of its Restricted Subsidiaries in favor of any
Person who has sold to the Borrower or any of its Restricted Subsidiaries stock,
partnership interests or assets pertaining to any of the Cellular Systems owned
by the Borrower and its Restricted Subsidiaries, such Indebtedness for Money
Borrowed (i) not to exceed $11,000,000 in principal amount in the aggregate at
any time outstanding, nor to exceed, together with the other Specified
Transactions, the Basket, and (ii) to be subject to a subordination agreement or
otherwise to have terms and conditions acceptable to the Majority Lenders.
"Seller Subordinated Debt" outstanding on the Agreement Date is generally
described on Schedule 7 attached hereto, including, without limitation, a
description of the holder, the principal amount, the payment terms, and the
maturity thereof.
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"Senior Debt" shall mean for the Borrower and its Consolidated
Subsidiaries on a consolidated basis, the sum (without duplication) of their
Indebtedness for Money Borrowed, other than Subordinated Debt.
"Specified Transactions" shall mean each of the following, when entered
into by the Borrower or any of its Restricted Subsidiaries: (i) Seller
Subordinated Debt; (ii) Capitalized Lease Obligations; (iii) Indebtedness in the
form of a sale-leaseback transaction; and (iv) additional secured and unsecured
Indebtedness for Money Borrowed (other than the Obligations).
"Subordinated Debt" shall mean (a) any Seller Subordinated Debt; (b)
$400,000,000 of Subordinated Debt outstanding as of the Agreement Date; and (c)
up to $400,000,000 in net proceeds (excluding fees, underwriter discounts, and
any additions to principal resulting from in-kind payments, or deferrals, of
interest) from the issuance of other subordinated Indebtedness for Money
Borrowed of the Borrower, unsecured with respect to the Borrower and its
Restricted Subsidiaries, subject to the following: (i) the Borrower shall, in a
certificate provided on the date of incurrence of such subordinated Indebtedness
for Money Borrowed, demonstrate its projected pro forma compliance (giving
effect to the incurrence of such subordinated Indebtedness for Money Borrowed)
with Sections 7.8, 7.9, 7.10, and 7.11; (ii) there shall be no repayment of the
principal amount of such subordinated Indebtedness for Money Borrowed including
any sinking fund payments or other principal payments until at least one year
and one day after the Maturity Date; (iii) the final maturity of such
subordinated Indebtedness for Money Borrowed must be at least one year and one
day after the Maturity Date; (iv) such subordinated Indebtedness for Money
Borrowed shall contain no covenants or provisions more restrictive on the
Borrower and its Subsidiaries than those contained herein; and (v) the terms of
subordination shall be (x) as set forth in the Subordination Agreement, (y) as
in effect on the Agreement Date with respect to outstanding Subordinated Debt,
or (z) as otherwise reasonably acceptable to the Majority Lenders. The amount of
Subordinated Debt permitted under clause (c) of the first sentence of this
definition may be increased above $400,000,000 on a dollar-for-dollar basis by
additional equity raised by the Borrower or any of its Restricted Subsidiaries
after the Agreement Date.
"Subordination Agreement" shall mean any Subordination Agreement between
certain holders of Subordinated Debt other
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than Seller Subordinated Debt, on the one hand, and the Administrative Agent, on
the other hand, such Subordination Agreement to be substantially in the form of
Exhibit H attached hereto.
"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 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 of which
more than fifty percent (50%) of the outstanding partnership 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.
"Subsidiaries" as used herein, unless otherwise indicated, shall mean all
Subsidiaries of the Borrower, including Consolidated Subsidiaries, Restricted
Subsidiaries, and Unrestricted Subsidiaries. The Subsidiaries of the Borrower as
of the Agreement Date are set forth on Schedule 3 attached hereto.
"Subsidiary Guaranty" shall mean, collectively, that certain Subsidiary
Guaranty dated as of June 30, 1995 in favor of the Administrative Agent, for
itself and for the ratable benefit of the Lenders, given by each Restricted
Subsidiary of the Borrower, as modified and amended by that certain First
Amendment to Subsidiary Guaranty dated as of May 6, 1996, as further modified
and amended by that certain Second Amendment to Subsidiary Guaranty of even date
herewith, substantially in the form of Exhibit I attached hereto, and any
similar guaranty delivered pursuant to Section 5.13 hereof.
"Subsidiary Pledge Agreement" shall mean, collectively, that certain
Subsidiary Pledge Agreement dated as of June 30, 1995 between each Restricted
Subsidiary of the Borrower having one or more of its own corporate Restricted
Subsidiaries, on the one hand, and the Administrative Agent, on the other hand,
as modified and amended by that certain First Amendment to Subsidiary Pledge
Agreement dated as of May 6, 1996, as further modified and amended by that
certain Second Amendment to Subsidiary Pledge Agreement of even date herewith,
substantially in the form of Exhibit J attached
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hereto, and any similar pledge agreement delivered pursuant to Section 5.13
hereof.
"Subsidiary Security Agreement" shall mean, collectively, that certain
Subsidiary Security Agreement dated as of June 30, 1995, between each of the
Borrower's Restricted Subsidiaries, on the one hand, and the Administrative
Agent, on the other hand, as modified and amended by that certain First
Amendment to Subsidiary Security Agreement dated as of May 6, 1996, as further
modified and amended by that certain Second Amendment to Subsidiary Security
Agreement of even date herewith, substantially in the form of Exhibit K attached
hereto, and any similar security agreement delivered pursuant to Section 5.13
hereof.
"Term Loans" shall mean, collectively, the amounts advanced by certain
of the Lenders to the Borrower in an aggregate amount of $200,000,000, evidenced
by the Term Notes, as set forth on Schedule 2-B attached hereto.
"Term Notes" shall mean those certain term promissory notes in the
aggregate original principal amount of $200,000,000, one issued to each of the
Lenders listed on Schedule 2-B hereto by the Borrower in the amount of each of
such Lender's Term Loan to the Borrower, each one substantially in the form of
Exhibit L attached hereto, and any extensions, modifications, renewals or
replacements of or amendments to any of the foregoing.
"Total Debt" shall mean, for the Borrower and the Consolidated
Subsidiaries of the Borrower, on a consolidated basis as of any calculation
date, the sum (without duplication) of (a) Senior Debt, plus (b) Subordinated
Debt.
"Unrestricted Subsidiaries" shall mean the Subsidiaries of the Borrower
designated as Unrestricted Subsidiaries on Schedule 3 attached hereto, together
with any Subsidiaries of the Borrower created or acquired after the Agreement
Date which are neither Consolidated Subsidiaries nor Restricted Subsidiaries.
"Use of Proceeds Letter" shall mean that certain Use of Proceeds Letter,
substantially in the form of Exhibit M attached hereto, delivered to the
Administrative Agent and the Lenders on the Agreement Date pursuant to Article 3
hereof.
"WPCS" shall mean Western PCS Corporation, a Delaware corporation and an
Unrestricted Subsidiary of the Borrower.
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"WPCS Agreements" shall mean (i) that certain Tax Sharing Agreement,
dated as of the Agreement Date, among the Borrower, WPCS, a Delaware
corporation, and Hutchison Telecommunications PCS (USA) Limited, a British
Virgin Islands corporation, (ii) that certain Services Agreement, dated as of
the Agreement Date, between the Borrower and WPCS, and (iii) that certain Cash
Management Agreement, dated as of the Agreement Date, between the Borrower and
WPCS.
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Each definition of an agreement or instrument in this Article 1 shall
include such agreement or instrument as amended, modified, renewed or restated
from time to time in accordance herewith.
ARTICLE 2
Loans
Section 2.1 The Loans
(a) The Lenders who have issued a Revolving Loan Commitment agree,
severally in accordance with their respective Commitment Ratios and not jointly,
upon the terms and subject to the conditions of this Agreement, to lend and
re-lend to the Borrower, on and after the Agreement Date, amounts requested by
the Borrower which, in the aggregate, do not exceed at any time the amount of
the Revolving Loan Commitment. Advances under the Revolving Loan Commitment may
be repaid and reborrowed as provided in Section 2.2 hereof in order to reborrow
Fixed Rate Advances for new Interest Periods or to otherwise effect changes in
the Interest Rate Bases applicable to the Advances hereunder, provided, however,
that there shall be no increase in the aggregate principal amount outstanding
under the Revolving Loan Commitment at any time after the Conversion Date.
(b) The Lenders who have agreed to make Term Loans agree, severally in
accordance with their respective Term Loan percentages as set forth on Schedule
2-B hereof and not jointly, upon the terms and subject to the conditions of this
Agreement, to continue to lend to the Borrower, on the Agreement Date, an
aggregate amount not to exceed $200,000,000. After the Agreement Date, the Term
Loans will bear interest at the Eurodollar Basis as provided in Section 2.2
hereof.
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(c) The Borrower may also borrow up to $250,000,000 of Additional
Facility Indebtedness, subject to the following conditions: (i) the Additional
Facility Indebtedness shall be acceptable to the Majority Lenders and on terms
and conditions no more favorable to the Borrower than the terms and conditions
of the Revolving Loan Commitment and shall have a final maturity no earlier than
the Maturity Date; (ii) each Lender hereunder shall be offered the opportunity
(but shall not be obligated) to issue a commitment for its pro rata share of
such Additional Facility Indebtedness; and (iii) the Additional Facility
Indebtedness shall constitute Obligations hereunder and shall rank pari passu
with the other Obligations.
Section 2.2 Manner of Borrowing and Disbursement
(a) Choice of Interest Rate, Etc. Any Advance under the Revolving Loan
Commitment shall, at the option of the Borrower, be made as a Base Rate Advance,
or, subject to Article 10 hereof, a CD Rate Advance or a Eurodollar 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 borrow
or to re-borrow any Fixed Rate Advances under the Revolving Loan Commitment, and
all subsequent Advances under the Revolving Loan Commitment shall be made as
Base Rate Advances. Subject to the provisions of Article 10 hereof, any Advance
as a Term Loan shall be made as a Eurodollar Advance; provided, however, that at
such time as there shall have occurred and be continuing a Default hereunder,
subject to the rights of the Lenders under Section 8.2 hereof, subsequent
rollover Advances of the Term Loan shall have a one month Interest Period; and
provided further, that in the event that for any reason Eurodollar Advances are
not available, Advances of the Term Loan shall be made, at the Borrower's
election, as Base Rate Advances or CD Rate Advances. Any notice given to the
Administrative Agent in connection with a requested Advance hereunder shall be
given to the Administrative Agent prior to 11:30 a.m. (Houston time) in order
for such Business Day to count toward the minimum number of Business Days
required.
(b) Base Rate Advances.
(i) Initial 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
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Borrower's failure to confirm any telephonic notice with a Request for
Advance shall not invalidate any notice so given.
(ii) Repayments and Reborrowings. Upon at least one (1), with
respect to items (A) and (C) of this sentence, or three (3), with
respect to item (B) of this sentence, Business Days' irrevocable prior
written notice to the Administrative Agent, the Borrower may repay or
prepay a Base Rate Advance without regard to its Payment Date and (A)
reborrow all or a portion of the principal amount thereof as one or more
Base Rate Advances, (B) reborrow all or a portion of the principal
thereof as one or more Fixed Rate Advances, or (C) not reborrow all or
any portion of such Base Rate Advance at that time. On the date
indicated by the Borrower, such Base Rate Advance shall be so repaid
and, as applicable, reborrowed.
(c) Eurodollar Advances.
(i) Initial Advances. The Borrower shall give the
Administrative Agent in the case of Eurodollar 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. The Administrative Agent, whose
determination shall be conclusive absent manifest error, shall determine
the available Eurodollar Bases and shall notify the Borrower of such
Eurodollar Bases. The Borrower shall promptly notify the Administrative
Agent by telephone or telecopy, and shall immediately confirm any such
telephonic notice in writing, of its selection of a Eurodollar Basis and
Interest Period for such Advance; provided, however, that the Borrower's
failure to confirm any such telephonic notice in writing shall not
invalidate any notice so given.
(ii) Repayments and Reborrowings. At least three (3) Business
Days prior to the Payment Date for a Eurodollar Advance, the Borrower
shall give the Administrative Agent written notice specifying whether
all or a portion of such Eurodollar Advance outstanding on the Payment
Date (A) is to be repaid and then reborrowed in whole or in part as a
Eurodollar Advance, and the Interest Period selected, (B) is to be
repaid and then reborrowed in whole or in part as a Base Rate
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Advance or a CD Rate Advance, and the Interest Period selected, or (C)
is to be repaid and not reborrowed at that time. Upon such Payment Date
such Eurodollar Advance will, subject to the provisions hereof, be so
repaid and, as applicable, reborrowed.
(d) CD Rate Advances.
(i) Initial Advances. The Borrower shall give the
Administrative Agent in the case of CD Rate Advances at least three (3)
Business Days' irrevocable 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 in writing shall not invalidate any notice so given.
The Administrative Agent, whose determination shall be conclusive absent
manifest error, shall determine the available CD Rate Bases and shall
notify the Borrower of such CD Rate Bases. The Borrower shall promptly
notify the Administrative Agent by telecopy or telephone, and shall
immediately confirm any such telephonic notice in writing, of its
selection of a CD Rate Basis and Interest Period for such Advance;
provided, however, that the Borrower's failure to confirm any such
telephonic notice in writing shall not invalidate any notice so given.
(ii) Repayments and Reborrowings. At least three (3) Business
Days prior to the Payment Date for a CD Rate Advance, the Borrower shall
give the Administrative Agent written notice specifying whether all or a
portion of such CD Rate Advance outstanding on the Payment Date (A) is
to be repaid and then reborrowed in whole or in part as a CD Rate
Advance, and the Interest Period selected, (B) is to be repaid and then
reborrowed in whole or in part as a Base Rate Advance or a Eurodollar
Advance, and the Interest Period selected, or (C) is to be repaid and
not reborrowed. Upon such Payment Date such CD Rate Advance will,
subject to the provisions hereof, be so repaid and, as applicable,
reborrowed at that time.
(e) Notification of Lenders. Upon receipt of a Request for Advance, or a
notice from the Borrower with respect to a selection of an Interest Period, or a
notice from the Borrower with respect to any outstanding Advance prior to the
Payment Date for such Advance, the Administrative Agent shall promptly notify
each Lender by telephone or telecopy of the contents thereof and the amount
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<PAGE> 39
of such Lender's portion of the Advance. Each Lender shall, not later than 1:30
p.m. (Houston 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.
(f) Disbursement.
(i) Prior to 3:00 p.m. (Houston time) on the date of an
Advance hereunder, the Administrative Agent shall, subject to the
satisfaction of any applicable conditions set forth in Article 3 hereof,
disburse the amounts made available to it 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.
(ii) Unless the Administrative Agent shall have received
notice from a Lender prior to 2:00 p.m. (Houston 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 for the first three (3) days and thereafter at the Federal Funds
Rate plus one percent (1%).
(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
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<PAGE> 40
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, together with interest
thereon. The failure of any Lender to fund its portion of any Advance
shall not relieve any other Lender of its obligation 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 satisfied all applicable conditions set forth in
Article 3 hereof, a Lender for any reason fails or refuses to fund its
portion of an Advance, then, until such time as such Lender has funded
its portion of such Advance, or all other Lenders have received payment
in full (whether by repayment or prepayment) of the principal and
interest due in respect of such Advance, such non-funding Lender shall
not have the right (i) to vote regarding any issue on which voting is
required or advisable under this Agreement or any other Loan Document
and the amount of the Revolving Loan Commitment and Term Loan, as
applicable, or Loans, as applicable, held by such Lender shall not be
counted as outstanding for purposes of determining "Majority Lenders"
hereunder, and (ii) to receive payments of principal, interest or fees
from the Borrower in respect of its unfunded portion of Advances.
Section 2.3 Interest
(a) On Base Rate Advances. Interest on each Base Rate Advance shall be
computed on the basis of a year of 365/366 days for the actual number of days
elapsed and shall be payable at the Base Rate Basis for such Advance, in arrears
on the applicable Payment Date for the period through the date immediately
preceding such Payment Date. Interest on Base Rate Advances then outstanding
shall also be due and payable on the Revolving Loan Maturity Date with respect
to Revolving Loans and the Maturity Date with respect to the Term Loans.
(b) On Eurodollar Advances. Interest on each Eurodollar 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 Eurodollar Basis for such Advance, in arrears on the
applicable Payment Date for the period through the day immediately preceding
such Payment Date,
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<PAGE> 41
and, in addition, if the Interest Period for a Eurodollar Advance exceeds three
(3) months, interest on such Eurodollar Advance shall also be due and payable in
arrears on every three-month anniversary of the beginning of such Interest
Period. Interest on Eurodollar Advances then outstanding shall also be due and
payable on the Revolving Loan Maturity Date with respect to Revolving Loans and
the Maturity Date with respect to Term Loans.
(c) On CD Rate Advances. Interest on each CD Rate 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 CD Rate Basis for such Advance, in arrears on the
applicable Payment Date for the period through the day immediately preceding
such Payment Date, and, in addition, if the Interest Period for a CD Rate
Advance exceeds ninety (90) days, interest on such CD Rate Advance shall also be
due and payable in arrears on the date of each ninety (90) day anniversary of
the beginning of such Interest Period. Interest on CD Rate Advances then
outstanding shall also be due and payable on the Revolving Loan Maturity Date.
(d) Interest if No Notice of Selection of Interest Rate Basis. With
respect to Revolving Loans, if the Borrower fails to give the Administrative
Agent timely notice of its selection of a Eurodollar Basis or a CD Rate Basis,
or if for any reason a determination of a Eurodollar Basis or a CD Rate Basis
for any Advance is not timely concluded, the Base Rate Basis shall apply to such
Advance. With respect to Term Loans, if the Borrower fails to give the
Administrative Agent timely notice of its selection of an Interest Period for
any rollover Advance, a one month Interest Period shall apply.
(e) Interest Upon Default. Immediately upon the occurrence of an Event
of Default hereunder, the outstanding principal balance of the Loans, together
with accrued and unpaid interest and other unpaid sums, shall bear interest at
the Default Rate. Such interest shall be payable on demand and shall accrue
until the earliest of (a) waiver or cure (to the satisfaction of the Lenders
required under Section 11.12 hereof to waive or cure) of the applicable Event of
Default, or (b) agreement by the Majority Lenders to rescind the charging of
interest at the Default Rate, or (c) payment in full of the Obligations.
