1
EXHIBIT 10.1
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."
CREDIT AGREEMENT
BY AND AMONG
LEAP WIRELESS INTERNATIONAL, INC.,
AS BORROWER,
XXXXXXXX XXXXXXXXXXXX
AND THE OTHER LENDERS NAMED HEREIN
AND
ABN AMRO BANK N.V.,
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS............................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Interpretive Provisions..................................................................16
SECTION 2. LOAN FACILITIES.......................................................................................17
2.1 Investment Capital Loan Commitments............................................................17
2.2 Working Capital Loan Commitments...............................................................17
2.3 Permitted Uses of Loan Proceeds................................................................18
2.4 Types of Loans.................................................................................18
2.5 Notice and Manner of Making Loans..............................................................18
2.6 Conversion and Continuation Elections..........................................................20
2.7 Scheduled Payment of Principal of the Loans....................................................21
2.8 Interest Rates; Payment of Interest; Commitment Fee; Calculation of Interest and Fees..........21
(a) Base Rate Loans.......................................................................21
(b) Eurodollar Loans......................................................................21
(c) Commitment Fee........................................................................22
(d) Calculation of Interest and Fees......................................................22
2.9 Payment Procedures.............................................................................22
(a) Payment on Business Days..............................................................22
(b) Place of Payment......................................................................22
(c) Distribution of Payments to Lenders by Administrative Agent...........................23
(d) Default Interest......................................................................23
(e) Application of Payments...............................................................23
(f) Designation of Payment................................................................23
(g) Administrative Agent's Right to Assume Payments Will Be Made By Borrower..............23
2.10 Prepayments of the Loans; Certain Required Payments; Aggregate Commitment Reduction............23
(a) Voluntary Prepayments; Commitment Reductions..........................................23
(b) Mandatory Prepayments; Aggregate Commitment Reduction.................................24
(i) Investment Capital Loans.....................................................24
i.
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(ii) Working Capital Loans........................................................24
(c) Investment Capital Loans in Excess of Aggregate Investment Capital Loan
Commitment; Working Capital Loans in Excess of Aggregate Working Capital Loan
Commitment............................................................................25
(d) Breakage Charge.......................................................................25
(e) Application of Prepayments............................................................25
2.11 Survivability..................................................................................25
2.12 Promissory Notes...............................................................................25
(a) Investment Capital Notes..............................................................25
(b) The Working Capital Notes.............................................................26
2.13 Net Payments...................................................................................26
2.14 Changed Circumstances; Taxes...................................................................27
2.15 Capital Requirements...........................................................................31
2.16 Substitution of Lenders........................................................................32
2.17 Conversion to High Yield Structure.............................................................32
SECTION 3. CONDITIONS OF LENDING.................................................................................33
3.1 Conditions Precedent to Initial Loans..........................................................33
(a) Notes.................................................................................33
(b) Security Agreement....................................................................33
(c) Financing Statements..................................................................33
(d) Collateral Control Agreements.........................................................33
(e) Securities Pledge Agreement...........................................................33
(f) Opinions of Counsel...................................................................33
(g) No Default; Representations and Warranties............................................33
(h) Officer's Certificate.................................................................33
(i) Corporate Proceedings.................................................................34
(j) Consummation of Distribution and Other Transactions...................................34
ii.
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(CONTINUED)
PAGE
(k) Adverse Change........................................................................34
(l) Consents, Approvals...................................................................34
(m) Organizational Documentation; Etc.....................................................34
(n) Litigation............................................................................34
(o) Board Resolutions.....................................................................35
(p) Incumbency Certificates...............................................................35
(q) Evidence of Insurance.................................................................35
(r) No Violation..........................................................................35
(s) Fee Letter............................................................................35
(t) Administrative Agent's Fee Letter.....................................................35
(u) Business Plan.........................................................................35
(v) Additional Matters, Documents or Information..........................................35
3.2 Conditions Precedent to All Loans..............................................................36
SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................36
4.1 Representations and Warranties of Borrower.....................................................36
(a) Corporate Organization; Structure.....................................................36
(b) Corporate Power; Authorization; Conflicts.............................................37
(c) Approvals.............................................................................37
(d) Enforceability........................................................................37
(e) Financial Statements/Projections......................................................37
(f) Litigation............................................................................37
(g) Use of Proceeds.......................................................................37
(h) Compliance With Laws, Other Agreements................................................38
(i) Event of Default......................................................................38
(j) Collateral Documents..................................................................38
(k) No Subordination......................................................................38
(l) Subsidiaries..........................................................................38
(m) Taxes.................................................................................38
(n) Ownership and Liens...................................................................39
(o) Indebtedness..........................................................................39
iii.
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(p) Accuracy of Information Furnished; Complete Disclosure................................39
(q) No Default............................................................................39
(r) No Burdensome Restrictions............................................................39
(s) ERISA Compliance......................................................................39
(t) Other Regulatory Compliance...........................................................40
(u) Environmental Condition...............................................................40
SECTION 5 COVENANTS OF BORROWER..............................................................................41
5.1 Affirmative Covenants..........................................................................41
(a) Compliance With Laws, Other Agreements................................................41
(b) Reporting Requirements................................................................41
(c) Insurance.............................................................................43
(d) Taxes and Other Indebtedness..........................................................43
(e) Maintenance of Existence; Conduct of Business.........................................43
(f) Financial Records, Inspection.........................................................44
(g) Use of Proceeds.......................................................................44
(h) Consents, Approvals...................................................................44
(i) Environmental Condition...............................................................44
(j) Renegotiation of Financial Covenants..................................................44
(k) Further Assurances....................................................................44
5.2 Negative Covenants.............................................................................45
(a) Encumbrances, Liens, Etc..............................................................45
(b) Indebtedness..........................................................................45
(c) Consolidation/Merger/Change of Control................................................45
(d) Disposition of Assets.................................................................45
(e) Investments...........................................................................46
(f) Capital Expenditures..................................................................46
(g) Limitation on Prepayments.............................................................46
(h) Transactions With Affiliates..........................................................46
(i) Dividends; Distributions..............................................................46
(j) Change in Lines of Business...........................................................46
iv.
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(CONTINUED)
PAGE
(k) Modification of the Specified Agreements..............................................47
(l) ERISA Compliance......................................................................47
(m) Other Compliance......................................................................47
5.3 Financial Covenants............................................................................47
SECTION 6. EVENTS OF DEFAULT.....................................................................................47
6.1 Events of Default..............................................................................47
6.2 Remedies.......................................................................................49
6.3 Unmatured Events of Default....................................................................49
6.4 Payment of Subordinated Indebtedness...........................................................50
SECTION 7. ADMINISTRATIVE AGENT..................................................................................50
7.1 Appointment of ABN AMRO Bank N.V. as Administrative Agent......................................50
7.2 Delegation of Duties by Administrative Agent...................................................50
7.3 Liability of Administrative Agent..............................................................50
7.4 Reliance by Administrative Agent...............................................................51
7.5 Notice of Default..............................................................................51
7.6 Non-Reliance by Lenders........................................................................52
7.7 Indemnification................................................................................52
7.8 Successor Administrative Agent.................................................................53
7.9 Matters Regarding the Collateral...............................................................53
SECTION 8. MISCELLANEOUS.........................................................................................54
8.1 Amendments.....................................................................................54
8.2 Notices, Etc...................................................................................56
8.3 No Waiver; Remedies............................................................................58
8.4 Costs, Expenses and Taxes......................................................................58
8.5 Right of Set-Off...............................................................................58
8.6 Binding Effect; Assignments; Governing Law.....................................................59
8.7 Collateral.....................................................................................59
8.8 Nature of Lenders' Obligations.................................................................59
8.9 Non-liability of Lenders.......................................................................59
8.10 Jurisdiction, Venue, Service of Process; Arbitration...........................................60
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(a) Jurisdiction, Venue.................................. 60
(b) Service of Process................................... 60
(c) Waiver of Jury Trial................................. 60
8.11 Conflict in Credit Documents.................................. 60
8.12 Maximum Rate.................................................. 60
8.13 Broker........................................................ 60
8.14 Indemnification............................................... 60
8.15 Headings...................................................... 61
8.16 Counterparts.................................................. 61
8.17 Survival...................................................... 61
8.18 Effectiveness................................................. 61
8.19 Confidentiality............................................... 61
8.20 Conflict in Credit Documents.................................. 62
8.21 Entire Agreement.............................................. 62
vi.
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is entered into as of August
[___], 1998, by and between LEAP WIRELESS INTERNATIONAL, INC., a Delaware
corporation ("Borrower"), XXXXXXXX XXXXXXXXXXXX, a Delaware corporation
("QUALCOMM"), as a Lender and such other Persons as shall from time to time
become Lenders hereunder (collectively, with QUALCOMM, "Lenders"), and ABN AMRO
BANK N.V., as Administrative Agent.
RECITALS
A. QUALCOMM plans to distribute to its stockholders all of the
outstanding shares of common stock of Borrower and to transfer certain of
QUALCOMM's joint venture and equity interests in various terrestrial-based
wireless telecommunications operating companies to Borrower, all as more fully
described in the Information Statement (defined below).
B. In order to help finance its ongoing operations after the completion
of the above-described distribution and transfer, Borrower desires to obtain
from Lenders certain credit facilities in the aggregate principal amount of up
to $265,000,000.
C. Lenders have agreed to make such credit available to Borrower, but
only for the purposes, upon the terms, subject to the conditions, and in
reliance on the representations and warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings set forth herein, and intending to be legally bound, Borrower,
Lenders and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, the following terms have
the respective meanings set forth below or set forth in the provision referenced
following such term:
"Administrative Agent" means ABN AMRO Bank N.V. solely when
acting in its capacity as Administrative Agent under any of the Credit Documents
and any successor Administrative Agent.
"Administrative Agent's Fee Letter" means the side letter, by
and among Borrower and Administrative Agent, relating to fees payable from time
to time from Borrower to Administrative Agent in consideration for the services
to be performed by Administrative Agent pursuant to the Credit Documents.
"Administrative Agent's Payment Office" means the address for
payments set forth on the signature page hereto in relation to the
Administrative Agent or such other address as Administrative Agent may from time
to time specify in accordance with SECTION 8.2.
1.
9
"Affected Loan" has the meaning set forth in SECTION 2.14(a).
"Affiliate" means, with respect to any Person, each other
Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person (excluding any trustee under, or any committee
with responsibility for administering, any pension plan or employee benefit
plan); provided, however, that for purposes of this Agreement, neither QUALCOMM
nor Borrower shall be deemed to be Affiliates of the other. Except as described
in the foregoing proviso, a Person shall be deemed to be "controlled by" another
Person if such other Person possesses, directly or indirectly, power (i) to vote
fifteen percent (15.0%) or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors, managing general
partners or managing members or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Aggregate Commitment" means, at any time, an amount equal to
the Aggregate Working Capital Loan Commitment plus the Aggregate Investment
Capital Loan Commitment.
"Aggregate Investment Capital Loan Commitment" means an amount
equal to $229,800,000.
"Aggregate Working Capital Loan Commitment" means an amount
equal to $35,200,000.
"Agreement" means this Credit Agreement, as the same may from
time to time be amended, modified, supplemented or restated as hereinafter
provided.
"Applicable Margin" means, with respect to Base Rate Loans,
4.25%, and, with respect to Eurodollar Loans, 5.25%.
"Asset Sale" means the sale, transfer, lease or other
disposition to any Person other than Borrower or any of its wholly-owned
Subsidiaries of (i) any assets or rights of Borrower, (ii) the stock or assets
of any of the Portfolio Investments to the extent the Net Proceeds of such
disposition may be legally distributed or paid as a dividend to Borrower without
violation of laws or agreements respecting the same and are identified on
SCHEDULE 2.3 to the Disclosure Letter as subject to mandatory prepayment under
Section 2.10(b) or (iii) the sale of any other Pledged Securities; provided,
however, that prior to the third anniversary of the date hereof an Asset Sale
shall not include any of the foregoing items (i), (ii) or (iii) where (A) the
Net Proceeds of such sale, transfer, lease or other disposition have been
invested in Investment Grade Securities in which Administrative Agent has a
first priority, perfected security interest, (B) Requisite Lenders shall have
approved Borrower's proposed reinvestment of such Net Proceeds in "like kind"
assets and (C) such Net Proceeds are indeed invested as so proposed within one
hundred eighty (180) days after such sale, transfer, lease or other disposition;
provided, further, that after the third anniversary of the date hereof an Asset
Sale shall not include the sale, transfer, lease or other disposition of
inventory and equipment in the ordinary course of business where the Net
Proceeds of such sale, transfer, lease or other disposition are reinvested in
"like kind" assets used by Borrower or its Subsidiaries in the ordinary course
of business of Borrower and its Subsidiaries within one hundred eighty (180)
days after such sale, transfer, lease or other disposition.
2.
10
"Base Rate" means the greater of (i) the rate of interest per
annum publicly announced by Administrative Agent at its headquarters from time
to time as its prime commercial lending rate for U.S. dollar loans, such rate to
be adjusted automatically (without notice) on the effective date of any change
in such publicly announced rate and (ii) the Federal Funds Effective Rate plus
one-half of one percent (0.50%) (rounded upwards, if necessary, to the next
one-eighth of one percent (1/8 of 1%).
"Base Rate Investment Capital Loan" means any Investment
Capital Loan bearing interest at the Base Rate.
"Base Rate Loan" means any Loan bearing interest at the Base
Rate.
"Borrower" has the meaning set forth in the Preamble hereto.
"Borrower Business" means certain of QUALCOMM's joint venture
and equity interests in terrestrial-based wireless telecommunications operating
companies, together with certain other assets and related liabilities, including
significant funding obligations, to be transferred from QUALCOMM to Borrower,
all as more fully described in the Separation and Distribution Agreement.
"Borrowing Request" has the meaning set forth in SECTION
2.5(a).
"Borrowing Request Review Period" has the meaning set forth in
SECTION 2.5(a).
"Business Day" means (i) with respect to a Base Rate Loan, any
day other than a Saturday, Sunday, or other day on which commercial banks in San
Diego, California or New York, New York are authorized or required to close
under the laws of the State of California, the laws of the State of New York or
the laws of the United States of America and (ii) with respect to a Eurodollar
Loan, each of the requirements of the foregoing clause (i) of this definition
and also a day on which dealings in Dollars or Dollar deposits are carried on in
the London interbank market.
"Business Plan" means that certain business plan of Borrower
dated as of [____________], which has been approved by Requisite Lenders, as the
same may from time to time be revised, amended, updated or otherwise modified
with the approval of Requisite Lenders.
"Capital Expenditures" means, with respect to any Person for
any period, expenditures that are capitalized in accordance with GAAP and, for
purposes of this definition, expenditures made during such period for equipment
and services financed under sale/leaseback arrangements or under an operating
lease.
"Capital Lease" means a lease that has been or should be
capitalized on the books of the subject lessee in accordance with GAAP.
"Change of Control" means a transaction or series of
transactions whereby (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities
3.
11
Exchange Act of 1934), directly or indirectly, of Voting Stock of Borrower (or
other securities convertible into such Voting Stock) representing 20% or more of
the combined voting power of all Voting Stock of Borrower; or (ii) during any
period of up to 18 consecutive months, commencing before or after the date of
this Agreement, individuals who at the beginning of such 18-month period were
directors of Borrower, together with such directors as are approved by directors
who were directors at the beginning of such period, shall cease for any reason
to constitute a majority of the board of directors of Borrower; or (iii) any
Person or two or more Persons acting in concert shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of the power to exercise,
directly or indirectly, a controlling influence over the management or policies
of Borrower. Notwithstanding the foregoing, any such transaction or series of
transactions involving QUALCOMM or any of its Affiliates shall not constitute a
Change of Control.
"Closing" means such time as when each and every condition set
forth in SECTION 3.1 has been satisfied or waived by each Lender.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations adopted thereunder.
"Collateral" means all Property and interest in Property, and
all proceeds thereof, now owned or hereafter acquired by Borrower in or upon
which a Lien now or hereafter exists in favor of Lenders or Administrative
Agent, whether under this Agreement or under any other document executed
Borrower and delivered to Administrative Agent or Lenders.
"Collateral Documents" means the Security Agreement, the
Securities Pledge Agreement, the Control Agreements and the Financing
Statements.
"Commitment Fee" means the fee described in SECTION 2.8(c).
"Commitment Fee Inception Date" means the later of the Closing
Date and the date an assignment under SECTION 8.6 shall occur whereby any Lender
other than QUALCOMM or its Subsidiaries shall have ten percent (10%) or more of
the Aggregate Commitments.
"Commitment Percentage" means, as to any Lender, with
reference to the Investment Capital Loans, its Investment Capital Loan
Commitment Percentage; and with reference to the Working Capital Loans, its
Working Capital Loan Commitment Percentage.
"Contingent Obligation" means as to any Person, any guaranty
of Indebtedness of any other Person, whether direct, indirect or contingent,
including any purchase or repurchase agreement or keep-well or other arrangement
of whatever nature having the effect of assuring, indemnifying or holding
harmless any Person against loss with respect to any Indebtedness of such other
Person; provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such contingent obligation is
4.
12
made, or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by Borrower in good faith.
"Continuation Date" means any date on which Borrower elects or
is deemed to elect to continue a Eurodollar Loan into another Interest Period.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Control Agreements" has the meaning set forth in SECTION
3.1(d).
"Conversion Date" means any date on which Borrower elects or
is deemed to elect to convert a Base Rate Loan to a Eurodollar Loan or a
Eurodollar Loan to a Base Rate Loan.
"Conversion To High Yield Structure" means the conversion
described in SECTION 2.16.
"Credit Documents" means this Agreement, the Notes, if any,
the Collateral Documents and any other agreements, certificates or instruments
that may hereafter be executed and delivered in favor of Administrative Agent or
one or more Lenders pursuant to this Agreement.
"Credit Party" means Borrower and each other party (other than
Administrative Agent and Lenders) to a Credit Document.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means an interest rate per annum equal to the
rate otherwise then applicable to the Loans plus (i) three percent (3.00%) in
the case of any Event of Default due to the failure to pay any principal,
interest or other amounts when due (including any failure to make payment
required to be made upon the acceleration of any Loans), and (ii) two percent
(2.00%) in the case of any Event of Default other than those specified in the
immediately preceding clause (i) of this definition.
"Disclosure Letter" means the letter designated as such dated
[_____________] from Borrower to Administrative Agent.
"Disposition Value" means, at any time, with respect to
Property, the fair market value thereof, valued at the time of such disposition.
"Distribution" means the distribution to QUALCOMM's
stockholders of all of the outstanding shares of common stock of Borrower
contemplated to occur on or about September 24, 1998, as more fully described in
the Information Statement.
5.
13
"Distribution Date" means the date on which the Distribution
occurs.
"Dollar," "Dollars" and "$" means dollars in lawful currency
of the United States of America.
"Equipment Agreement" means that certain Master Agreement
Regarding Equipment Procurement dated as of [___________], by and between
QUALCOMM and Borrower, including all schedules and exhibits thereto, as the same
may from time to time be amended, modified, supplemented or restated.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Borrower within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Borrower or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Company or
any ERISA Affiliate.
"Eurodollar Loan" means any Loan bearing interest at the
Eurodollar Rate.
"Eurodollar Rate" applicable to any Interest Period for any
Loan to be made, continued or converted, means the rate per annum (determined by
Administrative Agent and rounded upward, if necessary, to the next higher 1/16
of 1%) at which deposits in Dollars are offered to Administrative Agent by major
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days before the first day of such Interest Period with respect to
such Loan in an amount approximately equal to the aggregate principal amount of
the Loans subject to such Interest Period and for a period of time comparable to
such Interest Period. The determination of the Eurodollar Rate by Administrative
Agent shall be conclusive absent manifest error.
"Event of Default" means any of the events specified in
SECTION 6.1, provided that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied.
6.
14
"Facility Fee" means those certain fees payable pursuant to
the Fee Letter.
"Federal Funds Effective Rate" means, for any day, a
fluctuating interest rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"Fee Letter" means the side letter relating to the Facility
Fee dated as of the date hereof, between Borrower and QUALCOMM.
"Final Maturity Date" means, with respect to each of the
Investment Capital Loan Facility and the Working Capital Loan Facility, the date
which is the last Business Day in September, 2006.
"Financial Statements" means, with respect to any fiscal
quarter or full fiscal year of Borrower, consolidated and consolidating
statements of income and cash flows of Borrower and its Subsidiaries for such
fiscal quarter or full fiscal year of Borrower (and, if the end of such period
of Borrower is not also the end of Borrower's full fiscal year or first fiscal
quarter of its fiscal year, for the elapsed portion of such fiscal year of
Borrower), and consolidated and consolidating balance sheets of Borrower and its
Subsidiaries as of the end of such period of Borrower, setting forth in each
case in comparative form figures for the corresponding period in the preceding
fiscal year of Borrower (and, as applicable, the elapsed portion of the
preceding fiscal year of Borrower or, if such period is a full fiscal year,
corresponding figures from the preceding fiscal year), all prepared in
reasonable detail and in accordance with GAAP consistently applied and which
shall fairly present in all material respects the financial condition of
Borrower and its Subsidiaries.
"Financing Statements" means the UCC-1 financing statements
duly executed by Borrower, as debtor, in favor of Administrative Agent, for the
benefit of Lenders, as secured party, and caused to be filed prior to the
Closing Date in the jurisdictions required by Administrative Agent and Lenders.
"Fixed Rate Notes" has the meaning set forth in SECTION 2.16.
"Form W-8" has the meaning set forth in SECTION
2.14(c)(vii)(B)(1).
"Form 1001" has the meaning set forth in SECTION
2.14(c)(vii)(A)(1).
"Form 4224" has the meaning set forth in SECTION
2.14(c)(vii)(A)(1).
"Funding Date" means each date on or after the Closing Date on
which any of Lenders make a Loan hereunder.
7.
15
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Indebtedness" means, as to any Person, (a) all indebtedness
of such Person for borrowed money (including, with respect to Borrower, the
Obligations), (b) all obligations under Capital Leases of such Person, (c) to
the extent of the outstanding Indebtedness thereunder, all obligations of such
Person that are evidenced by a promissory note or other instrument representing
an extension of credit to such Person, whether or not for borrowed money, (d)
all obligations of such Person for the deferred purchase price of Property or
services (other than trade or other accounts payable in the ordinary course of
business in accordance with customary industry terms), (e) all obligations of
such Person of the nature described in clauses (a), (b), (c) or (d), above, and
not otherwise included therein which are secured by a Lien on assets of such
Person, whether or not such Person has assumed such obligation or whether or not
such obligation is non-recourse to the credit of such Person, but only to the
extent of the fair market value of the assets so subject to such Lien, (f) all
obligations of such Person arising under acceptance facilities or under
facilities for the discount of accounts receivable of such Person, (g) all
issued and outstanding letters of credit, performance bonds and similar
instruments, (h) all obligations of such Person to a counterparty under any
interest rate protection agreement or other hedging arrangement, (i) any
security which, by its terms or the happening of any event (excluding a change
in control), matures or is mandatorily redeemable or is otherwise exchangeable
into debt at the option of the holder thereof, and (j) all Contingent
Obligations.
"Information Statement" means that Information Statement dated
June 30, 1998 and filed by Borrower on Form 10 with the Securities and Exchange
Commission, as amended.
"Interest Payment Date" means, with respect to any Eurodollar
Loan, the last day of each Interest Period applicable to such Loan and, with
respect to Base Rate Loans, the last Business Day of each calendar quarter and
each date on which a Base Rate Loan is converted into a Eurodollar Loan;
provided, however, that if any Interest Period for a Eurodollar Loan exceeds
three (3) months, interest shall also be paid on the date which falls three (3)
months after the beginning of such Interest Period.
"Interest Period" means, with respect to each Eurodollar Loan,
the period commencing on the date of the making or continuation of or conversion
to such Eurodollar Loan and ending one, three or six months thereafter, as
Borrower may elect in the applicable Borrowing Request or Notice of
Conversion/Continuation; provided that:
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (c) below) that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business Day
unless, in the case of Eurodollar Loans, such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day;
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(b) any Interest Period applicable to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (c) below, end on the last Business
Day of a calendar month;
(c) any Interest Period with respect to a Eurodollar Loan that
would otherwise end after the applicable Final Maturity Date shall end on such
Final Maturity Date;
(d) no Interest Period applicable to any Eurodollar Loan shall
include a principal repayment date for such Eurodollar Loan unless an aggregate
principal amount of Loans at least equal to the principal amount due on such
principal repayment date shall be Base Rate Loans or other Eurodollar Loans
having Interest Periods ending on or before such date;
(e) no Interest Period with respect to a Eurodollar Loan may
include September 30, 2001 unless such date is either the first or the last date
for such Interest Period; and
(f) notwithstanding clauses (c) and (d) above, no Interest
Period applicable to a Eurodollar Loan shall have a duration of less than one
month, and if any Interest Period applicable to such Eurodollar Loan would be
for a shorter period, such Interest Period shall not be available hereunder.
"Investment" means, as to any Person, any direct or indirect
ownership or purchase or other acquisition by such Person of any capital stock,
equity interest, obligations or other securities, or a beneficial interest in
any capital stock, equity interest, obligations (excluding trade payables to
such Person arising in the ordinary course) or other securities of any other
Person (including a Subsidiary), or all or substantially all assets used to
conduct a business or a line of business, or any direct or indirect loan,
advance or capital contribution by such Person to any other Person, or any joint
venture or other arrangement involving the sharing of profits or losses from
joint business activities, including all indebtedness and accounts receivable
from that other Person which are not current assets or did not arise from sales
to that other Person in the ordinary course of business.
"Investment Capital Lender" means any Lender having an
Investment Capital Loan Commitment.
"Investment Capital Loan" has the meaning set forth in SECTION
2.1.
"Investment Capital Loan Commitment" means, with respect to
each Lender, the amount set forth in SCHEDULE 1.1 as such Lender's "Investment
Capital Loan Commitment," as such amount may be amended from time to time.
"Investment Capital Loan Commitment Percentage" means, as to
any Lender, the percentage equivalent of such Lender's Investment Capital Loan
Commitment divided by the Aggregate Investment Capital Loan Commitment.
9.
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"Investment Capital Loan Commitment Period" means the period
from and including the Closing Date to but not including the Termination Date or
such earlier date on which the Aggregate Investment Capital Loan Commitment
shall terminate as provided herein.
"Investment Capital Loan Facility" means the investment
capital loan facility, in the amount of $229,800,000 described in SECTION 2 to
be provided by Investment Capital Lenders to Borrower according to each
Investment Capital Lender's Investment Capital Loan Commitment.
"Investment Capital Loan Percentage" means the percentage
equivalent of the then aggregate unpaid principal amount of all Investment
Capital Loans then outstanding divided by the then aggregate unpaid principal
amount of all Loans then outstanding, or if no Loans are then outstanding, the
percentage equivalent of the Aggregate Investment Capital Loan Commitment
divided by the Aggregate Commitment.
"Investment Capital Note" or "Investment Capital Notes" means
those promissory notes, if any, referred to in SECTION 2.12(a).
"Investment Grade Instruments" means: (a) direct obligations
of the government of the United States of America or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the government of the United States of America, (b) money
market funds with assets in excess of $1,000,000,000, (c) certificates of
deposit ("CDS"), bankers acceptances, eurodollar CDs or Yankee CDs with (i) U.S.
commercial banks with capital of at least $200,000,000 and a senior long-term
dollar denominated debt rating of at least "A" by Moody's and S&P or (ii)
foreign commercial banks with assets of at least $1,000,000,000 and a Xxxxxxxx
Bankwatch rating of at least TBW-1, (d) eurodollar time deposits with the Nassau
or Cayman offshore branches of U.S. commercial banks with capital of at least
$200,000,000 and a senior long-term dollar denominated debt rating of at least
"A" by Moody's and S&P, (e) commercial paper rated at least "P2" by Moody's and
"A2" by S&P, (f) medium term, fixed or floating rate notes issued by U.S.
corporations in offerings of at least $100,000,000 with a maximum tenor of five
years and a senior long-term dollar denominated debt rating of at least "A" by
Moody's and S&P, and (g) repurchase agreements, provided that (w) the market
value of the collateral securing any such repurchase agreement must be equal to
at least 102% of the repurchase value plus accrued interest, (x) the collateral
(A) has a maturity of three years or less, (B) is issued by the government of
the United States of America or any agency or instrumentality thereof or U.S.
commercial banks with capital of at least $200,000,000 and a senior long-term
dollar denominated debt rating of at least "A" by Moody's and S&P and (C) has
pricing information that is available on the Bloomberg Reporting Service, (y)
must be executed with primary dealers listed by the New York Federal Reserve
Board and rated at least "P1" by Moody's and "A1" by S&P, and (z) such
collateral must be delivered to the Borrower's custodian.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
10.
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"Laws" means, collectively, all international, foreign,
federal, state and local statutes, treaties, codes, ordinances, rules,
regulations and precedents of any court or other governmental agency.
"Lender" or "Lenders" has the meaning set forth in the
Preamble hereto.
"Lending Office" means, with respect to any Lender, the office
or offices of such Lender specified as its "Domestic Lending Office" under its
name on the applicable signature page hereto, or such other office or offices of
such Lender as it may from time to time notify Borrower and Administrative
Agent.
"Lien" means any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority or other security agreement or
preferential agreement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, or any financing lease
having substantially the same economic effect as any of the foregoing).
"Loan" means an Investment Capital Loan or a Working Capital
Loan, and "Loans" means all of such loans, collectively.
"Material Adverse Effect" means a material adverse effect on
(i) the business, Properties, results of operations or financial condition or
prospects of Borrower and its Subsidiaries taken as a whole or (ii) the ability
of Borrower to discharge the Obligations in accordance with their terms.
"Maturity" means the earlier of (i) the Final Maturity Date
and (ii) the date on which (A) the Loans have been accelerated or (B) the Loans
have been prepaid in full and the Aggregate Commitment terminated pursuant to
this Agreement (including pursuant to a Conversion to High Yield Structure).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan," within the
meaning of Section 4001(a)(3) of ERISA, to which Borrower or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"Net Proceeds" means, with respect to any Asset Sales or any
issuance, raising or receipt of new equity or Indebtedness for borrowed money,
the gross cash consideration received by such Person from such sale, net of
commissions, direct sales costs, normal closing adjustments, taxes attributable
to such sale and professional fees and expenses incurred directly in connection
therewith, to the extent the foregoing are actually paid (or will be paid,
provided that such amounts have been accrued in accordance with GAAP and will be
paid within one year of the date of the closing of such sale of assets or
issuance and sale of common stock or other equity of Borrower in connection with
such sale).
