LOAN AGREEMENT
dated as of August 12, 1996
by and
between
AER FORCE COMMUNICATIONS B, L.P.,
as "Borrower,"
and
XXXXX PCS CORPORATION F,
as "Lender"
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS.................................................................1
SECTION 1.01. DEFINED TERMS................................................1
SECTION 1.02. INCORPORATION OF CERTAIN TERMS BY REFERENCE..................
ARTICLE II
THE LOAN....................................................................2
SECTION 2.01. THE INITIAL LOAN.............................................2
SECTION 2.03. PAYMENT OF PRINCIPAL.........................................5
SECTION 2.04. OPTIONAL PREPAYMENT..........................................5
SECTION 2.05. INTEREST RATE AND PAYMENT DATES..............................5
ARTICLE III
GENERAL PROVISIONS CONCERNING THE LOAN......................................6
SECTION 3.01. PAYMENTS.....................................................6
SECTION 3.02. PAYMENT ON NON-BUSINESS DAYS.................................6
SECTION 3.03. CONDITIONS; DOCUMENTATION....................................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..............................................6
SECTION 4.01. ORGANIZATION.................................................6
SECTION 4.02. AUTHORIZATION................................................7
SECTION 4.03. NO CONFLICT..................................................7
SECTION 4.04. LITIGATION...................................................7
SECTION 4.05. ACCURACY OF REPRESENTATIONS AND WARRANTIES; DISCLOSURE......7
ARTICLE V
AFFIRMATIVE COVENANTS.......................................................8
SECTION 5.01. PUNCTUAL PAYMENTS............................................8
SECTION 5.02. ACCOUNTING RECORDS...........................................8
SECTION 5.03. FINANCIAL STATEMENTS AND REPORTS.............................8
SECTION 5.04. COMPLIANCE...................................................9
SECTION 5.05. INSURANCE....................................................9
SECTION 5.06. FACILITIES...................................................9
SECTION 5.07. TAXES AND OTHER LIABILITIES..................................9
SECTION 5.08. NOTIFICATION.................................................9
SECTION 6.01. USE OF PROCEEDS.............................................10
SECTION 6.02. CONDUCT OF BUSINESS.........................................10
SECTION 6.04. ACQUISITION AND DISPOSITION OF ASSETS.......................10
SECTION 6.05. INCURRENCE OF INDEBTEDNESS..................................10
SECTION 6.06. CAPITAL EXPENDITURE; INVESTMENTS............................10
SECTION 6.07. LOANS; GUARANTEES...........................................10
SECTION 6.08. PARTNERSHIP DISTRIBUTIONS...................................10
SECTION 6.09. MATERIAL AGREEMENTS.........................................11
SECTION 6.10. RELATED PARTY TRANSACTION...................................11
ARTICLE VII
EVENTS OF DEFAULT..........................................................11
SECTION 7.01. EVENTS OF DEFAULT...........................................11
SECTION 7.02. ACCELERATION; REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT..13
ARTICLE VIIIMISCELLANEOUS.....................................................13
SECTION 8.01. COSTS, EXPENSES AND ATTORNEYS' FEES.........................13
SECTION 8.02. AMENDMENTS, ETC.............................................14
SECTION 8.03. NOTICES, ETC................................................14
SECTION 8.04. INDEMNIFICATION.............................................14
SECTION 8.05. NO WAIVER; REMEDIES.........................................14
SECTION 8.06. ASSIGNMENTS AND PARTICIPATION...............................15
SECTION 8.07. EFFECTIVENESS; BINDING EFFECT; GOVERNING LAW................15
SECTION 8.08. WAIVER OF JURY TRIAL........................................15
SECTION 8.09. CONSENT TO JURISDICTION; VENUE; AGENT FOR
SERVICE OF PROCESS........................................16
SECTION 8.10. ENTIRE AGREEMENT............................................16
SECTION 8.11. SEPARABILITY OF PROVISIONS..................................16
SECTION 8.12. EXECUTION IN COUNTERPARTS...................................16
SECTION 8.13. INDEPENDENCE OF COVENANTS...................................16
SECTION 8.14. SURVIVAL OF REPRESENTATIONS.................................16
LOAN AGREEMENT
This Loan Agreement (this "Agreement") dated as of August 12, 1996 is
entered into by and between Aer Force Communications B, L.P., a Delaware limited
partnership ("Borrower"), and XXXXX PCS CORPORATION F, a Delaware corporation
("Lender").
RECITALS:
WHEREAS, Borrower desires Lender to extend a loan to Borrower in such
amount and on such terms as set forth herein to acquire PCS Licenses pursuant to
the F-Block Auction; and
WHEREAS, Lender is prepared to make such Loan upon the terms and
subject to the conditions set forth herein only for the purposes of the
Partnership acquiring and operating PCS Licenses in the F-Block.