(f) Fixed Rate Advances. At no time may the number of outstanding Fixed
Rate Advances exceed ten (10).
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<PAGE> 42
(g) Applicable Margin. (i) With respect to any Advance under the
Revolving Loan Commitment, the Applicable Margin shall be as of any calculation
date the interest rate margin determined by the Administrative Agent based upon
the ratio of (A) Total Debt to (B) Operating Cash Flow for the most recent
fiscal quarter, multiplied by four, all determined for the most recent fiscal
quarter end, effective as of the second Business Day after the financial
statements referred to in Section 6.1 hereof are required to be furnished by the
Borrower to the Administrative Agent and each Lender for the fiscal quarter most
recently ended, expressed as a per annum rate of interest as follows:
<TABLE>
<CAPTION>
Leverage Ratio Base Rate Eurodollar CD Rate
-------------- Advance Advance Advance
Applicable Applicable Applicable
Margin Margin Margin
---------- ---------- ----------
<S> <C> <C> <C>
9.00 or greater 1.375% 2.375% 2.625%
8.00 or greater but less 1.00% 2.00% 2.250%
than 9.00
7.00 or greater but less 0.750% 1.750% 2.00%
than 8.00
6.00 or greater but less 0.500% 1.500% 1.750%
than 7.00
5.00 or greater but less 0.250% 1.250% 1.500%
than 6.00
Less than 5.00 0.00% 1.00% 1.250%
</TABLE>
In the event that the Borrower fails to timely provide (i) the financial
statements referred to above in accordance with the terms of Section 6.1 hereof
or (ii) the Performance Certificate referred to in Section 6.3 hereof, and
without prejudice to any additional rights under Section 8.2 hereof, no downward
adjustment of the Applicable Margin in effect for the preceding quarter shall
occur until the actual delivery of such statements.
(ii) With respect to the Term Loan, the Applicable Margin shall be
2.50%; provided however, that in the event that Eurodollar Advances are not
available, the Applicable Margin for Base Rate Advances of the Term Loan shall
be 1.50% and the Applicable Margin for CD Rate Advances shall be 2.75%.
Section 2.4 Repayment. (a) Commencing March 31, 2001 and at the end of
each calendar quarter thereafter, the
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<PAGE> 43
outstanding principal balance of the Revolving Loans as of the Conversion Date
shall be repaid as set forth below:
<TABLE>
<CAPTION>
Quarters Ending Percentage of Revolving Annual Percentage of
- --------------- Loans Outstanding as of the Revolving Loans Outstanding
Conversion Date to be as of the Conversion Date
Reduced Each Quarter: to be Reduced Each
--------------------------- Four-Quarter Period Ending
December 31:
---------------------------
<S> <C> <C>
March 31, 2001 through and 2.50% 10.00%
including December 31, 2001
March 31, 2002 through and 3.75% 15.00%
including December 31, 2002
March 31, 2003 through and 6.25% 25.00%
including December 31, 2003
March 31, 2004 through and 6.25% 25.00%
including December 31, 2004
March 31, 2005 6.25% 25.00%
through and including
December 31, 2005
</TABLE>
Any unpaid principal and interest of the Revolving Loans and any other
outstanding Obligations under the Revolving Loan Commitment shall be due and
payable in full on the Revolving Loan Maturity Date.
(b) Commencing June 30, 2001 and at the end of each calendar quarter
thereafter, the outstanding principal balance of the Term Loans as of the
opening of business on June 30, 2001 shall be repaid as set forth below:
<TABLE>
<CAPTION>
<S> <C> <C>
Quarters Ending Percentage of Term Annual Percentage of
- --------------- Loans Outstanding as Term Loans Outstanding
of the opening of as of June 30, 2000 to
business on June 30, be Reduced Each Four-
2000 to be Reduced Quarter Period Ending
Each Quarter: March 31:
------------------------- ---------------------------
</TABLE>
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<PAGE> 44
<TABLE>
<CAPTION>
<S> <C> <C>
June 30, 2001 through and .250% 1.0%
including March 31, 2002
June 30, 2002 through and .250% 1.0%
including March 31, 2003
June 30, 2003 through and .250% 1.0%
including March 31, 2004
June 30, 2004 through and .250% 1.0%
including March 31, 2005
June 30, 2005 through and .333% 1.0%*
including December 31, 2005
March 31, 2006 95.0% 95.0%**
</TABLE>
- ----------
* for three quarter period ending December 31, 2005
** for one quarter period ending March 31, 2006
Any unpaid principal and interest of the Term Loans and any other outstanding
Obligations shall be due and payable in full on the Maturity Date.
Section 2.5 Fees. (a) Fees Payable Under the Fee Letters. The Borrower
agrees to pay such fees as are mutually agreed upon and as are described in the
Fee Letters.
(b) Commitment Fee. In addition, the Borrower agrees to pay to the
Administrative Agent, for the benefit of each of the Lenders who have issued a
Revolving Loan Commitment in accordance with their respective Commitment Ratios
under the Revolving Loan Commitment, a commitment fee on the aggregate
unborrowed balance of the Revolving Loan Commitment, for each day from the
Agreement Date until the Conversion Date, at a rate of three-eighths of one
percent (3/8%) per annum, provided, however, that for any period of
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<PAGE> 45
time in which the Applicable Margin for Eurodollar Advances of the Revolving
Loans shall be 1.250% or less, the commitment fee shall be imposed at a rate of
one-quarter of one percent (1/4%). 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 Business Day of each calendar quarter,
commencing March 31, 1998, shall be fully earned when due, and shall be
non-refundable when paid.
Section 2.6 Prepayments
(a) Prepayment of Advances. The principal amount of any Base Rate
Advance may be prepaid in full or in part at any time, without penalty or
premium and without regard to the Payment Date for such Advance, upon not less
than three (3) Business Days' prior written notice to the Administrative Agent
of such prepayment. Fixed Rate Advances may be prepaid prior to the applicable
Payment Date, upon not less than three (3) Business Days' prior written notice
to the Administrative Agent, provided that the Borrower shall reimburse the
Lenders and the Administrative Agent, on demand, 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 2.11 hereof. Partial prepayments shall
be in a principal amount of not less than $5,000,000, and in an integral
multiple of $1,000,000.
(b) Prepayment of Loans. Amounts permanently prepaid on the Revolving
Loans whether by way of refinancing or prepayment of Advances under the
Revolving Loan Commitment accompanied, prior to the Conversion Date, by a
corresponding reduction in the Revolving Loan Commitment shall, unless otherwise
specified herein, be applied to interest and fees then outstanding hereunder on
account of Revolving Loans and under the Revolving Notes, and then to principal.
Amounts permanently prepaid on the Term Loans whether by way of refinancing or
prepayment of Advances under the Term Loans shall, unless otherwise specified
herein, be applied to interest then outstanding hereunder on account of the Term
Loans and under the Term Loan Notes, and then to principal. A notice of
prepayment shall be irrevocable. Upon receipt of any notice of prepayment or
reduction, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender's portion of the
prepayment. Any portion of the Loans which is permanently prepaid may not be
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<PAGE> 46
reborrowed. Prepayments of the Revolving Loans made after the Conversion Date
shall be applied to the repayment schedule set forth in Section 2.4(a) hereof in
inverse order of maturity. Prepayments of the Term Loans made after June 30,
2001 shall be applied to the repayment schedule set forth in Section 2.4(b)
hereof in inverse order of maturity.
Section 2.7 Borrower's Optional Cancellation of the Revolving Loan
Commitment. The Borrower shall have the right, on three (3) Business Days'
irrevocable notice to the Administrative Agent, to cancel all or a portion of
the Revolving Loan Commitment, on a pro rata basis among the Lenders, provided
that (i) any such cancellation shall be made in a principal amount of not less
than $5,000,000, and in an integral multiple of $1,000,000; (ii) as of the
effective date of such notice, the Revolving Loan Commitment shall be
permanently reduced to the amount stated in the Borrower's notice for all
purposes herein; and (iii) payment shall be made on or prior to the effective
date of such notice of any amount necessary to reduce the amount of the
Revolving Loans outstanding under the Revolving Loan Commitment to not more than
the amount of the Revolving Loan Commitment as reduced, together with any amount
required to be paid by the Borrower under Section 2.11 hereof.
Section 2.8 Mandatory Prepayments. In addition to the scheduled
repayments provided for in Section 2.4 hereof, the Borrower shall prepay the
Loans as follows:
(a) Repayment From Excess Cash Flow. On or prior to March 31, 2001, and
on or prior to each March 31st thereafter during the term of this Agreement, the
Borrower shall make an additional prepayment of the outstanding principal amount
of the Loans in an amount equal to fifty percent (50%) of Excess Cash Flow for
the previous fiscal year. Amounts so prepaid shall be applied to the repayment
schedule set forth in Section 2.4(a) and Section 2.4(b) hereof in inverse order
of maturity and shall be allocated pro rata among the Revolving Loans and the
Term Loans. Accrued interest on the principal amount of the Loans being prepaid
pursuant to this Section 2.8(a) to the date of such prepayment will be paid by
the Borrower concurrently with such principal prepayment.
(b) From Permitted Asset Sales. Net Proceeds from any Permitted Asset
Sale of one or more Core Properties shall be applied, on the Business Day of
receipt thereof by the Borrower or the affected Restricted Subsidiary, as
follows:
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<PAGE> 47
(i) Except as otherwise permitted in Section 2.8(b)(ii) hereof,
to permanently prepay the outstanding principal amount of the Loans in
order of maturity and shall be allocated pro rata between the Revolving
Loans and the Term Loans, provided that, prior to the Conversion Date,
as otherwise permitted hereunder, such amounts prepaid with Net Proceeds
and allocated to Revolving Loans may be reborrowed by the Borrower in an
amount not to exceed, in the aggregate, the amount of the Revolving Loan
Commitment; or
(ii) At the Borrower's election, so long as no Default then
exists or would be caused thereby, by the Borrower or any Restricted
Subsidiary to purchase one or more Allowable Wireless Systems, the
aggregate purchase price of which does not exceed such Net Proceeds, or
the sum of such Net Proceeds plus Advances otherwise available for
Acquisitions hereunder plus other funds available to the Borrower, so
long as the Borrower shall have (i) entered into a definitive contract
for purchase within twelve (12) months from the date of such Permitted
Asset Sale, and (ii) concluded such purchase within eighteen (18) months
from the date of such Permitted Asset Sale. In the event the Borrower
elects to exercise its right under this Section 2.8(b)(ii), the Borrower
shall so notify the Administrative Agent not less than five (5) Business
Days prior to the proposed date of the closing of the Permitted Asset
Sale and shall, upon its or any Restricted Subsidiary's receipt of any
Net Proceeds with respect to such Permitted Asset Sale, remit such Net
Proceeds to the Administrative Agent to reduce (prior to the Conversion
Date) the outstanding principal balance of the Revolving Loans (but not
the Term Loans nor the amount of the Revolving Loan Commitment).
Subsequent to the Conversion Date, any such amount shall be held in
trust in an interest-bearing account with the Administrative Agent or an
Affiliate thereof (the "Net Proceeds Trust") for the benefit of the
Borrower, to be applied to the ultimate purchase of the Allowable
Wireless System or Systems, as hereinafter provided. Amounts in any Net
Proceeds Trust shall also be subject to a valid and perfected first
priority Lien in favor of the Administrative Agent (for itself and for
the ratable benefit of the Lenders) to secure the Obligations, pursuant
to a deposit pledge agreement or other security agreement in
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<PAGE> 48
form and substance reasonably satisfactory to the Administrative Agent.
The Borrower shall consummate such purchase of the Allowable Wireless
System or Systems not later than eighteen (18) months after the date of
the applicable Permitted Asset Sale. To the extent that the Borrower
shall not have entered into a definitive contract for purchase within
twelve (12) months after the date of the Permitted Asset Sale, or
consummated any such purchase as of eighteen (18) months after the date
of such Permitted Asset Sale (for whatever reason, including the
occurrence of a Default hereunder), or the purchase price of such
purchase shall be less than the Net Proceeds of the Permitted Asset
Sale, any funds held in the Net Proceeds Trust relating to such sale
shall be applied in the manner set forth in Section 2.8(b)(i) hereof.
Section 2.9 Notes; Loan Accounts
(a) The Loans shall be repayable in accordance with the terms and
provisions set forth herein, and shall be evidenced by the Notes. One Term Note
shall be issued by the Borrower and payable to the order of each Lender listed
on Schedule 2-B hereof, and one Revolving Note shall be issued by the Borrower
and payable to the order of each Lender issuing a Revolving Loan Commitment. The
Notes shall be issued by the Borrower to the Lenders and shall be duly executed
and delivered by one or more Authorized Signatories.
(b) Each Lender may open and maintain on its books in the name of the
Borrower a loan account with respect to such Lender's 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 and
accrued interest thereon and shall credit such loan account for each payment on
account of principal of or interest on its Loan. The records of a Lender with
respect to the loan account maintained by it shall be prima facie evidence 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
the Loans.
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<PAGE> 49
Section 2.10 Manner of Payment
(a) Each payment (including any prepayment) by the Borrower on account
of the principal of or interest on the Loans, commitment fees and any other
amount owed to the Lenders, the Administrative Agent or any of them under this
Agreement or the Notes shall be made not later than 2:00 p.m. (Houston 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 2:00 p.m. (Houston time) shall be deemed received on
the next Business Day. Receipt by the Administrative Agent of any payment
hereunder at or prior to 2:00 p.m. (Houston time) on any Business Day shall be
deemed to constitute receipt on such Business Day. In the case of a payment for
the account of a Lender, the Administrative Agent will promptly thereafter (and,
if such amount is received before 2:00 p.m. (Houston time), on the same day)
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.
(b) The Borrower agrees to pay principal, interest, fees and all other
Obligations due hereunder, under the Fee Letters, under the Notes, or under the
other Loan Documents without set-off or counterclaim or any deduction
whatsoever.
(c) Prior to the acceleration of the Loans 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 2.10(c) then due and payable to the Administrative Agent or the Lenders,
or any of them, hereunder or under the Notes; and (iv) to the payment of
principal then due and payable on the Notes.
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<PAGE> 50
(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 2.11 Reimbursement
(a) Whenever any Lender shall sustain or incur any losses or
out-of-pocket expenses in connection with (i) failure by the Borrower to borrow
any Fixed Rate Advance after having given notice of its intention to borrow in
accordance with Section 2.2 hereof (whether by reason of the Borrower's election
not to proceed or the non-fulfillment of any of the conditions set forth in
Article 3), or (ii) prepayment of any Fixed Rate Advance in whole or in part for
any reason, the Borrower agrees to pay to such Lender, upon demand, an amount
sufficient to compensate such Lender for all such losses and reasonable
out-of-pocket expenses. Such Lender's good faith determination of the amount of
such losses or out-of-pocket expenses, as set forth in writing pursuant to
Section 2.11(b) hereof, and accompanied by calculations in reasonable detail
demonstrating the basis for its demand, shall be presumptively correct.
(b) Losses subject to reimbursement hereunder shall be (i) any loss
incurred by any Lender in connection with the re-employment of funds prepaid,
repaid, not borrowed, or paid, as the case may be, and the amount of such loss
shall be the excess, if any, of (1) the interest or other cost to such Lender of
the deposit or other source of funding used to make any such Fixed Rate Advance
for the remainder of its Interest Period, over (2) the interest earned (or to be
earned) by such Lender upon the re-lending or other redeployment of the amount
of such Fixed Rate Advance for the remainder of its putative Interest Period or
(ii) any other expenses incurred by any Lender or any participant of such Lender
permitted hereunder in connection with the re-employment of funds prepaid,
repaid, not borrowed, or paid, as the case may be.
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<PAGE> 51
Section 2.12 Pro Rata Treatment
(a) Advances. Each Advance from the Lenders shall be made pro rata on
the basis of the respective Commitment Ratios of certain of the Lenders with
respect to the Revolving Loan Commitment and on the basis of the Term Loan
percentage as set forth on Schedule 2-B hereof with respect to the Lenders
making Term Loans hereunder.
(b) Payments. Except as provided in Section 2.2(f)(iv) or Article 10
hereof or elsewhere in this Agreement, each payment and prepayment of principal
of the Loans, and each payment of interest on the Loans, shall be made to the
Lenders pro rata on the basis of their respective unpaid principal amounts
outstanding 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 made by it in excess of its
ratable share of the Term Loans or the Revolving Loans, as the case may be, such
Lender shall forthwith purchase from the other Lenders such interests (whether
by purchasing a participation or by assignment) in the applicable 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 each 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 2.12(b) may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
(c) Delayed Permitted Asset Sale Prepayment. In the event proceeds from
a Permitted Asset Sale are used to reduce the outstanding principal balance of
the Revolving Loans (but not the Revolving Loan Commitment) in accordance with
Section 2.8(b)(ii) hereof and the Borrower fails to enter into a definitive
contract for purchase of an Allowable Wireless System or Systems within twelve
(12) months from the date of the Permitted Asset Sale or the Borrower shall not
have consummated any such purchase as of eighteen (18) months after the date of
such Permitted Asset
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<PAGE> 52
Sale (for whatever reason, including a Default hereunder), or the purchase price
of such purchase shall be less than the Net Proceeds of the Permitted Asset
Sale, the proceeds of such Permitted Asset Sale, or applicable portion thereof,
shall be reallocated on the date twelve (12) months or eighteen (18) months
after the Permitted Asset Sale (as applicable) on a pro rata basis in the manner
set forth in Section 2.8(b)(i) hereof as if such proceeds had been used to
permanently reduce the Revolving Loans and the Term Loans upon receipt thereof
by the Borrower.
Section 2.13 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 with any
directive issued or adopted after the date hereof regarding capital adequacy
(whether or not having the force of law) of any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on any Lender's capital as a consequence of its obligations
hereunder with respect to the Loans and the Revolving Loan 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 such Lender shall promptly notify the Borrower of such adoption,
compliance, or change. 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) day after the date of demand 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 conclusive,
absent manifest error.