"Non-Bank Lender Tax Certificate" has the meaning set forth in
SECTION 2.14(c)(vii)(B)(1).
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"Note" means an Investment Capital Note, if any, or a Working
Capital Note, if any, and "Notes" means all of such notes, collectively.
"Notice of Conversion/Continuation" means a notice given by
Borrower to Administrative Agent in accordance with SECTION 2.6(b),
substantially in the form of EXHIBIT C, with appropriate insertions.
"Obligations" means, collectively, all Indebtedness,
principal, interest, fees, expenses of Administrative Agent and Lenders
(including fees, costs or expenses (other than attorneys' fees and costs)
incurred in connection with the preparation, negotiation, administration and
enforcement of the Credit Documents; and Administrative Agent's and any Lender's
reasonable attorneys' fees and expenses incurred in amending, enforcing or
defending the Credit Documents, whether or not suit is brought) and other
amounts owed to Administrative Agent or any Lender by any Credit Party pursuant
to this Agreement, the Credit Documents or any other agreement, whether absolute
or contingent, due or to become due, now existing or hereafter arising,
including any interest that accrues after the commencement of an insolvency
proceeding (including any proceeding commenced by or against any Credit Party
under any provision of the United States Bankruptcy Code, as amended, or under
any other bankruptcy or insolvency law, including assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
any Credit Party's creditors, or proceedings seeking reorganization, arrangement
or other relief) and including any Indebtedness, liability or obligation owing
from any Credit Party to others that Administrative Agent or any Lender may have
obtained by assignment or otherwise.
"Operating Lease" means, as applied to any Person, any lease
(including leases which may be terminated by the lessee at any time) of any
Property which is not a Capital Lease other than any such lease under which that
Person is lessor.
"Other Taxes" has the meaning set forth in SECTION
2.14(c)(ii).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which Borrower sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions, or in
the case of a multiple employer plan (as described in Section 4064(a) of ERISA)
has made contributions at any time during the immediately preceding five (5)
plan years.
"Permitted Indebtedness" has the meaning set forth in SECTION
5.2(b).
"Permitted Liens" means: (i) Liens for taxes and assessments
or other governmental charges or levies not at the time delinquent or thereafter
payable without penalty; (ii) Liens of carriers, warehousemen, mechanics,
materialmen, landlords, suppliers and lessors incurred in the ordinary course of
business for sums that are not overdue or that are being contested in good faith
by appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such lien, and for which
adequate reserves (in the good faith judgment of Borrower) have been
established; (iii) Liens
12.
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created to secure the payment of the purchase price of assets or Indebtedness
incurred solely for the purpose of financing or refinancing such purchase price
of assets (including a purchase by conditional sales agreements and other title
retention agreements, but not including Liens securing Capital Leases) on which
the Lien is created, provided that the aggregate amount secured thereby does not
exceed the value of the assets purchased at any one time outstanding and any
such Lien attaches only to the asset or assets so purchased; (iv) Liens securing
appeal and surety bonds (to the extent such Indebtedness is otherwise not
prohibited hereby); (v) Liens securing statutory obligations and performance
obligations under bid bonds, contracts or leases; (vi) Liens on Investment Grade
Instruments to the extent required under the terms of Permitted Indebtedness as
reserves for the payment of principal and interest on such Permitted
Indebtedness; and (vii) other ordinary course Liens which do not materially
interfere with the operation of the business of Borrower, including easements.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, limited liability company, Governmental Authority or other entity of
whatever nature.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA) which Borrower sponsors or maintains or to which Borrower makes,
is making, or is obligated to make contributions and includes any Pension Plan.
"Pledged Securities" means the equity or debt securities of
the Portfolio Investments held by Borrower and its Subsidiaries as to which an
affirmative pledge is required as set forth in Schedule 2.3 to the Disclosure
Letter now or hereafter issued, and each other certificate or instrument
representing or evidencing Investments (other than Investment Grade Instruments)
owned directly by Borrower, all of which shall, pursuant to the Securities
Pledge Agreement, be delivered to Administrative Agent on behalf of Lenders as
collateral for the Obligations under this Agreement.
"Portfolio Investments" means any or all of the Persons listed
on SCHEDULE 2.3 to the Disclosure Letter.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed and whether tangible or intangible.
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations issued by the PBGC.
"Requirements of Law" means, as to any Person, the certificate
or articles of incorporation and bylaws or other organizational or governing
documents of such Person, and any Law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which or by which such Person or any of its Property is subject.
"Requisite Investment Capital Lenders" means, at any time,
Investment Capital Lenders then holding more than fifty-one percent (51%) of the
then aggregate unpaid principal amount of all Investment Capital Loans then
outstanding or, if no Investment Capital Loans are
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then outstanding, Investment Capital Lenders then having more than fifty-one
percent (51%) of the Aggregate Investment Capital Loan Commitment.
"Requisite Lenders" means, at any time, Lenders then holding
more than fifty-one percent (51%) of the then aggregate unpaid principal amount
of all Loans then outstanding or, if no Loans are then outstanding, Lenders then
having more than fifty-one percent (51%) of the Aggregate Commitment.
"Requisite Working Capital Lenders" means, at any time,
Working Capital Lenders then holding more than fifty-one percent (51%) of the
then aggregate unpaid principal amount of all Working Capital Loans then
outstanding or, if no Working Capital Loans are then outstanding, Working
Capital Lenders then having more than fifty-one percent (51%) of the Aggregate
Working Capital Loan Commitment.
"Reserve Percentage" means the reserve percentage applicable
to an Interest Period (expressed as a decimal and rounded upwards, if necessary,
to the next higher 1/100 of 1%) in effect on the date the Eurodollar Rate for
such Interest Period is determined under regulations issued from time to time by
the Board of Governors of the Federal Reserve System for determining the maximum
reserve requirement (including any basic, supplemental, emergency or marginal
reserve requirement) with respect to "eurocurrency liabilities" (as defined
under such regulations) having a term comparable to such Interest Period.
"Responsible Officer" means any of the president, chief
financial officer or treasurer of Borrower.
"S&P" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"Securities Pledge Agreement" means the Securities Pledge
Agreement substantially in the form of EXHIBIT F, to be entered into by Borrower
as pledgor in favor of Administrative Agent, on behalf of Lenders, as pledgee,
which shall be acceptable to Administrative Agent and Lenders and adequate to
give to Administrative Agent, on behalf of Lenders, a first priority perfected
security interest in all of the Pledged Securities, including all schedules and
exhibits thereto, in each case as the same from time to time may be amended,
modified, supplemented or restated.
"Security Agreement" means each of the Security Agreement,
substantially in the form of EXHIBIT E, to be entered into by Borrower, as
grantor, and Administrative Agent, on behalf of Lenders, as secured party, and
any required consent agreements pertaining to the grant to Administrative Agent,
on behalf of Lenders, of any collateral, in each case satisfactory to
Administrative Agent and Lenders, including all schedules and exhibits thereto,
in each case as the same from time to time may be amended, modified,
supplemented or restated.
"Separation and Distribution Agreement" means that certain
Separation and Distribution Agreement, dated as of [_____________], by and
between QUALCOMM and Borrower, including all schedules and exhibits thereto, as
the same may from time to time be amended, modified, supplemented or restated.
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"Specified Agreements" means the Separation and Distribution
Agreement, the Equipment Agreement and the Tax Agreement, each dated as of
[_____________], by and between QUALCOMM and Borrower, including all schedules
and exhibits thereto, as the same may from time to time be amended, modified,
supplemented or restated.
"Subordinated Indebtedness" means unsecured Indebtedness of
Borrower the payment of the principal of and interest on which and any other
obligations of Borrower in respect thereof is subordinated to the payment of the
principal of and interest (including post-petition interest) on the Loans and
all other obligations and liabilities of Borrower to Lenders and Administrative
Agent hereunder and having terms and conditions first approved in writing by
Requisite Lenders.
"Subsidiary" means, as to any Person, an entity of which a
majority of the shares of stock (or similar equity interests) having ordinary
voting power (other than stock having such power only by reason of the happening
of a contingency) are at the time owned or controlled, directly or indirectly,
through one or more intermediaries, or both, by such Person.
"Taxes" has the meaning set forth in SECTION 2.14(c)(i).
"Termination Date" means September 30, 2000.
"Total Capitalization" means, as of any date, determined for
Borrower on an unconsolidated basis, the sum of (a) Total Debt, (b) the amount
designated by QUALCOMM on the Closing Date as the value of QUALCOMM's
contribution of assets to Borrower in exchange for the issuance of Borrower's
equity securities, (c) the Net Proceeds received by Borrower from any subsequent
issuance of Borrower's equity securities and (d) gains (net of any losses) from
assets sales.
"Total Debt" means, as of any date, determined for Borrower on
an unconsolidated basis the sum (without duplication) of (a) all principal and
interest expense owing under this Agreement, (b) any obligation for borrowed
money, including Subordinated Indebtedness and indebtedness convertible into
equity securities, (c) any security issued by Borrower for cash consideration
which, by its terms or the happening of any event (excluding a change in
control), matures or is mandatorily redeemable or is otherwise exchangeable into
debt at the option of the holder thereof or is redeemable by the holder thereof,
but only to the extent of amounts which mature, are redeemable or are
exchangeable prior to two years after the Final Maturity Date, (d) any
obligation evidenced by a bond, indenture, note or other similar instrument, (e)
any obligation to pay the deferred purchase price of Property or services, (f)
any obligation to purchase securities or other Property, (g) any contractual
obligation, contingent or otherwise, including obligations to reimburse any
other Person in respect of amounts paid under a letter of credit or performance
or other bond issued by such other Person, (h) any obligation of others secured
by a Lien on any asset of Borrower or its Subsidiaries (provided, that such
there is no recourse to Borrower or such Subsidiary), but only to the extent of
the fair market value of the assets so subject to such Lien and (i) any
Indebtedness of others guaranteed by Borrower or its Subsidiaries.
15.
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"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or Persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.
"Working Capital Lender" means any Lender having a Working
Capital Loan Commitment.
"Working Capital Loan" has the meaning set forth in SECTION
2.2.
"Working Capital Loan Commitment" means, with respect to each
Lender, the amount, if any, set forth in SCHEDULE 1.1 as such Lender's "Working
Capital Loan Commitment," as such amount may be amended from time to time.
"Working Capital Loan Commitment Percentage" means, as to any
Lender, the percentage equivalent of such Lender's Working Capital Loan
Commitment, if any, divided by the Aggregate Working Capital Loan Commitment.
"Working Capital Loan Commitment Period" means the period from
and including the Closing Date to and including the Termination Date or such
earlier date on which the Aggregate Working Capital Loan Commitment shall
terminate as provided herein.
"Working Capital Loan Facility" means the $35,200,000 Working
Capital Loan facility described in SECTION 2 to be provided by Working Capital
Lenders to Borrower according to each Working Capital Lender's Working Capital
Loan Commitment.
"Working Capital Loan Percentage" means the percentage
equivalent of the then aggregate unpaid principal amount of all Working Capital
Loans then outstanding divided by the then aggregate unpaid principal amount of
all Loans then outstanding, or if no Loans are then outstanding, the percentage
equivalent of the Aggregate Working Capital Loan Commitment divided by the
Aggregate Commitment.
"Working Capital Note" or "Working Capital Notes" means those
promissory notes, if any, referred to in SECTION 2.12(b).
1.2 OTHER INTERPRETIVE PROVISIONS.
(a) All terms defined in this Agreement shall have their
defined meanings when used in the other Credit Documents and any certificate or
other document made or delivered pursuant hereto, unless the context clearly
indicates otherwise.
(b) As used in this Agreement, the other Credit Documents, and
any certificate or other document made or delivered pursuant hereto, accounting
terms not defined in SECTION 1.1, and accounting terms partly defined in
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SECTION 1.1 to the extent not defined, shall have the respective meanings given
to them under GAAP. If any changes in GAAP from time to time hereafter ("GAAP
Changes") occasioned by the promulgation of rules, regulations, pronouncements
and opinions by or required by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) result in a change in the method of calculation
of any of the financial covenants, standards or other terms or conditions found
in this Agreement, the parties hereto agree to enter into negotiations to amend
such provisions so as to reflect equitably such GAAP Changes with the desired
result that the criteria for evaluating the financial condition and performance
of Borrower shall be the same after such GAAP Changes as if such GAAP Changes
had not been made.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified. The term "including" is not limiting and means "including,
without limitation," and "including, but not limited to."
(d) Wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and the neuter.
SECTION 2. LOAN FACILITIES.
2.1 INVESTMENT CAPITAL LOAN COMMITMENTS. Upon the terms, subject to the
conditions and in reliance upon the representations and warranties of Borrower
set forth in this Agreement and in the other Credit Documents, each Investment
Capital Lender, severally agrees, in accordance with this SECTION 2, to make
loans to Borrower (an "Investment Capital Loan" and collectively, the
"Investment Capital Loans"), in such Lender's Investment Capital Loan Commitment
Percentage of such aggregate amounts from time to time, from the Closing Date to
and including the Termination Date, which amounts shall be borrowed and repaid
subject to the limitations set forth herein. Investment Capital Loans borrowed
and repaid during the Investment Capital Loan Commitment Period may not be
re-borrowed. At no time shall the aggregate amount of outstanding Investment
Capital Loans exceed the Aggregate Investment Capital Loan Commitment. Each
calculation of the amount of an outstanding Investment Capital Loan under this
Agreement shall be made by excluding any amount of capitalized interest added to
the Loans pursuant to SECTION 2.8.
2.2 WORKING CAPITAL LOAN COMMITMENTS. Upon the terms, subject to the
conditions and in reliance upon the representations and warranties of Borrower
set forth in this Agreement and in the other Credit Documents, each Working
Capital Lender severally agrees, in accordance with this SECTION 2, to make
Working Capital Loans to Borrower (a "Working Capital Loan and collectively, the
"Working Capital Loans"), in such Lender's Working Capital Loan Commitment
Percentage of each borrowing of Working Capital Loans from time to time during
the Working Capital Loan Commitment Period on a revolving basis in an aggregate
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principal amount outstanding not to exceed at any one time such Lender's Working
Capital Loan Commitment, as more fully set forth in this SECTION 2. At no time
shall the aggregate amount of outstanding Working Capital Loans (computed by
excluding any amount of capitalized interest added to the Loans pursuant to
SECTION 2.8) exceed the Aggregate Working Capital Loan Commitment. Each
calculation of the amount of an outstanding Working Capital Loan under this
Agreement shall be made by excluding any amount of capitalized interest added to
the Loans pursuant to SECTION 2.8.
2.3 PERMITTED USES OF LOAN PROCEEDS. Borrower shall (i) use the
Investment Capital Loan proceeds solely to make Portfolio Investments in
accordance with the Business Plan, and in the amounts not exceeding the amounts,
set forth on SCHEDULE 2.3 to the Disclosure Letter and (ii) use the Working
Capital Loan proceeds solely to meet the normal working capital and operating
expenses of Borrower and overhead in accordance with, and not exceeding amounts
budgeted in, the Business Plan, but excluding, among other things, strategic
capital investments in wireless operators and acquisitions of telecommunications
licenses.
2.4 TYPES OF LOANS. Each Investment Capital Loan or Working Capital
Loan shall, in accordance with the terms of this Agreement, be in the form of
either a Base Rate Loan or a Eurodollar Loan; provided, however, that,
notwithstanding anything to the contrary herein, each initial borrowing of
Investment Capital Loans or Working Capital Loans pursuant to SECTION 2.5 shall
be comprised solely of Base Rate Loans until the first day of the calendar month
next succeeding the effective date of such initial borrowing of such Loans. At
no time may Borrower maintain Eurodollar Loans in more than five (5) separate
Interest Periods.
2.5 NOTICE AND MANNER OF MAKING LOANS.
(a) BORROWING REQUESTS. Whenever Borrower desires to obtain a
borrowing of Investment Capital Loans or Working Capital Loans, as applicable,
(provided that Borrower may not request more than two borrowings of Working
Capital Loans during any calendar month) Borrower shall deliver by electronic
facsimile transmission: (A) to each of Administrative Agent and QUALCOMM,
written notice specifying (1) whether such borrowing is to be a borrowing of
Investment Capital Loans or Working Capital Loans, (2) the amount of such
borrowing of Loans and (3) the requested Funding Date for such borrowing of
Loans, which notice shall be in the form of EXHIBIT B (a "Borrowing Request");
and (B) to QUALCOMM, a complete and current copy of the most recent budget in
Borrower's Business Plan (unless previously provided) and all other correct and
complete supporting documentary information necessary to evidence compliance
with SECTION 2.3; provided, however, that such Borrowing Request, budget, and
supporting documentary information pertaining thereto shall be delivered to
Administrative Agent or QUALCOMM (as applicable) no later than five (5) Business
Days prior to the requested Funding Date for such borrowing. After the date on
which QUALCOMM receives each Borrowing Request and the accompanying budget and
other supporting documentary information, QUALCOMM shall have four (4) Business
Days (the "Borrowing Request Review Period") during which to examine such budget
and other supporting documentary information to confirm that the intended use of
the requested Loans is consistent with the permitted uses set forth in SECTION
2.3. QUALCOMM shall, by the end of business on the final Business Day of the
Borrowing Request Review Period, advise Administrative Agent in writing whether
the condition set forth in the preceding sentence has been satisfied and,
provided
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that such condition has been satisfied and the making of such borrowing of
Investment Capital Loans or Working Capital Loans, as applicable, would not
otherwise contravene this Agreement, such Loan shall be advanced to Borrower on
the requested Funding Date.
(b) DISBURSEMENT OF LOANS. Administrative Agent shall promptly
notify each Investment Capital Lender (in the case of borrowings of Investment
Capital Loans) or Working Capital Lender (in the case of borrowings of Working
Capital Loans), as applicable, as to the content of each such Borrowing Request
and whether or not QUALCOMM has advised Administrative Agent that the condition
set forth in the second sentence of SECTION 2.5(a) has been satisfied and that
the making of the borrowing of Investment Capital Loans or Working Capital
Loans, as applicable, would not otherwise contravene this Agreement. Provided
that QUALCOMM has advised Administrative Agent in writing that the conditions
set forth in the second sentence of SECTION 2.5(a) have been satisfied and that
the making of such Loans would not otherwise contravene this Agreement, and
provided, further, that Borrower shall have complied with SECTION 2.5(d), if
applicable, Investment Capital Lenders (in the case of a borrowing of Investment
Capital Loans) or Working Capital Lenders (in the case of a borrowing of Working
Capital Loans), as applicable, shall disburse to Administrative Agent's Payment
Office in immediately available funds by 12:00 noon New York time on the
requested funding date an amount equal to their respective Working Capital Loan
Commitment Percentages or Investment Capital Loan Commitment Percentages, as
applicable, multiplied by the amount of the borrowing of such Loans requested in
such Borrowing Request, and Administrative Agent shall promptly disburse the
aggregate of such amounts in immediately available funds to the deposit account
designated by written notice delivered from Borrower to Administrative Agent
from time to time in accordance with SECTION 8.2.
(c) ADMINISTRATIVE AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR
LOANS. Unless Administrative Agent shall have been notified by any Investment
Capital Lender (in the case of a borrowing of Investment Capital Loans) or any
Working Capital Lender (in the case of a borrowing of Working Capital Loans), as
applicable, no later than the Business Day prior to the respective Funding Date
for such borrowing of Loans that such Lender does not intend to make available
to Administrative Agent immediately available funds equal to such Lender's
Commitment Percentage of the total principal amount of such borrowing of such
Loans, Administrative Agent may (in its sole and absolute discretion) assume
that such Lender has advanced funds in the amount of such Lender's Commitment
Percentage of such borrowing of such Loans to Administrative Agent on the
applicable Funding Date and Administrative Agent may, in reliance upon such
assumption, make available to Borrower corresponding funds. Administrative Agent
agrees to give prompt notice to Borrower in the event it advances funds on
behalf of a Lender under this SECTION 2.5(c); provided that failure to give such
notice shall in no way limit, restrict or otherwise affect Borrower's
obligations or Administrative Agent's or any Lender's rights or remedies under
this Agreement and the other Credit Documents. If Administrative Agent has made
funds available to Borrower based on such assumption and such Loan is not in
fact made available to Administrative Agent by such Lender, Administrative Agent
shall be entitled to recover the corresponding amount of such Loan on demand
from such Lender. If such Lender does not promptly pay such corresponding amount
upon Administrative Agent's demand, Administrative Agent shall notify Borrower
and Borrower shall repay such Loan to Administrative Agent, together with
accrued interest thereon. Administrative Agent also shall be entitled to recover
from such Lender interest on such Loan in respect of each day from
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the date such Loan was made by Administrative Agent to Borrower to the date such
corresponding amount is recovered by Administrative Agent at the Federal Funds
Rate.
(d) BORROWINGS IN EXCESS OF $20,000,000 IN ANY 30 DAY PERIOD.
Notwithstanding anything in this Agreement to the contrary, Lenders shall have
no obligation to advance an Investment Capital Loan to Borrower if the aggregate
of all Investment Capital Loans made within the thirty (30) day period prior to
the making of such Investment Capital Loan together with all Investment Capital
Loans made concurrently therewith shall exceed $20,000,000 unless Administrative
Agent shall have received a Borrowing Request in respect of such Investment
Capital Loan at least thirty (30) days prior to the requested Funding Date set
forth in such Borrowing Request. In the event at any time prior to the
Commitment Fee Inception Date the funding requested in the Borrowing Request
shall not be made on the Funding Date specified therein for any reason other
than the failure of Administrative Agent or any Lender to make funding available
on the terms provided herein, then Borrower shall reimburse to each Lender it
costs and expenses incurred in making such funding available to Borrower, such
amount to be determined in the good faith judgment of each Lender and paid to
each Lender within five (5) Business Days of such Lender's notice to Borrower
requesting reimbursement of the same.
2.6 CONVERSION AND CONTINUATION ELECTIONS.
(a) Borrower may, upon irrevocable written notice to
Administrative Agent:
(i) elect to convert on any Business Day, Base Rate
Loans in an amount equal to $1,000,000 (or any integral multiple of $100,000 in
excess thereof) into Eurodollar Loans; or
(ii) elect to convert on any Interest Payment Date
any Eurodollar Loans maturing on such Interest Payment Date (or any part
thereof) into Base Rate Loans; or
(iii) elect to continue on any Interest Payment Date
any Eurodollar Loans maturing on such Interest Payment Date (or any part thereof
in an amount equal to $1,000,000 or any integral multiple of $100,000 in excess
thereof) as Eurodollar Loans;
provided, that if the aggregate amount of Eurodollar Investment Capital Loans or
Eurodollar Working Capital Loans shall have been reduced by payment, prepayment,
or conversion of any part thereof, to be less than $1,000,000, such Eurodollar
Loans shall automatically convert into Base Rate Loans, and on and after such
date the right of Borrower to continue such Loans as, and convert such Loans
into, Eurodollar Loans shall terminate.
(b) Borrower shall deliver a Notice of Conversion/Continuation
to Administrative Agent by facsimile to be received by Administrative Agent
prior to 1:00 p.m. New York time at least (i) prior to the Commitment Fee
Inception Date, 4 Business Days in advance of the Conversion Date or
Continuation Date, and on or after the Commitment Fee Inception Date, 3 Business
Days in advance of the Conversion Date or Continuation Date, if any Loans are to
be converted into or continued as Eurodollar Loans; and (ii) one Business Day in
advance of the Conversion Date or Continuation Date, if any Loans are to be
converted into Base Rate Loans; specifying: (A) the proposed Conversion Date or
Continuation Date; (B) the
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aggregate amount of Loans to be converted or continued; (C) whether the proposed
conversion, if any, is a conversion from Eurodollar Loans to Base Rate Loans or
from Base Rate Loans to Eurodollar Loans; and (D) the duration of the requested
Interest Period (subject to the provisions of the definition of "Interest
Period").
(c) If, prior to the Commitment Fee Inception Date,
Administrative Agent does not receive a duly completed Notice of
Conversion/Continuation within the time limits specified in SECTION 2.6(b),
Borrower shall be deemed to have elected to convert or continue such Loans in
whole into or as Eurodollar Loans with an Interest Period of three months on the
last day of the then current Interest Period with respect thereto. If, on or
after the Commitment Fee Inception Date, Administrative Agent does not receive a
duly completed Notice of Conversion/Continuation within the time limits
specified in SECTION 2.6(b), Borrower shall be deemed to have elected to convert
or continue such Loans in whole into or as Base Rate Loans on the last day of
the then current Interest Period with respect thereto. Notwithstanding anything
to the contrary herein, any and all Eurodollar Loans shall be converted in whole
into Base Rate Loans on the last day of the then existing Interest Period with
respect thereto if Administrative Agent shall have received notice from Borrower
or a Lender that an Event of Default exists.
(d) Notwithstanding the foregoing, Borrower may not select an
Interest Period that would end, but for the provisions of the definition of
Interest Period, after the applicable Final Maturity Date.
2.7 SCHEDULED PAYMENT OF PRINCIPAL OF THE LOANS. The aggregate
principal amount of the outstanding Investment Capital Loans and the Working
Capital Loans, together with accrued and unpaid interest thereon and other
amounts owing to Administrative Agent, Investment Capital Lenders and Working
Capital Lenders in accordance with this Agreement, shall be due and payable in
full at Maturity.
2.8 INTEREST RATES; PAYMENT OF INTEREST; COMMITMENT FEE; CALCULATION OF
INTEREST AND FEES.
(a) BASE RATE LOANS. Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof at a rate per annum equal to the
Base Rate plus the Applicable Margin, which rate shall change as of the Business
Day next succeeding any change in the Base Rate. Unless Borrower shall have paid
such interest to Administrative Agent for the account of Lenders on or prior to
the Interest Payment Date, such interest shall automatically, without any action
or notice, on each Interest Payment Date occurring during the period from the
Closing Date through and including the earlier of (i) the Interest Payment Date
which ends on the calendar quarter ending on September 30, 2001 and (ii)
Maturity, be added to the outstanding principal amount of the Investment Capital
Loans (in the case of interest accrued in respect of the Investment Capital
Loans) or the Working Capital Loans (in the case of interest accrued in respect
of the Working Capital Loans), as applicable, as a new Base Rate Loan.
Thereafter, such interest shall be payable on each Interest Payment Date and at
Maturity.
(b) EURODOLLAR LOANS. Each Eurodollar Loan shall bear interest
on the outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the Eurodollar Rate plus the Applicable
Margin. Unless Borrower shall have
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paid such interest to Administrative Agent for the account of Lenders on or
prior to the Interest Payment Date, such interest shall automatically, without
any action or notice, on each Interest Payment Date occurring during the period
from the Closing Date through and including the earlier of (i) the Interest
Payment Date which ends on the calendar quarter ending on September 30, 2001 and
(ii) Maturity, be added to the outstanding principal amount of the Investment
Capital Loans (in the case of interest accrued in respect of the Investment
Capital Loans) or the Working Capital Loans (in the case of interest accrued in
respect of the Working Capital Loans), as applicable, as a new Base Rate Loan.
Thereafter, such interest shall be payable for such Interest Period on each
Interest Payment Date and at Maturity.
(c) COMMITMENT FEE. Commencing on the Commitment Fee Inception
Date, Borrower shall from time to time pay to Administrative Agent, (i) for the
ratable benefit of Investment Capital Lenders, a commitment fee equal to
one-half of one percent (0.50%) per annum on the average daily amount of the
unutilized portion of the Aggregate Investment Capital Loan Commitment during
each calendar quarter or portion thereof and (ii) for the ratable benefit of
Working Capital Lenders, a commitment fee equal to one-half of one percent
(0.50%) per annum on the average daily amount of the unutilized portion of the
Aggregate Working Capital Loan Commitment during each calendar quarter or
portion thereof. Commitment fees shall be payable on the last Business Day in
each calendar quarter.
(d) CALCULATION OF INTEREST AND FEES. Interest on the Loans
and the Commitment Fee shall be computed on the basis of a 360-day year for all
Eurodollar Loans and fees, and a 365/366-day year for all Base Rate Loans, in
each case for the actual number of days elapsed. In computing interest on any
Loan, the date of the making of such Loan shall be included and the date of
payment shall be excluded; provided, however, that if any Loan is repaid on the
same day on which it is made, such day shall be included in computing interest
on such Loan. Each change in the interest rate of the Base Rate Loans based on
changes in the Base Rate shall be effective on the effective date of such change
and to the extent of such change. Administrative Agent shall give Borrower
prompt written notice of any such change in the Base Rate; provided, however,
that any failure by Administrative Agent to provide Borrower with notice
hereunder shall not affect Lenders' right to make changes in the interest rate
of the Base Rate Loans based on changes in the Base Rate.
2.9 PAYMENT PROCEDURES.
(a) PAYMENT ON BUSINESS DAYS. Whenever any payment due under
this Agreement shall fall due on a day other than a Business Day, the due date
of such payment shall be extended to the next succeeding Business Day (subject,
however, to SUBSECTION (a) of the definition of the term "Interest Period") and
such payment shall be made on such Business Day, and such extension of time
shall be included in the computation of interest.
(b) PLACE OF PAYMENT. Borrower shall make all payments and
prepayments under this Agreement of the principal of and interest on the Loans
and the Commitment Fee to the Administrative Agent's Payment Office, in lawful
money of the United States and in immediately available funds no later than 1:00
p.m., New York time, on the date of payment (which must be a Business Day). All
payments received after 1:00 p.m., New York time, on any Business Day, shall be
deemed to have been received on the next succeeding Business Day.
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After the occurrence and during the continuance of an Event of Default, Borrower
authorizes Lenders to charge from time to time against any or all of Borrower's
deposits maintained with Lenders any amount payable by Borrower hereunder not
paid when due. Each Lender shall promptly notify Administrative Agent of each
such charge and pay over the same to Administrative Agent for application in
accordance with this Agreement
(c) DISTRIBUTION OF PAYMENTS TO LENDERS BY ADMINISTRATIVE
AGENT. Upon receipt of any payment or prepayment of the Commitment Fee, or the
principal of and interest on the Investment Capital Loans or the Working Capital
Loans by or on behalf of Borrower, Administrative Agent shall promptly pay over
to each Lender at its Lending Office its Investment Capital Loan Commitment
Percentage or Working Capital Loan Commitment Percentage, as applicable,
interest in like funds in the sum received.
(d) DEFAULT INTEREST. Upon the occurrence of an Event of
Default and so long as any Event of Default shall be continuing, including after
acceleration (whether before or after entry of judgment), Borrower shall, at the
option of Requisite Lenders, pay interest on the principal amount of each Loan
then outstanding at the Default Rate.