Section 2.14 Lender Tax forms. On or prior to the first Payment Date
hereunder and on or prior to the first Business Day of each calendar year
thereafter, each Lender
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which is organized in a jurisdiction other than the United States or a political
subdivision thereof shall provide each of the Administrative Agent and the
Borrower with either (a) two (2) properly executed originals of Form 4224 or
Form 1001 (or any successor forms) prescribed by the Internal Revenue Service or
other documents satisfactory to the Borrower and the Administrative Agent, and
properly executed Internal Revenue Service Form W-8 or Form W-9, as the case may
be, 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, or (b)(i) a
certificate executed by such Lender certifying that such Lender is not a "bank"
and that such Lender qualifies for the portfolio interest exemption under
Section 881(c) of the Internal Revenue Code of 1986, as amended, and (ii) two
(2) properly executed originals of Internal Revenue Service Form W-8 (or any
successor form) prescribed certifying such Lender's entitlement to an exemption
from United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note. 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.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Initial Advance. The obligation of
the Lenders to make the initial Advance hereunder is subject to the prior
fulfillment of each of the following conditions:
(a) The Administrative Agent shall have received each of the following
(with sufficient copies for each of the Lenders), in form and substance
satisfactory to the Administrative Agent and each of the Lenders:
(i) the loan certificate of the Borrower, in substantially the
form attached hereto as Exhibit N, including a certificate of incumbency
with respect to
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each Authorized Signatory, together with appropriate attachments which
shall include without limitation, the following items: (A) a copy of the
certificate of incorporation of the Borrower, certified to be true,
complete and correct by the Secretary of State of Washington, and a
true, complete and correct copy of the by-laws of the Borrower, (B)
certificates of good standing for the Borrower issued by the Secretary
of State or similar state official for each state in which the Borrower
is required to qualify or has qualified to do business, (C) a true,
complete and correct copy of the appropriate authorizing resolutions of
the Borrower, authorizing the Borrower to execute, deliver and perform
this Agreement and the other Loan Documents to which it is a party, and
(D) a true, complete and correct copy of any agreement in effect with
respect to the voting rights, ownership interests, or management of the
Borrower;
(ii) duly executed Notes;
(iii) duly executed Second Amendment to Borrower's Pledge
Agreement, together with appropriate stock certificates and undated
stock powers executed in blank;
(iv) duly executed Second Amendment to Security Agreement,
together with evidence of the filing of appropriate UCC-1 financing
statement forms;
(v) duly executed Second Amendment to Subsidiary Security
Agreement, executed and delivered by each Restricted Subsidiary of the
Borrower, together with evidence of the filing of appropriate UCC-l
financing statement forms;
(vi) copies of insurance binders or certificates covering the
assets of the Borrower and its Restricted Subsidiaries, and otherwise
meeting the requirements of Section 5.5 hereof;
(vii) legal opinions of (i) Rubin Baum Levin Constant & Friedman,
general counsel to the Borrower, and (ii) Gurman, Blask & Freedman, FCC
counsel to the Borrower and its Subsidiaries; each as counsel to the
Borrower and its Subsidiaries, addressed to each Lender and the
Administrative Agent, in form and substance
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satisfactory to the Administrative Agent and its special counsel, and
dated as of the Agreement Date;
(viii) duly executed Request for Advance for the initial Advance
of the Loans, which Request for Advance shall include calculations
demonstrating, as of the Agreement Date, the Borrower's compliance with
Section 2.1 and Sections 7.8, 7.9, 7.10, and 7.11 hereof;
(ix) duly executed Use of Proceeds Letter;
(x) duly executed Certificate of Financial Condition for the
Borrower and its Subsidiaries on a consolidated basis, given by the
chief financial officer of the Borrower which shall include a
certification that no event has occurred which could have a Materially
Adverse Effect since December 31, 1996;
(xi) any required FCC consents, Necessary Authorizations
(except as may be referred to in any Schedules hereto), or other
required consents to the closing of this Agreement or to the execution,
delivery and performance of this Agreement and the other Loan Documents;
(xii) duly executed Second Amendment to Subsidiary Pledge
Agreement from each Restricted Subsidiary of the Borrower which has one
or more corporate Restricted Subsidiaries together with appropriate
stock certificates and undated stock powers executed in blank;
(xiii) duly executed Second Amendment to Subsidiary Guaranty
executed and delivered by each Restricted Subsidiary of the Borrower;
(xiv) a loan certificate from each Restricted Subsidiary of the
Borrower, in substantially the form attached hereto as Exhibit O, with
respect to corporations, and Exhibit P, with respect to partnerships,
including a certificate of incumbency with respect to each officer or
partner authorized to execute Loan Documents on behalf of such
Subsidiary, together with appropriate attachments which shall include,
without limitation, the following items, if a corporation, and the
analogous items, if a partnership:
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(A) a copy of the certificate or articles of incorporation of such
Subsidiary, certified to be true, complete and correct by the Secretary
of State from the jurisdiction of incorporation of such Subsidiary, (B)
certificates of good standing for such Subsidiary issued by the
Secretary of State or similar state official for each state in which
such Subsidiary is incorporated or required to qualify to do business,
(C) a true, complete and correct copy of the By-Laws of such Subsidiary,
and (D) a true, complete and correct copy of the resolutions of such
Subsidiary authorizing it to execute, deliver and perform the Loan
Documents to which it is a party;
(xv) duly executed Second Amendment to Assignment of Rights by
Partner from the Borrower, and from each Restricted Subsidiary which is
a general or limited partner of any partnership, together with evidence
of the filing of appropriate UCC-l financing statement forms;
(xvi) termination of the Intercreditor Agreement (as such term
is defined in the Existing Loan Agreement); and
(xvii) 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 shall have received evidence satisfactory
to it that all Necessary Authorizations, including all necessary consents to the
execution, delivery and performance by the Borrower of this Agreement and the
other Loan Documents to which it is a party and by the Restricted Subsidiaries
of the Loan Documents to which they are parties, have been obtained or made, are
in full force and effect and are not subject to any pending or threatened
reversal or cancellation, and the Administrative Agent shall have received a
certificate of an Authorized Signatory so stating.
(c) The Lenders, the Administrative Agent, and Paul, Hastings, Janofsky
& Walker LLP, special counsel to the Administrative Agent, shall receive payment
of all fees and expenses due and payable on the Agreement Date in respect of the
transactions contemplated hereby.
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Section 3.2 Conditions Precedent to Each Advance. The obligation of the
Lenders to make each Advance (including the initial Advance hereunder) 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 and the
Restricted Subsidiaries 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) With respect to Advances which, if funded, would increase the
aggregate principal amount of Loans outstanding hereunder, the Administrative
Agent shall have received a duly executed Request for Advance and in the case of
other Advances, notice as required by Article 2 hereof;
(c) Each of the Administrative Agent and the Lenders shall have received
all such other certificates, reports, statements, opinions of counsel or other
documents as the Administrative Agent or any Lender may reasonably request;
(d) With respect to any Advance relating to any Acquisition, Investment
or the formation of any Restricted Subsidiary which is permitted hereunder, the
Administrative Agent and the Lenders shall have received such documents and
instruments relating to such Acquisition, Investment, or formation of a new
Restricted Subsidiary as are described in Section 5.13 hereof or otherwise
required herein; and
(e) There shall have occurred no event which could have a Materially
Adverse Effect.
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ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby agrees,
represents and warrants 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 jurisdiction of its incorporation, having the shareholders shown on
Schedule 8 attached hereto as its only shareholders of record as of the
Agreement Date who own five percent (5%) or more of the stock of the Borrower.
The Borrower has the corporate power and authority to own its properties and to
carry on its business as now being and hereafter proposed to be conducted. Each
Subsidiary of the Borrower is a corporation or a partnership duly organized,
validly existing and in good standing under the laws of the state of its
incorporation or formation, and has the corporate or partnership power and
authority, as the case may be, to own its properties and to carry on its
business as now being and hereafter proposed 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 makes such qualification
or authorization prudent.
(b) Authorization; Enforceability. The Borrower has the corporate power
and has taken all necessary 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 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
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of creditors' rights generally (insofar as any such law relates to the
bankruptcy, insolvency or similar event of the Borrower), and (iii) enforcement
may be subject to general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and may be
limited by public policies which may affect the enforcement of certain rights or
remedies provided for in this Agreement or the Security Documents.
(c) Subsidiaries; Authorization; Enforceability. The Borrower's
Subsidiaries (including its Unrestricted Subsidiaries) and Investments and its
direct and indirect ownership thereof are set forth as of the Agreement Date on
Schedule 3 attached hereto, and the Borrower has the unrestricted right to vote
the issued and outstanding shares of the corporate Subsidiaries, and the right
to vote its partnership interests in the partnership Subsidiaries in accordance
with the terms of the applicable partnership agreement, shown thereon; such
shares of such corporate 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 authority, as the case may be, 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 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 such Subsidiary), and (iii) enforcement may be subject to general principles
of equity (regardless of whether such enforcement is considered in a proceeding
in equity or at law) and may be limited by public policies which may affect the
enforcement of certain rights or remedies provided for in such Loan Documents.
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(d) Compliance with Other Loan Documents and Contemplated Transactions.
Except as set forth on Schedule 9 hereto, the execution, delivery and
performance, in accordance with their respective terms, by the Borrower of this
Agreement and the Notes, and by the Borrower and its Subsidiaries of each of the
other Loan Documents to which they are respectively party, and the consummation
of the transactions contemplated hereby and thereby, do not and will not (i)
require any consent or approval, governmental or otherwise, not already
obtained, (ii) violate any Applicable Law respecting the Borrower or any
Subsidiary of the Borrower, (iii) conflict with, result in a breach of, or
constitute a default under the certificate or articles of incorporation or
by-laws, or the partnership agreement, as the case may be, as such documents are
amended, of the Borrower or of any Subsidiary of the Borrower, or under any
material indenture, agreement, or other instrument, 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, (iv) conflict with, result in a breach of, or
constitute a default or violation of, the terms and conditions of any of the
material Licenses, or (v) 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 is a holding company for all its Subsidiaries
and the Borrower, together with its Restricted Subsidiaries, is engaged in the
business of owning, operating, and investing in Cellular Systems or otherwise
providing wireless communications or telecommunications services and in related
business activities.
(f) Licenses, Etc. The Licenses and all IOAs, as well as the Licenses
and all IOAs held by Unrestricted Subsidiaries, have been duly authorized by the
grantors thereof 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. Except as set forth on Schedule 10 attached hereto, the
Borrower and its Subsidiaries have secured all material Licenses and Necessary
Authorizations and all such material Licenses and Necessary Authorizations are
in full force and effect. Except as set forth on Schedule 10 attached hereto,
neither any material License nor any material Necessary Authorization is the
subject of any pending or, to the best
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of the Borrower's knowledge, threatened revocation. For purposes of this Section
4.1(f), "Licenses" shall mean and include Licenses of Unrestricted Subsidiaries,
each of which shall be listed as of the Agreement Date on Schedule 5 attached
hereto.
(g) Compliance with Law. The Borrower and its Subsidiaries are in
substantial compliance with all material Applicable Law.
(h) Title to Assets. The Borrower has good, legal and marketable title
to, or a valid leasehold interest in, all of its assets. Each of the Borrower's
Subsidiaries has good, legal and marketable title to, or a valid leasehold
interest in, all of its assets. None of such properties or assets held by the
Borrower or any of its Restricted 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
Restricted Subsidiaries as debtor or which covers or purports to cover any of
the assets of the Borrower or any of its Restricted Subsidiaries is currently
effective and on file in any state or other jurisdiction, and neither the
Borrower nor any of its Restricted 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, revocation, proceeding or
investigation pending against, or, to the best of the Borrower's knowledge,
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 any License or Necessary Authorization, in any court or before any
arbitrator of any kind or before or by any governmental body (including without
limitation the FCC), except as described on Schedule 11 attached hereto as of
the Agreement Date or as subsequently disclosed to the Administrative Agent and
the Lenders pursuant to Section 6.5 hereof; and, except as expressly set forth
on Schedule 11 (or if disclosed pursuant to Section 6.5), no such action, suit,
proceeding or investigation could reasonably be expected to have an adverse
outcome which (i) calls into question the validity of this Agreement or any
other Loan Document, (ii) challenges the continued possession and use of any
License
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granted by the FCC, by the Borrower, any of its Subsidiaries, or any Person in
which the Borrower has, directly or indirectly, an Investment and such challenge
could result in a Default pursuant to Section 8.1(l) or Section 8.1(m) hereof,
or (iii) could have a Materially Adverse Effect.
(j) Taxes. All federal, state and other tax returns (including
information 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) the payment of which the
Borrower or any of its Subsidiaries is diligently contesting in good faith by
appropriate proceedings, (ii) for which adequate reserves have been provided on
the books of the Borrower or the Subsidiary of the Borrower involved, and (iii)
as to which no Lien other than a Permitted Lien has attached and no foreclosure,
distraint, sale or similar proceedings have been commenced. The charges,
accruals and reserves on the books of the Borrower and each of its Subsidiaries
in respect of taxes are, in the judgment of the Borrower, adequate.
(k) Financial Statements. The Borrower has furnished or caused to be
furnished to the Administrative Agent and the Lenders its audited financial
statements on a consolidated basis with its Subsidiaries for the fiscal year
ended December 31, 1996, which, together with other financial statements
furnished to the Administrative Agent and the Lenders subsequent to the
Agreement Date, are complete and correct in all material respects and present
fairly in accordance with GAAP the financial position of the Borrower and its
Subsidiaries on a consolidated basis on and as at such dates and the results of
operations for the periods then ended. Except as provided on Schedule 12
attached hereto, 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 anticipated losses of the
Borrower or any of its Subsidiaries other than those which have been
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disclosed in writing to the Administrative Agent and the Lenders prior to the
Agreement Date and identified as such.
(l) No Adverse Change. Since December 31, 1996, there has occurred no
event which has had or which could have a Materially Adverse Effect.
(m) ERISA. The Borrower and each Subsidiary of the Borrower and each of
their respective Plans are in compliance in all material respects with ERISA and
the Code and neither the Borrower nor any of its Subsidiaries has incurred any
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code. The Borrower, each of its Subsidiaries, and each other
ERISA Affiliate have complied with all requirements of Sections 10001 and 10002
of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law No.
99-272), Section 4980B of the Internal Revenue 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 their respective 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 Subsidiaries has incurred any
material liability to PBGC in connection with any such Plan. The assets of each
such Plan subject to Title IV of ERISA are sufficient to provide the benefits
under such Plan. Such assets are also sufficient to provide all other "benefit
liabilities" (as defined in Section 9313(a) of the Pension Protection Act
included in the Omnibus Budget Reconciliation Act of 1987, Pub. L-100-203),
Section 4001A(16) of ERISA, due under the Plan upon termination. No Reportable
Event 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 in any material amount on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code.
Neither the Borrower nor any of its Subsidiaries is a participant in or is
obligated to make any payment to a Multiemployer Plan. Neither the Borrower nor
any of its Subsidiaries (1) has had either a complete withdrawal or a partial
withdrawal
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under Section 4201 et. seq. of ERISA from a Multiemployer Plan which had
"unfunded vested benefits" within the meaning of Section 4211 of ERISA or (2)
has ever received a notice and demand from the plan sponsor of a Multiemployer
Plan under Section 4219(b)(1) of ERISA.
(n) Compliance with Regulations G, T, U, and X. Neither the Borrower nor
any Subsidiary of the Borrower is engaged principally in or has as one of its
important activities the business of purchasing or carrying, or extending credit
for the purpose of purchasing or carrying, any margin stock within the meaning
of Regulations G, T, U, and X of the Board of Governors of the Federal Reserve
System; nor will any proceeds of the Loans be used for such purpose.
(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 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. Neither the Borrower nor any of its Subsidiaries is required to
obtain any consent, approval, authorization, permit or license which has not
already been obtained from, or effect any filing or registration which has not
already been effected with, any federal, state or local regulatory authority in
connection with the performance, in accordance with their respective terms, of
this Agreement or any other Loan Document.
(q) Absence of Default, Etc. The Borrower and its Subsidiaries are in
compliance in all respects with all of the provisions of their respective
certificates or articles of incorporation and by-laws, or their partnership
agreements, as the case may be, and no event has occurred or
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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, or with the passage of time
or giving of notice or both would constitute, (i) an Event of Default or (ii) a
material default by the Borrower or any of its Subsidiaries under any material
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, any
License, or any judgment, decree or order in the amount of $1,000,000 or more to
which the Borrower or any of its Subsidiaries is a party or by which the
Borrower or any of its Subsidiaries or any of their respective properties may be
bound or affected. Neither the Borrower nor any of its Subsidiaries is a party
to or bound by any contract or agreement continuing after the Agreement Date, or
bound by any Applicable Law, that could have a Materially Adverse Effect or
result in the loss of any License issued by the FCC.
(r) Accuracy and Completeness of Information. All information, reports,
prospectuses and other papers and data relating to the Borrower or any of its
Subsidiaries and furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or the 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. No fact or situation is currently known to the
Borrower which has had or could have a Materially Adverse Effect other than any
fact or situation known to and affecting the cellular telephone or
telecommunications industry generally.
(s) Agreements with Affiliates and Management Agreements. Except as set
forth on Schedule 13 attached hereto, neither the Borrower nor any of its
Subsidiaries has (i) to the best of its knowledge, any written agreements or
binding arrangements of any kind with any Affiliate or (ii) any material
management or consulting agreements of any kind, not entered into in the
ordinary course of business.
(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 the Borrower and each of its Subsidiaries have paid all minimum
and overtime wages required by law to be paid to their respective employees.
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(u) Priority. The Security Interest is a valid and perfected first
priority security interest in the Collateral in favor of the Administrative
Agent, for itself and for the ratable benefit of the Lenders, securing, in
accordance with the terms of the Security Documents, the outstanding
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 outstanding 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, (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 Restricted Subsidiaries, as the case may be), and (iii)
enforcement may be subject to general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law) and
may be limited by public policies which may affect the enforcement of certain
rights or remedies provided for in such Loan Documents.
(v) Indebtedness. Except as permitted pursuant to Section 7.1 hereof,
neither the Borrower nor any of its Restricted Subsidiaries has outstanding, as
of the Agreement Date, and after giving effect to the initial Advance hereunder
on the Agreement Date, any Indebtedness for Money Borrowed.
(w) Investments. All Investments of the Borrower and its Subsidiaries
are shown as of the Agreement Date on Schedule 3 attached hereto.
(x) Real Estate. Other than as listed and described on Schedule 14
attached hereto, (i) neither the Borrower nor any of its Restricted Subsidiaries
owns any real property, and (ii) no single parcel of such real estate has a fair
market value on the Agreement Date in excess of $500,000.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents 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
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to the extent expressly applicable only to the Agreement Date or previously
fulfilled in accordance with the terms hereof. All representations and
warranties made under this Agreement 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
Borrower shall have the right to borrow hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and unless the Majority 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 Restricted Subsidiaries to:
(a) preserve and maintain its existence, rights, franchises, licenses
and privileges in the state of its incorporation and in each other state in
which it operates a material part of its business, including, without
limitation, the Licenses, all IOAs (in accordance with their respective terms)
and all other Necessary Authorizations (other than any such the loss of which
would not be materially disadvantageous to (i) the Lenders or (ii) the Borrower
and its Subsidiaries, taken as a whole); 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 makes such qualification or authorization prudent.
Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
and will cause each of its Restricted Subsidiaries to, (a) engage in the
business of owning, operating and investing in Cellular Systems or otherwise
providing wireless communication or telecommunication services and in related
business activities, and (b) substantially comply with the requirements of all
material Applicable Law.
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Section 5.3 Maintenance of Properties. The Borrower will, and will cause
each of its Restricted 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), and from time to time make or
cause to be made all needed and appropriate repairs, renewals, replacements,
additions, betterments and improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The Borrower will,
and will cause each of its Subsidiaries on a consolidated basis to, maintain a
system of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made in
accordance with GAAP and reflecting all transactions required to be reflected by
GAAP and keep accurate and complete records of their respective properties and
assets. The Borrower and its Subsidiaries will maintain a fiscal year ending on
December 31.
Section 5.5 Insurance. The Borrower will, and will cause each of its
Restricted Subsidiaries to:
(a) Maintain insurance including, but not limited to, business
interruption coverage and public liability coverage insurance from responsible
companies in such amounts and against such risks to the Borrower and each of its
Restricted Subsidiaries as is prudent and satisfactory to the Administrative
Agent (including, without limitation, larceny, embezzlement, employee fidelity,
and other criminal misappropriation insurance).
(b) Keep their respective assets insured by responsible companies on
terms and in a manner reasonably acceptable to the Administrative Agent against
loss or damage by fire, theft, burglary, pilferage, loss in transit, explosions
and hazards insured against by extended coverage, in amounts which are prudent
for the cellular telephone industry and other wireless or telecommunications
service industry, in accordance with industry standards, and satisfactory to the
Administrative Agent, all premiums thereon to be paid by the Borrower and its
Restricted Subsidiaries.
(c) Require that each insurance policy for the Borrower and its
Restricted Subsidiaries provide for at least thirty (30) days' prior written
notice to the
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Administrative Agent of any termination of or proposed cancellation or
nonrenewal of such policy, or material reduction in coverage, and name the
Administrative Agent (for itself and for the ratable benefit of the Lenders) as
additional named loss payee to the extent of the Obligations and additional
named insured.
(d) Subject to subsection (e), below, proceeds of insurance for the
Borrower and its Restricted Subsidiaries paid to the Administrative Agent shall
be applied to the payment or prepayment of the Obligations as provided under
Section 2.10(c) or Section 8.3 hereof, as applicable. Any balance thereof
remaining after payment in full of the Obligations shall be paid to the Borrower
or as otherwise required by law.
(e) If the Borrower or any one or more of its Restricted Subsidiaries
shall be entitled to receive proceeds from any policy for insurance less than
the lesser of $10,000,000 or ten percent (10%) of the gross revenues of the
Borrower and its Restricted Subsidiaries for the prior fiscal year, then the
Borrower or any one or more of its Restricted Subsidiaries shall have the right
to elect either to use such proceeds to repair or rebuild the affected Cellular
System or to remit such proceeds to the Administrative Agent as provided under
Section 5.5(d) hereof. In the event such insurance proceeds exceed such
threshold, the Administrative Agent shall hold such proceeds pending its receipt
from the Borrower of a plan for the use of such proceeds and the approval of
such plan by the Majority Lenders.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will
cause each of its Restricted Subsidiaries to, pay and discharge all taxes,
including, without limitation, withholding taxes, assessments and governmental
charges or levies required to be paid by them or imposed upon them or their
income or profits or upon any properties belonging to them, prior to the date on
which penalties attach thereto, and all lawful claims for labor, materials and
supplies which, if unpaid, might become a Lien or charge upon any of their
properties; except that no such tax, assessment, charge, levy or claim need be
paid which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
appropriate books, but only so long as such tax, assessment, charge, levy or
claim does not become a Lien or charge other than a Permitted Lien and no
foreclosure, distraint, sale or
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similar proceedings shall have been commenced. The Borrower will, and will cause
each of its Restricted Subsidiaries to, timely file all information returns
required by federal, state or local tax authorities.
Section 5.7 Visits and Inspections. The Borrower will, and will cause
each of its Restricted Subsidiaries to, permit representatives of the
Administrative Agent and any of the Lenders, upon reasonable notice to the
Borrower or such Restricted Subsidiary and during normal business hours (i)
visit and inspect the properties of the Borrower or such Restricted Subsidiary,
(ii) inspect and make extracts from and copies of their respective books and
records, and (iii) discuss with their respective principal officers their
respective businesses, assets, liabilities, financial positions, results of
operations and business prospects. The Borrower and each of its Restricted
Subsidiaries will also permit representatives of the Administrative Agent and
any of the Lenders to discuss with their respective auditors their respective
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
Section 5.8 Payment of Indebtedness; Loans. Subject to any provisions
regarding subordination herein or as set forth in any other Loan Document, the
Borrower will, and will cause each of its Restricted Subsidiaries to, pay any
and all of their respective Indebtedness when and as it becomes due, other than
amounts diligently disputed in good faith and for which adequate reserves have
been set aside in accordance with GAAP.
Section 5.9 Use of Proceeds. The Borrower will use the aggregate
proceeds of all Advances (i) to finance Permitted Investments, (ii) to fund
Capital Expenditures, (iii) to (directly or indirectly through Restricted
Subsidiaries) acquire Allowable Wireless Systems as permitted hereunder, and
(iv) for working capital and other general corporate purposes. No proceeds of
Advances hereunder shall be used for the purchase or carrying or the extension
of credit for the purpose of purchasing or carrying any margin stock within the
meaning of Regulations G, T, U, and X of the Board of Governors of the Federal
Reserve System.
Section 5.10 Real Estate. The Borrower will, and will cause its
Restricted Subsidiaries to, grant a mortgage securing the Obligations to the
Administrative Agent, for
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itself and for the ratable benefit of the Lenders, in form and substance
satisfactory to the Administrative Agent, covering each parcel of real estate
having a fair market value, exclusive of equipment, in excess of $500,000
acquired by the Borrower or any of its Restricted Subsidiaries after the
Agreement Date. The Borrower will, and will cause its Restricted Subsidiaries
to, deliver to the Administrative Agent all documentation, including opinions of
counsel and policies of title insurance, which in the opinion of the
Administrative Agent is appropriate with each such grant, including any Phase I
environmental audit requested by the Administrative Agent or any Lender.
Section 5.11 Indemnity. The Borrower, for itself and on behalf of each
of its Restricted Subsidiaries agrees, jointly and severally, to indemnify and
hold harmless each Lender and the Administrative Agent and each of their
respective affiliates, employees, representatives, officers, trustees and
directors (any of the foregoing shall be an "Indemnitee") from and against any
and all claims, liabilities, losses, damages, actions, reasonable attorneys'
fees and expenses (as such fees and expenses are incurred) and demands by any
party, including the costs of investigating and defending such claims, whether
or not the Borrower, any Restricted Subsidiary of the Borrower, or the Person
seeking indemnification is the prevailing party (a) resulting from any breach or
alleged breach by the Borrower or any Restricted Subsidiary of the Borrower of
any representation, warranty, or covenant made hereunder or under any other Loan
Document; (b) arising out of or in connection with (i) the Revolving Loan
Commitment, the Loans or otherwise under this Agreement or any other Loan
Document (including the taking of Collateral for the Obligations), including the
use of the proceeds of Loans hereunder in any fashion by the Borrower or any of
its Restricted Subsidiaries or the performance of their respective obligations
under the Loan Documents by the Borrower or any of its Restricted 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 Restricted
Subsidiaries, or allegations that any of them has any joint liability with the
Borrower or any of its Restricted Subsidiaries for any reason, or (iii) any
claims against the Lenders or the Administrative Agent, or any of them, by any
shareholder, partner, or other investor in or lender to the Borrower or any
Restricted Subsidiary, by any brokers or finders or investment advisers or
investment bankers retained by the Borrower or by any other third
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party, arising out of the Revolving Loan Commitment, the Loans or otherwise
under this Agreement or any other Loan Document; or (c) in connection with taxes
(other than income taxes), 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, and 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 and the Restricted Subsidiaries
under this Section 5.11 are in addition to, and shall not otherwise limit, any
liabilities which the Borrower or any Restricted Subsidiary might otherwise have
in connection with any warranties or similar obligations of the Borrower or such
Restricted Subsidiary in any other agreement or instrument or for any other
reason.
Section 5.12 Interest Rate Hedging. Within ninety (90) days from the
Agreement Date, and at the end of each fiscal quarter thereafter, the Borrower
shall have entered into one or more Interest Hedge Agreements which result in
the fixing of a limit on the Borrower's interest obligations on an aggregate
principal amount of not less than fifty percent (50%) of the then outstanding
principal amount of the Loans. Such Interest Hedge Agreements shall provide
interest rate protection on terms reasonably acceptable to the Administrative
Agent for an average period of the lesser of three (3) years from the date of
such Interest Hedge Agreement or Agreements or the period remaining until the
Revolving Loan Maturity Date with respect to Interest Rate Hedge Agreements
entered into in connection with the Revolving Loans and the Maturity Date with
respect to Interest Rate Hedge Agreements entered into in connection with the
Term Loans, such terms to include consideration of the creditworthiness of the
other party to the proposed Interest Hedge Agreement. All Obligations of the
Borrower to any of the Lenders pursuant to any Interest Hedge Agreement shall
rank pari passu with all other Obligations.
Section 5.13 Covenants Regarding Formation of Restricted Subsidiaries
and the Making of Investments and Acquisitions. At the time of any Acquisition
permitted hereunder by the Borrower or any Restricted Subsidiary, or the
formation of any new Restricted Subsidiary of the Borrower or any of its
Restricted Subsidiaries (except for Restricted Subsidiaries which are then
inactive and which
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have no assets) which is permitted under this Agreement, the Borrower will, and
will cause its Restricted Subsidiaries, as appropriate, to (a) in the case of
the formation or Acquisition of a new Restricted Subsidiary, provide to the
Administrative Agent an executed Subsidiary Security Agreement for such new
Restricted Subsidiary, in substantially the form of Exhibit K attached hereto,
together with appropriate UCC-1 financing statements, as well as an executed
Subsidiary Guaranty for such new Restricted Subsidiary, in substantially the
form of Exhibit I 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 Restricted Subsidiary, substantially in the form of
Exhibit O or Exhibit P attached hereto, as appropriate, together with
appropriate attachments; (b) in the case of any Acquisition by the Borrower or
any Restricted Subsidiary or the formation of any new Restricted Subsidiary,
pledge to the Administrative Agent all of the stock (or other instruments or
securities evidencing ownership) of such Restricted Subsidiary or Person which
is acquired or formed, beneficially owned by the Borrower or any of the
Borrower's Restricted 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, Subsidiary Pledge Agreement, or a
new Subsidiary Pledge Agreement in substantially the form of Exhibit J 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) in any case, provide all other
documentation, including one or more opinions of counsel satisfactory to the
Administrative Agent which in the opinion of the Administrative Agent is
appropriate with respect to such Acquisition or the formation of such Restricted
Subsidiary. Investments made by the Borrower or any of its Restricted
Subsidiaries after the Agreement Date shall also be treated as additional
Collateral (other than as provided in Section 7.6(d) or Section 7.16)) and shall
be subject to the provisions of appropriate Security Documents. Any document,
agreement or instrument executed or issued pursuant to this Section 5.13 shall
be a "Loan Document" for purposes of this Agreement.
Section 5.14 Designation of Unrestricted Subsidiaries as Restricted
Subsidiaries; Designation of Restricted Subsidiaries as Consolidated
Subsidiaries.
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(a) Unrestricted to Restricted. Upon not less than three (3) Business
Days' prior written notice by the Borrower to the Administrative Agent, any
Unrestricted Subsidiary of the Borrower may be designated as a Restricted
Subsidiary hereunder (whether or not such Subsidiary is also then designated as
a Consolidated Subsidiary), provided that (i) no Default then exists or would be
caused thereby, (ii) any such Subsidiary does not (at the time of such
designation) have outstanding any Indebtedness for Money Borrowed other than
Permitted Debt, or any Liens on its assets or properties other than Permitted
Liens, and (iii) such Subsidiary shall provide to the Administrative Agent an
executed Subsidiary Security Agreement, in substantially the form of Exhibit K
attached hereto, together with appropriate UCC-1 financing statements, an
executed Subsidiary Guaranty in substantially the form of Exhibit I attached
hereto, and a Subsidiary Pledge Agreement (given by itself if appropriate and,
if its stock or other securities are not then Collateral, given by its parent
company), in substantially the form attached hereto, as Exhibit J, together with
appropriate stock certificates and stock powers therefor, as well as an
appropriate loan certificate for such new Restricted Subsidiary, substantially
in the form of Exhibit O or Exhibit P, attached hereto, as appropriate. Such new
Restricted Subsidiary shall also provide all other documentation which in the
opinion of the Administrative Agent is appropriate with respect to the
designation of such Unrestricted Subsidiary as a Restricted Subsidiary,
including legal opinions if advisable, all of which documents shall constitute
Security Documents and Loan Documents for purposes of this Agreement.
(b) Restricted to Consolidated. Upon not less than three (3) Business
Days' prior irrevocable written notice by the Borrower to the Administrative
Agent, any Subsidiary of the Borrower which is or is becoming a Restricted
Subsidiary may be designated as a Consolidated Subsidiary, provided that (i) no
Default then exists or would be caused thereby (unless such designation would
effect a cure of such Default), (ii) the prerequisites for a Restricted
Subsidiary set forth in Section 5.14(a) have been satisfied, and (iii) the
Borrower shall have demonstrated its continued compliance on a pro forma basis
through the Maturity Date with the financial covenants contained in Section 7.8,
7.9, 7.10, 7.11, and 7.15 hereof.
(c) Other. The Borrower may not designate a Restricted Subsidiary as an
Unrestricted Subsidiary, nor may
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the Borrower designate a Consolidated Subsidiary as a Subsidiary which is no
longer a Consolidated Subsidiary.
Section 5.15 Payment of Wages. The Borrower and each of its Restricted
Subsidiaries shall 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.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled), and unless the Majority Lenders, or
such greater number of Lenders as may be expressly provided herein, 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 sixty
(60) days after the last day of each quarter of each fiscal year of the
Borrower, unaudited balance sheets of the Borrower on a consolidated basis with
its Consolidated Subsidiaries, and on a consolidated basis with all of 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 basis with its Consolidated
Subsidiaries, and on a consolidated basis with all of its Subsidiaries, for such
quarter and for the elapsed portion of the year ended with the last day of such
quarter, which shall set forth in comparative form such figures as at the end of
and for such quarter and the appropriate prior period (but only for such quarter
and other periods for which such comparative figures are available) and shall be
certified by the chief financial officer of the Borrower, to be, in his or her
opinion, complete and correct in all material respects and to present fairly, in
accordance with GAAP (except as to the exclusion of certain Subsidiaries which
should be consolidated with the Borrower under GAAP), the financial position of
the Borrower on a consolidated basis with its Consolidated Subsidiaries and on a
consolidated basis with all of its
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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 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 statements of
operations for such fiscal year and, to the extent available, for the previous
two (2) fiscal years, the related audited consolidated statements of changes in
shareholders' equity for such fiscal year and, to the extent available, for the
previous two (2) fiscal years, and related audited consolidated statements of
cash flows of such fiscal year and, to the extent available, for the previous
two (2) fiscal years, which shall be accompanied by an opinion of Arthur
Anderson & Co., or other independent certified public accountants of recognized
national standing reasonably 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
Article 7 hereof.
Section 6.3 Performance Certificates. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2 hereof, the
Performance Certificate:
(a) setting forth as at the end of such quarterly period or fiscal year,
as the case may be, the arithmetical calculations required to establish (i) any
interest rate adjustment, as provided for in Section 2.3(g) hereof, and (ii)
whether or not the Borrower was in compliance with the requirements of Sections
7.8, 7.9, 7.10 and 7.11 hereof;
(b) setting forth on a consolidated basis for the Borrower and its
Consolidated Subsidiaries, for each such fiscal quarter or fiscal year, as the
case may be, (i) the number of Cellular System subscribers at the beginning of
such period, (ii) the number of gross new Cellular System subscribers added and
deactivated Cellular System subscribers lost during such period, and (iii) the
number of Cellular System subscribers at the end of such period;
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(c) stating that, to the best of his or her knowledge, no Default or
Event of Default has occurred as at the end of such quarterly period or year, as
the case may be, or, if a Default or an Event of Default has occurred,
disclosing each such Default or Event of Default and its nature, when it
occurred, whether it is continuing and the steps being taken by the Borrower
with respect to such Default or Event of Default; and
(d) setting forth, as of the end of such fiscal quarter or year, a list
of any IOAs pursuant to which the Borrower or any of its Restricted Subsidiaries
is then providing cellular telephone or other wireless telecommunications
services.
Section 6.4 Copies of Other Reports
(a) Promptly upon receipt thereof, copies of all material reports, if
any, submitted to the Borrower by the Borrower's independent public accountants
regarding the Borrower, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 6.2.
(b) Promptly upon receipt thereof, copies of any material adverse notice
or report regarding any License held by the Borrower or any Restricted
Subsidiary from the FCC.
(c) In connection with any proposed Acquisition by the Borrower or any
Restricted Subsidiary and promptly upon each request, such data, certificates,
reports, statements, opinions of counsel prepared for the Administrative Agent
and the Lenders, or any of them, 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 Restricted
Subsidiaries as the Administrative Agent or any Lender may reasonably request.
(d) Annually, a certificate of insurance indicating that the
requirements of Section 5.5 and Section 5.16 hereof remain satisfied for such
fiscal year.
(e) Annually, and in no event later than January 31 of any year, a copy
of the Borrower's annual financial projections for itself and its Restricted
Subsidiaries for such fiscal year.