(e) APPLICATION OF PAYMENTS. Except as specifically set forth
herein, all payments under this Agreement shall be credited first to all fees
and other expenses then due to Administrative Agent, next to all fees and other
expenses then due to Lenders, next to all interest then due, and lastly to all
principal then due.
(f) DESIGNATION OF PAYMENT. When making a payment under this
Agreement, Borrower shall clearly specify which Loan, fee or expense such
payment relates to and the nature of the payment.
(g) ADMINISTRATIVE AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE
MADE BY BORROWER. Unless Administrative Agent shall have been notified by
Borrower prior to the date on which any payment to be made by Borrower hereunder
is due that Borrower does not intend to remit such payment, Administrative Agent
may (in its sole and absolute discretion) assume that Borrower has remitted such
payment when so due and Administrative Agent may (in its sole and absolute
discretion) and in reliance upon such assumption, make available to each Lender
on such payment date an amount equal to such Lender's Investment Capital Loan
Commitment Percentage or Working Capital Loan Commitment Percentage, as
applicable, of such assumed payment. If Borrower has not in fact remitted such
payment to Administrative Agent, each Lender shall forthwith on demand repay to
Administrative Agent the amount of such assumed payment made available to such
Lender, together with interest thereon in respect of each date from and
including the date such amount was made available by Administrative Agent to
such Lender to the date such amount is repaid to Administrative Agent, at the
Federal Funds Rate.
2.10 PREPAYMENTS OF THE LOANS; CERTAIN REQUIRED PAYMENTS; AGGREGATE
COMMITMENT REDUCTION.
(a) VOLUNTARY PREPAYMENTS; COMMITMENT REDUCTIONS. Subject to
SECTION 2.10(d), Investment Capital Loans or Working Capital Loans may be
prepaid at any time, without premium or penalty, (1) in the case of Eurodollar
upon three (3) Business Days' notice,
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and (2) in the case of Base Rate Loans, upon one (1) Business Days' notice;
provided, however, that any such prepayment (i) shall be in the minimum
principal amount of $1,000,000, (ii) any interest accrued on the amounts so
prepaid to the date of such payment shall be paid at the time of any such
payment, and (iii) with respect to the prepayment of Investment Capital Loan
shall, if made during the Investment Capital Loan Commitment Period, cause the
Aggregate Investment Capital Loan Commitment to be permanently reduced by the
amount of such prepayment.
(b) MANDATORY PREPAYMENTS; AGGREGATE COMMITMENT REDUCTION.
(i) INVESTMENT CAPITAL LOANS. Net Proceeds
related to Asset Sales shall be paid by Borrower to Administrative Agent within
two (2) Business Days to be applied as a permanent prepayment of the principal
amount of the Investment Capital Loans then outstanding in an amount equal to
(x) the Investment Capital Loan Percentage multiplied by (y) 25% of such Net
Proceeds if such Asset Sale occurs on or after the third anniversary and prior
to the fifth anniversary of the date hereof, and 50% of such Net Proceeds if
such Asset Sale occurs on or after the fifth anniversary of the date hereof.
(ii) WORKING CAPITAL LOANS. Net Proceeds related
to Asset Sales shall be paid by Borrower to Administrative Agent within two (2)
Business Days to be applied as a permanent prepayment of the principal amount of
the Working Capital Loans then outstanding in an amount equal to (x) the Working
Capital Loan Percentage multiplied by (y) 25% of such Net Proceeds if such Asset
Sale occurs on or after the third anniversary and prior to the fifth anniversary
of the date hereof, and 50% of such Net Proceeds if such Asset Sale occurs on or
after the fifth anniversary of the date hereof.
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(c) INVESTMENT CAPITAL LOANS IN EXCESS OF AGGREGATE INVESTMENT
CAPITAL LOAN COMMITMENT; WORKING CAPITAL LOANS IN EXCESS OF AGGREGATE WORKING
CAPITAL LOAN COMMITMENT. Borrower shall immediately prepay (i) a portion of the
Investment Capital Loans to the extent the total outstanding balance of all
Investment Capital Loans exceeds the Aggregate Investment Capital Loan
Commitment and (ii) a portion of the Working Capital Loans to the extent the
total outstanding balance of all Working Capital Loans exceeds the Aggregate
Working Capital Loan Commitment.
(d) BREAKAGE CHARGE. Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss (but excluding loss of margin) or
expense actually incurred by such Lender, including funding costs and
administrative costs, as a consequence of (a) default by Borrower in the
conversion into or continuation of Eurodollar Loans after Borrower has given a
notice thereof, (b) default by Borrower in making any prepayment of Eurodollar
Loans after Borrower gives notice thereof or (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period.
(e) APPLICATION OF PREPAYMENTS. Prepayments of Investment
Capital Loans and Working Capital Loans shall be made in inverse order of
maturity.
2.11 SURVIVABILITY. All of Borrower's obligations under this Agreement
shall survive until all Obligations are fully satisfied and Lenders' obligations
to make the Loans hereunder expire. Notwithstanding the foregoing, Borrower's
obligations set forth in SECTIONS 8.4 and 8.14 shall survive Borrower's payment
of all obligations under the Credit Documents and the expiration of Lenders'
obligations to make Loans hereunder.
2.12 PROMISSORY NOTES.
(a) INVESTMENT CAPITAL NOTES. Each Investment Capital Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the Indebtedness of Borrower to such Lender resulting from each
Investment Capital Loan owing to such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder in respect of such Loans. Borrower agrees that upon notice by any
Investment Capital Lender to Borrower (with a copy of such notice to QUALCOMM)
to the effect that a promissory note or other evidence of Indebtedness is
required or appropriate in order for such Lender to evidence (whether for
purposes of pledge, enforcement or otherwise) the Investment Capital Loans owing
to, or to be made by, such Lender, Borrower shall promptly execute and deliver
to such Lender, with a copy to QUALCOMM, a promissory note substantially in the
form of EXHIBIT A-1 or in form and substance reasonably satisfactory to Borrower
and such Lender (each an "Investment Capital Note"), with appropriate
insertions, due on the earlier of the applicable Final Maturity Date or
Maturity, and payable to the order of such Lender in a principal amount equal to
the Investment Capital Loan Commitment of such Lender. Notwithstanding anything
to the contrary herein, Borrower agrees that the books and records of
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the Lender maintained to evidence such matters shall, in the absence of manifest
error, be prima facie evidence of the matters noted or recorded; provided,
however, that any failure by the Lender to make such notations or recordations
shall not reduce Borrower's liability thereunder.
(b) THE WORKING CAPITAL NOTES. Each Working Capital Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the Indebtedness of Borrower to such Lender resulting from each
Working Capital Loan owing to such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder. Borrower agrees that upon notice by any Working Capital Lender
to Borrower (with a copy of such notice to QUALCOMM) to the effect that a
promissory note or other evidence of Indebtedness is required or appropriate in
order for such Lender to evidence (whether for purposes of pledge, enforcement
or otherwise) the Working Capital Loans owing to, or to be made by, such Lender,
Borrower shall promptly execute and deliver to such Lender, with a copy to
QUALCOMM, a promissory note substantially in the form of EXHIBIT A-2 or in form
and substance reasonably satisfactory to Borrower and such Lender (each a
"Working Capital Note"), with appropriate insertions, due on the earlier of the
applicable Final Maturity Date or Maturity, and payable to the order of such
Lender in a principal amount equal to the Working Capital Loan Commitment of
such Lender. Notwithstanding anything to the contrary herein, Borrower agrees
that the books and records of the Lender maintained to evidence such matters
shall, in the absence of manifest error, be prima facie evidence of the matters
noted or recorded; provided, however, that any failure by the Lender to make
such notations or recordations shall not reduce Borrower's liability thereunder.
2.13 NET PAYMENTS. Borrower's obligation to make payments and perform
all other obligations hereunder, and the rights of Administrative Agent and
Lenders in and to such payments and performance, shall be absolute and
unconditional and shall not be subject to any abatement, reduction, set-off,
defense, counterclaim or recoupment for any reason whatsoever, including
abatements or reductions due to any present or future claims of Borrower against
Administrative Agent or any Lender under this Agreement, the Specified
Agreements or otherwise, or against any other Person for whatever reason. Except
as otherwise expressly provided herein, this Agreement shall not terminate, nor
shall the obligations of Borrower be affected, by reason of (a) any defect in or
damage to, or any loss or destruction of, any of the equipment or services
provided pursuant to the Equipment Agreement from any cause whatsoever, (b) the
interference with the use of any of the terrestrial-based wireless
telecommunications operating systems of Borrower or any of its portfolio
companies by Administrative Agent, any Lender or any other Person, (c) any
defect in title to, or Lien on, any of the terrestrial-based wireless
telecommunications operating systems (or any part thereof) of Borrower or any of
its portfolio companies, (d) any bankruptcy, insolvency, reorganization or other
proceeding relating to, or any action taken by any trustee or receiver of,
Administrative Agent, any Lender or any other Person, or (e) for any other
cause, whether similar or dissimilar to the foregoing, any present or future law
or regulation to the contrary notwithstanding, whether or not such cause shall
give rise to a claim by Borrower against any Lender under the Equipment
Agreement or otherwise, it being the express intention of the parties hereto
that all amounts payable by Borrower hereunder shall be, and continue to be,
payable in all events unless the obligation to pay shall be terminated pursuant
to the express provisions of this Agreement. All payments made by Borrower
hereunder as required hereby shall be final, and Borrower shall not seek to
recover any such payment or any part thereof for any reason whatsoever. Nothing
in this
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Agreement shall, however, release any claim Borrower may have against
Administrative Agent or any Lender, whether in connection with the Equipment
Agreement or otherwise. If for any reason whatsoever this Agreement shall be
terminated in whole or in part by operation of law or otherwise, Borrower shall
nonetheless, to the extent permitted by applicable law, pay to Administrative
Agent, on behalf of Lenders, an amount equal to each payment payable hereunder
at the time and in the manner that such payment would have become due and
payable under the terms of this Agreement if it had not been terminated in whole
or in part.
2.14 CHANGED CIRCUMSTANCES; TAXES.
(a) In the event that:
(i) on any date on which the Eurodollar Rate would
otherwise be set, Administrative Agent shall have determined in good faith
(which determination shall be final and conclusive) that adequate and fair means
do not exist for ascertaining the Eurodollar Rate, or
(ii) at any time Administrative Agent or any Lender
shall have determined in good faith (which determination shall be final and
conclusive) that:
(A) the making or continuation of or
conversion of any Loan to a Eurodollar Loan has been made impracticable or
unlawful by (1) the occurrence of a contingency that materially and adversely
affects the interbank eurodollar market or (2) compliance by any Lender in good
faith with any applicable law or governmental regulation, guideline or order or
interpretation or change thereof by any Governmental Authority charged with the
interpretation or administration thereof or with any request or directive of any
such Governmental Authority (whether or not having the force of law); or
(B) the Eurodollar Rate shall no longer
represent the effective cost to any Lender for U.S. dollar deposits in the
interbank market for deposits in which banks of the United States of America
regularly participate (including due to the imposition of a Reserve Percentage);
then, and in any such event, such Lender shall forthwith so notify
Administrative Agent and Borrower thereof. Until Administrative Agent or such
Lender notifies Borrower that the circumstances giving rise to such notice no
longer apply, the obligation of Lenders to allow selection by Borrower of the
type of Loan affected by the contingencies described in this SECTION 2.14
(herein called "Affected Loans") shall be suspended. If at the time
Administrative Agent or a Lender so notifies Borrower, Borrower has previously
given Administrative Agent a Borrowing Request or a Notice of
Conversion/Continuation with respect to one or more Affected Loans but such
Loans have not yet gone into effect, such notification shall be deemed to be
void and Borrower may request Loans of a non-affected type by giving a
substitute Borrowing Request or Notice of Conversion/Continuation pursuant to
this Agreement.
Upon such date as shall be specified in such notice (which shall not be
earlier than the date such notice is given) Borrower shall, with respect to the
outstanding Affected Loans, prepay the same, together with interest thereon and
any amounts required to be paid pursuant to SECTION 2.10(d), and may request a
Loan of another type in accordance with this Agreement, by giving a Borrowing
Request or a Notice of Conversion/Continuation pursuant to this Agreement;
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provided that any such prepayment shall not be deemed to constitute a prepayment
pursuant to SECTION 2.10.
(b) In case any law, regulation, treaty or official directive
or the interpretation or application thereof by any court or by any Governmental
Authority charged with the administration thereof or the compliance with any
guideline or request of any central bank or other Governmental Authority
(whether or not having the force of law):
(i) subjects any Lender to any tax with respect to
payments of principal or interest or any other amounts payable hereunder by
Borrower or otherwise with respect to the transactions contemplated hereby
(except for such taxes as are imposed on or measured by each Lender's net income
by the jurisdiction under the laws of which such Lender is organized or
maintains a place of business or is otherwise connected (other than a connection
resulting solely from the execution, delivery, or performance of this Agreement
and the other Credit Documents) or any political subdivision thereof), or
(ii) imposes, modifies or deems applicable any
deposit insurance, reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of, or loans by, any Lender
(including any imposition of a Reserve Percentage), or
(iii) imposes upon any Lender any other condition
with respect to its performance under this Agreement,
and the result of any of the foregoing is to increase the cost to such Lender,
reduce the income receivable by such Lender or impose any expense upon such
Lender with respect to any Eurodollar Loans, such Lender shall notify Borrower
thereof. Borrower agrees to pay to such Lender the amount of such increase in
cost, reduction in income or additional expense as and when such cost, reduction
or expense is incurred or determined, upon presentation by such Lender of a
statement in the amount and setting forth such Lender's calculation thereof,
which statement shall be deemed true and correct absent manifest error.
(c) (i) Bookmark not defined. Any and all payments by
Borrower to each Lender under this Agreement shall be made free and clear of,
and without deduction or withholding for, any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender, such taxes (including
income taxes, taxes on profits and franchise taxes) as are imposed on or
measured by each Lender's net income or profits by the jurisdiction under the
laws of which such Lender is organized or maintains a place of business or is
otherwise connected (other than a connection resulting solely from the
execution, delivery, or performance of this Agreement and the other Credit
Documents) or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes").
(ii) In addition, Borrower shall pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Credit Documents (hereinafter referred to as "Other
Taxes").
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(iii) Borrower shall indemnify and hold harmless each
Lender for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this SECTION 2.14)
paid by such Lender and any liability (including penalties, interest, additions
to tax and expenses, except for, in the event such Lender fails to deliver
notice of such assertion of Taxes or Other Taxes to Borrower within one hundred
eighty (180) days after it has received notice of such assertion or imposition
of Taxes or Other Taxes, any such penalties, interest or expenses which would
not have arisen but for the failure of such Lender to so notify Borrower of such
assertion or imposition of Taxes or Other Taxes) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within thirty
(30) days from the date such Lender makes written demand therefor.
(iv) If Borrower shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender, then:
(A) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 2.14) such Lender
receives an amount equal to the sum it would have received had no such
deductions been made;
(B) Borrower shall make such deductions; and
(C) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
(v) Within thirty (30) days after the date of payment
by Borrower of Taxes or Other Taxes, Borrower shall furnish to Administrative
Agent and each Lender the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to Administrative
Agent.
(vi) If Borrower fails to pay any Taxes or Other
Taxes when due to the appropriate
taxing authority or fails to furnish to each Lender the required receipts or
other required documentary evidence, Borrower shall indemnify Lenders for any
incremental Taxes or Other Taxes, interest or penalties that may become payable
by any of Lenders as a result of any such failure.
(vii) Each Lender which is a foreign Person (i.e., a
Person other than a United States Person for United States federal income tax
purposes) agrees that:
(A) in the case of any Lender which is a
"bank" within the meaning of Section 881(c)(3)(A) of the Code,
(1) it shall, no later than the
Closing Date (or, in the case of a Lender which becomes a party hereto pursuant
to this Agreement after the Closing Date, the date upon which such Lender
becomes a party hereto) deliver to Borrower and Administrative Agent two (2)
accurate and complete signed originals of IRS Form 4224 or any successor thereto
("Form 4224"), or two accurate and complete signed originals of IRS Form 1001 or
any successor thereto ("Form 1001"), as appropriate, in each case indicating
that such
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Lender is on the date of delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding of
United States federal income tax;
(2) if at any time a change in
circumstances necessitates any Lender's filing a new Form 4224 or Form 1001, it
shall within thirty (30) days after such change becomes effective deliver to
Borrower and Administrative Agent in replacement for, or in addition to, the
forms previously delivered by it hereunder, two accurate and complete signed
originals of Form 4224, or two accurate and complete signed originals of Form
1001, as appropriate, in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal, interest and fees
under this Agreement free from withholding of United States federal income tax;
(B) in the case of any Lender other than a
Lender described in clause (A) above,
(1) it shall, no later than the
Closing Date (or, in the case of a Lender which becomes a party hereto pursuant
to this Agreement after the Closing Date, the date upon which such Lender
becomes a party hereto) deliver to Borrower and Administrative Agent two (2)
accurate and complete signed originals of a certificate substantially in the
form of EXHIBIT D (any such certificate, a "Non-Bank Lender Tax Certificate")
and two accurate and complete signed originals of IRS Form W-8 or any successor
thereto ("Form W-8") certifying to such Lender's legal entitlement (assuming
compliance by Borrower with the terms of this Agreement) to an exemption whereby
such Lender is on the date of delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding of
United States Federal income tax;
(2) if at any time a change in
circumstances necessitates any Lender's filing a new Form W-8, it shall within
thirty (30) days after such change becomes effective deliver to Borrower and
Administrative Agent in replacement for, or in addition to, the forms previously
delivered by it hereunder, two accurate and complete signed originals of Form
W-8 certifying to such Lender's legal entitlement (assuming compliance by
Borrower with the terms of this Agreement) to an exemption whereby such Lender
is on the date of delivery thereof entitled to receive payments of principal,
interest and fees under this Agreement free from withholding of United States
federal income tax;
(C) it shall, before or within thirty (30)
days after the occurrence of any event (including the passing of time but
excluding any event mentioned in (A) or (B), above) requiring a change in or
renewal of the most recent Form 4224, Form 1001 or Form W-8 previously delivered
by such Lender, deliver to Borrower and Administrative Agent two accurate and
complete original signed copies of Form 4224, Form 1001 or Form W-8 in
replacement for the forms previously delivered by such Lender; and
(D) it shall, promptly upon Borrower's
reasonable request to that effect, deliver to Borrower and Administrative Agent
copies of such other forms or similar documentation as may be required from time
to time by any applicable law, treaty, rule or regulation in order to establish
such Lender's tax status for withholding purposes.
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(viii) Borrower will not be required to pay any
additional amounts in respect of United States federal income tax pursuant to
SECTION 2.14(c)(iv) to any Lender:
(A) if the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender to comply with
its obligations under SECTION 2.14(c)(vii) in respect of such Lending Office; or
(B) if such Lender shall have delivered to
Borrower and Administrative Agent a Form 4224, Form 1001 or Form W-8 in respect
of such Lending Office pursuant to SECTION 2.14(c)(vii), and such Lender shall
not at any time be entitled to exemption from deduction or withholding of United
States federal income tax in respect of payments by Borrower hereunder for the
account of such Lending Office for any reason other than a change in United
States law or regulations or in the official interpretation of such law or
regulations by any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the date
of delivery of such form.
(ix) If, at any time, Borrower requests any Lender to
deliver any forms or other documentation in addition to those required pursuant
to SECTION 2.14(c)(vii)(D), then Borrower shall, on demand of such Lender,
reimburse such Lender for any costs and expenses (including reasonable attorney
costs) reasonably incurred by such Lender in the preparation or delivery of such
forms or other documentation.
(x) If Borrower is required to pay additional amounts
to any Lender pursuant to SECTION 2.14(c) OR SECTION 2.15, then such Lender
shall use its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by such Lender which may thereafter accrue
if such change in the judgment of such Lender is not otherwise materially
disadvantageous to such Lender.
2.15 CAPITAL REQUIREMENTS. If after the date hereof any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for lenders, banks or bank holding
companies, or any change in the interpretation or application thereof by any
Governmental Authority charged with the administration thereof, or (ii)
compliance by such Lender or any of its Affiliates with any guideline, request
or directive of any such entity implemented after the date hereof regarding
capital adequacy (whether or not having the force of law), has the effect of
reducing the return on such Lender's or such Affiliate's capital as a
consequence of such Lender's commitment to make Eurodollar Loans hereunder to a
level below that which such Lender or such Affiliate could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such Affiliate's then existing policies with respect to capital adequacy and
assuming the full utilization of such entity's capital) by any amount deemed by
such Lender to be material, then such Lender shall notify Borrower thereof.
Borrower agrees to pay to such Lender the amount of such reduction in the return
on capital as and when such reduction is determined, upon presentation by such
Lender of a statement in the amount and setting forth such Lender's calculation
thereof, which statement shall be deemed true and correct absent manifest error.
In determining such amount, such Lender may use any reasonable averaging and
attribution methods.
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2.16 SUBSTITUTION OF LENDERS. In the event any Lender has demanded
compensation under SECTION 2.14(b) or under SECTION 2.15 which compensation
increases the effective lending rate of the Lender in excess of the rate of the
other Lenders, Borrower shall have the right to substitute for such Lender (the
"Affected Lender") another financial institution which shall be reasonably
acceptable to Administrative Agent and Requisite Lenders, for such Affected
Lender to assume the Investment Capital Loan Commitment and Working Capital Loan
Commitment of such Affected Lender and to purchase the Notes, if any, of such
Affected Lender. Such assumption and purchase shall be effected in accordance
with SECTION 8.6 hereof and by execution and delivery of an Assignment and
Acceptance described therein; provided, however, that the Affected Lender's
obligation to assign and sell its Investment Capital Loan Commitment, Working
Capital Loan Commitment and Notes, if any, shall be subject to the condition
that all amounts owing to such Affected Lender (including principal, accrued and
unpaid interest and fees, and all amounts owing to such Affected Lender under
SECTIONS 2.14(b), 2.15 AND 8.4) shall have been paid in full.
2.17 CONVERSION TO HIGH YIELD STRUCTURE. At any time and from time to
time, Requisite Lenders may cause all, but not less than all, of the Loans then
outstanding, together with the obligations of Borrower under this Agreement
relating thereto, to be converted to fixed rate obligations which may, at the
election of Requisite Lenders be secured or unsecured, but shall in either case
have other terms, covenants and conditions substantially similar to those of
high yield debt issuances for wireless communications companies at the time of
such proposed conversion (collectively, the "Fixed Rate Notes"); provided,
however, that such conversion may delayed by Borrower for such period as
Borrower's board of directors determines to be reasonably necessary to that such
conversion will not interfere with Borrower's other financing activities. After
notification to Borrower and Administrative Agent by QUALCOMM that Requisite
Lenders have elected to exercise such right, Borrower shall promptly provide its
active and good faith assistance with any Conversion to High Yield Structure,
including providing such information in such form as may be requested by
QUALCOMM, Requisite Lenders or Lenders' placement agents or other agents in
connection with the negotiation and preparation of any registration statements
and prospectuses, the sale or placement of the Fixed Rate Notes (including the
availability of Borrower's senior management for active participation in "road
shows," and doing all such other acts as are necessary and appropriate for the
expedient sale or placement of the Fixed Rate Notes). Upon each such conversion,
Borrower shall execute and deliver to the purchasers of Fixed Rate Notes (or a
trust established to effectuate such transaction) Fixed Rate Notes evidencing
the Loans so converted. Borrower acknowledges that, in the event the Fixed Rate
Notes contemplated to be issued under any Conversion to High Yield Structure are
not exempt from the registration requirements of the Securities Act of 1933, as
amended, Borrower shall be the registrant for such Conversion to High Yield
Structure and Borrower shall prepare and file with the Securities and Exchange
Commission a registration statement and use commercially reasonable efforts to
cause such registration statement to become and remain effective and use
commercially reasonable efforts to register or qualify the Fixed Rate Notes
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions as are necessary to effect the sale of the Fixed Rate
Notes. Notwithstanding the foregoing, Requisite Lenders shall not cause a
Conversion To High Yield Structure to occur if the yield to maturity of the
Fixed Rate Notes is anticipated in the good faith of Borrower and Requisite
Lenders and their respective financial advisors to exceed, or actually does
exceed, fourteen percent (14%) per annum.
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SECTION 3. CONDITIONS OF LENDING.
3.1 CONDITIONS PRECEDENT TO INITIAL LOANS. The obligation of Lenders to
make the initial Investment Capital Loans and the initial Working Capital Loans
in favor of Borrower is subject to the satisfaction or waiver of the following
conditions at the time of or immediately prior to the initial Funding Date which
in no event shall be later than September 25, 1998.
(a) NOTES. Borrower shall have duly executed and delivered, to
each Investment Capital Lender which has requested an Investment Capital Note,
and to each Working Capital Lender which has requested a Working Capital Note,
an Investment Capital Note and Working Capital Note, as applicable.
(b) SECURITY AGREEMENT. There shall have been delivered to
Administrative Agent the Security Agreement, duly executed by Borrower.
(c) FINANCING STATEMENTS. The Financing Statements, each
naming and duly executed by Borrower, as debtor, and Administrative Agent, as
secured party, including a description of the personal property collateral
granted or pledged by Borrower to Administrative Agent, on behalf of Lenders, as
security for the Obligations, shall have been caused to have been filed with
such Governmental Authorities as Administrative Agent and Lenders shall have
determined.
(d) COLLATERAL CONTROL AGREEMENTS. Separate written collateral
control agreements ("Control Agreements") (1) executed by Administrative Agent,
Borrower and each depository institution at which Borrower maintains a deposit
account; and (2) executed by Administrative Agent, Borrower and each securities
intermediary at which Borrower maintains an investment, brokerage or similar
account which holds financial assets (as defined in Section 8102(a)(9) of the
UCC) owned beneficially by Borrower, each satisfactory to Lenders.
(e) SECURITIES PLEDGE AGREEMENT. There shall have been
delivered to Administrative Agent the Securities Pledge Agreement, duly executed
by Borrower, together with the certificates representing the Pledged Securities
pursuant thereto and appropriate undated stock powers executed in blank for such
certificates.
(f) OPINIONS OF COUNSEL. Lenders and Administrative Agent
shall have received a legal opinion dated the Closing Date from Xxxxxx &
Xxxxxxx, counsel to Borrower, together with such opinions of local counsel in
the jurisdiction of each Portfolio Investment whose securities have been
transferred to Borrower in connection with the Distribution or are pledged to
Administrative Agent under the Securities Pledge Agreement, all in form and
substance satisfactory to Lenders' and Lenders' respective counsel.
(g) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
making the initial Loan and also after giving effect thereto (i) there shall
exist no Default or Event of Default, and (ii) all representations and
warranties contained herein and in the other Credit Documents in effect at such
time shall be true and correct.
(h) OFFICER'S CERTIFICATE. Administrative Agent shall have
received certificates dated such date, signed by the president and chief
financial officer (such certificate
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and all other certificates delivered under this Agreement to be in such Person's
corporate, not individual, capacity) of Borrower stating that all of the
applicable conditions set forth in this SECTION 3.1 have been satisfied as of
such date.
(i) CORPORATE PROCEEDINGS. All corporate and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
reasonably satisfactory in form and substance to Lenders, and Lenders shall have
received all information and copies of all certificates, documents and papers,
including records of corporate proceedings and governmental approvals, if any,
which Lenders may have reasonably requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate
officers or Governmental Authorities.
(j) CONSUMMATION OF DISTRIBUTION AND OTHER TRANSACTIONS.
Administrative Agent shall have received evidence satisfactory to Lenders that
the Distribution has been consummated, the Borrower Business has been
transferred to Borrower and the other transactions described in the Information
Statement as occurring in connection with the Distribution have occurred, and
that there exist no material defaults under any of the Specified Agreements.
(k) ADVERSE CHANGE. Nothing shall have occurred, including the
termination of any contract, lease or other agreement, the incurrence of any
damage, destruction or loss (whether or not covered by insurance), the
occurrence of any employee strike, work-stoppage, slow-down or lock-out or any
substantial threat directed to Borrower or any of its Affiliates of any imminent
strike, work-stoppage, slow-down or lock-out, which Lenders shall reasonably
determine has, or is reasonably expected to have, a Material Adverse Effect.
(l) CONSENTS, APPROVALS. All necessary governmental and third
party consents, approvals and licenses in connection with the transactions
contemplated by the Specified Agreements and the Credit Documents and otherwise
referred to herein to be obtained on or before the initial Funding Date shall
have been obtained and remain in effect; and all applicable waiting periods
shall have expired without any action being taken by any competent Governmental
Authority which restrains, prevents or imposes materially adverse conditions
upon the consummation of this Agreement or the Specified Agreements.
(m) ORGANIZATIONAL DOCUMENTATION; ETC. Administrative Agent
and each Lender shall have received copies of the Certificate of Incorporation
and Bylaws of Borrower, any agreements entered into by any such entity governing
the terms and relative rights of its capital stock, certified as true and
complete by an appropriate corporate officer or Governmental Authority, and a
Certificate of Good Standing and franchise tax good standing issued by the
Delaware Secretary of State and appropriate government officials for each other
state in which Borrower is qualified to do business or in which the failure to
so qualify could with reasonable likelihood have a Material Adverse Effect, and
the provisions of the foregoing shall be reasonably satisfactory to Lenders.
(n) LITIGATION. There shall be no actions, suits or
proceedings pending or threatened with respect to Borrower or any Subsidiary
that (i) might reasonably be expected to
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have a Material Adverse Effect, or (ii) have a material adverse effect on the
ability of Borrower to perform its obligations under the Specified Agreements or
the rights or remedies of QUALCOMM under the Specified Agreements. There shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified with
respect to the performance of any of the Specified Agreements, the Credit
Documents, or the making of any Loan hereunder.
(o) BOARD RESOLUTIONS. Administrative Agent and Lenders shall
have received resolutions of Borrower's Board of Directors approving and
authorizing the execution, delivery and performance of the Credit Documents to
which it is a party and the transactions contemplated thereby, in form and
substance reasonably satisfactory to Lenders and their respective counsel, such
resolutions certified as of the initial Funding Date by Borrower's corporate
Secretary or an Assistant Secretary, as applicable, as being in full force and
effect without modification or amendment.
(p) INCUMBENCY CERTIFICATES. Administrative Agent and Lenders
shall have received signature and incumbency certificates of Borrower's officers
executing this Agreement or the other Credit Documents to which it is or is to
be a party.