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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 ten (10) days after any officer of the Borrower becomes aware of
the occurrence of any of the following events:
(a) the commencement of all material proceedings and investigations by
or before any governmental body and all actions and proceedings in any court or
before any arbitrator against, or to the extent known to the Borrower, in any
other way relating materially adversely to the Borrower or any Restricted
Subsidiary of the Borrower, or any of their respective properties, assets or
businesses or any License;
(b) any material adverse change with respect to the business, assets,
liabilities, financial position, results of operations or business prospects of
the Borrower or any Restricted Subsidiary of the Borrower, other than changes in
the ordinary course of business which have not had and could not have a
Materially Adverse Effect;
(c) any Default or the occurrence or non-occurrence of any event (A)
which constitutes, or which with the passage of time or giving of notice or both
would constitute a material default by the Borrower or any Restricted Subsidiary
of the Borrower under any material agreement other than this Agreement to which
the Borrower or any Restricted Subsidiary of the Borrower is a party or by which
any of their respective properties may be bound, or (B) which could have a
Materially Adverse Effect, giving in each case the details thereof and
specifying the action proposed to be taken with respect thereto;
(d) 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; and
(e) 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
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the representation and warranty in Section 4.1(m) of this
Agreement.
ARTICLE 7
Negative Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow from the Lenders hereunder (whether or not the
conditions to borrowing have been or can be fulfilled), and unless the Majority
Lenders, or such greater number of Lenders as may be expressly provided herein,
shall otherwise consent in writing:
Section 7.1 Indebtedness of the Borrower and its Restricted Subsidiaries
The Borrower shall not, and shall cause each of its Restricted
Subsidiaries not 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) Current accounts payable, accrued expenses and customer advance
payments incurred in the ordinary course of business;
(c) Specified Transactions (including Seller Subordinated Debt) in the
aggregate not to exceed the Basket;
(d) Subordinated Debt (other than Seller Subordinated Debt);
(e) Indebtedness secured by Permitted Liens (other than those described
in items (a) and (i) of the definition of Permitted Liens);
(f) Obligations under Interest Hedge Agreements;
(g) Indebtedness of the Borrower or any of its Restricted Subsidiaries
to the Borrower or any other Restricted Subsidiary, and Indebtedness expressly
permitted under Section 7.5 hereof; and
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(h) Indebtedness representing extensions, renewals, refinancings or
replacements (but not increases in principal amounts) of the foregoing.
Section 7.2 Limitation on Liens. The Borrower shall not, and shall
cause each of its Restricted Subsidiaries not 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
cause each of its Restricted Subsidiaries not to, except in connection with a
transaction otherwise permitted hereunder, enter into any amendment of, or agree
to or accept or consent to any waiver of any of the material provisions of its
articles or certificate of incorporation or partnership agreement, as
appropriate.
Section 7.4 Liquidation, Merger, Disposition of Assets
(a) Disposition of Assets. The Borrower shall not, and shall cause each
of its Restricted Subsidiaries not to, at any time sell, lease, abandon, or
otherwise dispose of any of its or their Core Properties (other than swaps of
Cellular Systems permitted under Section 7.6(b)(i) hereof) unless (i) Net
Proceeds therefrom are applied as provided in Section 2.8(b) hereof, (ii)
Section 7.6(g) hereof is complied with (if applicable), and (iii) no Default
then exists or would be caused thereby (unless such sale, lease, abandonment or
other disposal would cure any such Default). At the time of any such Permitted
Asset Sale hereunder, the Borrower shall provide the Administrative Agent and
the Lenders with projections assuming the consummation of the Permitted Asset
Sale and demonstrating pro forma compliance with Sections 7.8, 7.9, 7.10, 7.11,
and 7.15 hereof for the remaining term of this Agreement.
(b) Liquidation or Merger. The Borrower shall not, and shall cause each
of its Restricted Subsidiaries not to, at any time liquidate or dissolve itself
(or suffer any liquidation or dissolution) or otherwise wind up, or enter into
any merger, provided that if no Default then exists or would be caused thereby,
the following such transactions are permitted: (i) a merger among the Borrower
and one or more Consolidated Subsidiaries, provided the Borrower is the
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surviving corporation; (ii) a merger between or among two or more Consolidated
Subsidiaries; (iii) an Acquisition permitted hereunder effected by a merger in
which the Borrower or a Consolidated Subsidiary of the Borrower is the surviving
Person; (iv) a liquidation or dissolution of one or more Consolidated
Subsidiaries into its or their parent entity (provided the Borrower or one of
its Consolidated Subsidiaries is such parent entity); and (v) a merger between
or among two or more Restricted Subsidiaries which are not Consolidated
Subsidiaries.
Section 7.5 Limitation on Guaranties. The Borrower shall not, and shall
cause each of its Restricted Subsidiaries not 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, or (b)
obligations under agreements of the Borrower or any of its Restricted
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 Restricted Subsidiaries, or (c) as may be
contained in any Loan Document including, without limitation, the Subsidiary
Guaranty, or (d) a Guaranty of any obligation of any employee of the Borrower or
any of its Restricted Subsidiaries, provided that the aggregate amount
guaranteed under all such Guaranties shall not exceed $1,000,000 at any time, or
(e) a subordinated and unsecured Guaranty by the Borrower of obligations of its
Restricted Subsidiaries with respect to Seller Subordinated Debt, or (f)
guaranties in existence on the Agreement Date, as described on Schedule 15
attached hereto, of obligations of certain Unrestricted Subsidiaries under
certain cell site, retail outlet, and other real estate leases, provided that
(i) the maximum amount of rent and other obligations so guaranteed shall not
exceed $3,500,000, and (ii) no such lease shall have its term extended without
termination of the related Borrower or Restricted Subsidiary Guaranty.
Section 7.6 Investments and Acquisitions. The Borrower shall not, and
shall cause each of its Restricted Subsidiaries not to, make any loan or
advance, or make any Investment or otherwise acquire for consideration evidences
of Indebtedness, capital stock or other securities of any Person, or make any
Acquisition, except that the Borrower may make Investments in its own
Consolidated Subsidiaries,
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and that, so long as no Default then exists or would be caused thereby:
(a) Cash Equivalents. The Borrower and its Restricted Subsidiaries may,
directly or through a brokerage account (i) purchase marketable, direct
obligations of the United States of America, its agencies and instrumentalities
maturing within three hundred sixty-five (365) days of the date of purchase,
(ii) purchase commercial paper issued by corporations, each of which shall have
a combined net worth of at least $100 million and each of which conducts a
substantial part of its business in the United States of America, maturing
within two hundred seventy (270) days from the date of the original issue
thereof, and rated "P-2" or better by Moody's Investors Service, Inc. or "A-2"
or better by Standard and Poor's Ratings Group, and (iii) purchase repurchase
agreements, bankers' acceptances, and certificates of deposit maturing within
three hundred sixty-five (365) days of the date of purchase which are issued by,
or time deposits maintained with, a United States national bank the deposits of
which are insured by the Federal Deposit Insurance Corporation and having
capital, surplus and undivided profits totaling more than $100 million and rated
"A" or better by Moody's Investors Service, Inc. or Standard and Poor's Ratings
Group;
(b) Acquisitions. (i) Subject to compliance with subsection (ii) of this
Section 7.6(b), the Borrower and its Restricted Subsidiaries may make
Acquisitions as follows:
(A) Acquisitions of Allowable Wireless Systems as permitted by
Section 2.8(b)(ii) hereof;
(B) Acquisitions of Allowable Wireless Systems, and dispositions
of Cellular Systems, in connection with swap transactions involving the
trade of its Cellular Systems for those of other cellular operators
(whether or not such swaps involve boot);
(C) Acquisitions of Allowable Wireless Systems listed on
Schedule 1 hereof;
(D) Acquisitions of Cellular Systems other than the Allowable
Wireless Systems subject to the approval of and upon terms and
conditions satisfactory to the Majority Lenders; and
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(E) Acquisitions by the Borrower, solely through the issuance of
its common stock, of additional Subsidiaries which are engaged in the
business described in Section 5.2(a) hereof.
(ii) No Acquisitions otherwise permitted under Section 7.6(b) hereof may
be consummated unless:
(A) the Borrower shall have demonstrated through revised
projections assuming the consummation of the Acquisition its pro forma
compliance with Sections 7.8, 7.9, 7.10, and 7.11 hereof, after giving
effect to such Acquisition and shall have certified to the
Administrative Agent and the Lenders that such Acquisition shall not
have a Materially Adverse Effect;
(B) with respect to any Acquisition of more than $10,000,000,
the Borrower shall provide the Administrative Agent and the Lenders with
notice, not less than thirty (30) days prior to the proposed closing
thereof, and with copies of all material information pertaining to such
Acquisition, and a certificate signed by the chief financial officer of
the Borrower, certifying the Borrower's pro forma compliance with the
covenants listed in item (A) of this subsection, together with any
calculations necessary to demonstrate such compliance; and
(C) Section 5.13 of this Agreement has been complied with.
(c) Other Investments.
(i) The Borrower and its Restricted Subsidiaries may (in addition to any
Investments or Acquisitions otherwise permitted under this Section 7.6) make
Investments in Unrestricted Subsidiaries engaged primarily in the business of
wireless communications, in an amount not to exceed, in the aggregate, the sum
of (a) $150,000,000, plus (b) Available Equity, plus (c) amounts received on or
after the Agreement Date from any Unrestricted Subsidiary as a return of prior
Investment.
(ii) No Investment otherwise permitted under this Section 7.6(c) hereof
may be consummated unless:
(A) the Borrower shall have demonstrated through revised
projections assuming the consummation of the
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Investment its pro forma compliance with Sections 7.8, 7.9, 7.10 and
7.11 hereof, after giving effect to the Advance of the Loans used for
such Investment, and shall have certified to the Administrative Agent
and the Lenders that such Investment shall not have a Materially Adverse
Effect; and
(B) with respect to any Investment of more than $10,000,000, the
Borrower shall provide the Administrative Agent and the Lenders with
notice, not less than ten (10) days prior to the proposed closing of the
Investment, and with copies of all material information pertaining to
such Investment, and a certificate signed by the chief financial officer
of the Borrower certifying the Borrower's pro forma compliance with the
covenants listed in item (A) of this subsection, together with any
calculations necessary to demonstrate such compliance.
(d) Employee Loans. The Borrower and its Restricted Subsidiaries may
make loans to employees, (i) in connection with stock option plans, provided (x)
such loans do not involve cash payments by the Borrower and (y) the Borrower and
its Restricted Subsidiaries incur no obligations at any time to repurchase the
stock so purchased, and (ii) for all other purposes in an amount not to exceed,
in the aggregate outstanding at any time, $1,000,000.
(e) Seller Paper. The Borrower and its Restricted Subsidiaries, in
connection with its receipt of Net Proceeds, may receive and hold one or more
promissory notes or other evidences of Indebtedness for Money Borrowed, provided
that (i) such promissory notes or other evidences of Indebtedness for Money
Borrowed shall be endorsed to the order of the Administrative Agent as
additional Collateral for the Obligations, and (ii) at no time shall the
aggregate amount of such outstanding Indebtedness held by the Borrower and its
Restricted Subsidiaries exceed $50,000,000.
(f) Industrial Revenue Bond. The Borrower or one of its Consolidated
Subsidiaries may make an Investment, in an amount not to exceed $17,500,000, in
one or more industrial revenue development bonds issued by the City of
Albuquerque, New Mexico, for the sole purpose of financing a new call center for
the Borrower and its Subsidiaries, provided that such industrial revenue bonds
as may be purchased by the Borrower or any Consolidated Subsidiary has been or
shall be pledged as additional Collateral for the Obligations.
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Section 7.7 Restricted Payments and Purchases. The Borrower shall not,
and shall cause each of its Restricted Subsidiaries not to, directly or
indirectly declare or make any Restricted Payment or Restricted Purchase, except
that so long as no Default hereunder then exists or would be caused thereby:
(a) On March 31, 2001 and on each March 31st thereafter, the Borrower
may pay dividends or make other distributions to its shareholders, provided that
(i) the Borrower shall have prepaid the Loans from the Borrower's Excess Cash
Flow for the preceding fiscal year in the amount required by Section 2.8(a)
hereof, (ii) the aggregate amount of such dividends and distributions shall not
exceed, in any year, the amount of the Borrower's Excess Cash Flow for the
preceding fiscal year remaining after payment of the amount required to be
prepaid on the Loans by the Borrower pursuant to Section 2.8(a) hereof, and
(iii) the Borrower shall provide the Lenders with a certificate, signed by the
chief financial officer of the Borrower, demonstrating pro forma compliance with
the terms of this Section 7.7, after giving effect to such dividend payments;
(b) The Borrower may make scheduled payments of interest and principal
on the Seller Subordinated Debt and scheduled payments of interest on its
Subordinated Debt;
(c) Any Restricted Subsidiary of the Borrower which is a partnership may
make payments to its partners which are not Affiliates, as required by the
partnership agreement of such Subsidiary, and any Restricted Subsidiary of the
Borrower which is a corporation may make payments to its shareholders who are
not Affiliates, as required by the articles of incorporation or any shareholders
agreement of such corporate Restricted Subsidiary, provided, however, that the
aggregate amount of all such payments in any fiscal year shall not exceed the
greater of (i) $1,000,000 or (ii) one percent (1%) of the Operating Cash Flow of
the Borrower and its Consolidated Subsidiaries for such fiscal year;
(d) The Borrower and its Restricted Subsidiaries may make Restricted
Payments and Restricted Purchases which are permitted to be made under Section
7.6 hereof;
(e) The Borrower and its Restricted Subsidiaries may make Restricted
Purchases of minority ownership interests in the Borrower and its Restricted
Subsidiaries from Persons who are not Affiliates of the Borrower, provided that
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(i) the aggregate amount of money spent on such Restricted Purchases shall not
exceed $15,000,000 in the aggregate during the term of this Agreement, and (ii)
such minority ownership interests so purchased shall become additional
Collateral for the Obligations pursuant to the terms of one or more of the
Security Documents; and
(f) The Borrower may make payments required to be made under the WPCS
Agreements.
Section 7.8 Ratio of Operating Cash Flow to Cash Interest Expense. The
Borrower shall not at any time permit the ratio as of the end of any fiscal
quarter of (i) its Operating Cash Flow for the two (2) fiscal quarter period
then ended, to (ii) its Cash Interest Expense for such two (2) fiscal quarter
period, to be less than the ratio set forth below opposite the period during
which the last day of such two-quarter period ends:
<TABLE>
<CAPTION>
Quarter Ended: Ratio
-------------- -----
<S> <C>
March 31, 1998 1.20:1
June 30, 1998 through March 31, 1999 1.30:1
June 30, 1999 through March 31, 2000 1.50:1
June 30, 2000 and thereafter 2.00:1
</TABLE>
Section 7.9 Fixed Charge Coverage Ratio. The Borrower shall not at any
time permit the Fixed Charge Coverage Ratio for any fiscal quarter to be less
than 1.00:1.
Section 7.10 Leverage Ratios. The Borrower shall not at any time permit
the Leverage Ratio (Senior Debt) to exceed the ratio set forth below in column A
for any fiscal quarter ending during the periods indicated; nor shall the
Borrower permit the Leverage Ratio (Total Debt) to exceed the ratio set forth in
column B for any fiscal quarter ending during the periods indicated:
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<TABLE>
<CAPTION>
A B
Senior Total
Period Debt Ratio Debt Ratio
------ ---------- ----------
<S> <C> <C>
Agreement Date through
March 31, 1998 9.0:1 10.0:1
June 30, 1998 8.0:1 10.0:1
September 30, 1998 through
March 31, 1999 7.5:1 9.5:1
June 30, 1999 7.0:1 9.0:1
September 30, 1999 through
December 31, 1999 6.5:1 8.5:1
March 31, 2000 through
June 30, 2000 6.0:1 8.0:1
September 30, 2000 through
December 31, 2000 5.5:1 7.5:1
March 31, 2001 through
December 31, 2001 5.0:1 7.0:1
March 31, 2002 and
Thereafter 5.0:1 6.5:1
</TABLE>
Section 7.11 Annualized Operating Cash Flow to Pro Forma Debt Service
Ratio. The Borrower shall not permit the ratio of its Annualized Operating Cash
Flow to its Pro Forma Debt Service to be less than 1.00:1 for any fiscal
quarter.
Section 7.12 Affiliate Transactions. Except as specifically provided
herein (including, without limitation, Section 7.7 hereof) and as may be
described on Schedule 13 attached hereto, the Borrower shall not, and shall
cause each of its Restricted Subsidiaries not to, at any time engage in any
material transaction with an Affiliate, or make an assignment or other transfer
of any of its properties or assets to any Affiliate, unless such transaction (i)
is determined by the board of directors of the Borrower or such Restricted
Subsidiary to be in the best interests of the Borrower or such Restricted
Subsidiary, and (ii) such transaction is on terms no less advantageous to the
Borrower or such Restricted Subsidiary than would be the
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case if such transaction had been effected with a non-Affiliate.
Section 7.13 Real Estate. Neither the Borrower nor any of its Restricted
Subsidiaries shall purchase or become obligated to purchase any single parcel of
real estate having a purchase price in excess of $500,000 except in compliance
with Section 5.10 hereof.
Section 7.14 ERISA Liabilities. The Borrower shall not, and shall cause
each of its Subsidiaries not to, (i) permit the assets of any of their
respective Plans to be less than the amount necessary to provide all accrued
benefits under such Plans on an ongoing basis, or (ii) enter into any
Multiemployer Plan.
Section 7.15 Limitation on Leases. Neither the Borrower nor any of its
Restricted Subsidiaries shall make or be or become obligated to make any payment
in respect of any obligation as lessee under any lease for property or equipment
having an unexpired term (including any renewal terms under options available to
the lessor) of more than one year (excluding any lease permitting cancellation
at the option of the lessee within sixty (60) days or less) unless, after giving
effect to the occurrence of such lease liability, the aggregate rental amount
for all such leases in any fiscal year does not exceed the greater of
$10,000,000 or seven percent (7%) of the gross revenues for the Borrower and its
Restricted Subsidiaries for the prior fiscal year.
Section 7.16 New Unrestricted Subsidiaries. The Borrower shall cause all
of the stock of any new Unrestricted Subsidiary (which is a direct Subsidiary of
the Borrower, or a direct subsidiary of a Restricted Subsidiary) to be pledged
to the Administrative Agent pursuant to the terms of the Borrower Pledge
Agreement or the Subsidiary Pledge Agreement, as additional Collateral for the
Obligations.
Section 7.17 Limitation on Preferred Stock of Restricted Subsidiaries.
The Borrower shall not permit any Restricted Subsidiary to create or issue any
preferred stock except for (i) preferred stock outstanding on the Agreement
Date, (ii) preferred stock issued to and held by the Borrower or any other
Restricted Subsidiary, (iii) preferred stock issued by a Person prior to the
time such Person became a direct or indirect Restricted Subsidiary,
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(iv) preferred stock issued by a Restricted Subsidiary, the proceeds of which
are used to refinance any outstanding preferred stock of such Restricted
Subsidiary, with an aggregate liquidation preference not to exceed the
liquidation preference of the preferred stock so refinanced, plus the amount of
any financing fees and other expenses incurred in connection with such
refinancing, and provided such refinancing preferred stock by its terms, or by
the terms of the agreement or instrument pursuant to which such preferred stock
is issued, does not provide for payments of liquidation values at its stated
maturity or by way of a sinking fund or by way of any mandatory redemption,
defeasance, retirement or repurchase, prior to the stated maturity of the
preferred stock being refinanced, or (v) preferred stock issued by a Restricted
Subsidiary with a cumulative liquidation preference in an amount which would be
permitted hereunder to be incurred as Indebtedness.
Section 7.18 New Mexico Bond. The Administrative Agent, the Managing
Agents, the Co-Agents, the Documentation Agent, the Syndication Agent and the
Lenders hereby (i) consent to the entering into by the Borrower of a Lease and
Purchase Agreement and the entering into by Western Wireless Bond Purchaser,
Inc., a Restricted Subsidiary of an Indenture and a Bond Purchase Agreement,
each dated as of February 1, 1997, and other documents contemplated by such
agreements, in connection with the issuance by the City of Albuquerque of the
bond or bonds referred to in Section 7.6(f) hereof (collectively the "New Mexico
Bond") and the performance of their respective obligations in connection with
the New Mexico Bond, and (ii) agree that (w) the continuing obligations of the
Borrower and such Restricted Subsidiary arising pursuant to such agreements
shall not constitute "Indebtedness" under Section 4.1(v) or under Section 7.1
hereof, or for purposes of determining compliance with Sections 7.8 through 7.11
of this Agreement, (x) any Lien created or deemed to be existing pursuant to
such agreement shall be deemed to be a "Permitted Lien" hereunder, (y) under
Section 5.10 hereof, consent is given to the extent that such provision is
deemed applicable to the transactions contemplated by the New Mexico Bond, and
(z) for purposes of Section 7.15 hereof, rental payments under the Lease and
Purchase Agreement referred to above shall not be included in determining
compliance with the limitation on "aggregate rental amount of all such leases,"
to the extent such payments are matched by payments to such Restricted
Subsidiary of principal and interest on the New Mexico Bond.
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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 to be incorrect or misleading in any material
respect when made or deemed to be made pursuant to Section 4.2 hereof;
(b) (i) The Borrower shall default in the payment of any principal
amount of the Notes, or (ii) the Borrower shall default in the payment of any
interest, fees or other amounts payable to the Lenders, the Administrative
Agent, or any of them, when due, and such Default shall not be cured by payment
in full within three (3) Business Days;
(c) The Borrower shall default in the performance or observance of any
agreement or covenant contained in Article 7 hereof;
(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 date of occurrence of such default,
or, if later, the date on which an officer of the Borrower knew or should have
known of the occurrence of such default;
(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 Borrower, any of its Subsidiaries, or any other
obligor thereunder, which shall not be cured within a period of thirty (30) days
from the occurrence of such default, or, if later, the date on which an officer
of the Borrower knew or should have known of the occurrence of such default;
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(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) such petition and stay shall continue undismissed for a period of
forty-five (45) 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 shall seek or consent 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 its
Subsidiaries shall fail generally to pay their respective debts as they become
due, or the Borrower or any of its Subsidiaries shall take any action in
furtherance of any such action;
(h) A judgment 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
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<PAGE> 92
if, after the expiration of any such stay, such judgment, warrant or process
shall not have been paid or discharged;
(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 to which the Borrower
or any of its Subsidiaries 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 PBGC shall institute proceedings to terminate any such Plan;
or the Borrower or any of its Subsidiaries shall incur any liability to PBGC in
connection with the termination of any such Plan; or any Plan or trust created
under any Plan of the Borrower or any of its Subsidiaries 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 in any material amount on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code and,
in each case, such event or condition, together with other such events or
conditions, if any, would subject the Borrower and its Subsidiaries to any tax,
liability or penalty in excess of $1,000,000;
(j) Any event shall occur which has a Materially Adverse Effect;
(k) There shall occur (i) any default under any Indebtedness of the
Borrower or any of its Restricted Subsidiaries in an aggregate principal amount
exceeding $1,000,000 at maturity or which default allows the holder of such
Indebtedness to accelerate the maturity of such Indebtedness; (ii) any default
under any Interest Hedge Agreement having a notional principal amount of
$1,000,000 or more; or (iii) any defeasance or any other action the result of
which is to defease or repay any Subordinated Debt (other than Seller
Subordinated Debt) without payment in full of the Obligations;
(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. "
310(b) and any interpretation of the FCC thereunder) to the Borrower or any of
its Subsidiaries and such order shall not have been rescinded within sixty (60)
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days after such delivery, with respect to any material License;
(m) One or more Licenses shall be terminated or revoked such that the
Borrower and its Restricted Subsidiaries are no longer able to operate the
related Cellular System or any portion 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 Restricted Subsidiaries are no longer
able to operate the related Cellular System or any portion thereof and retain
the revenue received therefrom, except in the event that the termination or
revocation is with respect to any License that is not material;
(n) Any Security Document or any Note or any other 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 or other obligations purported to be created
under any Loan Document;
(o) Any Security Document shall for any reason fail or cease to create a
valid and first-priority Lien on or Security Interest in any material portion of
the Collateral purported to be covered thereby, subject to any Permitted Lien,
or any such Lien or Security Interest shall cease to be perfected, except if
such failure results from the Administrative Agent's failure to file any UCC-3
continuation statement in the appropriate jurisdiction; or
(p) (i) John Stanton, Theresa Gillespie, the Stanton Family Trust, and
their Affiliates cease to own and control a minimum of 1,000,000 voting shares
in the Borrower (adjusted for stock splits, etc.), or (ii) John Stanton ceases,
for any reason, to serve as Chairman of the Borrower and a successor Chairman
acceptable to the Majority Lenders is not appointed or does not commence to
serve within sixty (60) days from the date Mr. Stanton ceases to serve as
Chairman, or (iii) there shall be a Change of Control, together with the
affirmative vote of the Majority Lenders
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that such Change in Control, together with any results thereof, constitutes an
Event of Default; provided, however, that if a successor Chairman acceptable to
the Majority Lenders is appointed and commences to serve, subsection (i) of this
Section 8.1(p) shall no longer have any force or effect, but subsection (ii)
shall apply to Mr. Stanton's successor and to each other successor Chairperson.
Section 8.2 Remedies
(a) If an Event of Default specified in Section 8.1 (other than an Event
of Default under Section 8.1(f) or Section 8.1(g)) shall have occurred and shall
be continuing, the Administrative Agent, at the request of the Majority Lenders,
shall formally declare that an Event of Default has occurred and (i) terminate
the Revolving Loan Commitment and (ii) declare the principal of and interest on
the Loans and the Notes and all other amounts owed to the Lenders and the
Administrative Agent under this Agreement and the Notes and any other
Obligations to be forthwith due and payable without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived, anything in
this Agreement or in the Notes or any other Loan Document to the contrary
notwithstanding, and the Revolving Loan Commitment shall thereupon forthwith
terminate and all such amounts shall be immediately due and payable.
(b) Upon the occurrence and continuance of an Event of Default specified
in Section 8.1(f) or Section 8.1(g), all principal, interest and other amounts
due hereunder and under the Notes, and all other Obligations, shall thereupon
and concurrently therewith become due and payable and the Revolving Loan
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 Majority 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.
(c) Upon acceleration of the Notes, as provided in subsection (a) or (b)
of this Section 8.2, the Administrative Agent and the Lenders shall have all of
the post-default rights granted to them, or any of them, under the Loan
Documents and under Applicable Law.
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(d) Upon acceleration of the Notes, as provided in subsection (a) or (b)
of this Section 8.2, the Administrative Agent, upon request of the Majority
Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Restricted Subsidiaries, both to
operate and to sell such properties and assets, and the Borrower, for itself and
on behalf of its Restricted Subsidiaries, hereby consents to such right and such
appointment and hereby waives any objection the Borrower or any Restricted
Subsidiary 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.
Subsequent to the acceleration of the Loans under Section 8.2 hereof, payments
and prepayments under this Agreement made to any of the Administrative Agent,
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 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; 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(f)), to the payment of any unpaid interest which may have accrued on
the Obligations; fourth, to the Lenders pro rata until all Advances 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 deemed to be Advances and
shall be paid on a pro rata basis with the Advances); fifth, to the Lenders pro
rata on the basis of their respective unpaid amounts, to the payment of any
other unpaid
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Obligations; sixth, to damages incurred by the Administrative Agent or any
Lender by reason of any breach hereof or of any other Loan Document; and
seventh, upon satisfaction in full of all Obligations, to the Borrower or as
otherwise required by law. Notwithstanding the foregoing, each Lender may
allocate amounts received by it pursuant to this Section 8.3 in its discretion
to the various Obligations held by it.
ARTICLE 9
The Administrative Agent
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 Loan and in its Note irrevocably to
appoint and authorize, the Administrative Agent to take such actions as its
agent on its behalf and to exercise such powers hereunder and under the Security
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 respective directors, officers, employees or agents shall be
liable for any action taken or omitted to be taken by it or them hereunder or in
connection herewith, except for its or their own gross negligence or willful
misconduct.
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, whether under Section 11.1, Section 11.5, or otherwise
hereunder, as the holder of all of the interests of such Lender in its Loan 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 Paul, Hastings, Janofsky & Walker LLP, Atlanta, Georgia, special
counsel to the Administrative Agent, or with other legal counsel selected by it
with due care and shall not be liable for any action taken or suffered by it in
good faith in consultation
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with the Majority 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 other
instrument, document or communication furnished pursuant hereto or in connection
herewith, and the Administrative Agent shall be entitled to assume (absent
knowledge to the contrary) 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
Revolving Loan Commitment and its Loans, Toronto Dominion (Texas), Inc. shall
have the same rights and powers hereunder and under the other Loan Documents as
any other Lender 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.
Section 9.6 Responsibility of the Administrative Agent. The duties and
obligations of the Administrative Agent under this Agreement and the Security
Documents are only those expressly set forth in this Agreement and the Security
Documents. The Administrative Agent shall be entitled to assume that no Default
has occurred and is continuing unless it has actual knowledge, or has been
notified by the Borrower, of such fact, or has been notified by a Lender in
writing that such Lender considers that a 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. The Administrative Agent shall provide promptly each Lender with
copies of such documents received from the Borrower as such Lender may
reasonably request.
Section 9.7 Security Documents. The Administrative Agent, as collateral
agent hereunder and under the Security Documents, is hereby authorized to act on
behalf of the Lenders, in its own capacity and through other agents and
sub-agents appointed by it with due care, under the Security Documents, provided
that the Administrative Agent shall not
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agree to the release of any Collateral, or any property encumbered by any
mortgage, pledge or security interests except in compliance with Section 11.12
hereof. In connection with its role as secured party with respect to the
Collateral hereunder, the Administrative Agent shall act as collateral agent,
for itself and for the ratable benefit of the Lenders, and such role as
administrative agent shall be disclosed on all appropriate accounts,
certificates, filings, mortgages, and other Collateral documentation.
Section 9.8 Action by the 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 Majority
Lenders to exercise or refrain from exercising such rights or to take or refrain
from taking such action; provided that the Administrative Agent shall not
exercise any rights under Section 8.2(a) of this Agreement except upon the
request of the Majority Lenders or of all the Lenders, where expressly required
by this Agreement. 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 for the protection of the
interests of the Lenders, except for its gross negligence or willful misconduct,
or conduct in breach of this Agreement as determined by a final, non-appealable
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 in acting or refraining from acting under this Agreement or any other
Loan Document in accordance with the instructions of the Majority Lenders or of
all the Lenders, where expressly required by this Agreement, and any action
taken or failure to act pursuant to such instructions shall be binding on all
Lenders.
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 (other than through a notice by one party hereto
to all other parties), the Administrative Agent or such Lender shall promptly
notify the Administrative Agent, and
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the Administrative Agent shall take such action and assert such rights under
this Agreement as the Majority Lenders or of all the Lenders, where expressly
required by this Agreement, 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 Majority Lenders shall fail to request the
Administrative Agent to take action or to assert rights under this Agreement in
respect of any Default within ten (10) days after their receipt of the notice of
any Default from the Administrative Agent or any Lender, or shall request
inconsistent action with respect to such 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 Majority
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.
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;
or
(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 other Loan Document, 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.
Section 9.11 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not
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reimbursed by the Borrower) pro rata according to their percentage of the
outstanding principal amount of the Loans from and against any and all
liabilities, obligations, losses (other than in the event of a bankruptcy or
out-of-court 'work-out' of the Loans), damages, penalties, actions, judgments,
suits, costs, expenses (including 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 relating to or arising out of its role as
Administrative Agent under this Agreement, any other Loan Document, or any other
document contemplated by this Agreement 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 in its role as Administrative Agent,
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 order of a court having jurisdiction over the subject
matter.
Section 9.12 Credit Decision. Each Lender represents and warrants to
each other Lender, to each Managing Agent, and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement and to make its
Advances it has independently taken whatever steps it considers necessary to
evaluate the financial condition and affairs of the Borrower and its
Subsidiaries and that it has made an independent credit judgment, and that it
has not relied upon the Administrative Agent, any Managing Agent, or any other
Lender, 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 Obligations remains outstanding, it
will continue to make its own independent evaluation of the financial condition
and affairs of the Borrower.
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Section 9.13 Successor Administrative Agent.
(a) Resignation. 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. Upon any such resignation, the Majority Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Majority Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of resignation, 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. 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. After any retiring Administrative Agent's resignation 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. The resignation of the
Administrative Agent may not take effect until a successor Administrative Agent
is appointed.
(b) Removal. The Administrative Agent may be removed as
Administrative Agent hereunder at any time by written notice given to it by
Lenders holding not less than sixty-six and two-thirds percent (66-2/3%) of the
sum of the Revolving Loan Commitment plus outstanding principal balance of the
Term Loans. Upon any such removal, such Lenders shall have the right to appoint
a successor Administrative Agent, subject, at any such time as there is no
Default hereunder, to the prior written consent of the Borrower, such consent
not to be unreasonably withheld or delayed. Any such successor Administrative
Agent may 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. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such
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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. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article shall continue in effect for its benefit in respect of any actions taken
or to be taken by it while it was acting as the Administrative Agent.
Section 9.14 Delegation of Duties. The Administrative Agent may execute
any of its respective 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.
ARTICLE 10
Change in Circumstances
Affecting Fixed Rate Advances
Section 10.1 Fixed Rate Basis Determination Inadequate or Unfair. If
with respect to any proposed Fixed Rate 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 such type of Fixed Rate 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 either or both types of
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Fixed Rate 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 each affected Fixed Rate Advance of such
Lender, together with accrued interest thereon and any reimbursement required
under Section 2.11 hereof, on either (a) the last day of the then current
Interest Period applicable to such affected Fixed Rate Advances if such Lender
may lawfully continue to maintain and fund such Fixed Rate Advances to such day
or (b) immediately if such Lender may not lawfully continue to fund and maintain
such affected Fixed Rate Advances to such day. Concurrently with repaying each
affected Fixed Rate Advance of such Lender, notwithstanding anything contained
in Article 2 or Article 3 hereof, the Borrower may borrow a Base Rate Advance
(or the other type of Fixed Rate Advance, if available) from such Lender, and
such Lender shall make such Advance, if so requested, in an amount such that the
outstanding principal amount of the Note held by such Lender shall equal the
outstanding principal amount of such Note 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 Fixed Rate Advances, or its Fixed
Rate Advances, or shall change the basis of taxation of payments to any
Lender of the principal of or interest on its Fixed Rate Advances or in
respect of any other amounts due
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under this Agreement, in respect of its Fixed Rate Advances or its
obligation to make Fixed Rate 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 or Domestic 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 or the New York certificate of deposit
market any other condition affecting its obligation to make Fixed Rate
Advances or its Fixed Rate Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any such Fixed Rate 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, within five (5) 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, 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 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 the then outstanding affected
Fixed Rate Advances of
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such Lender, together with accrued interest thereon to the date of prepayment,
along with any reimbursement required under Section 2.11 hereof. Concurrently
with prepaying such Fixed Rate Advances, the Borrower may borrow a Base Rate
Advance from such Lender, and such Lender shall, if so requested, make such
Advance in an amount such that the outstanding principal amount of the Note held
by such Lender shall equal the outstanding principal amount of such Note
immediately prior to such prepayment.
Section 10.4 Effect On Other Advances. If notice has been given pursuant
to Section 10.1, 10.2 or 10.3 suspending the obligation of any Lender to make
either or both types of Fixed Rate Advances, or requiring either or both types
of Fixed Rate Advances of any Lender 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 Advances which would otherwise be made by
such Lender as either or both types of Fixed Rate Advances affected shall, at
the option of the Borrower, be made instead as Base Rate Advances or the
unaffected type of Fixed Rate Advances.
ARTICLE 11
Miscellaneous
Section 11.1 Notices
(a) Unless otherwise specifically provided herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given three (3) days after deposit in the mail, designated as
certified mail, return receipt requested, postage-prepaid, or one (1) day after
being entrusted to a reputable commercial overnight delivery service, or when
sent by telecopy addressed to the party to which such notice is directed at its
address determined as provided in this Section 11.1, except that notices under
Article 2 shall be effective only upon receipt. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
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(i) If to the Borrower, to it at:
Western Wireless Corporation
2001 NW Sammamish Road
Issaquah, Washington 98027
Attn: John Stanton
Chairman and Chief Executive Officer
with a copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
Attn: Barry A. Adelman, Esq.
and to:
Alan R. Bender, Esq.
General Counsel
2001 NW Sammamish Road
Issaquah, Washington 98027
(ii) If to the Administrative Agent, to it at:
Toronto Dominion (Texas), Inc.
909 Fannin, Suite 900
Houston, Texas 77010
Attn: Manager, Agency
with a copy to:
TD Securities (USA) Inc.