(q) EVIDENCE OF INSURANCE. Administrative Agent and Lenders
shall have received certificates and binders with respect to insurance required
by this Agreement.
(r) NO VIOLATION. The consummation of the transactions
contemplated hereby shall not contravene, violate or conflict with, nor involve
Administrative Agent or Lenders in a violation of, any Requirement of Law,
including applicable usury law, and evidence satisfactory to Administrative
Agent and Lenders shall have been received as to the compliance with applicable
usury law including at a minimum the obtaining of a qualification permit or
exemption from the California Corporations Commissioner or evidence that certain
equity securities of Borrower are traded on the NASDAQ National Market System.
(s) FEE LETTER. QUALCOMM shall have received the Fee Letter,
duly executed by Borrower and accepted by QUALCOMM, together with the payment of
such fees and delivery of such other items as are set forth in the Fee Letter to
be paid or delivered on the Closing Date (the payment or delivery of which shall
be deemed to be a concurrent condition).
(t) ADMINISTRATIVE AGENT'S FEE LETTER. Administrative Agent
shall have received the Administrative Agent's Fee Letter, duly executed by
Borrower and by Administrative Agent, together with the payment of such fees as
are set forth in the Administrative Agent's Fee Letter to be paid on the Closing
Date (the payment of which shall be deemed to be a concurrent condition).
(u) BUSINESS PLAN. Lenders shall have reviewed and approved in
form and substance the Business Plan.
(v) ADDITIONAL MATTERS, DOCUMENTS OR INFORMATION. Lenders
shall have received each additional document, instrument, legal opinion or item
of information reasonably requested by any Lender, including a copy of any debt
instrument, security agreement or other material contract to which Borrower or
any of Borrower's Subsidiaries may be a party, and all
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corporate and other proceedings, and all documents, instruments and other legal
matters in connection with the transactions contemplated by this Agreement, the
other Credit Documents and the Specified Agreements shall be reasonably
satisfactory in form and substance to Lenders, and Lenders shall have received
such other documents, legal opinions and other opinions in respect of any aspect
or consequence of the transactions contemplated hereby.
The acceptance of the proceeds of the initial Loan shall constitute a
representation and warranty by Borrower to Administrative Agent and Lenders that
all of the applicable conditions specified above exist as of that time. All of
the agreements, certificates, legal opinions and other documents and papers
referred to in this SECTION 3.1, unless otherwise specified, shall be delivered
to Lenders and shall be reasonably satisfactory in form and substance to
Lenders.
3.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of Lenders to
make any Loan shall be subject to the further conditions precedent that:
(a) On the date of such Loan the following statements shall be
true:
(i) All representations and warranties contained
herein and in the other Credit Documents in effect at such time shall be true
and correct with the same effect (except for any representation and warranty
that speaks only as of a specific date, which shall be true and correct in all
material respects as of such date) as though such representations and warranties
had been made on and as of the date of the making of such Loan; and
(ii) No Default or Event of Default has occurred and
is continuing or would result from the making of such Loan.
(iii) As to any Investment Capital Loan made after
the Closing Date there shall not have occurred with respect to any Portfolio
Investment as to which Borrower is not then contractually obligated to make such
Investment any material adverse change in the results of operations, financial
condition or prospects of any Person in which such Portfolio Investment is made.
(b) Lenders shall have received such other approvals, opinions
or documents as Lenders may reasonably request in connection with the requested
Loan.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
4.1 REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby
warrants and represents to each Lender as follows, in each case after giving
effect to the Distribution and the transactions described in the Information
Statement as occurring in connection with the Distribution, and agrees that each
of said warranties and representations shall be deemed to survive until the
full, complete and indefeasible payment and performance of the Obligations and
shall apply anew to each borrowing hereunder:
(a) CORPORATE ORGANIZATION; STRUCTURE. Borrower and each of
its direct Subsidiaries are corporations duly incorporated, validly existing and
in good standing under the
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laws of their respective places of incorporation, have the power and authority
to own their Property and carry on their business as now being conducted, and
are qualified as foreign corporations and in good standing in each jurisdiction
where the nature of their business or assets requires such qualification except
where the failure to so qualify would not be reasonably likely to result in a
Material Adverse Effect. The ownership structure of Borrower and each of its
Subsidiaries as of the date hereof is as set forth in SCHEDULE 4.1(a) to the
Disclosure Letter.
(b) CORPORATE POWER; AUTHORIZATION; CONFLICTS. The execution,
delivery and performance by Borrower and each Subsidiary of Borrower which may
become a party to any Credit Document are within their corporate powers, have
been duly authorized by all necessary corporate action, and do not (i)
contravene such Person's certificate of incorporation or bylaws, (ii) violate
any law or regulation or any contractual restriction binding on or affecting
such Person, except where such violation would not be reasonably likely to have
a Material Adverse Effect, or (iii) result in or require the creation of any
Lien other than Permitted Liens, upon or with respect to any of the Properties
of Borrower or any such Subsidiaries.
(c) APPROVALS. No consent, order, authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body is required for (i) the due execution, delivery and performance
of any Credit Document by Borrower or by any Subsidiary of Borrower or (ii) the
legality, validity, binding effect or enforceability of any such Credit
Document.
(d) ENFORCEABILITY. This Agreement is, each other Credit
Document to which Borrower is or will be a party when delivered hereunder will
be, legal, valid and binding obligations of such Person enforceable against it
in accordance with their respective terms, provided that the enforceability of
any of such documents may be subject to or limited by bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws relating to or
affecting the rights of creditors generally and the application of equitable
principles.
(e) FINANCIAL STATEMENTS/PROJECTIONS. All pro forma financial
statements giving effect to the transactions described in the Information
Statement, financial forecasts and projections delivered to Administrative Agent
or Lenders have been reasonably prepared as of the Closing Date.
(f) LITIGATION. To the best of Borrower's knowledge, there are
no pending or threatened actions, suits, investigations or proceedings against
Borrower, any of its direct Subsidiaries or Person in which Borrower has made a
Portfolio Investment or against any of their respective Properties or revenues
before any court, governmental department, commission, board, bureau,
instrumentality or agency or arbitrator except as described on SCHEDULE 4.1(f)
to the Disclosure Letter. There is no pending or threatened action, suit,
investigation or proceeding against Borrower, any direct Subsidiary of Borrower
or Person in which Borrower has made a Portfolio Investment or against any of
their respective Properties or revenues before any court, governmental
department, commission, board, bureau, instrumentality or agency or arbitrator
which might have a Material Adverse Effect.
(g) USE OF PROCEEDS. The proceeds of all Investment Capital
Loans and Working Capital Loans shall be used solely as described in SECTION
2.3.
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(h) COMPLIANCE WITH LAWS, OTHER AGREEMENTS. Except as
disclosed in SCHEDULE 4.1(h) to the Disclosure Letter, neither Borrower, any of
its direct Subsidiaries nor Persons in which Borrower has made a Portfolio
Investments is in violation or default with respect to their respective
certificates of incorporation, bylaws or any applicable laws, rules or
regulations where such violation or default would be reasonably likely to have a
Material Adverse Effect, nor has Borrower, any of its direct Subsidiaries nor
Persons in which Borrower has made a Portfolio Investment violated any statutes,
laws, regulations, or ordinances applicable to them or violated or defaulted
with respect to any order, writ, decree or judgment of any court or
administrative agency or violated or defaulted (nor is there any waiver in
effect which, if not in effect, would result in a violation or default) under
any mortgage, indenture, lease, contract or other agreement or instrument
binding upon Borrower, its direct Subsidiaries or Persons in which Borrower has
made a Portfolio Investment, where such violation or default would be reasonably
likely to have a Material Adverse Effect.
(i) EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
(j) COLLATERAL DOCUMENTS. Except for Permitted Liens and Liens
noted in SCHEDULE 4.1(j) to the Disclosure Letter, the provisions of the
Collateral Documents are effective to create and maintain in favor of
Administrative Agent for the benefit of Lenders a legal, valid and enforceable
first priority perfected security interest in the Pledged Securities and the
collateral granted thereunder.
(k) NO SUBORDINATION. The obligations of Borrower under this
Agreement or under any other contracts or instruments executed by Borrower in
connection therewith and herewith (i) are not subordinated in right of payment
to any other obligation of Borrower and (ii) will at all times rank prior to all
present and future unsecured Indebtedness of Borrower.
(l) SUBSIDIARIES. As of the Closing Date neither Borrower nor
any of its Subsidiaries has any Subsidiaries other than as disclosed in SCHEDULE
4.1(l) to the Disclosure Letter.
(m) TAXES. Each of Borrower and Borrower's Subsidiaries has
filed or has caused to be filed all material tax returns which it is required to
file or has obtained extensions for the filing thereof, and each of Borrower and
Borrower's Subsidiaries has paid (i) all taxes shown to be due and payable on
said returns or on any assessments made against it or against any of its
Property (other than those the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of Borrower or
Borrower's Subsidiaries, as the case may be) and (ii) all other taxes, fees or
other charges imposed on it or imposed on any of its Property by any
Governmental Authority (other than those the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of Borrower or Borrower's Subsidiaries, as the case may be), and no claims
are being asserted with respect to any such taxes, fees or other charges (other
than those the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of Borrower or Borrower's
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Subsidiaries, as the case may be). No tax Liens have been filed with respect to
any such taxes, fees or other charges (other than those the amount or validity
of which is currently being contested in good faith by appropriate proceedings
and with respect to which reserves in conformity with GAAP have been provided on
the books of Borrower or Borrower's Subsidiaries, as the case may be).
(n) OWNERSHIP AND LIENS. Except as shown in SCHEDULE 4.1(n) to
the Disclosure Letter, Borrower and its Subsidiaries own and have good and
marketable title in fee simple absolute to, or valid leasehold interests in, all
of their respective Properties, including the Properties and leasehold interests
reflected in the Financial Statements or footnotes thereto (other than any
Properties disposed of in the ordinary course of business or otherwise in
compliance with this Agreement) referred to in SECTION 4.1(e) and, except as set
forth in SCHEDULE 4.1(n) to the Disclosure Letter, none of the Properties owned
by Borrower or its Subsidiaries and none of their respective leasehold interests
are subject to any Lien, except Permitted Liens.
(o) INDEBTEDNESS. SCHEDULE 4.1(o) to the Disclosure Letter is
a complete and correct list of all Indebtedness, credit agreements, indentures,
purchase agreements, guaranties, Capital Leases and other investments,
agreements and arrangements presently in effect providing for or relating to
extensions of credit (including agreements and arrangements for the issuance of
letters of credit or for acceptance financing, but not including non-delinquent
trade credit providing for payment within ninety (90) days of invoice) involving
$100,000 or more in respect of which Borrower or any of its Subsidiaries is in
any manner directly or contingently obligated. The maximum principal or face
amounts of the credits in question, which are outstanding and which can be
outstanding, are correctly stated, and all Liens of any nature given or agreed
to be given as security therefor are correctly described or indicated in such
Schedule.
(p) ACCURACY OF INFORMATION FURNISHED; COMPLETE DISCLOSURE.
Neither this Agreement nor any certificate, data, report, statement or other
information furnished to Lenders by or on behalf of Borrower or any of
Borrower's Subsidiaries in connection with the transactions contemplated hereby
or by the other Credit Documents contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. There is no fact known to Borrower which would be
reasonably likely to have a Material Adverse Effect which has not been disclosed
herein or in such other documents, certificates and statements furnished to
Lenders for use in connection with the transaction contemplated hereby.
(q) NO DEFAULT. Neither Borrower nor any of its Subsidiaries
is in default under or with respect to any Contractual Obligation in any respect
which would with reasonable likelihood lead to a Material Adverse Effect.
(r) NO BURDENSOME RESTRICTIONS. No Contractual Obligation of
Borrower or any of its Subsidiaries and no Requirement of Law, insofar as
Borrower may reasonably foresee, may result in a Material Adverse Effect.
(s) ERISA COMPLIANCE.
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(i) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS and to the best
knowledge of Borrower, nothing has occurred which would cause the loss of such
qualification. Borrower and each ERISA Affiliate have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(ii) There are no pending or, to the best knowledge
of Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan which has resulted or would reasonably be expected to result
in a Material Adverse Effect.
(iii) (i) No ERISA Event has occurred or is
reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under Title IV of ERISA with respect
to any Pension Plan (other than premiums due and not delinquent under Section
4007 of ERISA); (iv) neither Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; (v) neither Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA; (vi) neither Borrower
nor any ERISA Affiliate has any liability with respect to "expected post
retirement benefit obligations" within the meaning of Statement of Financial
Accounting Standards No. 106; and (vii) "no prohibited transaction" (as defined
in Section 406 of ERISA and Section 4975 of the Code) that would have a Material
Adverse Effect on Borrower or any ERISA Affiliate has occurred with respect to
any Plan.
(t) OTHER REGULATORY COMPLIANCE. Borrower is not subject to
regulation as an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940.
Borrower is not engaged principally, or as one of the important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T and U of the Board of
Governors of the Federal Reserve System). Borrower has complied with all the
provisions of the Federal Fair Labor Standards Act.
(u) ENVIRONMENTAL CONDITION. None of Borrower's Properties has
ever been used by Borrower or, to the best of Borrower's knowledge, by previous
owners or operators, in the disposal of, or to produce, store, handle, treat,
release, or transport, any hazardous waste or hazardous substance other than in
accordance with applicable law; to the best of Borrower's knowledge, none of
Borrower's Properties has ever been designated or identified in any manner
pursuant to any environmental protection statute as a hazardous waste or
hazardous substance disposal site, or a candidate for closure pursuant to any
environmental protection statute; no Lien arising under any environmental
protection statute has attached to any revenues or to any
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Property owned by Borrower or any of its Subsidiaries; and Borrower has never
received a summons, citation, notice, or directive from the Environmental
Protection Agency or any other federal, state or other Governmental Authority
concerning any action or omission by Borrower resulting in the releasing, or
otherwise disposing of hazardous waste or hazardous substances into the
environment.
SECTION 5. COVENANTS OF BORROWER.
5.1 AFFIRMATIVE COVENANTS. So long as any of the Obligations shall
remain unpaid or unsatisfied or any Credit Party shall have any other obligation
to Administrative Agent or any Lender hereunder or any Lender shall have any
commitment hereunder (whichever is later), Borrower shall, and as to each
covenant below expressly requiring compliance by its Subsidiaries, shall not
permit any Subsidiary to, directly or indirectly:
(a) COMPLIANCE WITH LAWS, OTHER AGREEMENTS. With respect to
Borrower and its Subsidiaries, comply with respect to: (i) their respective
certificates of incorporation, bylaws or any applicable laws, rules or
regulations where failure to so comply would be reasonably likely to have a
Material Adverse Effect, (ii) orders, writs, decrees or judgments of any court
or administrative agency and (iii) mortgages, indentures, leases, contracts or
other agreements or instruments binding upon Borrower or its Subsidiaries, where
failure to so comply would be reasonably likely to have a Material Adverse
Effect.
(b) REPORTING REQUIREMENTS. Furnish to each Lender copies of
each of the following:
(i) As soon as available and in any event within
ninety (90) days after the end of each fiscal year of Borrower, audited
Financial Statements for the immediately preceding fiscal year (provided that
consolidating figures for such Financial Statements may be unaudited), certified
in a manner reasonably acceptable to Lenders by an independent public accountant
firm acceptable to Lenders, and an opinion of such accountants relating to such
Financial Statements, accompanied by (w) a compliance certificate (with
calculations in reasonable detail), in form satisfactory to Lenders, signed by
Borrower's chief financial officer, certifying (A) that the Financial Statements
attached were prepared in accordance with GAAP and fairly present in all
material respects the financial condition of such Person, (B) that the
calculation of the financial covenants with respect to the Financial Statements,
is accurate and as required under this Agreement, (C) that Borrower has taken
all steps to pledge all collateral required to be pledged under the Securities
Pledge Agreement and (D) that such officer is familiar with the terms of this
Agreement and that no Default or Event of Default has occurred or is continuing
under this Agreement, or if such a Default or Event of Default has occurred and
is continuing, containing a statement as to the nature thereof and the steps
being taken with respect thereto, (x) copies of any and all management letters
relating to the audits of such Financial Statements, (y) a certificate of
accountants of Borrower stating that in making the examination necessary for
their certification they have obtained no knowledge of any Default or Event of
Default with respect to the financial covenants required under this Agreement
which has occurred and is continuing, or if, in the opinion of such accountants,
a Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof, and (z) an annual
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budget of Borrower and its Subsidiaries prepared by Borrower's chief financial
officer in form and detail satisfactory to Lenders;
(ii) As soon as available and in any event within
forty-five (45) days of the end of each fiscal quarter of Borrower, unaudited
Financial Statements for the accounting period then ended, accompanied by a
compliance certificate (with calculations in reasonable detail) signed by
Borrower's chief financial officer, certifying (A) that the Financial Statements
attached were prepared in accordance with GAAP and fairly present in all
material respects the financial condition of such Person as of such date (except
as to the absence of notes and subject to year-end adjustments), (B) that the
calculation of the financial covenants with respect to such Financial
Statements, is accurate and as required under this Agreement, (C) that Borrower
has taken all steps to pledge all collateral required to be pledged under the
Securities Pledge Agreement and (D) that such officer is familiar with the terms
of this Agreement and that no Default or Event of Default has occurred or is
continuing under this Agreement, or if such a Default or Event of Default has
occurred and is continuing, containing a statement as to the nature thereof and
the steps being taken with respect thereto;
(iii) As soon as available and in any event within
thirty (30) days of the end of each month of Borrower, such financial statements
generated for the month then ended, signed by Borrower's chief financial
officer, certifying (A) such financial statements are the same financial
statements prepared for and presented to Borrower's management for such period,
(B) that Borrower has each taken all steps to pledge all collateral required to
be pledged under the Securities Pledge Agreement and (C) that such officer is
familiar with the terms of this Agreement and that no Default or Event of
Default has occurred or is continuing under this Agreement, or if such a Default
or Event of Default has occurred and is continuing, containing a statement as to
the nature thereof and the steps being taken with respect thereto;
(iv) Promptly after the sending or filing thereof,
copies of all reports which Borrower sends to its securities holders and, to the
extent not included in such reports, any and all monthly, quarterly and audited
annual financial statements of Borrower, any and all press releases that
Borrower issues or, as reasonably requested by any Lender, other information
(whether or not publicly filed);
(v) Promptly after any Responsible Officer of
Borrower has knowledge thereof, give notice to each Lender of: (A) the
occurrence of any Default or Event of Default; (B) any material default or event
of default under any contractual obligation of Borrower or any of its
Subsidiaries; (C) any litigation or proceeding affecting Borrower or any of its
Subsidiaries which might have a Material Adverse Effect; and (D) any notice of
termination of any of the Specified Agreements. Each notice pursuant to this
subsection shall be accompanied by a certificate of a responsible officer
setting forth details of the occurrence referred to therein and stating what
action Borrower proposes to take with respect thereto; and
(vi) Promptly after the occurrence of any of the
following events affecting Borrower or any ERISA Affiliate (but in no event more
than 10 days after such event), deliver to each Lender a copy of any notice with
respect to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to Borrower or any ERISA Affiliate with
respect to such event: (i) an ERISA Event; (ii) a material increase in
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the Unfunded Pension Liability of any Pension Plan; (iii) the adoption of, or
the commencement of contributions to, any Plan subject to Section 412 of the
Code by Borrower or any ERISA Affiliate; (iv) the adoption of any amendment to a
Plan subject to Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability; (v) a "prohibited
transaction" (as defined in Section 406 of ERISA and Section 4975 of the Code)
that would result in any material liability to Borrower or any ERISA Affiliate;
or (vi) any challenge by the IRS to the tax qualification of any Pension Plan
under Section 401 or 501 of the Code.
(c) INSURANCE. With respect to Borrower and its Subsidiaries,
maintain, and cause each Subsidiary to maintain, insurance with responsible and
reputable insurance companies and associations reasonably satisfactory to
Lenders, in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar Properties, including
coverage for general liability and hazard coverages reasonably satisfactory to
Lenders. All policies of insurance shall be endorsed (i) as so that if at any
time should they be canceled, or coverage be reduced which materially affects
the interests of Lenders or Administrative Agent, such cancellation or reduction
shall not be effective as to Lenders or Administrative Agent for thirty (30)
days after receipt by Administrative Agent of written notice from such insurer
of such cancellation or reduction and (ii) to name Administrative Agent, on
behalf of Lenders, as loss payee, and as further set forth in the Collateral
Documents.
(d) TAXES AND OTHER INDEBTEDNESS. With respect to Borrower and
its Subsidiaries, promptly pay and discharge when due, and cause each Subsidiary
to promptly pay and discharge when due, any and all Indebtedness (other than
Permitted Indebtedness), Liens (other than Permitted Liens), charges, taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any of its Properties prior to the date upon which
penalties accrue thereon, and lawful claims which, if unpaid, are or might
become a Lien (other than a Permitted Lien) or material charge upon its Property
or otherwise would be reasonably likely to have a Material Adverse Effect,
except for items being contested by Borrower in good faith where Borrower has
provided adequate reserves to satisfy such item if the contest is not
successful.
(e) MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS. Except as
otherwise permitted by this Agreement, preserve and maintain its corporate
existence, its business substantially as contemplated in the Business Plan to be
conducted, and all of its rights, licenses, privileges and franchises necessary
or desirable in the normal conduct of said business. Borrower shall conduct its
business in an orderly, efficient and regular manner, keep its Properties useful
or necessary in its business in good working order and condition, and from time
to time make all needed repairs, renewals and replacements thereto, so that the
efficiency of its Properties shall be usefully preserved. Borrower shall comply
with all applicable orders, writs, decrees and judgments, with its certificate
of incorporation and bylaws, and with the terms of all mortgages, indentures,
leases, contracts and other agreements and instruments binding upon it or its
Property, except to the extent that the failure to comply with such mortgages,
indentures, leases, contracts, agreements or instruments would not be reasonably
likely to have a Material Adverse Effect.
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(f) FINANCIAL RECORDS, INSPECTION. With respect to Borrower
and its Subsidiaries, keep and maintain, and cause each of its Subsidiaries to
keep and maintain, accurate books of record and account in accordance with GAAP
consistently applied. On reasonable notice, which shall in no event need to be
longer than fourteen (14) Business Days, Borrower shall permit, and cause each
Subsidiary to permit, Administrative Agent, Lenders or representatives thereof,
during customary business hours and as often as Administrative Agent or Lenders
may reasonably request, to inspect, audit and examine its books and records, to
take extracts therefrom, to inspect its Properties and assets and to discuss its
affairs, finances and accounts with its principal officers and its independent
public accountants.
(g) USE OF PROCEEDS. Use the proceeds of the Investment
Capital Loans and the Working Capital Loans solely as described in SECTION 2.3.
(h) CONSENTS, APPROVALS. From time to time obtain all material
necessary governmental and third party consents, approvals and licenses in
connection with the transactions contemplated by the Specified Agreements and
the Credit Documents and such consents, approvals and licenses shall remain in
effect, including all required consents from Borrower's contractual
counterparties to the assignment to Administrative Agent or Lenders or their
designees of revenue producing agreements.
(i) ENVIRONMENTAL CONDITION. Use its Properties in such a
manner as to comply with all environmental protection statutes and shall not use
its Properties for the disposal of, or to produce, store, handle, treat,
release, or transport, any hazardous waste or hazardous substance other than in
accordance with applicable law; Borrower shall use its commercially reasonable
efforts to ensure that (i) none of its Properties will be designated or
identified in any manner pursuant to any environmental protection statute as a
hazardous waste or hazardous substance disposal site, or a candidate for closure
pursuant to any environmental protection statute and (ii) no Lien arising under
any environmental protection statute will attach to any revenues or to any
Property owned by Borrower.
(j) RENEGOTIATION OF FINANCIAL COVENANTS. Prior to Borrower,
after the date hereof, obtaining additional equity or Subordinated Indebtedness,
Borrower shall negotiate in good faith new values for the financial covenant set
forth in SECTIONS 5.3 in order to give effect to such proposed incremental
capital, and Borrower and Requisite Lenders shall reach agreement and enter into
an amendment to this Agreement modifying such financial covenants.
(k) FURTHER ASSURANCES. In addition to the obligations and
documents which this Agreement expressly requires it to execute, acknowledge,
deliver and perform, Borrower shall execute and acknowledge (or cause to be
executed and acknowledged) and deliver to Administrative Agent all documents,
and take all actions, that may be reasonably requested by Administrative Agent
or Lenders from time to time to confirm the rights created or now or hereafter
intended to be created under the Credit Documents, to protect and further the
validity, priority and enforceability of the Liens created under the Collateral
Documents, to subject to the Liens created under the Collateral Documents any
Property intended by the terms of any Credit Document to be covered by the
Collateral Documents, or otherwise to carry out the purposes of the Credit
Documents and the transactions contemplated hereunder and thereunder.
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5.2 NEGATIVE COVENANTS. So long as any of the Obligations shall remain
unpaid or unsatisfied or any Credit Party shall have any other obligations to
make payments to Administrative Agent or Lenders hereunder or Lenders shall have
any commitment hereunder (whichever is later), Borrower shall not, and as to
each covenant below expressly requiring compliance by its Subsidiaries, shall
not permit any Subsidiary to, directly or indirectly:
(a) ENCUMBRANCES, LIENS, ETC. Except for Liens in favor of
Administrative Agent and Lenders and except for Permitted Liens and Liens
disclosed in SCHEDULE 4.1(n) to the Disclosure Letter,
(i) As to Borrower, create, incur, assume or suffer
to exist any Lien of any nature, upon or with respect to any Properties, now
owned or hereafter acquired by Borrower, and
(ii) As to Borrower and its Subsidiaries, create,
incur, assume or suffer to exist any Lien of any nature upon or with respect to
any equity interest in any Portfolio Investment as to which a negative pledge is
required as set forth on SCHEDULE 2.3 to the Disclosure Letter.
(b) INDEBTEDNESS. Incur, create, assume or permit to exist any
Indebtedness except: (i) the Obligations; (ii) Indebtedness under the Fixed Rate
Notes; (iii) purchase money Indebtedness, provided that (A) such purchase money
financing arrangements are entered into in the ordinary course of business on an
arms'-length basis; and (B) such other vendors shall have entered into
intercreditor agreements with Administrative Agent satisfactory to Requisite
Lenders, in their sole and absolute discretion, which agreements shall provide
for, without limitation, (1) agreement as to the terms and conditions pertaining
to the disposition of shared collateral and (2) pari passu status as to all
shared collateral; (iv) obligations under Capital Leases and Operating Leases;
(v) interest rate swaps or caps that are bona fide xxxxxx of floating rate
liabilities and do not subject Borrower or any of its Subsidiaries to
speculative risks; (vi) Subordinated Indebtedness and (vii) other Indebtedness;
provided, however, that in no event shall Indebtedness be permitted to be
incurred or maintained hereunder to the extent that the same shall cause the
financial covenant set forth in SECTION 5.3 to be violated. Collectively, the
Indebtedness described in this SECTION 5.2(b) is referred to as "Permitted
Indebtedness."
(c) CONSOLIDATION/MERGER/CHANGE OF CONTROL. Consolidate with
or merge into any other Person or permit any other Person to merge into it or
permit a Change of Control to occur.
(d) DISPOSITION OF ASSETS. With respect to Borrower, cause or
allow to occur an Asset Sale; provided, however, that Borrower may effect Asset
Sales if (i) immediately after giving effect thereto no Default or Event of
Default would exist; (ii) in the good faith opinion of Borrower's board of
directors, such Asset Sale is in exchange for consideration having a fair market
value at least equal to the property exchanged and is in the best interests of
Borrower; (iii) at least 80% of the consideration received by Borrower or such
Subsidiary in such Asset Sale is in the form of cash; and (iv) the Disposition
Value of all property that was the subject of any Asset Sale occurring in the
immediately preceding four fiscal quarters of Borrower would not exceed 35% of
the total consolidated assets of Borrower and its Subsidiaries.
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(e) INVESTMENTS. Make or permit to remain outstanding any
Investment other than (i) Investment Grade Instruments, (ii) loans and advances
to employees for business expenses, relocation, medical purposes and other
purposes in the ordinary course of business, in the aggregate not to exceed
$250,000 at any time outstanding, (iii) Investments in Subsidiaries listed on
SCHEDULE 4.1(l) to the Disclosure Letter, (iv) direct and indirect Investments
in the Persons described in SCHEDULE 2.3 to the Disclosure Letter, provided that
(A) such Investments do not exceed the amounts set forth in such Schedule, (B)
such Investments are made in accordance with the Business Plan, and (C) except
as expressly described in such Schedule, Administrative Agent has and maintains
a first priority perfected security interest in the equity interests of each
such Person, as evidenced by documents in form and substance satisfactory to
Requisite Lenders, including an opinion of local counsel satisfactory to
Requisite Lenders in respect of Investments in foreign entities and (v) other
Investments, provided, that such other Investments are not made with the
proceeds of any Loans.
(f) CAPITAL EXPENDITURES. Incur or make or commit to incur or
make Capital Expenditures from the proceeds of Loans in any fiscal year in
excess of amounts set forth in the Business Plan or make or commit to incur or
make Capital Expenditures if the incurrence of such Capital Expenditure would
result in or cause an Event of Default or a Default.
(g) LIMITATION ON PREPAYMENTS. Make or commit to make any
prepayment or voluntary redemptions of any Indebtedness except prepayments of
any amounts payable hereunder and permitted to be paid hereby, provided,
however, that Borrower may refinance any such Indebtedness if the Indebtedness
created in such refinancing transaction has a weighted average life to maturity
not less than the Indebtedness refinanced. .
(h) TRANSACTIONS WITH AFFILIATES. With respect to Borrower and
its Subsidiaries, except for reasonable management, operating and tax sharing
agreements, enter into any transaction, including the purchase, sale, or
exchange of Property or the rendering of any service, with any Affiliate, except
in the ordinary course of, and pursuant to the reasonable requirements of, its
business or upon fair and reasonable terms no less favorable to it than it would
obtain in a comparable arm's-length transaction with a Person not an Affiliate;
provided, however, that no violation of this covenant shall exist in respect of
past practices of QUALCOMM that are continued by Borrower after the Closing Date
and in respect of transactions of Borrower with QUALCOMM which are consistent
with past dealings between separate business units within QUALCOMM.
(i) DIVIDENDS; DISTRIBUTIONS. With respect to Borrower,
declare or pay cash dividends upon any of its stock or distribute any of its
Property or redeem, retire, purchase or acquire, directly or indirectly, any of
its stock, or make any change in its capital structure.