31 West 52nd Street
New York, New York 10019-6101
Attn: Managing Director,
Communications Finance
and to:
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree Street, Suite 2400
Atlanta, Georgia 30308-2222
Attn: Kevin Conboy, Esq.
(iii) If to the Managing Agents, the Agents, the Co-Agents, or
the Lenders, to them at the addresses set forth beside
their names on Schedules 2-A and 2-B.
Copies shall be provided to Persons other than parties hereto only in the case
of notices under Article 8 hereof.
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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, but not limited to, the fees
and disbursements of Paul, Hastings, Janofsky & Walker LLP, special counsel for
the Administrative Agent and its Affiliates;
(b) all reasonable out-of-pocket expenses of the Administrative Agent in
connection with the administration of the transactions contemplated in this
Agreement or the other Loan Documents, the restructuring and "work out" of such
transactions, and the preparation, negotiation, execution and delivery of any
waiver, amendment or consent by the Administrative Agent and the Lenders
relating to this Agreement or the other Loan Documents, including, but not
limited to, the fees and disbursements of any experts, agents or consultants and
of special counsel for the Administrative Agent, but excluding any assignment
fee pursuant to Section 11.5(b) hereof; and
(c) all out-of-pocket costs and expenses of obtaining performance 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 special counsel for the Administrative Agent.
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 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 an Advance. In the event the Lenders decide
to fund an Advance at a time when the Borrower is not in strict compliance with
the terms of this
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Agreement, such decision by the Lenders shall not be deemed to constitute an
undertaking by the Lenders to fund any further Advances or preclude the Lenders
and 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 Majority Lenders shall not constitute a
modification of this Agreement, 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 such as to require further notice of their intent to
require strict adherence to the terms of this Agreement 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 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, but not limited to, Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other Indebtedness
at any time held or owing by any Lender or the Administrative Agent to or for
the credit or the account of the Borrower or any of its Restricted Subsidiaries
against and on account of the Obligations irrespective of whether (a) any Lender
or the Administrative Agent shall have made any demand hereunder or (b) the
Administrative Agent shall have declared the principal of and interest on the
Loans and other amounts due hereunder to be due and payable as permitted by
Section 8.2 and although such Obligations or any of them, shall be contingent or
unmatured. Upon direction by the Administrative Agent with the consent of the
Majority Lenders, each Lender holding deposits of the Borrower or any of its
Restricted Subsidiaries shall exercise its set-off rights as so directed.
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Section 11.5 Assignment
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of each of the Lenders.
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(b) Each Lender may enter freely into participation agreements with
respect to or otherwise grant participations in its Loans to one or more banks
or other lenders or financial institutions; provided, however, that (i) such
Lender's obligations hereunder shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participant shall not be entitled by the benefit of
its participation to vote or otherwise take action under this Agreement or any
other Loan Document, except with respect to the matters referred to in items
(a), (b), (c), (d), (e), and (g) of Section 11.12 hereof, and (iv) the Borrower
shall have the right to consent to a proposed participant (such consent not to
be unreasonably withheld or delayed) and shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations hereunder. In addition, each Lender may (x) sell or assign up to one
hundred percent (100%) of its rights hereunder and under the other Loan
Documents to any Federal Reserve Bank without limitation; and (y) sell or assign
up to one hundred percent (100%) of its rights hereunder and under the other
Loan Documents to any other Person on an assignment basis, provided that (A) (i)
such assignment is to an Affiliate of the assignor or another Lender, or (ii)
the Borrower (unless there exists at the time of such assignment an Event of
Default hereunder) and the Administrative Agent have given their prior written
consent to the proposed assignee of a Lender hereunder, which consents shall not
be unreasonably delayed or withheld, provided that such consents may be
reasonably withheld if the proposed assignee is subject to withholding tax of
the sort referred to in Section 2.14 hereof, (B) the assignee assumes a pro rata
share of the assignor Lender's obligations hereunder determined by the
percentage of the Revolving Loan Commitment or Term Loan assigned, as
applicable, for the period from the date of the assignment through the Revolving
Loan Maturity Date with respect to an assignment of a Revolving Loan Commitment
or the Maturity Date with respect to an assignment of a Term Loan, and (C) each
such assignment shall be in a principal amount of not less than the lesser of
the entire amount of such Lender's interest hereunder or $5,000,000, unless an
assignment is from one Lender to another, in which case there shall be no
minimum assignment amount. Each Lender who sells or assigns a portion of its
Loans pursuant hereto shall pay to the Administrative Agent an assignment fee of
$3,500 with respect to each assignment, such fee to be paid to the
Administrative Agent not later than the effective
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date of the assignment of the Loan relating thereto. Each Lender agrees to
provide the Administrative Agent and the Borrower with written notice of the
assignment of all or part of its rights hereunder, and the Administrative Agent
shall keep a record of all such assignments in order to be able to calculate the
Commitment Ratios of the Lenders as of any time. All assignments by any of the
Lenders of any interests hereunder shall be made pursuant to an Assignment and
Assumption Agreement substantially in the form attached hereto as Exhibit Q.
Each Lender may provide any proposed participant or assignee with confidential
information provided to such Lender regarding the Borrower and its Subsidiaries
on a confidential basis, and such participant or assignee shall agree to
maintain such confidentiality. Further, each permitted assignee of any portion
of the Loans shall be entitled to the benefits of Sections 2.11 and 2.13 and
Article 10 hereof and all other provisions hereof and of the other Loan
Documents as a 'Lender' hereunder.
(c) Except as specifically set forth in Section 11.5(b) 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.
(d) The provisions of this Section 11.5 shall not apply to any purchase
of participations among the Lenders pursuant to Section 2.12 hereof.
Section 11.6 Accounting Principles
(a) Except as set forth in the following sentence, references in this
Agreement to GAAP shall be to such principles as in effect from time to time,
and all accounting terms used herein without definition shall be used as defined
under GAAP. All references to Operating Cash Flow, Total Debt, Fixed Charges,
Debt Service, and other such terms shall be deemed to refer to such items of the
Borrower and its Consolidated Subsidiaries excluding both Restricted
Subsidiaries which are not Consolidated Subsidiaries and Unrestricted
Subsidiaries on a consolidated basis, consistently applied, unless otherwise
indicated herein.
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(b) With respect to any determination of whether the Borrower shall be
permitted to make an Investment, Acquisition, Restricted Payment, or the like,
which determination depends upon whether the Borrower's aggregate amount of such
aforementioned items equals or exceeds a sum, one of whose constituents is
Available Equity or proceeds of Subordinated Debt, the Available Equity or
proceeds of Subordinated Debt used for such determination may not be
double-counted.
Section 11.7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.8 Governing Law. This Agreement and the Notes shall be
construed in accordance with and governed by the internal laws of the State of
New York applicable to agreements made and to be performed in New York. If any
action or proceeding shall be brought by the Administrative Agent or any Lender
in order to enforce any right or remedy under this Agreement or under any Note,
the Borrower hereby consents and will, and the Borrower will cause each
Subsidiary to, submit to the jurisdiction of any state or federal court of
competent jurisdiction sitting within the area comprising the Southern District
of New York on the date of this Agreement. The Borrower, for itself and on
behalf of its Subsidiaries, hereby agrees that service of the summons and
complaint and all other process which may be served in any such suit, action or
proceeding may be effected by mailing by registered mail a copy of such process
to the offices of the Borrower at the address given in Section 11.1 hereof and
that personal service of process shall not be required. Nothing herein shall be
construed to prohibit service of process by any other method permitted by law or
the bringing of any suit, action or proceeding in any other jurisdiction. The
Borrower agrees that final judgment in such suit, action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by Applicable Law.
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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 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 returned
forthwith. It is the express intent hereof that the Borrower not pay 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, the Federal
Funds Rate, the CD Rate, and the Eurodollar Rate 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 other
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, in the case of Security Documents executed by the
Administrative Agent for itself and on behalf of the Lenders, signed by the
Administrative Agent and approved by) the Majority Lenders and, in the case of
an amendment, by the Borrower, except that in the event of
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(a) any increase in the amount of the Revolving Loan Commitment, (b) any delay
or extension in the terms of repayment or change in the order of application of
repayment of the Loans provided in Section 2.4 or Section 2.8 hereof, (c) any
reduction in principal, interest or fees due hereunder or postponement of the
payment thereof, (d) any release of any substantial portion of the Collateral
for the Loans other than in connection with a sale or disposition otherwise
permitted hereunder, or any failure to take Collateral to which the Lenders are
otherwise entitled pursuant to Section 5.13 or 5.14 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 Guaranty of all or any portion of the
Obligations, except in connection with a merger, sale or other disposition
otherwise permitted hereunder, or (g) any amendment of this Section 11.12, or of
the definition of Majority Lenders, or of any portion of Sections 2.10, 2.12,
5.11 or Article 10 as they relate to the relative priority of payment among the
Obligations, or any other provision of this Agreement or any of the other Loan
Documents specifically requiring the consent or approval of each of the Lenders,
any amendment or waiver or consent may be made only by an instrument in writing
signed by (or, in the case of Security Documents executed by the Administrative
Agent for itself and on behalf of the Lenders, signed by the Administrative
Agent and approved 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 the Administrative Agent
and by each of the Lenders.
Section 11.13 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
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 or its Affiliates and each Lender or its respective
Affiliates to enter into or maintain business relationships with the Borrower or
any of its Affiliates beyond the relationships
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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 2.11, 2.13, 5.11, 9.11, 10.3 and 11.2 hereof, shall survive the
termination of this Agreement and the payment and performance of all other
Obligations.
Section 11.17 Senior Debt. The Indebtedness of the Borrower evidenced by
the Notes is secured by the Security Documents and is intended by the parties
hereto to be in parity with the Interest Hedge Agreements in effect from time to
time between the Borrower and any Lender and senior in right of payment to all
other Indebtedness for Money Borrowed 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. The Lenders shall hold all non-public,
proprietary or confidential information (which has been identified as such by
the Borrower) obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices; however,
the Lenders may make disclosure of any such information to their examiners,
Affiliates, outside auditors, counsel, consultants, appraisers and other
professional advisors in connection with this Agreement or as reasonably
required by any
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proposed syndicate member or any proposed transferee or participant in
connection with the contemplated transfer of any Note or participation therein
or as required or requested by any governmental authority or representative
thereof or in connection with the enforcement hereof or of any Loan Document or
related document or pursuant to legal process or with respect to any litigation
between or among the Borrower and any of the Lenders. In no event shall any
Lender be obligated or required to return any materials furnished to it by the
Borrower. 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 a breach of this Section 11.19 by such Lender), (ii) is already in the
possession of such Lender on a nonconfidential basis, or (iii) comes into the
possession of such Lender in a manner not known to such Lender to involve a
breach of a duty of confidentiality owing to the Borrower.
ARTICLE 12
Waiver of Jury Trial
Section 12.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON
BEHALF 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, OR THE ADMINISTRATIVE AGENT,
OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, IS A PARTY, AS TO ALL MATTERS
AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE
NOTES OR THE OTHER LOAN DOCUMENTS.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first appearing above.
BORROWER: WESTERN WIRELESS CORPORATION, A
WASHINGTON CORPORATION
By: /s/ Donald Guthrie
----------------------------------------------
Title: Chief Financial Officer
Attest: /s/ Alan Bender
------------------------------------------
Title: Senior Vice President
ADMINISTRATIVE
AGENT: TORONTO DOMINION (TEXAS), INC.
By: /s/ Kimberly Burleson
-----------------------------------------------
Title: Vice President
DOCUMENTATION
AGENT: BARCLAYS CAPITAL
By: /s/ James K. Downey
-----------------------------------------------
Title: Associate Director
SYNDICATION AGENT: J.P. MORGAN SECURITIES INC.
By: /s/ Martin Pryor
-----------------------------------------------
Title: Vice President
MANAGING AGENTS: TD SECURITIES (USA) INC.
By: /s/ Horace J. Zona
-----------------------------------------------
Title: Vice President and Director
[Signatures continued on next page]
BARCLAYS CAPITAL
By: /s/ James K. Downey
-----------------------------------------------
Title: Associate Director
Second Amended and Restgated
Western Wireless Loan Agreement
Signature Page 1
<PAGE> 118
J.P. MORGAN SECURITIES INC.
By: /s/ Martin Pryor
-----------------------------------------------
Title: Vice President
AGENTS: THE CHASE MANHATTAN BANK
By: /s/ John J. Huber
-----------------------------------------------
Title: Managing Director
CIBC INC.
By: /s/ Cynthia McCahill
-----------------------------------------------
Title: Executive Director
CIBC Oppenheimer Corp., as Agent
FLEET NATIONAL BANK
By: /s/ Jeffrey R. Greene
-----------------------------------------------
Title: Vice President
By: /s/ Alexander G. Ivanov
-----------------------------------------------
Title: Vice President
ING (U.S.) CAPITAL CORPORATION
By: /s/ William James
-----------------------------------------------
Title: Vice President
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 2
<PAGE> 119
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Thomas A. Coates
-----------------------------------------------
Title: Vice President
SOCIETE GENERALE
By: /s/ John Sadik-Khan
-----------------------------------------------
Title: Vice President
CO-AGENTS: BANK OF HAWAII
By: /s/ Elizabeth O. Maclean
-----------------------------------------------
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ Lynae S. Young
-----------------------------------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Mark D. Thorsheim
-----------------------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ J. Kevin Sampson
-----------------------------------------------
Title: Vice President
LENDERS: TORONTO DOMINION (TEXAS), INC.
By: /s/ Kimberly Burleson
-----------------------------------------------
Title: Vice President
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 3
<PAGE> 120
BARCLAYS BANK PLC
By: /s/ James K. Downey
-----------------------------------------------
Title: Associate Director
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ David V. Fox
-----------------------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/ John J. Huber
-----------------------------------------------
Title: Managing Director
CIBC INC.
By: /s/ Cynthia McCahill
-----------------------------------------------
Title: Executive Director
CIBC Oppenheimer Corp., as Agent
FLEET NATIONAL BANK
By: /s/ Jeffrey R. Greene
-----------------------------------------------
Title: Vice President
By: /s/ Alexander G. Ivanov
-----------------------------------------------
Title: Vice President
ING (U.S.) CAPITAL CORPORATION
By: /s/ William James
-----------------------------------------------
Title: Vice President
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 4
<PAGE> 121
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Thomas A. Coates
-----------------------------------------------
Title: Vice President
SOCIETE GENERALE
By: /s/ John Sadik-Khan
-----------------------------------------------
Title: Vice President
BANK OF HAWAII
By: /s/ Elizabeth O. Maclean
-----------------------------------------------
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ Lynae S. Young
-----------------------------------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Mark D. Thorsheim
-----------------------------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ J. Kevin Sampson
-----------------------------------------------
Title: Vice President
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 5
<PAGE> 122
ABN AMRO BANK N.V.
By: /s/ James J. Rice
-----------------------------------------------
Title: Vice President
By: /s/ Paul S. Faust
-----------------------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ Fred L. Thorne
-----------------------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION D/B/A SEAFIRST
By: /s/ Barbara Trimble
-----------------------------------------------
Title: Vice President
BANK OF MONTREAL, CHICAGO BRANCH
By: /s/ Patrick Keleher
-----------------------------------------------
Title: Vice President
BANQUE NATIONALE DE PARIS
By: /s/ Jennifer Y. Cho
-----------------------------------------------
Title: Vice President
By: /s/ Colleen S. Breit
-----------------------------------------------
Title: Assistant Vice President
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 6
<PAGE> 123
BANQUE PARIBAS
By: /s/ Darlynn Ernst
-----------------------------------------------
Title: Assistant Vice President
By: /s/ Thomas Brandt
-----------------------------------------------
Title: Director
CITY NATIONAL BANK
By: /s/ Rod Bollins
-----------------------------------------------
Title: Vice President
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ Jane A. Majeski
-----------------------------------------------
Title: Vice President
By: /s/ William E. Lambert
-----------------------------------------------
Title: Assistant Vice President
FIRST NATIONAL BANK OF MARYLAND
By: /s/ Chris L. Smith
-----------------------------------------------
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Bruce W. Lofton
-----------------------------------------------
Title: Senior Vice President
THE FUJI BANK LIMITED, LOS ANGELES AGENCY
By: /s/ Masahito Fukuda
-----------------------------------------------
Title: Joint General Manager
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 7
<PAGE> 124
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ Stephen B. King
-----------------------------------------------
Title: Authorized Signatory
MERITA BANK LTD
By: /s/ Charles Lansdown
-----------------------------------------------
Title: Vice President
By: /s/ Eric I. Mann
-----------------------------------------------
Title: Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Neil Brisson
-----------------------------------------------
Title: Director
MERRILL LYNCH PRIME RATE PORTFOLIO
BY: MERRILL LYNCH ASSET
MANAGEMENT, L.P., AS
INVESTMENT ADVISOR
By: /s/ Lynn Baranski
-----------------------------------------------
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING RATE FUND
By: /s/ Lynn Baranski
-----------------------------------------------
Title: Authorized Signatory
NATIONSBANK OF TEXAS, N.A.
By: /s/ Rosario Echeverria
-----------------------------------------------
Title: Vice President
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 8
<PAGE> 125
PRIME INCOME TRUST, INC.
By: /s/ Rajesh K. Gupta
-----------------------------------------------
Title: Senior Vice President
ML CBO IV (CAYMAN) LTD.
By: PROTECTIVE ASSET MANAGEMENT L.L.C.
AS COLLATERAL MANAGER
By: /s/ James Dondero, CFA, CPA
-----------------------------------------------
Title: President
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ Karen L. Stefancic
-----------------------------------------------
Title: Vice President
SILICON VALLEY BANK
By: /s/ Geir B. Hansen
-----------------------------------------------
Title: Assistant Vice President
SKANDINAVISKA ENSKILDA BANKEN CORPORATION
By: /s/ Johan Stern
-----------------------------------------------
Title: Vice President
By: /s/ Lars Nybom
-----------------------------------------------
Title: Assistant Vice President
STATE STREET BANK AND TRUST COMPANY
By: /s/ James C. Gregg
-----------------------------------------------
Title: Vice President
[Signatures continued on next page]
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 9
<PAGE> 126
SUMITOMO BANK LIMITED
By: /s/ Goro Hiria
-----------------------------------------------
Title: Joint General Manager
By:
-----------------------------------------------
Title:
THE SUMITOMO TRUST & BANKING CO., LTD.,
NEW YORK BRANCH
By: /s/ Suraj P. Bhatia
-----------------------------------------------
Title: Senior Vice President
Manager, Corporate Finance Dept.