(j) CHANGE IN LINES OF BUSINESS. With respect to Borrower and
its Subsidiaries, engage to any substantial extent in any business other than
the businesses described in the Information Statement and the Business Plan;
provided, however, that this covenant shall not restrict Borrower or its
Subsidiaries from engaging in any business to the extent such business is not
financed with Loans.
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(k) MODIFICATION OF THE SPECIFIED AGREEMENTS. Without the
prior written approval of Requisite Lenders, amend, modify, supplement or
restate any of the Specified Agreements in a manner which might materially
negatively affect the ability of any Credit Party to perform its obligations
under this Agreement and the other Credit Documents.
(l) ERISA COMPLIANCE. (a) engage, or suffer or permit any
ERISA Affiliate to engage, in a "prohibited transaction" (as defined in Section
406 of ERISA and Section 4975 of the Code) or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or could
reasonably expected to result in liability of Borrower in an aggregate amount in
excess of $250,000; (b) engage, or suffer or permit any ERISA Affiliate to
engage, in a transaction that could be subject to Section 4069 or 4212(c) of
ERISA; or (c) incur, or suffer or permit any ERISA Affiliate to incur, any
obligation to contribute to a Pension Plan required by a collective bargaining
agreement or as a consequence of the acquisition of an ERISA Affiliate, unless
(A) Borrower shall notify Administrative Agent in writing that it intends to
incur such obligation and (B) after Administrative Agent's receipt of such
notice, Requisite Lenders consent to the establishment or maintenance of, or
Borrower's incurring an obligation to contribute to, the Pension Plan, which
consent may not unreasonably be withheld but may be subject to such reasonable
conditions as Requisite Lenders may require.
(m) OTHER COMPLIANCE. Become subject to regulation as an
"investment company" or as a Person controlled by an "investment company,"
within the meaning of the Investment Company Act of 1940, or become principally
engaged in, or undertake as one of its important activities, the business of
extending credit for the purpose of purchasing or carrying margin stock, or use
the proceeds of any Loan for such purpose, or fail to comply with the Federal
Fair Labor Standards Act, in each case which violation would be reasonably
likely to have a Material Adverse Effect.
5.3 FINANCIAL COVENANTS. As of any day during each period set forth
below and so long as any of the Obligations shall remain unpaid or unsatisfied
or any Credit Party shall have any other obligation to make payments to
Administrative Agent or Lenders hereunder, Borrower shall not at any time permit
the quotient obtained by dividing Total Debt by Total Capitalization, in each
case with respect to Borrower, to exceed the following levels during the
indicated periods:
PERIOD LEVEL
Closing Date through 4th anniversary thereof 70%
After the 4th anniversary of the Closing Date 50%
SECTION 6. EVENTS OF DEFAULT.
6.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an Event of Default:
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(a) Borrower shall fail to pay when due any principal of, or
interest on, any Loan, or Borrower shall fail to pay when due any fees or other
amounts payable under this Agreement and any such failure shall continue for
five (5) days; or
(b) Any representation or warranty made by Borrower (or any of
its officers), under or in connection with this Agreement or any other Credit
Document shall prove to have been incorrect in any material respect when made or
deemed made; or
(c) Borrower, or any Subsidiary of Borrower to the extent
applicable, shall fail to perform or observe any other term, covenant or
agreement on its part to be performed or observed and contained in this
Agreement or any other Credit Document and such failure shall continue for
thirty (30) days after Borrower has knowledge of such failure (provided,
however, that the breach of SECTIONS 5.1(b)(vi) and (g), 5.2(a) - (g), (i) and
(k) - (m) and 5.3 shall, immediately upon any such breach, constitute an Event
of Default); or
(d) (i) Borrower shall fail to pay any of its Material
Indebtedness (excluding Indebtedness incurred under this Agreement) or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Material Indebtedness; (ii) Borrower shall commit
any other default under any agreement or instrument relating to any such
Material Indebtedness, or any other event, shall occur and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Material Indebtedness; (iii) any such
Material Indebtedness shall be declared to be due and payable, or required to be
prepaid, prior to the stated maturity thereof; or (iv) Borrower shall commit a
material default under any of the Specified Agreements and such default shall
continue after the applicable grace period specified in such agreement. As used
in this SECTION 6.1, "Material Indebtedness" shall mean any Indebtedness of
Borrower or its Subsidiaries in excess of $1,000,000; or
(e) Borrower shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its Property, (ii) be unable, or admit in writing its
inability, to pay its debts generally as they mature, (iii) make a general
assignment for the benefit of its or any of its creditors, (iv) be dissolved or
liquidated in full or in part, (v) become insolvent (as such term may be defined
or interpreted under any applicable statute), (vi) commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or consent to any such relief or to the
appointment of or taking possession of its Property by any official in an
involuntary case or other proceeding commenced against it, or (vi) take any
action for the purpose of effecting any of the foregoing; or
(f) Proceedings for the appointment of a receiver, trustee,
liquidator or custodian of Borrower or of all or a substantial part of any of
its Property, or an involuntary case or other proceedings seeking liquidation,
reorganization or other relief with respect to Borrower under any bankruptcy,
insolvency or other similar law now or hereafter in effect shall be commenced
and an order for relief entered or such proceeding shall not be dismissed or
discharged within 90 days of commencement; or
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(g) Borrower shall fail to pay and discharge any judgment or
order, or levy of any attachment, execution or other process against its assets
and such judgment, order, levy or other process shall remain undischarged,
unvacated, unbonded or unstayed for a period of sixty (60) days or in any event
five (5) days prior to the time of any proposed sale under any such judgment or
levy; or
(h) If any of the Specified Agreements or any Credit Document,
including this Agreement, the Security Agreement or the Securities Pledge
Agreement, shall for any reason be, or be asserted to be, unenforceable or cease
to be in full force and effect or shall cease to give Administrative Agent and
Lenders the Liens, rights, powers and privileges purported to be created thereby
(including a perfected security interest in, and Lien on, all of the collateral
subject thereto) in favor of Lenders, superior to and prior to the rights of all
third Persons and subject to no other Liens (except to the extent expressly
permitted herein or therein; or
(i) (i) an ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $250,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $250,000; or (iii) Borrower or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$250,000; or
(j) An event shall have occurred which would be reasonably
likely to result in a Material Adverse Effect; or
(k) A Change of Control shall occur.
6.2 REMEDIES. Immediately and without notice upon the occurrence of an
Event of Default specified in SECTION 6.1(e), 6.1(f) or SECTION 6.1(h), or, at
the option of Requisite Lenders, upon the occurrence of any other Event of
Default, (i) all amounts and obligations owed to Administrative Agent and
Lenders pursuant to this Agreement and the other Credit Documents shall
immediately become due and payable (including any unpaid commitment or facility
fees) and (ii) the obligation of Lenders to make any Loan under this Agreement
or the other Credit Documents and all commitments hereunder shall be terminated,
all without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and (iii) without the expiration of any other period of
grace, except for a notice of foreclosure as provided in the Securities Pledge
Agreement, Administrative Agent or any Lender may immediately enforce payment of
the amounts owed it hereunder and exercise any and all other rights and remedies
granted to it by this Agreement or any of the other Credit Documents or at law,
in equity or otherwise.
6.3 UNMATURED EVENTS OF DEFAULT. Upon the occurrence of any Default,
the obligation of Lenders to make any Loans under this Agreement or the other
Credit Documents shall be suspended until such event is either waived by
Requisite Lenders or, to the extent allowed hereunder, cured by Borrower.
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6.4 PAYMENT OF SUBORDINATED INDEBTEDNESS. Upon the occurrence and
during the continuance of an Event of Default, Administrative Agent, at the
request of Requisite Lenders, on behalf of Lenders, may deliver to Borrower
written notice, or telephonic notice promptly confirmed in writing, directing
Borrower to make no further payments on account of any Subordinated
Indebtedness. Immediately upon receipt of such notice, Borrower shall cease
making and shall make no further payments of any nature whatsoever on account of
such Subordinated Indebtedness (except as otherwise permitted by the terms of
subordination of such Subordinated Indebtedness), whether such payments are owed
to the holder of such Subordinated Indebtedness or to some other Person, unless
and until Requisite Lenders have waived such Event of Default in writing or
shall have otherwise consented to such payment in writing in advance, such
consent being at Requisite Lenders' sole and absolute discretion.
SECTION 7. ADMINISTRATIVE AGENT.
7.1 APPOINTMENT OF ABN AMRO BANK N.V. AS ADMINISTRATIVE AGENT. Lenders
hereby designate and appoint ABN AMRO Bank N.V. as Administrative Agent to act
in an administrative function as specified under this Agreement and the other
Credit Documents and irrevocably authorizes Administrative Agent to take such
action on its behalf under and subject to the provisions of this Agreement and
each other Credit Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Credit Document, together with such other powers, in the judgment of
Administrative Agent, as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement or any other Credit
Document, Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein or therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Document or otherwise exist against Administrative
Agent.
7.2 DELEGATION OF DUTIES BY ADMINISTRATIVE AGENT. Administrative Agent
may execute any of its duties under this Agreement by or through Administrative
Agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Administrative Agent
shall not be responsible for the negligence or misconduct of any Administrative
Agent or attorney-in-fact that it selects with reasonable care.
7.3 LIABILITY OF ADMINISTRATIVE AGENT. None of Administrative
Agent-Related Persons (defined below) shall (a) be liable for any action taken
or omitted to be taken by any of them under or in connection with this Agreement
or any other Credit Document (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by Borrower or any Affiliate
of Borrower, or any officer thereof, contained in this Agreement or in any other
Credit Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Credit Document, or for the
value of any Collateral or the validity, priority, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Credit Document, or for
any failure of Borrower or any other party to any Credit Document to perform its
obligations hereunder or thereunder. No Administrative Agent-Related Person
shall be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the
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agreements contained in, or conditions of, this Agreement or any other Credit
Document, or to inspect the Properties, books or records of Borrower or any of
Borrower's Affiliates. "Administrative Agent-Related Persons" shall mean
Administrative Agent and any successor Administrative Agent, together with their
respective Affiliates, and the employees, agents and attorneys-in-fact of such
persons.
7.4 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrower),
independent accountants and other experts selected by Administrative Agent.
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of Requisite Lenders as it deems appropriate
and indemnification for all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action, provided, however, that
Administratiave Agent shall be justified in refusing to take action if such
action is in violation of law or the terms of this Agreement or any other Credit
Document, based on the advise of Administrative Agent's legal counsel.
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Credit Document in
accordance with a request or consent of Requisite Lenders and such request and
any action taken or failure to act pursuant thereto shall be binding upon all of
Lenders.
(b) For purposes of determining compliance with the conditions
precedent specified in SECTION 3, each Lender that has executed this Agreement
or shall hereafter execute and deliver an Assignment and Acceptance in
accordance with SECTION 8.6 shall be deemed to have consented to, approved or
accepted or to be satisfied with each document or other matter either sent by
Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to such Lender, unless an officer of Administrative
Agent responsible for the transactions contemplated by the Credit Documents
shall have received notice from such Lender prior to the initial borrowing
specifying its objection thereto and either such objection shall not have been
withdrawn by notice to Administrative Agent to that effect or such Lender shall
not have made available to Administrative Agent its ratable portion of such
borrowing.
7.5 NOTICE OF DEFAULT. Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to Administrative Agent on behalf and for the benefit of Lenders,
unless Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." In the event that
Administrative Agent receives such a notice, Administrative Agent shall give
notice thereof to each Lender. Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be requested by Requisite
Lenders in accordance with SECTION 6; provided, however, that unless and until
Administrative Agent shall have received any such request, Administrative
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Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem in the best interest of Lenders.
7.6 NON-RELIANCE BY LENDERS. Each Lender expressly acknowledges that
none of Administrative Agent-Related Persons has made any representation or
warranty to it and that no act by Administrative Agent hereafter taken,
including any review of the affairs of Borrower, shall be deemed to constitute
any representation or warranty by Administrative Agent to such Lender. Each
Lender confirms to Administrative Agent that it has not relied, and will not
rely hereafter, on Administrative Agent to check or inquire on such Lender's
behalf into the adequacy, accuracy or completeness of any information provided
by Borrower or any other Person under or in connection with the Credit Documents
or the transactions herein contemplated (whether or not the information has been
or is hereafter distributed to such Lender by Administrative Agent). Each Lender
represents to Administrative Agent that it has, independently and without
reliance upon Administrative Agent and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, Property, financial and other condition and
creditworthiness of Borrower, and all applicable regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and the other Credit Documents and extend credit to Borrower under and
pursuant to this Agreement. Each Lender also represents that it will,
independently and without reliance upon Administrative Agent and based on such
documents and appraisals and decisions in taking or not taking action under this
Agreement and the other Credit Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
Property, financial and other condition and creditworthiness of Borrower. Except
for notices, reports and other documents expressly herein required to be
furnished to Lenders by Administrative Agent, Administrative Agent shall not
have any duty or responsibility to provide to any Lender any credit or other
information concerning the business, prospects, operations, Property, financial
and other condition or creditworthiness of Borrower which may come into the
possession of any Administrative Agent-Related Persons. Administrative Agent
shall not be responsible to any Lender for the execution, effectiveness,
priority, genuineness, validity, enforceability, collectibility or sufficiency
of this Agreement the Credit Documents or for any representations or warranties,
recitals or statements made herein or therein or made in any written or oral
statements, or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made available by
Administrative Agent to Lenders or by or on behalf of Borrower to Administrative
Agent or any Lender in connection with the Credit Documents or the transactions
contemplated thereby or for the financial condition or business affairs of
Borrower or any Person liable for payment of the Obligations, nor shall
Administrative Agent be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or
agreements contained in any of the Credit Documents or as to the use of proceeds
of the Loans or as to the existence or possible existence of any Default or
Event of Default.
7.7 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, Lenders shall indemnify upon demand Administrative
Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrower
and without limiting the obligation of Borrower to do so) ratably from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind
whatsoever which may at any time (including at any time following the repayment
of the Loans or the
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termination or the resignation of the related Administrative Agent) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any of the other Credit Documents or the
transactions contemplated hereby or thereby or any action taken or omitted by
any such Person under or in connection with any of the foregoing; provided,
however, that no Lender shall be liable for the payment to Administrative
Agent-Related Persons of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Person's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender shall reimburse Administrative Agent
upon demand for its ratable share of any costs or other out-of-pocket expenses
(including reasonable attorneys' expenses and disbursements) incurred by
Administrative Agent in connection with the preparation, execution,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any other Credit Document to
the extent that Administrative Agent has not previously been reimbursed for such
expenses by or on behalf of Borrower. Without limiting the generality of the
foregoing, if the IRS or any Administrative Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed, or because such Lender failed
to notify Administrative Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), such Lender shall indemnify Administrative Agent fully for all amounts
paid, directly or indirectly, by Administrative Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to Administrative Agent under this SECTION
7.7, together with all costs and expenses (including reasonable attorneys'
expenses and disbursements). The obligations of Lenders in this SECTION 7.7
shall survive the repayment of all Obligations and the termination of the Credit
Documents.
7.8 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may, and at
the request of Requisite Lenders shall, resign as Administrative Agent upon 30
days' notice to Lenders. If Administrative Agent shall resign as Administrative
Agent under this Agreement and the other Credit Documents, then Requisite
Lenders shall appoint from among Lenders a successor Administrative Agent for
Lenders. If no successor Administrative Agent is appointed prior to the
effective date of the resignation of Administrative Agent, Administrative Agent
may appoint, after consulting with Lenders and Borrower, a successor
Administrative Agent from among Lenders. Upon the acceptance of its appointment
as successor Administrative Agent hereunder and under the other Credit
Documents, such successor Administrative Agent shall succeed to the rights,
powers and duties of Administrative Agent, the term "Administrative Agent" shall
mean such successor Administrative Agent effective upon its appointment, and the
former Administrative Agent's appointment, rights, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this SECTION 7
and SECTIONS 8.4 and 8.14 shall continue to inure to its benefit as to actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Credit Documents.
7.9 MATTERS REGARDING THE COLLATERAL.
(a) Administrative Agent is authorized on behalf of Lenders,
without the necessity of any notice to or further consent from Lenders, from
time to time to take any action
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with respect to any Collateral or the Collateral Documents which may be
necessary to perfect and maintain perfected the security interest in and Liens
upon the Collateral granted pursuant to the Collateral Documents; provided,
however, that Administrative Agent shall not be responsible for the
effectiveness of such Collateral Document as provided in SECTION 7.6.
(b) Lenders irrevocably authorize Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and payment in full of all Loans and all other Obligations payable under this
Agreement and under any other Credit Document; (ii) constituting Property sold
or to be sold or disposed of as part of or in connection with any disposition
permitted hereunder; (iii) constituting Property in which Borrower did not own
an interest at the time the Lien was granted or at any time thereafter; (iv)
constituting Property leased to Borrower under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by Borrower to be, renewed or
extended; (v) consisting of an instrument evidencing Indebtedness or another
debt instrument, if the indebtedness evidenced thereby has been paid in full; or
(vi) if approved, authorized or ratified in writing by Requisite Lenders or all
Lenders, as the case may be, as provided in SECTION 8.1. Upon request by
Administrative Agent at any time, Lenders shall confirm in writing
Administrative Agent's authority to release particular types or items of
Collateral pursuant to this SECTION 7.9(b). Requisite Lenders may also deliver
written directions to Administrative Agent not to take any specific action
permitted by this SECTION 7.9(b) and, following receipt of such notice, but
subject to the other terms of this Agreement, Administrative Agent shall cease
from taking such action.
SECTION 8. MISCELLANEOUS.
8.1 AMENDMENTS. No amendment or waiver of any provision of this
Agreement or any of the other Credit Documents, nor consent to any departure by
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by Requisite Lenders and acknowledged by Administrative
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such amendment, waiver or consent shall, unless in writing and signed by all
Lenders (other than any Lender which is in default of its obligations hereunder)
and Borrower and acknowledged by Administrative Agent, do any of the following:
(a) increase or extend the Aggregate Investment Capital Loan
Commitment or any Investment Capital Lender's Investment Capital Loan Commitment
Percentage (or reinstate any such commitment terminated hereunder); or increase
or extend the Aggregate Working Capital Loan Commitment or any Working Capital
Lender's Working Capital Loan Commitment Percentage (or reinstate any such
commitment terminated hereunder);
(b) postpone or delay any date fixed by this Agreement or any
other Credit Document for any payment or prepayment of amounts due to Lenders
hereunder or under any other Credit Document other than payments of principal,
interest and commitment fees solely with respect to either the Investment
Capital Loan Facility or the Working Capital Facility;
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(c) reduce the amount of any amounts payable to Lenders (or
any of them) hereunder or under any other Credit Document other than payments of
principal, interest and commitment fees solely with respect to either the
Investment Capital Loan Facility or the Working Capital Facility;
(d) change the percentage of the Aggregate Commitment, the
Aggregate Investment Capital Loan Commitment or the Aggregate Working Capital
Loan Commitment or of the aggregate unpaid principal amount of the Loans, the
Investment Capital Loans or the Working Capital Loans, as applicable, which is
required for Lenders, Investment Capital Lenders or Working Capital Lenders, as
applicable, to take any action hereunder;
(e) release all or any substantial part of the collateral
granted or pledged under any of the Collateral Documents, except as otherwise
may be provided in the Collateral Documents; or
(f) amend this SECTION 8.1 or any provision herein expressly
providing for consent or other action by all Lenders, all Investment Capital
Lenders or all Working Capital Lenders;
provided further, that no amendment or waiver shall, unless in writing and
signed by Administrative Agent in addition to Requisite Lenders, Requisite
Investment Capital Lenders or Requisite Working Capital Lenders, as applicable,
or all Lenders, all Investment Capital Lenders or all Working Capital Lenders,
as applicable, affect the rights or duties of Administrative Agent under this
Agreement or any other Credit Document.
Notwithstanding anything to the contrary in this SECTION 8.1, no
amendment or waiver of any provision of this Agreement or any of the other
Credit Documents relating solely to the terms and conditions of the Investment
Capital Loan Facility (including as to those matters set forth in this Agreement
expressly requiring the approval of Requisite Investment Capital Lenders), nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by Requisite Investment Capital
Lenders; provided, however, that no such amendment, waiver or consent shall,
unless in writing and signed by all Investment Capital Lenders (other than any
Investment Capital Lender which is in default of its obligations hereunder) and
Borrower and acknowledged by Administrative Agent, do any of the following:
(g) postpone or delay any date fixed by this Agreement or any
other Credit Document for any payment or prepayment of principal, interest, fees
or other amounts due to Investment Capital Lenders (or any of them) solely with
respect to the Investment Capital Loan Facility hereunder or under any other
Credit Document; or
(h) reduce the principal of, or the rate of interest specified
herein on any Investment Capital Loan (except in connection with a waiver of
applicability of any post-default increase in interest rates), or any fees or
other amounts payable to Investment Capital Lenders with respect to the
Investment Capital Loan Facility hereunder or under any other Credit Document.
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Notwithstanding anything to the contrary in this SECTION 8.1, no
amendment or waiver of any provision of this Agreement or any of the other
Credit Documents relating solely to the terms and conditions of the Working
Capital Loan Facility (including as to those matters set forth in this Agreement
expressly requiring the approval of Requisite Working Capital Lenders), nor
consent to any departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by Requisite Working Capital
Lenders; provided, however, that no such amendment, waiver or consent shall,
unless in writing and signed by all Working Capital Lenders (other than any
Working Capital Lender which is in default of its obligations hereunder) and
Borrower and acknowledged by Administrative Agent, do any of the following:
(i) postpone or delay any date fixed by this Agreement or any
other Credit Document for any payment or prepayment of principal, interest, fees
or other amounts due to Working Capital Lenders (or any of them) solely with
respect to the Working Capital Loan Facility hereunder or under any other Credit
Document; or
(j) reduce the principal of, or the rate of interest specified
herein on any Working Capital Loan (except in connection with a waiver of
applicability of any post-default increase in interest rates), or any fees or
other amounts payable to Working Capital Lenders solely with respect to the
Working Capital Loan Facility hereunder or under any other Credit Document.
8.2 NOTICES, ETC. Except as to those notices and other communications
which are expressly authorized to be sent telephonically, all notices and other
communications provided for hereunder shall be in writing (including facsimile
communication) and sent by certified mail, overnight courier service, telecopied
or delivered, and addressed to Borrower, Administrative Agent or such Lender at
its address shown, or at such other address as it may, by written notice
received by the other parties to this Agreement, have designated as its address
for such purposes. Administrative Agent or any Lender giving any waiver, consent
or notice to, or making any request upon, Borrower hereunder shall promptly
notify the other parties to this Agreement at the addresses set forth below:
Borrower Leap Wireless International, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Fax No.: [____________]
With a copy to:
Leap Wireless International, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax No.: [_____________]
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Administrative Agent ABN AMRO Bank N.V.
Agency Services
1325 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx, Vice President
and Director
Fax No.: (000) 000-0000
Phone No.: (000) 000-0000
With a copy to:
ABN AMRO Bank N.V.
Los Angeles Branch
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Credit Administration
Fax No.: (000) 000-0000
Lender XXXXXXXX Xxxxxxxxxxxx
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Vice President, Customer Finance
Fax No. (000) 000-0000
With copy to:
XXXXXXXX Xxxxxxxxxxxx
0000 Xxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: General Counsel
Fax No. (000) 000-0000
The address for notices for Persons which subsequently become Lenders hereunder
shall be as noted in the assignment and acceptance documentation to which such
Person becomes a party. Except as set forth below, all such notices and
communications shall, when mailed or telecopied, be effective, if deposited in
the mails, two (2) Business Days after deposit in the mails, or if telecopied,
upon being telecopied, with receipt telephonically confirmed by sender,
respectively, addressed as aforesaid; provided, however, that notices to Lenders
or Administrative Agent pursuant to the provisions of SECTION 2 shall not be
effective, as of a given Business Day, unless
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actually received by Lenders or Administrative Agent or both, as applicable,
prior to 1:00 p.m. New York time, on said Business Day. Notices given to Lenders
or Administrative Agent pursuant to the provisions of SECTION 2 which are
received after 1:00 p.m. New York time on a Business Day shall be considered
effective as of the next succeeding Business Day. Each of such notices specified
in SECTION 2 shall be given by telephone, facsimile or delivery of such notice.
Neither Lenders nor Administrative Agent shall incur any liability to Borrower
in acting upon any telephone or facsimile notice referred to in SECTION 2 which
Lenders or Administrative Agent believe in good faith to have been given by a
duly authorized officer or other person authorized to borrow on behalf of
Borrower. Each such telephonic or facsimile notice shall be irrevocable and
binding on Borrower.
8.3 NO WAIVER; REMEDIES. No failure on the part of Administrative Agent
or Lenders to exercise, and no delay in exercising, any right under any Credit
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any right under any Credit Document preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided in
the Credit Documents are cumulative and not exclusive of any remedies provided
by law.
8.4 COSTS, EXPENSES AND TAXES. Borrower agrees to pay Administrative
Agent or Lenders, as the case may be, on demand, whether or not any Loan is made
hereunder, (i) all reasonable fees and expenses, including reasonable attorneys'
fees, incurred by Administrative Agent and Lenders in connection with the
negotiation of and/or the preparation of amendments to and waivers under the
Credit Documents, (ii) all reasonable costs and expenses, if any (including
reasonable counsel fees and expenses), incurred by Administrative Agent and
Lenders in connection with the enforcement and administration of the Credit
Documents and the other documents to be delivered under the Credit Documents and
(iii) any and all recording and filing fees associated with the foregoing and
any future stamp, excise and other similar taxes with respect to the foregoing,
and Borrower agrees to indemnify and hold Administrative Agent and Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission to pay Lenders any such taxes. As used herein,
"attorneys' fees" shall include, without limitation, allocable costs of
Administrative Agent's and Lenders' in-house legal counsel and staff.
8.5 RIGHT OF SET-OFF.
(a) Upon the occurrence and during the continuance of any
Event of Default, Administrative Agent and Lenders are hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by Lenders
to or for the credit or the account of Borrower against any and all of the
obligations of Borrower now or hereafter existing under any Credit Document,
irrespective of whether or not Administrative Agent or Lenders shall have made
any demand under such Credit Document and although such obligations may be
unmatured. Lenders agree promptly to notify Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Lenders under this
Section are in addition to other rights and remedies (including other rights of
set-off) which Lenders may have.
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(b) Borrower's obligations to make payments and perform all
other obligations hereunder, and the rights of Administrative Agent and Lenders
in and to such payments and performance, are absolute and unconditional and
shall not be subject to any abatement, reduction, set-off, defense, counterclaim
or recoupment for any reason whatsoever.
8.6 BINDING EFFECT; ASSIGNMENTS; GOVERNING LAW. This Agreement and the
other Credit Documents shall be binding upon and inure to the benefit of
Borrower, Lenders and Administrative Agent and their respective successors and
assigns. Borrower shall not have the right to assign its rights or delegate its
duties hereunder or any interest herein without the prior written consent of
Lenders and Administrative Agent. Lenders may assign or sell participation
interests in all or any part of their interests under this Agreement or any of
the other Credit Documents; provided, however, no Lender shall transfer or grant
any participating interest under which the participant shall have rights to
approve any amendment, consent or waiver with respect to this Agreement except
to the extent such amendment, consent or waiver would require unanimous consent
as described in SECTION 8.1; and provided, further, that no assignment of a
Lender's Loans and portion or the Aggregate Commitment shall be in an aggregate
amount of less than $2,500,000; and provided, finally, that prior to the fourth
anniversary hereof QUALCOMM in its capacity as a Lender hereunder shall not make
any assignment of its interests under this Agreement if, as a result of such
assignment, QUALCOMM's percentage portion of all Loans then outstanding, all
Investment Capital Commitments and all Working Capital Commitments, respectively
would, in each case be less than 51%. Lenders may, subject to SECTION 8.19,
disclose the Credit Documents and any financial or other information relating to
Borrower to any potential assignee or participant. The form of Assignment and
Acceptance is attached hereto as EXHIBIT G. This Agreement and the other Credit
Documents shall be governed by, and construed in accordance with, the laws of
the State of California.
8.7 COLLATERAL. The obligations of Borrower under this Agreement are
secured by the Collateral Documents.
8.8 NATURE OF LENDERS' OBLIGATIONS. Nothing contained in this
Agreement, any other Credit Document or the Specified Agreements and no action
taken by Lenders pursuant hereto or thereto may, or may be deemed to, make
Administrative Agent or Lenders a partnership, an association, a joint venture,
or other entity, with Borrower.
8.9 NON-LIABILITY OF LENDERS. The relationship between Borrower and
Lenders is, and shall at all times remain, solely that of borrower and lender,
and Lenders and Administrative Agent neither undertake nor assume any
responsibility or duty to Borrower to review, inspect, supervise, pass judgment
upon, or inform Borrower of any matter in connection with any phase of
Borrower's business, operations, or condition, financial or otherwise. Borrower
shall rely entirely upon its own judgment with respect to such matters, and any
review, inspection, supervision, exercise of judgment, or information supplied
to Borrower by Administrative Agent or any of Lenders in connection with any
such matter is for the protection of Administrative Agent and Lenders, and
neither Borrower nor any third party is entitled to rely thereon.
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8.10 JURISDICTION, VENUE, SERVICE OF PROCESS; ARBITRATION.
(a) JURISDICTION, VENUE. BORROWER, ADMINISTRATIVE AGENT AND
EACH LENDER HEREBY AGREE THAT ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF CALIFORNIA IN THE COUNTY OF SAN DIEGO OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF CALIFORNIA AS ADMINISTRATIVE AGENT OR ANY
LENDER MAY ELECT, AND, BY EXECUTION AND DELIVERY HEREOF, EACH OF BORROWER,
LENDERS AND ADMINISTRATIVE AGENT ACCEPTS AND CONSENTS TO, FOR ITSELF AND IN
RESPECT TO ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL BE EXCLUSIVE, UNLESS
WAIVED BY ADMINISTRATIVE AGENT AND EACH LENDER IN WRITING, WITH RESPECT TO ANY
ACTION OR PROCEEDING BROUGHT BY BORROWER AGAINST ADMINISTRATIVE AGENT OR ANY
LENDER. NOTHING HEREIN SHALL LIMIT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. BORROWER WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT
TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID COURTS ON THE
BASIS OF FORUM NON CONVENIENS.
(b) SERVICE OF PROCESS. SERVICE OF PROCESS ON BORROWER,
ADMINISTRATIVE AGENT OR ANY LENDER IN ANY ACTION SUBJECT TO THIS SECTION 8.10
SHALL BE EFFECTIVE IF MAILED TO SUCH PARTY AT THE ADDRESS FOR NOTICES SPECIFIED
IN SECTION 8.2.
(c) WAIVER OF JURY TRIAL. BORROWER, EACH LENDER AND
ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS.
8.11 CONFLICT IN CREDIT DOCUMENTS. To the extent there is any actual
irreconcilable conflict between the provisions of this Agreement and any other
Credit Document, the provisions of this Agreement shall prevail.
8.12 MAXIMUM RATE. In no event whatsoever shall the interest rate and
other charges charged hereunder exceed the highest rate permissible under any
law which a court of competent jurisdiction shall, in a final determination,
deem applicable hereto. In the event that a court determines that Lenders have
received interest and other charges hereunder in excess of the highest rate
applicable hereto, Lenders shall promptly refund such excess amount to Borrower
and the provisions hereof shall be deemed amended to provide for such
permissible rate.
8.13 BROKER. Borrower and Lenders represent and warrant to each other
that, with respect to the financing transaction herein contemplated, no Person
is entitled to any brokerage fee or other commission as a result of their
respective conduct and each agrees to indemnify and hold the other harmless
against any and all such claims for which the indemnitor is responsible.
8.14 INDEMNIFICATION. Borrower agrees to indemnify, save, and hold
harmless Administrative Agent, Lenders and their directors, officers, agents,
attorneys and employees (collectively, the "indemnitees") from and against: (i)
any and all claims, demands, actions, or
60.
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causes of action that are asserted against any indemnitee by any Person if the
claim, demand, action, or cause of action arises out of or relates to a claim,
demand, action, or cause of action that the Person asserts or may assert against
Borrower, or any officer, director or shareholder of Borrower in their capacity
as such, (ii) any and all claims, demands, actions or causes of action that are
asserted against any indemnitee (other than by Borrower or by another
indemnitee) if the claim, demand, action or cause of action arises out of or
relates to the Loans, the use of proceeds of any Loans, or the relationship of
Borrower and Lenders under this Agreement or any transaction contemplated
pursuant to this Agreement, (iii) any administrative or investigative proceeding
by any governmental agency arising out of or related to a claim, demand, action
or cause of action described in clauses (i) or (ii) above; and (iv) any and all
liabilities, losses, costs, or expenses (including outside attorneys' fees,
in-house counsel fees and disbursements) that any indemnitee suffers or incurs
as a result of any of the foregoing; provided, that Borrower shall have no
obligation under this SECTION 8.14 to any Lender or Administrative Agent with
respect to any of the foregoing arising out of the gross negligence or willful
misconduct of such Lender or Administrative Agent.
8.15 HEADINGS. Headings in this Agreement are for convenience of
reference only and are not part of the substance hereof.
8.16 COUNTERPARTS. This Agreement may be executed in identical original
counterparts, each of which will be deemed to be an original and taken together
shall constitute one and the same instrument.
8.17 SURVIVAL. All indemnities herein shall survive the execution and
delivery of this Agreement and the making and repayment of all Loans.
8.18 EFFECTIVENESS. This Agreement shall become effective on the date
on which Borrower, Lenders and Administrative Agent shall have signed a copy
hereof and shall have delivered the same to the other parties.
8.19 CONFIDENTIALITY. Each of Administrative Agent and Lenders agrees
that it will use its reasonable best efforts to keep confidential and to cause
any representative designated under SECTION 5.1(g) to keep confidential any
material non-public information from time to time supplied to it under this
Agreement; provided, however, that nothing herein shall prohibit Administrative
Agent or any Lender from disclosing such information (i) to the extent
Administrative Agent or such Lender in good faith believes it is required by
statute, rule, regulation or judicial process to divulge such information to any
Person as required by such authority, (ii) to Administrative Agent's or such
Lender's counsel, (iii) to Administrative Agent's or such Lender's examiners,
regulators, advisors, auditors or comparable Persons, (iv) to any of
Administrative Agent's or such Lender's Affiliates, (v) to any other Lender or
any assignee, transferee or participant of all or any portion of Administrative
Agent's or any Lender's rights under this Agreement or the other Credit
Documents who is notified of the confidential nature of the information and
agrees to be bound by this provision or provisions reasonably comparable hereto,
or (vi) any other Person in connection with any litigation to which any of
Lenders is a party; and provided, further, that no Lender or Administrative
Agent shall have any obligation under this SECTION 8.19 to the extent any such
information
61.
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becomes available on a non-confidential basis from a source other than Borrower
or its Subsidiaries or that any information becomes publicly available other
than by a breach of this SECTION 8.19. Each Lender agrees it will use all
confidential information exclusively for the purpose of evaluating, monitoring,
selling, protecting or enforcing its rights under this Agreement and the other
Credit Documents. Without affecting any other rights of Borrower, each Lender
agrees that Borrower shall be entitled to seek the remedies of injunction and
specific performance for any breach of the provisions of this SECTION 8.19.
8.20 CONFLICT IN CREDIT DOCUMENTS. To the extent there is any actual
irreconcilable conflict between the provisions of this Agreement and any other
Credit Document, the provisions of this Agreement shall prevail.
8.21 ENTIRE AGREEMENT. This Agreement, the other Credit Documents and
the documents and agreements executed in connection herewith and therewith
constitute the final agreement of the parties hereto and supersede any prior
agreement or understanding, written or oral, with respect to the matters
contained herein and therein.
62.
70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunder duly authorized, as of the date
first above written.
BORROWER: LEAP WIRELESS INTERNATIONAL, INC.,
a Delaware corporation
By:
-------------------------------------
Xxxxxx X. Xxxxx,
President and Chief Executive Officer
By:
-------------------------------------
Xxx Xxxxxxxxxxx,
Senior Vice President, Finance and Treasurer
ADMINISTRATIVE AGENT: ABN AMRO BANK N.V., AS ADMINISTRATIVE AGENT
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
Administrative Agent's Payment Office
ABN AMRO Bank N.V.
1325 Avenue of the Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No. 000000000
F/O ABN AMRO Bank N.V. - Chicago CPU
Acct. No. 650-001-1789-41
REF: CPU 00436844 QUALCOMM
LENDER: XXXXXXXX XXXXXXXXXXXX
By:
-------------------------------------
Name:
CREDIT AGREEMENT
63.
71
Title:
Domestic Lending Office
XXXXXXXX Xxxxxxxxxxxx
0000 Xxxx Xxxx.
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Vice President - Customer Finance
Fax No. (000) 000-0000
With Copy to: General Counsel
CREDIT AGREEMENT
72
SCHEDULE 1.1
COMMITMENTS
INVESTMENT CAPITAL LOAN COMMITMENT WORKING CAPITAL LOAN COMMITMENT
XXXXXXXX Xxxxxxxxxxxx $229,800,000 $35,200,000
73
INDEX OF SCHEDULES
Schedule 1.1 -- Commitments
INDEX OF EXHIBITS
Exhibit A-1 -- Form of Investment Capital Note
Exhibit A-2 -- Form of Working Capital Note
Exhibit B -- Form of Borrowing Request
Exhibit C -- Form of Notice of Conversion/Continuation
Exhibit D -- Form of Non-Bank Lender Tax Certificate
Exhibit E -- Form of Security Agreement
Exhibit F -- Form of Securities Pledge Agreement
Exhibit G -- Form of Assignment and Acceptance
74
EXHIBIT A-1
FORM OF INVESTMENT CAPITAL NOTE
$________________ [ DATE ]
San Diego, California, U.S.A.
LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation ("Borrower"),
for value received, hereby promises to pay to the order of [ NAME OF LENDER ], a
corporation duly organized under the laws of the State of [______________]
("Lender"), at the offices of [________________________] or at such other office
as the Administrative Agent may specify from time to time, in lawful money of
the United States of America at Maturity (as defined in that certain Credit
Agreement dated as of _______________, 1998, by and among Borrower, the Lenders
and ABN AMRO Bank N.V., as Administrative Agent, as the same may from time to
time amended, modified, supplemented or restated, the "Credit Agreement"), the
lesser of (i) the principal amount of _______________________________________
Dollars ($______________) or (ii) the principal amount of all Investment Capital
Loans outstanding in favor of Lender at Maturity. Borrower further agrees (a) to
make scheduled repayments of principal in the amounts and on the dates provided
in the Credit Agreement and (b) to pay interest on the unpaid principal balance
hereof from time to time outstanding, in like money and funds, for the period
commencing on the date hereof until paid in full, at the rates per annum and on
the dates provided in the Credit Agreement. All remaining accrued but unpaid
interest shall in any event be due and payable upon Maturity. All capitalized
terms used and not otherwise defined herein shall have the meanings given to
such terms in the Credit Agreement.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of the Credit Agreement and the other Credit
Documents, but neither this reference to the Credit Agreement and the other
Credit Documents nor any provision thereof shall affect or impair the absolute
and unconditional obligation of the undersigned maker of this Note to pay the
principal of and interest on this Note as herein provided.
In case an Event of Default (as defined in the Credit Agreement) shall
occur, the aggregate unpaid principal of and accrued interest on this Note shall
become or may be declared to be due and payable in the manner and with the
effect provided in the Credit Agreement.
The undersigned may, at its option, prepay all or any part of the
principal of this Note before maturity upon the terms provided in the Credit
Agreement. In addition, the undersigned shall, upon the terms provided in the
Credit Agreement, be obligated to make certain prepayments of the principal of
this Note in certain amounts before maturity.
The undersigned maker hereby waives presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.
1.
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This instrument shall have the effect of an instrument executed under
seal and shall be governed by and construed in accordance with the laws of the
State of California (without giving effect to any conflict of laws provisions
contained therein).
LEAP WIRELESS INTERNATIONAL, INC..,
a Delaware corporation
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
2.
76
EXHIBIT A-2
FORM OF WORKING CAPITAL NOTE
$__________ [ DATE ]
San Diego, California, U.S.A.
LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation ("Borrower"),
for value received, hereby promises to pay to the order of [ NAME OF LENDER ], a
corporation duly organized under the laws of the State of [______________]
("Lender"), at the offices of [________________________], or at such other
office as the Administrative Agent may specify from time to time, in lawful
money of the United States of America at Maturity (as defined in that certain
Credit Agreement dated as of _______________, 1998, by and among Borrower, the
Lenders and ABN AMRO Bank N.V., as Administrative Agent, as the same may from
time to time amended, modified, supplemented or restated, the "Credit
Agreement"), the lesser of (i) the principal amount of
_____________________________________ Dollars ($________________) or (ii) the
principal amount of all Working Capital Loans outstanding in favor of Lender at
Maturity. Borrower further agrees (a) to make scheduled repayments of principal
in the amounts and on the dates provided in the Credit Agreement and (b) to pay
interest on the unpaid principal balance hereof from time to time outstanding,
in like money and funds, for the period commencing on the date hereof until paid
in full, at the rates per annum and on the dates provided in the Credit
Agreement. All remaining accrued but unpaid interest shall in any event be due
and payable upon Maturity. All capitalized terms used and not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of the Credit Agreement and the other Credit
Documents, but neither this reference to the Credit Agreement and the other
Credit Documents nor any provision thereof shall affect or impair the absolute
and unconditional obligation of the undersigned maker of this Note to pay the
principal of and interest on this Note as herein provided.
In case an Event of Default (as defined in the Credit Agreement) shall
occur, the aggregate unpaid principal of and accrued interest on this Note shall
become or may be declared to be due and payable in the manner and with the
effect provided in the Credit Agreement.
The undersigned may, at its option, prepay all or any part of the
principal of this Note before maturity upon the terms provided in the Credit
Agreement. In addition, the undersigned shall, upon the terms provided in the
Credit Agreement, be obligated to make certain prepayments of the principal of
this Note in certain amounts before maturity.
The undersigned maker hereby waives presentment, demand, notice of
dishonor, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note.
1.
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This instrument shall have the effect of an instrument executed under
seal and shall be governed by and construed in accordance with the laws of the
State of California (without giving effect to any conflict of laws provisions
contained therein).
LEAP WIRELESS INTERNATIONAL, INC..,
a Delaware corporation
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT B
FORM OF BORROWING REQUEST
Date: ____________________
To: [______________________________]
Re: Credit Agreement dated as of ____________, 1998 (as the same may from
time to time be amended, modified or supplemented or restated, the
"Credit Agreement"), by and among Leap Wireless International, Inc., as
Borrower, XXXXXXXX Xxxxxxxxxxxx ("QUALCOMM") and the other Lenders
named therein (collectively, the "Lenders"), and ABN AMRO Bank N.V., as
Administrative Agent on behalf of the Lenders
Ladies and Gentlemen:
The undersigned, LEAP WIRELESS INTERNATIONAL, INC. ("Borrower") refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby each gives you notice irrevocably, pursuant to SECTION
2.5(a) of the Credit Agreement, of the borrowing of a [Working Capital Loan]
[Investment Capital Loan] as specified herein:
1. The aggregate amount of the requested borrowing is
$__________________.
2. The Funding Date, which shall be a Business Day, of the requested
borrowing is _____________, 199__/200__.
The undersigned hereby certifies that the following statements are true and on
the date hereof, and will be true on the date of the proposed borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of Borrower contained
in SECTION 4 of the Credit Agreement are true and correct as though made on and
as of such date (except to the extent such representations and warranties relate
to an earlier date, in which case they are true and correct as of such date);
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed borrowing;
(c) the requested borrowing will not cause the aggregate
principal amount of all outstanding [Working Capital Loans] [Investment Capital
Loans] to exceed, as of the designated funding date, the [Aggregate Working
Capital Loan Commitment] [Aggregate Investment Capital Loan Commitment.]; and
(d) attached hereto as SCHEDULE 1 (to be delivered to QUALCOMM
only) is (i) a complete and current copy of Borrower's budget and (ii) all other
correct and complete
1.
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supporting documentary information necessary to evidence compliance with SECTION
2.3 of the Credit Agreement.
LEAP WIRELESS INTERNATIONAL, INC..,
a Delaware corporation
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
2.
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SCHEDULE 1 TO BORROWING REQUEST
DATED _____________, 19__/200__
BUDGET AND SUPPORTING DOCUMENTARY INFORMATION
Schedule 1
81
EXHIBIT C
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date: ____________________
To: [____________________]
Attention: __________________
Re: The Credit Agreement dated as of ____________, 1998 (as the same may
from time to time be amended, modified or supplemented or restated, the
"Credit Agreement"), by and among Leap Wireless International, Inc., as
Borrower, XXXXXXXX Xxxxxxxxxxxx ("QUALCOMM") and the other Lenders
named therein (collectively, the "Lenders"), and ABN AMRO Bank N.V., as
Administrative Agent on behalf of the Lenders
Ladies and Gentlemen:
The undersigned, LEAP WIRELESS INTERNATIONAL, INC., ("Borrower"), refers to the
Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby each gives you notice irrevocably, pursuant to SECTION
2.6(b) of the Credit Agreement, of the [conversion] [continuation] of the
[Working Capital Loans] [Investment Capital Loans] specified herein, that:
1. The date of the [conversion] [continuation] is _____________,
19__/200__.
2. The aggregate amount of the proposed [Working Capital Loans]
[Investment Capital Loans] [converted] is $______________ or [continued] is
$______________.
3. The [Working Capital Loans] [Investment Capital Loans] are to be
[converted into] [continued as] [Eurodollar Loans] [Base Rate Loans].
4. [If applicable:] The duration of the Interest Period for the
Eurodollar Loans included in the [conversion] [continuation] shall be
___________ months. The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
proposed [conversion] [continuation], before and after giving effect thereto and
to the application of the proceeds therefrom:
(a) the representations and warranties of Borrower contained
in SECTION 4 of the Credit Agreement are true and correct as though made on and
as of such date (except to the extent such representations and warranties relate
to an earlier date, in which case they are true and correct as of such date);
and
82
(b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed borrowing.
LEAP WIRELESS INTERNATIONAL, INC..,
a Delaware corporation
By:
-----------------------------------
Name:
----------------------------------
Title:
---------------------------------
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83
EXHIBIT D
FORM OF NON-BANK LENDER TAX CERTIFICATE
Reference is hereby made to the Credit Agreement dated as of _________,
1998 (as the same may from time to time be amended, modified or supplemented or
restated, the "Credit Agreement"), by and among Leap Wireless International,
Inc., a Delaware corporation, as the borrower ("Borrower"), XXXXXXXX
Xxxxxxxxxxxx ("QUALCOMM") and the other Lenders named therein (collectively,
the "Lenders"), and ABN AMRO Bank N.V., as Administrative Agent on behalf of
the Lenders. Pursuant to the provisions of SECTION 2.14(c)(vii) of the Credit
Agreement, the undersigned hereby certifies that it is not a "bank" as such
term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as
amended and the Treasury Regulations adopted thereunder.
NAME OF LENDER:
---------------------------------
By: -----------------------------
Name: ---------------------------
Title: --------------------------
84
EXHIBIT E
FORM OF SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of _______, 1998, is made by LEAP
WIRELESS INTERNATIONAL, INC., a Delaware corporation (the "Grantor"), in favor
of the Agent on behalf and for the benefit of the Lenders (as such terms are
defined below).
I.
RECITALS
A. The Grantor is entering into that Credit Agreement dated as of the
date hereof (as the same may from time to time be amended, modified,
supplemented or restated, the "Credit Agreement"), among Grantor, as borrower,
XXXXXXXX XXXXXXXXXXXX, a Delaware corporation ("QUALCOMM"), and the Persons from
time to time party thereto and named as Lenders therein (the "Lenders"), and ABN
AMRO Bank N.V., as Agent (in such capacity, the "Agent"), pursuant to which the
Lenders agree to make certain loans in favor of the Grantor (the "Loans") for
the purposes, upon the terms and subject to the conditions set forth in the
Credit Agreement.
B. The Lenders are willing to make the Loans available to the Grantor,
but only upon the condition, among others, that the Grantor shall have executed
and delivered to the Agent this Security Agreement.
II.
AGREEMENT
NOW, THEREFORE, in order to induce the Lenders to enter into the Credit
Agreement and to make the Loans available thereunder, and in consideration of
the Agent agreeing to act in such capacities thereunder, and for other good and
valuable consideration, and intending to be legally bound, the Grantor hereby
represents, warrants, covenants and agrees as follows:
SECTION 1. DEFINED TERMS. Unless otherwise defined herein, (a) the
capitalized terms defined in the Credit Agreement are used herein as therein
defined and (b) the following capitalized terms shall have the following
meanings (such meanings being equally applicable to both the singular and plural
forms of the terms defined):
"Account Debtor" means any "account debtor," as such term is defined in
Section 9105(1)(a) of the UCC.
"Account" means any "account," as such term is defined in Section 9106
of the UCC, now owned or hereafter acquired by the Grantor or in which the
Grantor now holds or hereafter acquires any interest and, in any event, shall
include, without limitation, all accounts receivable, book debts and other forms
of obligations (other than forms of obligations evidenced by Chattel Paper,
Documents or Instruments) now owned or hereafter received or acquired by or
belonging or owing to the Grantor (including, without limitation, under any
trade name, style or division
1.
85
thereof) whether arising out of goods sold or services rendered by the Grantor
or from any other transaction, whether or not the same involves the sale of
goods or the performance of services or both by the Grantor (including, without
limitation, any such obligation which may be characterized as an account or
contract right under the UCC) and all of the Grantor's rights in, to and under
all of its respective purchase orders or receipts now owned or hereafter
acquired by it for goods or services, and all of Grantor's rights to any goods
represented by any of the foregoing (including, without limitation, unpaid
seller's rights of rescission, replevin, reclamation and stoppage in transit and
rights to returned, reclaimed or repossessed goods), and all monies due or to
become due to the Grantor under all purchase orders and contracts for the sale
of goods or the performance of services or both by the Grantor (whether or not
yet earned by performance on the part of the Grantor or in connection with any
other transaction), now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of said purchase orders and
contracts and all collateral security and guaranties of any kind given by any
Person with respect to any of the foregoing.
"Chattel Paper" means any "chattel paper," as such term is defined in
Section 9105(1)(b) of the UCC, now owned or hereafter acquired by the Grantor or
in which the Grantor now holds or hereafter acquires any interest.
"Collateral" shall have the meaning assigned to such term in SECTION 2
of this Security Agreement.
"Contracts" means all contracts, undertakings, franchise agreements or
other agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which the Grantor may now or hereafter have any right,
title or interest, including, without limitation, (i) any and all reseller
contracts and (ii) with respect to an Account, any agreement relating to the
terms of payment or the terms of performance thereof.
"Copyrights" means all of the following now owned or hereafter acquired
by the Grantor or in which the Grantor now holds or hereafter acquires any
interest: (i) all copyrights, whether registered or unregistered, held pursuant
to the laws of the United States, any State thereof or of any other country;
(ii) registrations, applications and recordings in the United States Copyright
Office or in any similar office or agency of the United States, any state
thereof or any other country; (iii) any continuations, renewals or extensions
thereof; and (iv) any registrations to be issued in any pending applications.
"Copyright License" means any written agreement granting any right to
use any Copyright or Copyright registration now owned or hereafter acquired by
the Grantor or in which the Grantor now holds or hereafter acquires any
interest.
"Deposit Account" means any "deposit account," as such term is defined
in Section 9105(e) of the UCC, and includes, without limitation, any demand,
time, savings passbook or like account now or hereafter maintained with a bank,
savings and loan association, credit union or like organization (including any
Lender), by or for the benefit of Grantor, or in which Grantor now holds or
hereafter acquires any interest, and all funds and amounts therein, whether or
not restricted or designated for a particular purpose.
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"Documents" means any "documents," as such term is defined in Section
9105(1)(f) of the UCC, now owned or hereafter acquired by the Grantor or in
which the Grantor now holds or hereafter acquires any interest.
"Equipment" means any "equipment," as such term is defined in Section
9109(2) of the UCC, now or hereafter owned or acquired by the Grantor or in
which the Grantor now holds or hereafter acquires any interest and, in any
event, shall include, without limitation, all machinery, equipment, base station
transceiver subsystems, intelligent base system controllers, furnishings, trucks
and other vehicles, boats, tractors, trailers, railcars and other rolling stock,
aircraft, aircraft engines, avionics, tanks, pumps, filters, generators,
computers and other electronic data-processing and any other office equipment of
any nature whatsoever, laboratory equipment, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
"Fixtures" means "fixtures," as such term is defined in Section
9313(1)(a) of the UCC, now or hereafter owned or acquired by the Grantor or in
which the Grantor now holds or hereafter acquires any interest and, in any
event, shall include, without limitation, regardless of where located, all of
the fixtures, systems, machinery, apparatus, equipment and fittings of every
kind and nature whatsoever and all appurtenances and additions thereto and
substitutions or replacements thereof, now or hereafter attached or affixed to
or constituting a part of, or located in or upon, real property wherever
located, including, without limitation, all heating, electrical, mechanical,
lighting, lifting, plumbing, ventilating, air-conditioning and air cooling,
refrigerating, food preparation, incinerating and power, loading and unloading,
signs, escalators, elevators, boilers, communication, switchboards, tanks,
pumps, filters, sprinkler and other fire prevention and extinguishing fixtures,
systems, machinery, apparatus and equipment, and all engines, motors, dynamos,
machinery, pipes, pumps, tanks, conduits and ducts constituting a part of any of
the foregoing, together with all right, title and interest of the Grantor in and
to all extensions, improvements, betterments, renewals, substitutes, and
replacements of, and all additions and appurtenances to any of the foregoing
property, and all conversions of the security constituted thereby, immediately
upon any acquisition or release thereof or any such conversion, as the case may
be.
"General Intangibles" means any "general intangibles," as such term is
defined in Section 9106 of the UCC, now owned or hereafter acquired by the
Grantor or in which the Grantor now holds or hereafter acquires any interest
and, in any event, shall include, without limitation, all right, title and
interest which the Grantor may now or hereafter have in or under any Contract,
customer lists, Copyrights, Trademarks, Patents, rights in Intellectual
Property, interests in partnerships, limited liability companies, joint ventures
and other business associations, Licenses, permits, copyrights, trade secrets,
proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know-how,
software, data bases, data, skill, expertise, recipes, experience, processes,
models, drawings, materials and records, goodwill (including, without
limitation, the goodwill associated with any Trademark, Trademark registration
or Trademark licensed under any Trademark License), claims in or under insurance
policies, including unearned premiums, uncertificated securities, cash and other
forms of money or currency, Deposit Accounts
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(including as defined in Section 9105(e) of the UCC), rights to receive tax
refunds and other payments and rights of indemnification.
"Instruments" means any "instrument," as such term is defined in
Section 9105(1)(i) of the UCC now owned or hereafter acquired by the Grantor or
in which the Grantor now holds or hereafter acquires any interest, including,
without limitation, all notes, certificated securities, and other evidences of
indebtedness, other than instruments that constitute, or are a part of a group
of writings that constitutes, Chattel Paper.
"Intellectual Property" means all Copyrights, Trademarks, Patents,
trade secrets, customer lists, proprietary or confidential information,
inventions (whether or not patented or patentable), technical information,
procedures, designs, knowledge, know-how, software, data bases, data, skill,
expertise, recipes, experience, processes, models, drawings, materials and
records.
"Inventory" means any "inventory," as such term is defined in Section
9109(4) of the UCC, wherever located, now or hereafter owned or acquired by the
Grantor or in which the Grantor now holds or hereafter acquires any interest,
and, in any event, shall include, without limitation, all inventory, all raw
materials and work in process therefor, finished goods thereof, and materials
used or consumed in the manufacture or production thereof, merchandise, tickets,
goods and other personal property which are held by or on behalf of the Grantor
for sale or lease or are furnished or are to be furnished under a contract of
service or which constitute raw materials, work in process or materials used or
consumed or to be used or consumed in the Grantor's business, or the processing,
packaging, promotion, delivery or shipping of the same, and all finished goods
whether or not such inventory is listed on any schedules, assignments or reports
furnished to the Agent from time to time and whether or not the same is in
transit or in the constructive, actual or exclusive occupancy or possession of
the Grantor or is held by the Grantor or by others for the Grantor's accounts,
including, without limitation, all goods covered by purchase orders and
contracts with suppliers and all goods billed and held by suppliers and all
inventory which may be located on premises of the Grantor or of any carriers,
forwarding agents, truckers, warehousemen, vendors, selling agents or other
persons.
"Investment Property" means any "investment property," as such term is
defined in Section 9115(1)(f) of the UCC), now owned or hereafter acquired by
Grantor or in which Grantor now holds or hereafter acquires any interest,
including, without limitation, all securities, whether certificated or
uncertificated, security entitlements, Securities Accounts, commodity contracts,
commodity accounts and financial assets, as such terms are defined in the UCC.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by the Grantor or in which the Grantor now holds or hereafter acquires any
interest.
"Patent License" means any written agreement granting any right with
respect to any invention on which a Patent is in existence now owned or
hereafter acquired by the Grantor or in which the Grantor now holds or hereafter
acquires any interest.
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"Patents" means all of the following now owned or hereafter acquired by
the Grantor or in which the Grantor now holds or hereafter acquires any
interest: (a) letters patent of the United States or any other county, all
registrations and recordings thereof, and all applications for letters patent of
the United States or any other country, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country; (b) all reissues, continuations,
continuations-in-part or extensions thereof; (c) all xxxxx patents, divisionals,
and patents of addition; and (d) all patents to issue in any such applications.
"Proceeds" means "proceeds," as such term is defined in Section 9306(1)
of the UCC and, in any event, shall include, without limitation, (a) any and all
Accounts, Chattel Paper, Instruments, Investment Property, cash or other forms
of money or currency or other proceeds payable to the Grantor from time to time
in respect of the Collateral, (b) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Grantor from time to time with
respect to any of the Collateral, (c) any and all payments (in any form
whatsoever) made or due and payable to the Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of Governmental Authority), (d) any claim of
the Grantor against third parties (i) for past, present or future infringement
of any Patent or Patent License or (ii) for past, present or future infringement
or dilution of any Trademark or Trademark License or for injury to the goodwill
associated with any Trademark, Trademark registration or Trademark licensed
under any Trademark License, (e) all certificates, dividends, cash, Instruments
and other property received or distributed in respect of or in exchange for any
Investment Property, (f) all cash and other proceeds received under and in
respect of any letter of credit or other support obligation, and (g) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.
"Secured Obligations" means all loans, advances, debts, liabilities and
obligations, for monetary amounts owed by the Grantor to the Lenders, Agent or
the Agent, whether due or to become due, matured or unmatured, liquidated or
unliquidated, contingent or non-contingent, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, arising under
the Credit Agreement or any other Credit Document, including, without
limitation, under any of the Notes, the Fixed Rate Notes (upon any Conversion to
High Yield Structure), interest rate or currency swap or other hedging
agreements, whether or not evidenced by any note, agreement or other document or
instrument. This term includes, without limitation, all principal, interest
(including interest that accrues after the commencement of a case against the
Grantor or any Affiliate of the Grantor under the United States Bankruptcy
Code), fees, including, without limitation, any and all closing fees, prepayment
fees, commitment fees, loan fees, agent fees, Attorney Costs and any and all
other fees, expenses, costs or other sums chargeable to the Grantor under any of
the Credit Documents.
"Securities Account" means any "securities account," as such term is
defined in Section 8501(a) of the UCC.
"Security Agreement" means this Security Agreement and all Schedules
hereto, as the same may from time to time be amended, modified, supplemented or
restated.
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"Trademark License" means any written agreement granting any right to
use any Trademark or Trademark registration now owned or hereafter acquired by
the Grantor or in which the Grantor now holds or hereafter acquires any
interest.
"Trademarks" means any of the following now owned or hereafter acquired
by the Grantor or in which the Grantor now holds or hereafter acquires any
interest: (a) any and all trademarks, tradenames, corporate names, business
names, trade styles, service marks, logos, other source or business identifiers,
prints and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and any applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof and (b) any reissues, extensions or
renewals thereof.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of California; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Agent's security interest in any collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of California, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection of priority and for purposes of
definitions related to such provisions.
SECTION 2. GRANT OF SECURITY INTEREST. As security for the full,
complete and final payment when due (whether at stated maturity, by acceleration
or otherwise) of all the Secured Obligations and in order to induce the Lenders
and the Agent to enter into the Credit Agreement and the Lenders to make the
Loans available to and for the benefit of the Grantor upon the terms and subject
to the conditions thereof, the Grantor hereby assigns, conveys, mortgages,
pledges, hypothecates and transfers to the Agent, on behalf and for the benefit
of itself and the Lenders, and hereby grants to the Agent, on behalf and for the
benefit of itself and the Lenders, a security interest in and to all of the
Grantor's right, title and interest in, to and under each of the following (all
of which being hereinafter collectively called the "Collateral"):
(a) All Accounts;
(b) All Chattel Paper;
(c) All Contracts;
(d) All Documents;
(e) All Equipment;
(f) All Fixtures;
(g) All General Intangibles;
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(h) All Instruments;
(i) All Inventory;
(j) All Investment Property;
(k) All other goods and personal property of the Grantor
whether tangible or intangible and whether now or hereafter owned or existing,
leased, consigned by or to, or acquired by, the Grantor and wherever located;
and
(l) To the extent not otherwise included, all Proceeds of each
of the foregoing and all accessions to, substitutions and replacements for, and
rents, profits and products of each of the foregoing.