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY
By: /s/ Morgan Edwards
-----------------------------------------------
Title: Deputy General Manager
U.S. BANK OF WASHINGTON, N.A.
By: /s/ Gary Egbert
-----------------------------------------------
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By: /s/ Jeffrey W. Maillet
-----------------------------------------------
Title: Senior Vice President and
Director
Second Amended and Restated
Western Wireless Loan Agreement
Signature Page 10
<PAGE> 1
EXHIBIT 10.68
February 10, 1998
Tim Wong
Western Wireless Corporation
2001 NW Sammamish Road
Issaquah, WA 98027
Dear Tim:
This letter (the "Letter Agreement") sets forth the terms of your employment
with Western Wireless Corporation ("WWC"). It will supersede all prior
agreements and understandings between you and WWC with respect to your
employment by WWC; provided, however, that any existing stock option agreements
and indemnification agreements between you and WWC shall remain unmodified and
in full force and effect.
1. Your title will be Vice President - Engineering. In that capacity you
will report to the President of WWC (the "President").
2. Your responsibilities will include supervision of all engineering
functions, together with such other duties as may be assigned to you by
the President. In addition, you agree to serve as a director and/or
senior officer of any subsidiary of WWC, if so elected, without any
additional salary or other compensation. You will devote substantially
all of your business time and attention to the obligations delineated in
this Letter Agreement.
3. Your base compensation will be $160,000, payable in accordance with
standard payroll practices of WWC. In addition, you will have an
opportunity, as determined by WWC, to earn a performance bonus targeted
at $46,500 per year, to be paid quarterly, and to continue, during the
course of your employment, participation in the option program at a
level to be determined by WWC. It is understood that nothing contained
herein will prevent WWC, in its sole and absolute discretion, from, at
any time, increasing your compensation, either permanently or for a
limited period, whether in base compensation, by bonus or otherwise, if
WWC in its sole discretion, shall deem it advisable to do so in order to
recognize and fairly compensate you for the value of your services to
WWC; provided, however, that nothing contained in this paragraph three
shall in any manner obligate WWC to make any such increase or provide
any such additional compensation or benefits.
4. WWC will reimburse you for all reasonable out-of-pocket business
expenses paid or incurred by you in connection with the performance of
your duties, upon submission of signed, itemized lists of such expenses
on general forms established for that purpose by WWC.
5. You will be entitled to participate in all group health and insurance
programs and all other fringe benefit or retirement plans or other plans
effective generally with respect to executives of WWC.
6. WWC has previously entered, or will enter, into an Indemnification
Agreement with you pursuant to which WWC will agree to indemnify you
against certain liabilities arising by reason of your affiliation with
WWC.
7. (a) Notwithstanding any other provision of this Letter Agreement, your
employment by
<PAGE> 2
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Tim Wong
WWC may be terminated by WWC at any time, with or without Cause, as
defined below. In the event of a termination for Cause you will have no
rights to severance payments. Termination for "Cause" means (i) your
gross neglect or willful material breach of your principal employment
responsibilities or duties, (ii) a final judicial adjudication that you
are guilty of a felony, (iii) fraudulent conduct as determined by a
court of competent jurisdiction in the course of your employment with
WWC or any of its subsidiaries, (iv) the breach by you of the covenant
set forth in paragraph nine, below, or (v) the material breach by you of
any other provision of this Letter Agreement which continues uncured for
a period of thirty (30) days after notice thereof by WWC. In the event
of your voluntary termination of employment with WWC, you will have no
rights to severance benefits.
(b) In the event of an involuntary termination for other than Cause
(which shall include your resignation as a direct result of (i) a
reduction in your base compensation and/or incentive bonus target
percentage, or (ii) the material breach by the Company of any provision
of this Letter Agreement which continues uncured for a period of thirty
(30) days after notice thereof by you), then (A) you will be entitled to
receive a severance payment in an amount equal to your accrued but
unpaid existing annual targeted incentive bonus through the date of
termination, 6 months of your then base compensation and an amount equal
to 6 months of your existing annual targeted incentive bonus; (B) WWC
will, at its expense, make all COBRA benefit payments on behalf of you
and your dependents for six (6) months following such involuntary
termination; and (C) with respect to any stock options previously
granted to you by WWC which remain unvested at the time of the
involuntary termination, notwithstanding the vesting language in the
stock option agreement pursuant to which such options were granted,
there shall be immediate vesting of that portion of each such grant of
unvested stock options as equals the product of the total number of such
options under such grant which remain unvested multiplied by a fraction
the numerator of which is the sum of (i) the number of days from the
date on which the last vesting of options under such grant took place to
and including the date on which the termination occurs plus (ii) 183 and
the denominator of which is the number of days remaining from the date
on which the last vesting of options under such grant took place to and
including the date on which the final vesting under such grant would
have occurred.
Your death or permanent disability will be deemed an involuntary
termination for other than Cause. "Permanent disability" shall mean your
inability substantially to render the services required hereunder for
eight (8) months in any eighteen (18) month period because of a physical
or mental condition, it being understood that until you have received
notice from WWC terminating this Letter Agreement, you will continue to
receive your base compensation and all other benefits to which you are
entitled under this Letter Agreement.
(c) You agree that upon termination of your employment by WWC for any
reason you will surrender to WWC all proprietary records, lists and
other documents obtained by you or entrusted to you during the course of
your employment by WWC, together with all copies of all such documents.
8. You agree not to disclose at any time, whether during the term of this
Letter Agreement or thereafter, any secret or confidential information
relating to WWC's or any of its subsidiaries' businesses, financial
condition or prospects, which information you have obtained while
employed by WWC or by any of its subsidiaries or any of the predecessors
in interest of any of
<PAGE> 3
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Tim Wong
them, except (i) as may be required in furtherance of the businesses of
WWC or of any of its subsidiaries, (ii) with WWC's express prior written
consent, (iii) if such information is made generally available to the
public through no fault of yours, or (iv) if such disclosure is required
by applicable law or regulation or by legal process and then only with
prompt written notice to WWC in advance of any such disclosure.
9. You agree that, during the term of your employment by WWC and for a
period of one (1) year immediately following the termination of your
employment with WWC for any reason whatsoever, you will not, either
directly or indirectly, for compensation or any other consideration,
individually or as an employee, broker, agent, consultant, lender,
contractor, advisor, solicitor, stockholder (provided that ownership of
5% or less of the outstanding stock of any corporation listed on a
national securities exchange is not prohibited), proprietor, partner, or
person having any other material economic interest in, affiliated with
or rendering services to any other entity, engage in or provide services
to or for a business that is substantially the same as or similar to
WWC's or its subsidiaries? businesses and which competes within the
applicable commercial mobile radio services markets serviced by WWC or
its subsidiaries, directly or indirectly.
10. This Letter Agreement contains the entire agreement between you and WWC
with respect to your employment by WWC. This Letter Agreement may not be
amended, waived, changed, modified or discharged except by an instrument
in writing executed by or on behalf of you and WWC.
11. All notices, requests, demands and other communications with respect to
this Letter Agreement will be in writing and will be deemed to have been
duly given if delivered by hand, registered or certified mail (first
class postage and fees prepaid, return receipt requested), telecopier or
overnight courier guaranteeing next-day delivery, as follows:
a) to WWC:
Western Wireless Corporation
2001 NW Sammamish Road, Suite 100
Issaquah, Washington 98027
Attention: Chief Executive Officer
Telecopier: (206) 450-7731
with a copy (which does not constitute notice) to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza, 29th Floor
New York, New York 10112
Attention: Barry A. Adelman, Esq.
Telecopier: (212) 698-7825
b) to you:
Tim Wong
(home address)
<PAGE> 4
Page 4
Tim Wong
and/or to such other persons and addresses as either you or WWC has
specified in writing to the other by notice as aforesaid.
12. If any part of this Letter Agreement is hereafter construed to be
invalid or unenforceable in any jurisdiction, the same will not affect
the remainder of the Letter Agreement or the enforceability of such part
in any other jurisdiction, which will be given full effect, without
regard to the invalid portions or the enforceability in such other
jurisdiction. If any part of this Letter Agreement is held to be
unenforceable because of the scope thereof, you and WWC agree that the
court making such determination will have the power to reduce the
duration and/or area of such provision and, in its reduced form, said
provision shall be enforceable; provided, however, that such court's
determination will not affect the enforceability of this Letter
Agreement in any other jurisdiction beyond such court's authority.
13. This Letter Agreement will be governed by and construed and interpreted
in accordance with the laws of the State of Washington without reference
to conflicts of laws principles.
Please signify your acceptance of the terms of this Letter Agreement by signing
where indicated below.
Sincerely yours,
WESTERN WIRELESS CORPORATION
By:
Title:
AGREED TO AND ACCEPTED:
Tim Wong
<PAGE> 1
EXHIBIT 10.69
February 10, 1998
Robert Dotson
Western Wireless Corporation
2001 NW Sammamish Road
Issaquah, WA 98027
Dear Robert:
This letter (the "Letter Agreement") sets forth the terms of your employment
with Western Wireless Corporation ("WWC"). It will supersede all prior
agreements and understandings between you and WWC with respect to your
employment by WWC; provided, however, that any existing stock option agreements
and indemnification agreements between you and WWC shall remain unmodified and
in full force and effect.
1. Your title will be Vice President - Marketing. In that capacity you will
report to the President of WWC (the "President").
2. Your responsibilities will include supervision of all marketing
functions, together with such other duties as may be assigned to you by
the President. In addition, you agree to serve as a director and/or
senior officer of any subsidiary of WWC, if so elected, without any
additional salary or other compensation. You will devote substantially
all of your business time and attention to the obligations delineated in
this Letter Agreement.
3. Your base compensation will be $147,000, payable in accordance with
standard payroll practices of WWC. In addition, you will have an
opportunity, as determined by WWC, to earn a performance bonus targeted
at $40,000 per year, to be paid quarterly, and to continue, during the
course of your employment, participation in the option program at a
level to be determined by WWC. It is understood that nothing contained
herein will prevent WWC, in its sole and absolute discretion, from, at
any time, increasing your compensation, either permanently or for a
limited period, whether in base compensation, by bonus or otherwise, if
WWC in its sole discretion, shall deem it advisable to do so in order to
recognize and fairly compensate you for the value of your services to
WWC; provided, however, that nothing contained in this paragraph three
shall in any manner obligate WWC to make any such increase or provide
any such additional compensation or benefits.
4. WWC will reimburse you for all reasonable out-of-pocket business
expenses paid or incurred by you in connection with the performance of
your duties, upon submission of signed, itemized lists of such expenses
on general forms established for that purpose by WWC.
5. You will be entitled to participate in all group health and insurance
programs and all other fringe benefit or retirement plans or other plans
effective generally with respect to executives of WWC.
6. WWC has previously entered, or will enter, into an Indemnification
Agreement with you pursuant to which WWC will agree to indemnify you
against certain liabilities arising by reason of your affiliation with
WWC.
7. (a) Notwithstanding any other provision of this Letter Agreement, your
employment by
<PAGE> 2
Page 2
Robert Dotson
WWC may be terminated by WWC at any time, with or without Cause, as
defined below. In the event of a termination for Cause you will have no
rights to severance payments. Termination for "Cause" means (i) your
gross neglect or willful material breach of your principal employment
responsibilities or duties, (ii) a final judicial adjudication that you
are guilty of a felony, (iii) fraudulent conduct as determined by a
court of competent jurisdiction in the course of your employment with
WWC or any of its subsidiaries, (iv) the breach by you of the covenant
set forth in paragraph nine, below, or (v) the material breach by you of
any other provision of this Letter Agreement which continues uncured for
a period of thirty (30) days after notice thereof by WWC. In the event
of your voluntary termination of employment with WWC, you will have no
rights to severance benefits.
(b) In the event of an involuntary termination for other than Cause
(which shall include your resignation as a direct result of (i) a
reduction in your base compensation and/or incentive bonus target
percentage, or (ii) the material breach by the Company of any provision
of this Letter Agreement which continues uncured for a period of thirty
(30) days after notice thereof by you), then (A) you will be entitled to
receive a severance payment in an amount equal to your accrued but
unpaid existing annual targeted incentive bonus through the date of
termination, 6 months of your then base compensation and an amount equal
to 6 months of your existing annual targeted incentive bonus; (B) WWC
will, at its expense, make all COBRA benefit payments on behalf of you
and your dependents for six (6) months following such involuntary
termination; and (C) with respect to any stock options previously
granted to you by WWC which remain unvested at the time of the
involuntary termination, notwithstanding the vesting language in the
stock option agreement pursuant to which such options were granted,
there shall be immediate vesting of that portion of each such grant of
unvested stock options as equals the product of the total number of such
options under such grant which remain unvested multiplied by a fraction
the numerator of which is the sum of (i) the number of days from the
date on which the last vesting of options under such grant took place to
and including the date on which the termination occurs plus (ii) 183 and
the denominator of which is the number of days remaining from the date
on which the last vesting of options under such grant took place to and
including the date on which the final vesting under such grant would
have occurred.
Your death or permanent disability will be deemed an involuntary
termination for other than Cause. "Permanent disability" shall mean your
inability substantially to render the services required hereunder for
eight (8) months in any eighteen (18) month period because of a physical
or mental condition, it being understood that until you have received
notice from WWC terminating this Letter Agreement, you will continue to
receive your base compensation and all other benefits to which you are
entitled under this Letter Agreement.
(c) You agree that upon termination of your employment by WWC for any
reason you will surrender to WWC all proprietary records, lists and
other documents obtained by you or entrusted to you during the course of
your employment by WWC, together with all copies of all such documents.
8. You agree not to disclose at any time, whether during the term of this
Letter Agreement or thereafter, any secret or confidential information
relating to WWC's or any of its subsidiaries' businesses, financial
condition or prospects, which information you have obtained while
<PAGE> 3
Page 3
Robert Dotson
employed by WWC or by any of its subsidiaries or any of the predecessors
in interest of any of them, except (i) as may be required in furtherance
of the businesses of WWC or of any of its subsidiaries, (ii) with WWC's
express prior written consent, (iii) if such information is made
generally available to the public through no fault of yours, or (iv) if
such disclosure is required by applicable law or regulation or by legal
process and then only with prompt written notice to WWC in advance of
any such disclosure.
9. You agree that, during the term of your employment by WWC and for a
period of one (1) year immediately following the termination of your
employment with WWC for any reason whatsoever, you will not, either
directly or indirectly, for compensation or any other consideration,
individually or as an employee, broker, agent, consultant, lender,
contractor, advisor, solicitor, stockholder (provided that ownership of
5% or less of the outstanding stock of any corporation listed on a
national securities exchange is not prohibited), proprietor, partner, or
person having any other material economic interest in, affiliated with
or rendering services to any other entity, engage in or provide services
to or for a business that is substantially the same as or similar to
WWC's or its subsidiaries? businesses and which competes within the
applicable commercial mobile radio services markets serviced by WWC or
its subsidiaries, directly or indirectly.
10. This Letter Agreement contains the entire agreement between you and WWC
with respect to your employment by WWC. This Letter Agreement may not be
amended, waived, changed, modified or discharged except by an instrument
in writing executed by or on behalf of you and WWC.
11. All notices, requests, demands and other communications with respect to
this Letter Agreement will be in writing and will be deemed to have been
duly given if delivered by hand, registered or certified mail (first
class postage and fees prepaid, return receipt requested), telecopier or
overnight courier guaranteeing next-day delivery, as follows:
a) to WWC:
Western Wireless Corporation
2001 NW Sammamish Road, Suite 100
Issaquah, Washington 98027
Attention: Chief Executive Officer
Telecopier: (206) 450-7731
with a copy (which does not constitute notice) to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza, 29th Floor
New York, New York 10112
Attention: Barry A. Adelman, Esq.
Telecopier: (212) 698-7825
b) to you:
Robert Dotson
(home address)
<PAGE> 4
Page 4
Robert Dotson
and/or to such other persons and addresses as either you or WWC has
specified in writing to the other by notice as aforesaid.
12. If any part of this Letter Agreement is hereafter construed to be
invalid or unenforceable in any jurisdiction, the same will not affect
the remainder of the Letter Agreement or the enforceability of such part
in any other jurisdiction, which will be given full effect, without
regard to the invalid portions or the enforceability in such other
jurisdiction. If any part of this Letter Agreement is held to be
unenforceable because of the scope thereof, you and WWC agree that the
court making such determination will have the power to reduce the
duration and/or area of such provision and, in its reduced form, said
provision shall be enforceable; provided, however, that such court's
determination will not affect the enforceability of this Letter
Agreement in any other jurisdiction beyond such court's authority.
13. This Letter Agreement will be governed by and construed and interpreted
in accordance with the laws of the State of Washington without reference
to conflicts of laws principles.
Please signify your acceptance of the terms of this Letter Agreement by signing
where indicated below.
Sincerely yours,
WESTERN WIRELESS CORPORATION
By:
Title:
AGREED TO AND ACCEPTED:
Robert Dotson
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WESTERN
WIRELESS CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS AS OF AND FOR
THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH 10Q
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 132,532
<SECURITIES> 0
<RECEIVABLES> 62,856
<ALLOWANCES> 12,505
<INVENTORY> 21,791
<CURRENT-ASSETS> 224,336
<PP&E> 941,398
<DEPRECIATION> 253,958
<TOTAL-ASSETS> 1,803,617
<CURRENT-LIABILITIES> 119,115
<BONDS> 1,315,000
0
0
<COMMON> 801,227
<OTHER-SE> (546,467)
<TOTAL-LIABILITY-AND-EQUITY> 1,803,617
<SALES> 9,849
<TOTAL-REVENUES> 120,513
<CGS> 21,929
<TOTAL-COSTS> 152,758
<OTHER-EXPENSES> 37,658
<LOSS-PROVISION> 6,528
<INTEREST-EXPENSE> 31,188
<INCOME-PRETAX> (64,150)
<INCOME-TAX> 0
<INCOME-CONTINUING> (64,150)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (64,150)
<EPS-PRIMARY> (0.85)<F1>
<EPS-DILUTED> (0.85)
<FN>
<F1>FOR PURPOSES OF THIS EXHIBIT, PRIMARY MEANS BASIC.
</FN>
</TABLE>