Notwithstanding anything to the contrary contained herein, the Grantor
shall be deemed not to have assigned to the Agent, or have granted to the Agent,
on behalf and for the benefit of itself and the Lenders, a security interest in
any Collateral to the extent such assignment, or the grant of such security
interest, would violate any governmental statute, rule, regulation or order
relating to communications licenses.
SECTION 3. RIGHTS OF THE AGENT; COLLECTION OF ACCOUNTS.
(a) Notwithstanding anything contained in this Security
Agreement to the contrary, the Grantor expressly agrees that it shall remain
liable under each of its Contracts and each of its Licenses to observe and
perform all the conditions and obligations to be observed and performed by it
thereunder and that it shall perform all of its duties and obligations
thereunder, all in accordance with and pursuant to the terms and provisions of
each such Contract or License. Neither the Agent nor any Lender shall have any
obligation or liability under any Contract or License by reason of or arising
out of this Security Agreement or the granting to the Agent of a security
interest therein or the receipt by the Agent or any Lender of any payment
relating to any Contract or License pursuant hereto, nor shall the Agent or any
Lender be required or obligated in any manner to perform or fulfill any of the
obligations of the Grantor under or pursuant to any Contract or License, or to
make any payment, or to make any inquiry as to the nature or the sufficiency of
any payment received by it or the sufficiency of any performance by any party
under any Contract or License, or to present or file any claim, or to take any
action to collect or enforce any performance or the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
(b) The Agent authorizes the Grantor to collect its Accounts;
provided that the Agent may, upon the occurrence and during the continuation of
any Event of Default and without notice, limit or terminate said authority at
any time. If required by the Agent at any time during the continuation of any
Event of Default, any Proceeds, when first collected by the Grantor, received in
payment of any such Account or in payment for any of its Inventory or on account
of any of its Contracts shall be promptly deposited by the Grantor in precisely
the form received (with all necessary endorsements) in a special bank account
maintained by the Agent subject to withdrawal by the Agent only, as hereinafter
provided, and until so turned over shall be deemed to be held in trust by the
Grantor for and as the Agent's property, on behalf and for the benefit of the
Lenders, and shall not be commingled with the Grantor's other funds or
properties. Such
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Proceeds, when deposited, shall continue to be collateral security for all of
the Secured Obligations and shall not constitute payment thereof until applied
as hereinafter provided. Upon the occurrence and during the continuation of any
Event of Default, the Agent may, in its sole discretion, after consultation with
Required Lenders, apply all or a part of the funds on deposit in said special
account to the principal of or interest on or both in respect of any of the
Secured Obligations in accordance with the provisions of SUBSECTION 7(d), below,
and any part of such funds which the Agent elects not so to apply and deem not
required as collateral security for the Secured Obligations shall be paid over
from time to time by the Agent to the Grantor. If an Event of Default has
occurred and is continuing, at the request of the Agent, the Grantor shall
deliver to the Agent all original and other documents evidencing, and relating
to, the sale and delivery of such Inventory and the Grantor shall deliver all
original and other documents evidencing and relating to, the performance of
labor or service which created such Accounts, including, without limitation, all
original orders, invoices and shipping receipts.
(c) The Agent may at any time, upon the occurrence and during
the continuation of any Event of Default, after first notifying the Grantor of
its intention to do so, notify Account Debtors of the Grantor, parties to the
Contracts of the Grantor, obligors in respect of Instruments of the Grantor and
obligors in respect of Chattel Paper of the Grantor that the Accounts and the
right, title and interest of the Grantor in and under such Contracts,
Instruments, and Chattel Paper have been assigned to the Agent, on behalf and
for the benefit of the Lenders, and that payments shall be made directly to the
Agent. Upon the request of the Agent, the Grantor shall so notify such Account
Debtors, parties to such Contracts, obligors in respect of such Instruments and
obligors in respect of such Chattel Paper. Upon the occurrence and during the
continuation of an Event of Default, the Agent may, in its name, or in the name
of others communicate with such Account Debtors, parties to such Contracts,
obligors in respect of such Instruments and obligors in respect of such Chattel
Paper to verify with such parties, to the Agent's satisfaction, the existence,
amount and terms of any such Accounts, Contracts, Instruments or Chattel Paper.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Grantor hereby
represents and warrants to the Agent that:
(a) The Grantor is the sole legal and equitable owner or, as
to Intellectual Property licensed from other Persons, licensee of each item of
the Collateral in which it purports to grant a security interest hereunder,
having good, marketable and insurable title or rights thereto free and clear of
any and all Liens, except for the Permitted Liens.
(b) No effective security agreement, financing statement,
equivalent security or lien instrument or continuation statement covering all or
any part of the Collateral exists, except such as may have been filed by the
Grantor in favor of the Agent pursuant to this Security Agreement or such as
relate to other Permitted Liens.
(c) This Security Agreement creates a legal and valid security
interest on and in all of the Collateral in which the Grantor now has rights,
and all filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken. Accordingly, the Agent has a fully
perfected first priority security interest in all of the Collateral in which the
Grantor now has rights to the extent a security interest in such Collateral may
be
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perfected by (i) the filing of UCC financing statements, (ii) the delivery into
the Agent's possession of the execution originals to all Chattel Paper and
Instruments, (iii) the delivery of collateral control agreements duly executed
by the depository institution or the security intermediary (as defined in
Section 8102(a)(14) of the UCC), as applicable, at which Grantor maintains its
Deposit Accounts, or its Securities Accounts and (iv) the delivery of written
notice of such security interest to all issuers and underwriters of insurance
policies maintained by the Grantor, subject only to the Permitted Liens. This
Security Agreement will create a legal and valid security interest in the
Collateral in which the Grantor later acquires rights, when the Grantor acquires
those rights, subject only to the Permitted Liens.
(d) The Grantor's chief executive office, principal place of
business, and the place where the Grantor maintains its records concerning the
Collateral are presently located at the address(es) set forth on SCHEDULE I
attached to this Security Agreement and incorporated herein by this reference.
The Grantor shall not change such chief executive office or principal place of
business or remove or cause to be removed, except in the ordinary course of
business, the records concerning the Collateral from those premises without
prior written notice to the Agent.
(e) All Collateral with respect to which a security interest
may be perfected by the secured party's taking possession thereof, including,
without limitation, all Chattel Paper and Instruments, is set forth on SCHEDULE
II attached to this Security Agreement and incorporated herein by this
reference. All action necessary or desirable to protect and perfect such
security interest in each item set forth on SCHEDULE II, including, without
limitation, the delivery of all originals thereof to the Agent, has been duly
taken. The security interest of the Agent in the Collateral listed on SCHEDULE
II is prior in right and interest to all other Liens and is enforceable as such
against creditors of and purchasers from the Grantor.
(f) The amount represented by the Grantor to the Agent from
time to time as owing by each Account Debtor or by all Account Debtors in
respect of the Accounts of the Grantor shall at such time be the correct amount
actually and unconditionally owing by such Account Debtors thereunder.
(g) All Copyrights, Copyright Licenses, Patents, Patent
Licenses, Trademarks and Trademark Licenses owned, held or in which the Grantor
otherwise has any rights are listed on SCHEDULE III attached to this Security
Agreement and incorporated herein by this reference. The Grantor shall amend
SCHEDULE III from time to time to reflect any additions to or deletions from
this list.
(h) The names and addresses of all financial institutions with
which the Grantor maintains its Deposit Accounts and the account numbers and
account names of such Deposit Accounts are listed on SCHEDULE IV.1 attached to
this Security Agreement and incorporated herein by this reference. The names and
addresses of all security intermediaries with which the Grantor maintains its
Securities Accounts and the account numbers and account names of such Securities
Accounts are listed on SCHEDULE IV.2 attached to this Security Agreement and
incorporated herein by reference. The Grantor shall amend SCHEDULES IV.1 and
IV.2 from time to time within twenty (20) Business Days after opening any
additional Deposit
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Account or Securities Account, or closing or changing the account number or
account name on any existing Deposit Account or Securities Account.
SECTION 5. COVENANTS. The Grantor covenants and agrees with the Agent
that from and after the date of this Security Agreement and until the Secured
Obligations have been completely and indefeasibly paid and performed in full:
5.1 FURTHER ASSURANCES; PLEDGE OF INSTRUMENTS. At any time and
from time to time, upon the written request of the Agent, and at the sole
expense of the Grantor, the Grantor shall promptly and duly execute and deliver
any and all such further instruments and documents and take such further action
as the Agent may reasonably deem desirable to obtain the full benefits of this
Security Agreement and of the rights and powers herein granted, including,
without limitation, (a) using its best efforts to secure all consents and
approvals from any and all Governmental Authorities or other Person necessary or
appropriate for the assignment to the Agent of any Contract or License held by
the Grantor or in which the Grantor has any rights not heretofore assigned, (b)
filing any financing or continuation statements under the UCC with respect to
the security interests granted hereby, (c) filing or cooperating with the Agent
in filing any forms or other documents required to be filed with the United
States Patent and Trademark Office, United States Copyright Office, or any
filings in any foreign jurisdiction or under any international treaty, required
to secure or protect the Agent's interest in the Collateral (d) transferring
Collateral to the Agent's possession (if a security interest in such Collateral
can be perfected by possession), (e) placing the interest of the Agent as
lienholder on the certificate of title (or other evidence of ownership) of any
vehicle or watercraft owned by the Grantor or in or with respect to which the
Grantor holds a beneficial interest, (f) as to any new Deposit Account or
Securities Account to be opened by the Grantor, as applicable, executing and
delivering, and causing the applicable depository institution or security
intermediary to execute and deliver, a collateral control agreement with respect
to each new Deposit Account or Securities Account, and (g) as to any new
insurance policy to be maintained by the Grantor, to execute and deliver to the
insurance company issuing such policy a Notice of Security Interest in Insurance
Policy. The Grantor also hereby authorizes the Agent to file any such financing
or continuation statement without the signature of the Grantor. If any amount
payable under or in connection with any of the Collateral is or shall become
evidenced by any Instrument, such Instrument, other than checks and notes
received in the ordinary course of business, shall be duly endorsed in a manner
satisfactory to the Agent and delivered to the Agent immediately upon the
Grantor's receipt thereof.
5.2 MAINTENANCE OF RECORDS. The Grantor shall keep and
maintain at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments received and
all credits granted with respect to the Collateral and all other dealings with
the Collateral. The Grantor shall xxxx its books and records pertaining to the
Collateral to evidence this Security Agreement and the security interests
granted hereby. All Chattel Paper shall be marked with the following legend:
"This writing and the obligations evidenced or secured hereby are subject to the
security interest of XXXXXXXX Xxxxxxxxxxxx, as the Agent on behalf and for the
benefit of the Lenders named in a Credit Agreement dated as of ______, 1998, as
the same may thereafter from time to time be amended, modified, supplemented or
restated."
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5.3 INDEMNIFICATION. In any suit, proceeding or action brought
by the Agent or any Lender relating to any Account, Chattel Paper, Contract,
General Intangible, Instrument or Document for any sum owing thereunder, or to
enforce any provision of any Account, Chattel Paper, Contract, General
Intangible, Instrument or Document, the Grantor shall save, indemnify and keep
the Agent and such Lender harmless from and against all expense, loss or damage
suffered by reason of any defense, set-off, counterclaim, recoupment or
reduction of liability whatsoever of the obligor thereunder arising out of a
breach by the Grantor of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to, or in favor of, such
obligor or its successors from the Grantor, and all such obligations of the
Grantor shall be and remain enforceable against and only against the Grantor and
shall not be enforceable against the Agent or such Lender.
5.4 COMPLIANCE WITH TERMS OF ACCOUNTS, ETC. In all material
respects, the Grantor shall perform and comply with all obligations in respect
of Accounts, Chattel Paper, Contracts, Documents, Instruments and Licenses and
all other agreements to which it is a party or by which it is bound.
5.5 LIMITATION ON LIENS ON COLLATERAL. The Grantor shall not
create, permit or suffer to exist, and shall defend the Collateral against and
take such other action as is necessary to remove, any Lien on the Collateral,
except the Permitted Liens to the extent so permitted under the Credit
Agreement. The Grantor shall further defend the right, title and interest of the
Agent in and to any of the Grantor's rights under the Chattel Paper, Contracts,
Documents, General Intangibles, Instruments, Investment Property and Deposit
Accounts and to the Equipment, Fixtures and Inventory and in and to the Proceeds
thereof against the claims and demands of all Persons whomsoever.
5.6 LIMITATIONS ON MODIFICATIONS OF ACCOUNTS, ETC. Upon the
occurrence and during the continuation of any Event of Default, the Grantor
shall not, without the Agent's prior written consent, grant any extension of the
time of payment of any of the Accounts, Chattel Paper, Instruments or amounts
due under any Contract or Document, compromise, compound or settle the same for
less than the full amount thereof, release, wholly or partly, any Person liable
for the payment thereof, or allow any credit or discount whatsoever thereon
other than trade discounts granted in the ordinary course of business of the
Grantor.
5.7 MAINTENANCE OF INSURANCE. The Grantor shall maintain, with
financially sound and reputable companies, the insurance policies with limits
and coverage provisions as required in the Credit Agreement.
5.8 TAXES, ASSESSMENTS, ETC. The Grantor shall pay before they
become delinquent all property and other taxes, assessments and government
charges or levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Equipment, Fixtures or Inventory, except to
the extent the validity thereof is being contested in good faith and adequate
reserves are being maintained in connection therewith.
5.9 LIMITATIONS ON DISPOSITION. The Grantor shall keep the
Collateral separate and identifiable from other property located on the same
premises as the Collateral, and
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the Grantor shall not sell, lease, transfer or otherwise dispose of any of the
Collateral, or attempt or contract to do so except as permitted by the Credit
Agreement.
5.10 FURTHER IDENTIFICATION OF COLLATERAL. The Grantor shall,
if so requested by the Agent, furnish to the Agent, not more than four times per
year, unless an Event of Default shall have occurred and be continuing, in which
case the Grantor shall furnish as often as the Agent shall request, statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Agent may reasonably request,
all in reasonable detail.
5.11 NOTICES. The Grantor shall advise the Agent promptly, in
reasonable detail, of (a) any material Lien, other than Permitted Liens,
attaching to or asserted against any of the Collateral, (b) any material change
in the composition of the Collateral and (c) the occurrence of any other event
which might have or result in a material adverse change with respect to the
Collateral or the security interest created hereunder.
5.12 RIGHT OF INSPECTION AND AUDIT. The Grantor shall permit
the Agent and the Lenders such rights of inspection and audit except as limited
in the Credit Agreement. In addition, upon reasonable notice to the Grantor
(unless an Event of Default has occurred and is continuing, in which case no
notice is necessary), the Agent and its agents and representatives shall also
have the right during the Grantor's ordinary business hours, to enter into and
upon any premises where any of the Equipment, Fixtures or Inventory is located
for the purpose of conducting audits and making physical verifications of such
Equipment, Fixtures and Inventory and test verifications of the Accounts in any
manner and through any medium that it considers advisable, and the Grantor
agrees to furnish all such assistance and information as the Agent may
reasonably require in connection therewith.
5.13 MAINTENANCE OF FACILITIES. The Grantor shall maintain and
protect its properties, assets and facilities, including, without limitation,
its Equipment and Fixtures in good order and working repair and condition
(taking into consideration ordinary wear and tear) and from time to time make or
cause to be made all needful and proper repairs, renewals and replacements
thereto and shall competently manage and care for its property in accordance
with prudent industry practices.
5.14 CONTINUOUS PERFECTION. The Grantor shall not change its
name, identity or corporate structure in any manner which might make any
financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9402(7) of the UCC (or any other then
applicable provision of the UCC) unless the Grantor shall have given the Agent
prior written notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such change
if it is impossible to take such action in advance) necessary or requested by
the Agent to amend such financing statement or continuation statement so that it
is not seriously misleading.
5.15 COVENANTS REGARDING INTELLECTUAL PROPERTY.
(a) The Grantor shall notify the Agent immediately if
it knows that any application or registration relating to any Copyright, Patent
or Trademark which is material
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to the conduct of the Grantor's business may become abandoned, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office, or any court)
regarding the Grantor's ownership or license of any Copyright, Patent or
Trademark which is material to the conduct of the Grantor's business, its right
to register the same, or to keep and maintain the same.
(b) The Grantor shall take all commercially
reasonable steps necessary to prevent any misuse, infringement,
misappropriation, unauthorized use or abandonment of its Copyrights, Patents,
Trademarks or other Intellectual Property, whether owned or licensed. The
Grantor's efforts pursuant to this SECTION 5.15 shall include, but not be
limited to: (i) establishing prudent security measures and procedures governing
access to, and use of, property protected by Copyrights, Trademarks or Patents
or of Intellectual Property owned or licensed by the Grantor or developed by any
Person on behalf of the Grantor; (ii) establishing and maintaining in force any
agreements with employees and consultants or any written terms of employment, as
are customarily used in the Grantor's industry for the protection of
Intellectual Property; and (iii) vigorous enforcement of the Grantor's rights in
any Intellectual Property.
(c) In no event shall the Grantor, either itself or
through any agent, employee, licensee or designee, file an application for the
registration of any Patent or Trademark with the United States Patent and
Trademark Office, any Copyright with the United States Copyright Office, or any
similar office or agency in any other country or any political subdivision
thereof unless it promptly informs the Agent and, upon request of the Agent,
executes and delivers any and all agreements, instruments, documents, and papers
as the Agent may reasonably request to evidence the Agent's security interest in
such Copyright, Patent or Trademark, including, with respect to Trademarks, the
goodwill of the Grantor, relating thereto or represented thereby.
(d) The Grantor shall take all necessary action to
maintain and pursue each application (and to obtain the relevant registration)
and to maintain the registration of each of the Copyrights, Patents and
Trademarks which is material to the conduct of the Grantor's business,
including, without limitation, the filing of applications for renewal,
affidavits of use, affidavits of noncontestability and opposition and
interference and cancellation proceedings.
(e) In the event that any Copyright, Patent or
Trademark is infringed, misappropriated or diluted by a third party, the Grantor
shall notify the Agent promptly after the Grantor learns thereof and shall,
unless the Grantor shall reasonably determine that such Copyright, Patent or
Trademark is not material to the conduct of the Grantor's business, promptly xxx
for infringement, misappropriation or dilution and to recover any and all
damages for such infringement, misappropriation or dilution and take such other
actions as the Grantor shall reasonably deem appropriate under the circumstances
to protect such Copyright, Patent or Trademark.
SECTION 6. THE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) Subject to SECTION 6(b) below, the Grantor hereby
irrevocably constitutes and appoints the Agent, and any officer or agent
thereof, with full power of substitution, as its
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true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of the Grantor and in the name of the Grantor or in its own
name, from time to time at the Agent's discretion, for the purpose of carrying
out the terms of this Security Agreement, to take any and all appropriate action
and to execute and deliver any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Security Agreement
and, without limiting the generality of the foregoing, hereby gives the Agent
the power and right, on behalf of the Grantor, without notice to or assent by
the Grantor to do the following:
(i) to ask, demand, collect, receive and give
acquittances and receipts for any and all monies due or to become due under any
Collateral and, in the name of the Grantor in its own name or otherwise to take
possession of, endorse and collect any checks, drafts, notes, acceptances or
other Instruments for the payment of monies due under any Collateral and to file
any claim or to take or commence any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Agent for the purpose of
collecting any and all such monies due under any Collateral whenever payable;
(ii) to pay or discharge any Liens, including,
without limitation, any tax lien, levied or placed on or threatened against the
Collateral, to effect any repairs or any insurance called for by the terms of
this Security Agreement and to pay all or any part of the premiums therefor and
the costs thereof, which actions shall be for the benefit of the Lenders and the
Agent and not the Grantor; and
(iii) to (1) direct any person liable for any payment
under or in respect of any of the Collateral to make payment of any and all
monies due or to become due thereunder directly to the Agent or as the Agent
shall direct, (2) receive payment of any and all monies, claims and other
amounts due or to become due at any time arising out of or in respect of any
Collateral, (3) sign and endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with Accounts and other Instruments and
Documents constituting or relating to the Collateral, (4) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of any Collateral, (5) defend any suit, action or
proceeding brought against the Grantor with respect to any Collateral, (6)
settle, compromise or adjust any suit, action or proceeding described above and,
in connection therewith, give such discharges or releases as the Agent may deem
appropriate, (7) license or, to the extent permitted by an applicable license,
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any Patent or Trademark throughout the world for such
term or terms, on such conditions and in such manner as the Agent shall in its
sole discretion determine and (8) sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for all purposes,
and to do, at the Agent's option and the Grantor's expense, at any time, or from
time to time, all acts and things which the Agent may reasonably deem necessary
to protect, preserve or realize upon the Collateral and the Agent's security
interest therein in order to effect the intent of this Security Agreement, all
as fully and effectively as the Grantor might do.
(b) The Agent agrees that, except upon the occurrence and
during the continuation of an Event of Default, it shall not exercise the power
of attorney or any rights
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granted to the Agent on behalf of Lenders pursuant to this SECTION 6. The
Grantor hereby ratifies, to the extent permitted by law, all that said attorney
shall lawfully do or cause to be done by virtue hereof. The power of attorney
granted pursuant to this SECTION 6 is a power coupled with an interest and shall
be irrevocable until the Secured Obligations are completely and indefeasibly
paid and performed in full.
(c) The powers conferred on the Agent hereunder are solely to
protect the Agent's and the Lender's interests in the Collateral and shall not
impose any duty upon the Agent to exercise any such powers. The Agent shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers and neither it nor any of its officers, directors,
employees, agents or representatives shall be responsible to the Grantor for any
act or failure to act, except for its own gross negligence or willful
misconduct.
(d) The Grantor also authorizes the Agent, on behalf of
Lenders, at any time and from time to time upon the occurrence and during the
continuation of any Event of Default, to (i) communicate in its own name with
any party to any Contract with regard to the assignment of the right, title and
interest of the Grantor in and under the Contracts hereunder and other matters
relating thereto and (ii) execute, in connection with the sale of Collateral
provided for in SECTION 7, below, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
(e) If the Grantor fails to perform or comply with any of its
agreements contained herein and the Agent or any Lender, as provided for by the
terms of this Security Agreement, shall perform or comply, or otherwise cause
performance or compliance, with such agreement, the reasonable expenses,
including attorney costs, of the Agent or such Lender incurred in connection
with such performance or compliance, together with interest thereon at a rate of
interest equal to the rate of interest per annum applying to Base Rate Loans,
shall be payable by the Grantor to the Agent within (3) three days of written
demand and shall constitute Secured Obligations secured hereby.
SECTION 7. RIGHTS AND REMEDIES UPON DEFAULT.
(a) If any Event of Default shall occur and be continuing, the
Agent may exercise in addition to all other rights and remedies granted to it
under this Security Agreement, the Credit Agreement, the other Credit Documents
and under any other instrument or agreement securing, evidencing or relating to
the Secured Obligations, all rights and remedies of a secured party under the
UCC. Without limiting the generality of the foregoing, the Grantor expressly
agrees that in any such event the Agent, without demand of performance or other
demand, advertisement or notice of any kind (except the notice specified below
of time and place of public or private sale) to or upon the Grantor or any other
Person (all and each of which demands, advertisements and notices are hereby
expressly waived to the maximum extent permitted by the UCC and other applicable
law), may forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and may forthwith sell, lease, assign, give an
option or options to purchase or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at public or private sale or sales, at any exchange or broker's board or at any
of the Agent's offices or elsewhere at such prices as it may deem best, for cash
or on credit or for future delivery without assumption of any credit risk.
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The Agent or any Lender shall have the right upon any such public sale or sales,
and, to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of said Collateral so sold, free of any right or
equity of redemption, which equity of redemption the Grantor hereby releases.
The Grantor further agrees, at the Agent's request, to assemble the Collateral
and make it available to the Agent at places which the Agent shall reasonably
select, whether at the Grantor's premises or elsewhere. The Agent and the
Lenders shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale as provided in SUBSECTION 7(d), below, the
Grantor remaining liable for any deficiency remaining unpaid after such
application, and only after so paying over such net proceeds and after the
payment by the Agent of any other amount required by any provision of law,
including Section 9504(1)(c) of the UCC, need the Agent account for the surplus,
if any, to the Grantor. To the maximum extent permitted by applicable law, the
Grantor waives all claims, damages, and demands against the Agent or any Lender
arising out of the repossession, retention or sale of the Collateral except such
as arise out of the gross negligence or willful misconduct of the Agent. The
Grantor agrees that the Agent need not give more than ten (10) days' notice
(which notification shall be deemed given in accordance with the Credit
Agreement) of the time and place of any public sale or of the time after which a
private sale may take place and that such notice is reasonable notification of
such matters. The Grantor shall remain liable for any deficiency if the net
proceeds of any sale or disposition of the Collateral are insufficient to pay
all of the Secured Obligations, the Grantor also being liable for the reasonable
attorney costs of any attorneys employed by the Agent or any Lender to collect
such deficiency.
(b) The Grantor also agrees to pay all reasonable fees, costs
and expenses of the Agent and Lenders, including, without limitation, reasonable
attorney costs, incurred in connection with the enforcement of any of its rights
and remedies hereunder.
(c) The Grantor hereby waives presentment, demand, protest or
any notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Security Agreement or any Collateral.
(d) The Proceeds of any sale, disposition or other realization
upon all or any part of the Collateral shall be distributed by the Agent in the
following order of priorities:
FIRST, to the Agent, Agent and the Lenders in an
amount sufficient to pay in full the reasonable costs of the
Agent in connection with such sale, disposition or other
realization, including all fees, costs, expenses, liabilities
and advances incurred or made by the Agent and Lenders in
connection therewith, including, without limitation, attorney
costs;
SECOND, to the Agent and the Lenders in an amount
equal to the then unpaid principal of and accrued interest and
prepayment premiums, if any, on the Secured Obligations;
THIRD, to the Agent and the Lenders in an amount
equal to any other Secured Obligations which are then unpaid;
and
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FINALLY, upon payment in full of all of the Secured
Obligations, to the Grantor or its representatives or as a
court of competent jurisdiction may direct.
SECTION 8. GRANT OF LICENSE TO INTELLECTUAL PROPERTY. For the purpose
of enabling the Agent to exercise its rights and remedies under SECTION 7,
above, at such time as the Agent shall be lawfully entitled to exercise such
rights and remedies, the Grantor hereby grants to the Agent an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to the Grantor) to use, license or sublicense any Copyright, Patent
or Trademark, and to exercise any rights held by the Grantor under any
Intellectual Property License or sublicense, now owned or hereafter acquired by
the Grantor or in which the Grantor now holds or hereafter acquires any
interest, and wherever the same may be located, and including, without
limitation, in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and to all computer and automatic
machinery software and programs used for the compilation or printout thereof.
SECTION 9. LIMITATION ON THE AGENT'S DUTY IN RESPECT OF COLLATERAL. The
Agent shall be deemed to have acted reasonably in the custody, preservation and
disposition of any of the Collateral if it takes such action as the Grantor
requests in writing, but failure of the Agent to comply with any such request
shall not in itself be deemed a failure to act reasonably, and no failure of the
Agent to do any act not so requested shall be deemed a failure to act
reasonably.
SECTION 10. REINSTATEMENT. This Security Agreement shall remain in full
force and effect and continue to be effective should any petition be filed by or
against the Grantor for liquidation or reorganization, should the Grantor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Grantor's property and assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of the
Secured Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any
obligee of the Secured Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Secured Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
SECTION 11. CONSENT OF GOVERNMENTAL AUTHORITIES. Notwithstanding
anything to the contrary contained herein, to the extent that the exercise of
any power granted, or remedy available, to the Agent hereunder requires the
prior approval of any governmental authority, then the Agent hereby agrees that
it may not and shall not exercise any such right or avail itself of any such
remedy, until the required consent has been obtained.
SECTION 12. MISCELLANEOUS.
12.1 NOTICES. Any notice or other communication hereunder to
any party shall be addressed and delivered (and shall be deemed given) in
accordance with the Credit Agreement.
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12.2 SEVERABILITY. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
12.3 HEADINGS. The various headings in this Security Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this agreement or any provisions hereof.
12.4 NO WAIVER; CUMULATIVE REMEDIES.
(a) The Agent shall not by any act, delay, omission
or otherwise be deemed to have waived any of its respective rights or remedies
hereunder, nor shall any single or partial exercise of any right or remedy
hereunder on any one occasion preclude the further exercise thereof or the
exercise of any other right or remedy.
(b) The rights and remedies hereunder provided are
cumulative and may be exercised singly or concurrently, and are not exclusive of
any rights and remedies provided by law.
(c) None of the terms or provisions of this Security
Agreement may be waived, altered, modified or amended except by an instrument in
writing, duly executed by the Grantor and the Agent.
12.5 TIME IS OF THE ESSENCE. Time is of the essence for the
performance of each of the terms and provisions of this Security Agreement.
12.6 TERMINATION OF THIS SECURITY AGREEMENT. Subject to
SECTION 10, above, this Security Agreement shall terminate upon the full and
complete payment of the Secured Obligations and the termination of all
Commitments under the Credit Agreement. Upon any such termination, the Agent
will, at the Grantor's expense, execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination,
including all documents necessary to evidence the grant back to the Grantor of
the license granted pursuant to Section 8 of this Security Agreement.
12.7 SUCCESSOR AND ASSIGNS. This Security Agreement and all
obligations of the Grantor hereunder shall be binding upon the successors and
assigns of the Grantor, and shall, together with the rights and remedies of the
Agent hereunder, inure to the benefit of the Agent and the Lenders, any future
holder of any Note and their respective successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Secured Obligations or any
portion thereof or interest therein shall in any manner affect the security
interest created herein and granted to the Agent hereunder.
12.8 FURTHER INDEMNIFICATION. The Grantor agrees to pay, and
to save the Agent and each Lender harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all excise, sales or
other similar taxes which may be payable or
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determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Security Agreement.
12.9 GOVERNING LAW. In all respects, including all matters of
construction, validity and performance, this Security Agreement and the Secured
Obligations arising hereunder shall be governed by, and construed and enforced
in accordance with, the laws of the State of California applicable to contracts
made and performed in such state, without regard to the principles thereof
regarding conflict of laws.
12.10 COUNTERPARTS. This Security Agreement may be executed in
any number of counterparts, each of which when so delivered shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument. Each such agreement shall become effective upon the execution of a
counterpart hereof or thereof by each of the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Security Agreement to be executed and delivered by its duly authorized signatory
on the date first set forth above.
GRANTOR LEAP WIRELESS INTERNATIONAL, INC.
a Delaware corporation
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Accepted and acknowledged by:
ABN AMRO BANK N.V., as Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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SCHEDULE I
LOCATION OF THE GRANTOR'S CHIEF EXECUTIVE OFFICE PRINCIPAL PLACE
OF BUSINESS AND RECORDS PERTAINING TO COLLATERAL
104
SCHEDULE II
LIST OF COLLATERAL DELIVERED BY
THE GRANTOR TO THE AGENT
105
SCHEDULE III
PATENTS, PATENT LICENSES, TRADEMARKS, TRADEMARK LICENSES,
COPYRIGHTS AND COPYRIGHT LICENSES OF THE GRANTOR
106
SCHEDULE IV.1
DEPOSIT ACCOUNTS
107
SCHEDULE IV.2
SECURITIES ACCOUNTS
108
SECURITIES PLEDGE AGREEMENT
THIS SECURITIES PLEDGE AGREEMENT ("Securities Pledge Agreement") dated
as of August ____, 1998, is made by LEAP WIRELESS INTERNATIONAL, INC., a
Delaware corporation (the "Pledgor"), in favor of ABN AMRO BANK N.V., as agent
on behalf and for the benefit of the Lenders party to the Credit Agreement
(defined below) (the "Agent").
RECITALS
A. The Pledgor is entering into that Credit Agreement dated as of the
date hereof (as the same may from time to time be amended, modified,
supplemented or restated, the "Credit Agreement"), among the Pledgor as
borrower, QUALCOMM and the other Persons from time to time party thereto and
named as Lenders therein (the "Lenders"), and the Agent, pursuant to which the
Lenders agree to make certain loans in favor of Pledgor (the "Loans") for the
purposes, upon the terms and subject to the conditions set forth in the Credit
Agreement.
B. The Pledgor is the record and beneficial owner of the shares of
capital stock and debt instruments shown in SCHEDULE I attached hereto, which
Schedule is incorporated herein by this reference and may be amended or
supplemented pursuant to the terms of this Securities Pledge Agreement
(collectively, the "Pledged Securities").
C. The Lenders are willing to make and maintain the Loans in favor of
the Pledgor on and after the Closing Date under the Credit Agreement, but only
upon the condition, among others, that the Pledgor shall have executed this
Securities Pledge Agreement and delivered this Securities Pledge Agreement and
the Pledged Collateral (as defined below) to the Agent, on behalf and for the
benefit of the Lenders, in order to secure the Secured Obligations (defined
below).
D. In order to induce, and in consideration of the agreement of the
Lenders to make and maintain the Loans to the Pledgor pursuant to the Credit
Agreement, the Pledgor is willing to execute this Securities Pledge Agreement
and deliver this Securities Pledge Agreement and the Pledged Collateral to the
Agent, on behalf and for the benefit of the Lenders, to secure the Secured
Obligations.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, the Pledgor hereby
represents, warrants, covenants and agrees as follows:
SECTION 1. DEFINITIONS. All capitalized terms used but not defined
herein shall have the respective meanings given to them in the Credit Agreement.
In addition, the following terms not otherwise defined in the Preamble or
Recitals of this Securities Pledge Agreement shall have the following meanings:
"Act" shall have the meaning set forth in SECTION 7.2(e), below.
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"Pledged Collateral" shall have the meaning set forth in SECTION 2(a),
below.
"Secured Obligations" shall have the meaning set forth in SECTION 2(a),
below.
SECTION 2. PLEDGE.
(a) As security for the full, prompt and complete
payment and performance when due (whether by stated maturity, by acceleration or
otherwise) of all Obligations (as defined in the Credit Agreement), together
with, without limitation, the prompt payment of all expenses, including, without
limitation, reasonable Attorney Costs, incidental to the collection of the
Obligations and the enforcement or protection of the Agent's Lien in and to the
collateral pledged hereunder, the Pledgor hereby pledges to the Agent, and
grants to the Agent, on behalf and for the benefit of the Lenders, a security
interest in all of the following (collectively, the "Pledged Collateral"),
except as specifically provided in Section 6, below:
(i) the Pledged Securities owned or held by the
Pledgor and the certificates representing the Pledged Securities, and all
dividends, cash, interest payments, instruments, and other property or proceeds
from time to time received, receivable, or otherwise distributed in respect of
or in exchange for any or all of the Pledged Securities;
(ii) all voting trust certificates held by the
Pledgor evidencing its beneficial interest in any Pledged Securities subject to
any voting trust; and
(iii) all additional shares and voting trust
certificates from time to time acquired by the Pledgor in any manner (which
additional shares shall be deemed to be part of the Pledged Securities), and the
certificates representing such additional shares, and all dividends, cash,
interest payments, instruments, and other property or proceeds from time to time
received, receivable, or otherwise distributed in respect of or in exchange for
any or all of such shares.
(The Obligations and all other obligations and covenants to be
performed by the Pledgor under this Securities Pledge Agreement shall
hereinafter from time to time be collectively referred to as the "Secured
Obligations.")
(b) The Agent's security interest on behalf and for the
benefit of the Lenders in the Pledged Collateral shall be of first priority.
(c) Notwithstanding anything to the contrary contained herein,
the Pledgor shall be deemed not to have pledged to the Agent, or have granted to
the Agent, a security interest in any Pledged Collateral to the extent such
pledge, or the grant of such security interest, would violate any governmental
statute, law, rule, regulation or order relating to communications licenses.
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. The Pledgor shall deliver to
the Agent on the date hereof all certificates or other instruments representing
or evidencing any Pledged Securities, accompanied by appropriate duly executed
instruments of transfer or assignment (including, without limitation, stock
powers) in blank, all in form and substance satisfactory to the Agent. Except as
specifically provided in SECTION 6, below, the Pledgor shall receive all
certificates, cash, instruments, and other property or proceeds from time to
time received,
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receivable, or otherwise distributed in respect of or in exchange for any or all
of the Pledged Securities in trust for the Agent and shall immediately upon
receipt deliver to the Agent such certificates, cash, instruments, and other
property and proceeds, together with any necessary endorsement.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby
represents and warrants to the Agent, on behalf and for the benefit of the
Lenders, as follows:
(a) The Pledgor is the sole holder of record and the sole
beneficial owner of the Pledged Collateral pledged to the Agent by the Pledgor
under SECTION 2 of this Securities Pledge Agreement, free and clear of any Lien
thereon or affecting title thereto, except for (i) the Lien created by this
Securities Pledge Agreement, and (ii) the Permitted Liens.
(b) None of the Pledged Securities has been transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such transfer may be subject with respect to which
such transfer could with reasonable likelihood result in a material adverse
effect on the business, properties, assets, operations or condition (financial
or otherwise) or prospects of the Pledgor or any of the Pledgor's Subsidiaries.
(c) No consent, approval, authorization or other order of any
Person and no consent or authorization of any Governmental Authority or
regulatory body is required to be made or obtained by the Pledgor either (i) for
the pledge by the Pledgor of the Pledged Collateral pursuant to this Securities
Pledge Agreement or for the execution, delivery, or performance of this
Securities Pledge Agreement by the Pledgor; or (ii) for the exercise by the
Agent of the voting or other rights provided for in this Securities Pledge
Agreement or the remedies in respect of the Pledged Collateral pursuant to this
Securities Pledge Agreement.
(d) The pledge, grant of a security interest in, and delivery
of the Pledged Collateral pursuant to this Securities Pledge Agreement, will
create a valid first priority Lien on and in the Pledged Collateral pledged by
the Pledgor, and the proceeds thereof, securing the payment of the Secured
Obligations assuming (i) continued possession of the Pledged Securities by the
Agent and (ii) that the Agent has no notice prior to or on the date of delivery
of such Pledged Securities of an adverse claim within the meaning of the UCC.
(e) This Securities Pledge Agreement has been duly executed
and delivered by the Pledgor and constitutes a legal, valid, and binding
obligation of the Pledgor, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other similar laws
affecting the rights of creditors generally or by the application of general
equity principles.
The representations and warranties contained in this Securities Pledge
Agreement shall be true, accurate and complete at the time of the Pledgor's
execution of this Securities Pledge Agreement, and shall continue to be true,
accurate and complete until the Secured Obligations have been paid or otherwise
satisfied in full.
SECTION 5. COVENANTS OF THE PLEDGOR. The Pledgor covenants and agrees,
in addition to its other obligations under the Credit Agreement and the other
Credit Documents, that until the Secured Obligations have been paid and
performed in full:
3.
111
(a) Without the prior written consent of the Agent, the
Pledgor shall not sell, assign, transfer, pledge, or otherwise encumber any of
the Pledgor's rights in or to the Pledged Collateral pledged by the Pledgor or
any unpaid dividends or other distributions or payments with respect thereto or
xxxxx x Xxxx therein except as otherwise permitted by this Securities Pledge
Agreement.
(b) The Pledgor shall, at the Pledgor's own expense, promptly
execute, acknowledge, and deliver all such instruments and take all such action
as the Agent from time to time may reasonably request in order to ensure to the
Agent the benefits of the Lien in and to the Pledged Collateral intended to be
created by this Securities Pledge Agreement.
(c) The Pledgor shall maintain, preserve and defend the title
to the Pledged Collateral and the Lien of the Agent thereon against the claim of
any other Person.
(d) The Pledgor shall, upon obtaining any additional shares of
Stock of any other Person not evidenced on SCHEDULE I attached hereto, promptly
(and in any event within five (5) Business Days) deliver to the Agent all share
certificates and voting trust certificates respecting such Stock of such other
Person, and deliver to the Agent a Pledge Amendment duly executed by the
Pledgor, substantially in the form of SCHEDULE II attached hereto, which is
incorporated herein by this reference (a "Pledge Amendment"), and executed
instruments of transfer or assignments (including, without limitation, stock
powers) executed in blank, in respect of the additional shares of stock which
are to be pledged pursuant hereto. The Pledgor hereby authorizes the Agent to
attach each Pledge Amendment hereto and agrees that all shares listed on any
Pledge Amendment delivered to the Agent shall for all purposes hereunder be
considered Pledged Collateral.
SECTION 6. THE PLEDGOR'S RIGHTS. So long as no Event of Default shall
have occurred and be continuing:
(a) The Pledgor shall have the right, from time to time, to
vote and give consents with respect to the Pledged Collateral or any part
thereof for all purposes not inconsistent with the provisions of this Securities
Pledge Agreement and the Credit Agreement; provided, however, that no vote shall
be cast, and no consent shall be given or action taken, which would have the
effect of impairing the position or interest of the Agent in respect of the
Pledged Collateral (except as and to the extent expressly permitted by the
Credit Agreement).
(b) The Pledgor shall be entitled, from time to time, to
collect and receive for the Pledgor's own use, and shall not be required to
pledge pursuant to SECTION 2, above, any cash dividends or cash interest
payments paid in respect of the Pledged Securities, except such cash dividends
or cash interest payments received after and during the continuance of an Event
of Default; provided, however, that until actually paid, all rights to any such
permitted cash dividends or cash interest payments shall remain subject to the
Lien created by this Securities Pledge Agreement. All dividends and interest
payments (other than such cash dividends and cash interest payments as are
permitted to be paid to the Pledgor in accordance with this clause (b)) and all
rights, property, proceeds and products received, receivable or otherwise
distributed in respect of any of the Pledged Securities of the Pledgor whenever
paid or made, shall be delivered to the Agent to hold as Pledged Collateral and
shall, if recovered by the Pledgor, be
4.
112
received in trust for the benefit of the Agent, be segregated from the other
property or funds of the Pledgor, and be forthwith delivered to the Agent as
Pledged Collateral.
SECTION 7. DEFAULTS AND REMEDIES.
7.1 EVENTS OF DEFAULT. The occurrence of an Event of Default
under or as defined in the Credit Agreement shall be an "Event of Default"
hereunder.
7.2 REMEDIES. Upon the occurrence of an Event of Default and
so long as the same shall be continuing, and in addition to the other remedies
available under the Credit Agreement and the other Credit Documents:
(a) All or any portion of the Secured Obligations
may, at the option of the Agent and without demand, notice, or legal process of
any kind, be declared, and immediately shall become, due and payable.
(b) The Agent (personally or through an agent) is
hereby authorized and empowered to transfer and register in its name or in the
name of its nominee the whole or any part of the Pledged Collateral, to exchange
certificates or instruments representing or evidencing Pledged Securities for
certificates or instruments of smaller or larger denominations, to exercise the
voting rights with respect thereto, to collect and receive all cash dividends
and other distributions made thereon, to sell in one or more sales after ten
(10) days' prior written notice of the time and place of any public sale or of
the time after which a private sale is to take place (which notice the Pledgor
agrees is commercially reasonable), but without any previous notice or
advertisement, the whole or any part of the Pledged Collateral and to otherwise
act with respect to the Pledged Collateral as though the Agent were the outright
owner thereof, the Pledgor hereby irrevocably constituting and appointing the
Agent the proxy and attorney-in-fact of the Pledgor, with full power of
substitution (which appointment is coupled with an interest) to take all such
actions permitted hereunder or otherwise permitted by law; provided, however,
the Agent shall not have any duty to exercise any such right or to preserve the
same and shall not be liable for any failure to do so or for any delay in doing
so. Any sale shall be made at a public or private sale at such location as the
Agent may reasonably select, and the Agent or any one or more Lenders may be the
purchaser of the whole or any part of the Pledged Collateral so sold and hold
the same thereafter in its or their own right free from any claim of the Pledgor
or any right of redemption. Each sale shall be made to the highest bidder, but
the Agent reserves the right to reject any and all bids at such sale which it,
in its sole discretion, shall deem inadequate. Except as otherwise provided
herein, the Pledgor hereby waives demand of performance, notices of sale,
advertisements, and the presence of the Pledged Collateral at any sale thereof.
Any sale hereunder may be conducted by an auctioneer or any officer or agent of
the Agent.
(c) If, at the original time or times appointed for
the sale of the whole or any part of the Pledged Collateral, the highest bid
shall be inadequate to discharge in full all the Secured Obligations if there be
but one sale, or if the Pledged Collateral be offered for sale in lots, if at
any of such sales, the highest bid for the lot offered for sale would indicate
to the Agent, in its sole discretion, the unlikelihood of the proceeds of the
sales of the whole of the Pledged Collateral being sufficient to discharge all
the Secured Obligations, the Agent may, on one or more occasions and in its sole
discretion, postpone any of said sales by public
5.
113
announcement at the time of sale, and no other notice of such postponement or
postponements of sale need be given, any other notice being hereby waived;
provided, however, that if a sale is postponed for more than sixty (60) days,
the Agent shall re-notice the Pledgor of any subsequent sale of the affected
Pledged Collateral in accordance with SECTION 7.2(b), above.
(d) In the event of any sales hereunder, the Agent
shall, after deducting all costs or expenses of every kind (including, without
limitation, reasonable attorneys' fees, costs and other legal expenses) for
care, safekeeping, collection, sale, delivery, or otherwise, apply the residue
of the proceeds of the sales to the payment or reduction, either in whole or in
part, of the Secured Obligations in accordance with the agreements and
instruments governing and evidencing such Obligations, returning the surplus, if
any, to the Pledgor.
(e) If, at any time when the Agent shall determine to
exercise its right to sell the whole or any part of the Pledged Collateral
hereunder, such Pledged Collateral or the part thereof to be sold shall not, for
any reason whatsoever, be effectively registered under the Securities Act of
1933, as amended (the "Act"), the Agent may, in its discretion (subject only to
applicable requirements of law), sell such Pledged Collateral or part thereof by
private sale in such manner and under such circumstances as the Agent may deem
necessary or advisable, but subject to the other requirements of this SECTION 7,
and shall not be required to effect such registration or cause the same to be
effected. Without limiting the generality of the foregoing, in any such event
the Agent may, in its sole discretion, (i) in accordance with applicable
securities laws, proceed to make such private sale notwithstanding that a
registration statement for the purpose of registering such Pledged Collateral or
part thereof could be or shall have been filed under the Act; (ii) approach and
negotiate with a single possible purchaser to effect such sale; and (iii)
restrict such sale to a purchaser who will represent and agree that such
purchaser is purchasing for its own account, for investment, and not with a view
to the distribution or sale of such Pledged Collateral or part thereof. In
addition to a private sale as provided above in this SECTION 7, if any of the
Pledged Collateral shall not be freely distributable to the public without
registration under the Act at the time of any proposed sale hereunder, then the
Agent shall not be required to effect such registration or cause the same to be
effected but may, in its sole discretion (subject only to applicable
requirements of law), require that any sale hereunder (including a sale at
auction) be conducted subject to such restrictions as the Agent may, in its sole
discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors'
rights and the Act and all applicable state securities laws.
(f) The Pledgor agrees that a breach of any covenants
contained in this SECTION 7 with the effect of denying the Agent the realization
of the practical benefits to be provided by this SECTION 7 will cause
irreparable injury to the Agent and the Lenders, that in such event the Agent
and the Lenders would have no adequate remedy at law in respect of such breach
and, as a consequence, agrees that in such event each and every covenant
contained in this SECTION 7 shall be specifically enforceable against the
Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that the Secured Obligations are not then due and payable.
SECTION 8. TERMINATION. Immediately following the full and complete
payment, in cash of all the Secured Obligations, the Agent shall deliver to the
Pledgor the Pledged Collateral
6.
114
pledged by the Pledgor at the time subject to this Securities Pledge Agreement
and all instruments of assignment executed in connection therewith, free and
clear of the Lien hereof, and all of the Pledgor's obligations hereunder shall
at such time terminate.
SECTION 9. CONSENT OF GOVERNMENTAL AUTHORITIES. Notwithstanding
anything to the contrary contained herein, to the extent that the exercise of
any power granted, or remedy available, to the Agent hereunder requires the
prior approval of any Governmental Authority, then the Agent hereby agrees that
it may not and shall not exercise any such right or avail itself of any such
remedy, until the required consent has been obtained.
SECTION 10. MISCELLANEOUS.
10.1 ENTIRE AGREEMENT. This Securities Pledge Agreement
constitutes and contains the entire agreement of the parties and supersedes any
and all prior and contemporaneous agreements, negotiations, correspondence,
understandings and communications between the parties, whether written or oral,
respecting the subject matter hereof.
10.2 ASSIGNABILITY. This Securities Pledge Agreement shall be
binding upon and inure to the benefit of the Pledgor, the Agent, and the
Lenders, and their respective successors and assigns as permitted under the
Credit Agreement, except that the Pledgor shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of the
Agent.
10.3 NOTICES. Any notice or other communication hereunder to
any party shall be addressed and delivered (and shall be deemed given) in
accordance with the Credit Agreement.
10.4 NO WAIVER; AMENDMENTS. No failure on the part of the
Agent to exercise, no delay in exercising and no course of dealing with respect
to, any right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law. This
Securities Pledge Agreement may not be amended or modified except by written
agreement between the Pledgor and the Agent, and no consent or waiver hereunder
shall be valid unless in writing and signed by the Agent.
10.5 SEVERABILITY. If any provision of this Securities Pledge
Agreement is held to be unenforceable for any reason, it shall be adjusted, if
possible, rather than voided in order to achieve the intent of the parties to
the extent possible. In any event, all other provisions of this Securities
Pledge Agreement shall be deemed valid and enforceable to the full extent
possible.
10.6 GOVERNING LAW. This Securities Pledge Agreement has been
delivered to the Agent and accepted by the Agent in the State of California.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE CREDIT DOCUMENTS, IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
STOCK PLEDGE AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED
BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
7.
115
WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
8.
116
IN WITNESS WHEREOF, the Pledgor has caused this Securities Pledge
Agreement to be duly executed as of the date first written above.
PLEDGOR LEAP WIRELESS INTERNATIONAL, INC.,
a Delaware corporation
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
SECURITIES PLEDGE AGREEMENT (Borrower)
117
ACCEPTED AND ACKNOWLEDGED BY:
ABN AMRO BANK N.V.,
as the Agent
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
SECURITIES PLEDGE AGREEMENT (Borrower)
118
SCHEDULE I
Attached to and forming a part of that certain Securities Pledge
Agreement ("Securities Pledge Agreement") dated as of______, 1998, executed by
LEAP WIRELESS INTERNATIONAL, INC., a Delaware corporation ("Pledgor"), in favor
of ABN AMRO BANK N.V., as agent on behalf and for the benefit of the Lenders
(the "Agent").
STOCK OR NOTE ISSUER CLASS OF STOCK OR NOTES STOCK CERTIFICATE NUMBER OF SHARES OR AMOUNT
NUMBERS OR NOTE OF NOTE
IDENTIFICATION
----------------------------- ----------------------------- ---------------------------- ----------------------------
----------------------------- ----------------------------- ---------------------------- ----------------------------
----------------------------- ----------------------------- ---------------------------- ----------------------------
----------------------------- ----------------------------- ---------------------------- ----------------------------
SECURITIES PLEDGE AGREEMENT (Borrower)
119
SCHEDULE II
PLEDGE AMENDMENT
THIS PLEDGE AMENDMENT ("Pledge Amendment") dated ________, 19__, is
delivered pursuant to Section 5(d) of that certain Securities Pledge Agreement
dated as of _____, 1998 (the "Securities Pledge Agreement") executed by LEAP
WIRELESS INTERNATIONAL, INC., a Delaware corporation ("Pledgor"), in favor of
ABN AMRO BANK N.V., as agent on behalf and for the benefit of the Lenders (the
"Agent").
The undersigned hereby agrees that (a) this Pledge Amendment shall be
attached to the Securities Pledge Agreement, (b) the Pledged Securities listed
on this Pledge Amendment shall be and become a part of the Pledged Collateral
and shall secure all Secured Obligations as defined in the Securities Pledge
Agreement and (c) the undersigned is a Pledgor under the Securities Pledge
Agreement and assumes all obligations of Pledgor thereunder.
PLEDGOR LEAP WIRELESS INTERNATIONAL, INC.,
a Delaware corporation
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
STOCK OR NOTE ISSUER CLASS OF STOCK OR NOTES STOCK CERTIFICATE NUMBER OF SHARES OR AMOUNT
NUMBERS OR NOTE OF NOTE
IDENTIFICATION
----------------------------- ----------------------------- ---------------------------- ----------------------------
----------------------------- ----------------------------- ---------------------------- ----------------------------
----------------------------- ----------------------------- ---------------------------- ----------------------------
----------------------------- ----------------------------- ---------------------------- ----------------------------
----------------------------- ----------------------------- ---------------------------- ----------------------------
SECURITIES PLEDGE AGREEMENT (Borrower)
120
EXHIBIT G
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated _____________, 199__/200__, between
________________________________ (the "Assignor") and
____________________________ (the "Assignee").
PRELIMINARY STATEMENT
A. This Assignment and Acceptance is being executed and delivered in
accordance with and with reference to SECTION 8.6 of the Credit Agreement dated
as of _________________, 1998 (as the same may from time to time amended,
modified, supplemented or restated, the "Credit Agreement"), by and among Leap
Wireless International, Inc., a Delaware corporation (the "Borrower"), QUALCOMM,
Incorporated ("QUALCOMM") and the other Lenders named therein (collectively, the
"Lenders"), and ABN AMRO Bank N.V. as Administrative Agent (the "Administrative
Agent"). Capitalized terms used but not otherwise defined herein shall have the
meanings given them in the Credit Agreement.
B. The Assignor is a Lender under and as defined in the Credit
Agreement and, as such, presently has outstanding Investment Capital Loans and
Working Capital Loans under its respective Investment Capital Loan Commitment
and Working Capital Loan Commitment under the Credit Agreement as set forth in
SCHEDULE I attached hereto.
C. On the terms and conditions set forth below, the Assignor desires to
sell and assign to the Assignee, and the Assignee desires to purchase and assume
from the Assignor, a __________%(1) interest (the "Assigned Percentage") in and
to all of the Assignor's rights and obligations in, to and under the Credit
Agreement and the other Credit Documents as of the Effective Date (as defined
below).
D. After giving effect to such assignment, the respective outstanding
Investment Capital Loans and Working Capital Loans of the Assignor and the
Assignee under the Credit Agreement will be as set forth in SCHEDULE II attached
hereto.
NOW THEREFORE, the Assignor and the Assignee hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee WITHOUT
RECOURSE, and the Assignee hereby purchases and assumes from the Assignor, the
Assigned Percentage of the Assignor's rights and obligations under the Credit
Agreement as of the Effective Date.
2. After the execution and delivery of this Assignment and Acceptance
by the Assignee, the Assignor will, upon request of the Assignee, promptly
provide to the Assignee copies of all Credit Documents and other documents not
previously furnished to the Assignee
--------
(1) Specify percentage of ASSIGNOR'S INTEREST ONLY in total facility to accuracy
of nine decimal points (for example, if Assignor has a 25% interest in the total
facility and 50% of that is being assigned, then complete the blank "50%", not
"12.5%").
1.
121
that were delivered to such Assignor pursuant to the conditions precedent set
forth in SECTION 3 of the Credit Agreement.
3. THE ASSIGNOR:
(a) represents and warrants that as of the date hereof the
amounts of each of its Investment Capital Loan Commitment and Working Capital
Loan Commitment (without giving effect to assignments thereof which have not yet
become effective) are as set forth in SCHEDULE III attached hereto;
(b) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim;
(c) makes no representations or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other Credit Document furnished pursuant
thereto; and
(d) makes no representations or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
guarantor of the Obligations or the performance or observance by the Borrower or
any guarantor of any of its Obligations under the Credit Agreement or any other
Credit Document furnished pursuant thereto.
4. THE ASSIGNEE:
(a) represents and warrants that it is an Eligible Assignee;
(b) confirms that it has received a copy of the Credit
Agreement, together with copies of such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
this Assignment and Acceptance;
(c) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement or any other Credit Documents;
(d) appoints and authorizes the Administrative Agent to take
such action as administrative agent on its behalf and to exercise such powers
under the Credit Agreement and the other Credit Documents as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and
(e) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement and the other
Credit Documents are required to be performed by a Lender.
2.
122
5. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
recording by the Administrative Agent and acceptance by the Borrower. The
proposed effective date for this Assignment and Acceptance shall be
[______________, 19___/200___].
6. At or before 12:00 noon, local time of the Assignor on the proposed
effective date, the Assignee shall have paid to the Assignor the purchase price
agreed to by the Assignor and the Assignee by wire transfer (the "Purchase
Price") and the Administrative Agent shall have recorded, and the Borrower shall
have accepted, this Assignment and Acceptance (the satisfaction of the foregoing
two conditions on such date being the "Effective Date"). As of the Effective
Date, (a) the Assignee shall be a party to the Credit Agreement and shall be
entitled to the rights and benefits of the Credit Documents and, to the extent
of the percentage assigned in this Assignment and Acceptance, have the rights
and obligations of a Lender thereunder, (b) the Assignor shall, to the extent of
the percentage assigned in this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement and the other
Credit Documents; provided, however, that any assignment by the Assignor of
rights to indemnification under and pursuant to the Credit Documents, including,
without limitation, under and pursuant to SECTION 8.14 of the Credit Agreement,
shall be undivided and nonexclusive, with each of the Assignor and the Assignee
being severally deemed to be beneficiaries of such indemnity rights, and (c) the
amounts of the Investment Capital Loan Commitments and the Working Capital Loan
Commitments for each of the Assignor and Assignee (after giving effect to the
assignment pursuant to this Assignment and Acceptance) will be as set forth in
SCHEDULE IV attached hereto. The Assignor shall retain all rights and
obligations applicable to it under the Credit Agreement relating to credits
extended, acts or omissions made, or other matters arising, prior to the
Effective Date.
7. Upon and after the Effective Date, the Administrative Agent shall be
directed to make all payments under the Credit Agreement which are payable by
the Administrative Agent for the account of the appropriate Lender to the
appropriate Lenders severally in proportion to their respective percentages
determined after giving effect to this assignment, when payment is due. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the other Credit Documents for periods prior to the
Effective Date directly between themselves.
8. Each of the parties to this Assignment and Acceptance agrees that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Assignment and Acceptance.
9. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of California.
3.
123
IN WITNESS WHEREOF, each of the parties hereto has caused this
Assignment and Acceptance to be executed and delivered by a duly authorized
person on the date first set forth above.
ASSIGNOR:
[NAME OF ASSIGNOR]
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
ASSIGNEE:
[NAME OF ASSIGNEE]
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
4.
124
ADMINISTRATIVE AGENT:
RECORDED this ______ day of
_____________, 199__/200__
ABN AMRO BANK N.V., as Administrative Agent
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
BORROWER:
ACCEPTED this _______ day of
______________, 199__/200__
LEAP WIRELESS INTERNATIONAL, INC.,
a Delaware corporation
By:
-------------------------------------
Printed Name:
---------------------------
Title:
----------------------------------
5.
125
SCHEDULE I
ASSIGNOR'S OUTSTANDING LOANS
(PRIOR TO ASSIGNMENT)
Investment Capital Loans $_______________
Working Capital Loans $_______________
Schedule I
126
SCHEDULE II
ASSIGNOR'S AND ASSIGNEE'S OUTSTANDING LOANS
(AFTER ASSIGNMENT)
ASSIGNOR: OUTSTANDING LOANS
--------- -----------------
Investment Capital Loans $_______________
Working Capital Loans $_______________
ASSIGNEE: OUTSTANDING LOANS
--------- -----------------
Investment Capital Loans $_______________
Working Capital Loans $_______________
Schedule II
127
SCHEDULE III
ASSIGNOR'S COMMITMENT AMOUNTS
(PRIOR TO ASSIGNMENT)
Investment Capital Loan Commitment $_______________
Working Capital Loan Commitment $_______________
Schedule III
128
SCHEDULE IV
ASSIGNOR'S AND ASSIGNEE'S COMMITMENT AMOUNTS
(AFTER ASSIGNMENT)
ASSIGNOR: REVISED COMMITMENT
--------- ------------------
Investment Capital Loan Commitment $_______________
Working Capital Loan Commitment $_______________
ASSIGNEE: REVISED COMMITMENT
--------- ------------------
Investment Capital Loan Commitment $_______________
Working Capital Loan Commitment $_______________
Schedule IV