AGREEMENT:
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS . As used in this Agreement, the following
terms have the following meanings:
"APPLICABLE RATE": An interest rate, compounded annually, equal to 15%
per annum.
"BUSINESS DAY": A day other than a Saturday, Sunday or other day on
which commercial banks in New York are authorized or required by law to close.
"LOAN DOCUMENTS": This Agreement, the Note, and all other documents
executed in connection with this Agreement and/or the Loan.
"MATURITY DATE": The Fifth (5th) Anniversary of the date hereof.
"NOTE": The promissory note substantially in the form of EXHIBIT A
hereto to be executed by Borrower, payable to the order of Lender.
"PARTNERSHIP AGREEMENT": The Partnership Agreement of Borrower dated as
of July 26, 1996.
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"SUBSIDIARY": Any corporation of which fifty percent (50%) or more of
the issued and outstanding voting securities are, directly or indirectly, owned
by Borrower or any Subsidiary of Borrower or any other entity of which fifty
percent (50%) or more of the ownership interests are owned, directly or
indirectly, by Borrower or any Subsidiary of Borrower.
SECTION 1.02. INCORPORATION OF CERTAIN TERMS BY REFERENCE . Capitalized
terms used herein but not otherwise defined shall have the meanings specified in
the Partnership Agreement as in effect on the date hereof.
ARTICLE II
THE LOAN
SECTION 2.01. THE INITIAL LOAN .
(a) THE LOAN. Lender agrees, on the terms and conditions hereinafter
set forth, to make a loan (the "Initial Loan") to Borrower in the aggregate
principal amount of Eleven Million, Eight Hundred Thousand Dollars
($11,800,000). The Initial Loan shall be made immediately prior to the date that
the Borrower is required to make up-front deposits to the FCC for the F-Block
Auction and shall be used by Borrower for such purpose and for the purposes set
forth in Paragraph (b) of this Section 2.01.
(b) MANDATORY PREPAYMENT.
(1) If after the termination of the F-Block Auction, Borrower
has any funds, including Initial Capital Contributions as provided in the
Partnership Agreement, which are not being used, or reasonably held for use, to
fund the initial 10% down payment (due within 5 business days after release of
the F-Block Auction closing notice) for any PCS Licenses won by Borrower in the
F-Block Auction, Borrower shall, upon the written demand of Lender, immediately
prepay the Initial Loan in an amount equal to such unused proceeds.
(2) If the FCC shall not grant any PCS Licenses to Borrower in
respect of any PCS Licenses won in the F-Block Auction or if any PCS License
granted to Borrower pursuant to the F-Block Auction is either transferred or
revoked, Borrower shall, upon the demand of Lender, immediately prepay all
amounts owed by Borrower to Lender under the Loan Documents. If no PCS Licenses
are granted to Borrower, Borrower shall not have to pay any interest or
commitment fees, but only to pay the principal of the Loan.
(3) The net proceeds from the sale by the Partnership of any
assets shall be used to prepay promptly a portion of the Loan equal to said net
proceeds.
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(4) Any prepayment under (b)(1) and (b)(3) hereof shall be
applied to the payment of any accrued and unpaid principal before any
application to principal.
(c) SUPPLEMENTAL LOANS. Lender agrees, on the terms and conditions set
forth, to make loans ("Supplemental Loans") to Borrower from time to time in an
aggregate principal amount up to the amount prepaid by Borrower pursuant to
Section 2.01 (b)(1); provided, however, that the total of the Initial Loan and
Supplemental Loans shall not exceed 60% of the cost (net of any bidding credits)
of all PCS Licenses granted to Borrower pursuant to the F-Block Auction, in each
case reduced by any amounts deemed to be Supplemental Loans pursuant to the
second succeeding sentence. Supplemental Loans shall only be used for the
following purposes:
(i) to fund the remaining 10% down payment due after PCS Licenses
are granted;
(ii) to make installment interest and principal payments on any PCS
Licenses granted to Borrower pursuant to Section 24.716 of the
FCC Rules;
(iii) to make payments pursuant to the next to last sentence of
Section 1 and the proviso clause of Section 2 of the Expenses
Agreement (the "Expenses Agreement") dated as of July 26, 1996
among the Partnership, the General Partner and the Initial
Limited Partner; and
(iv) any other business purposes approved in writing by Lender;
Supplemental Loans shall also include (1) all reasonable out-of-pocket expenses
(including reasonable attorneys' fees) of the Initial Limited Partner pursuant
to Section 1(b) of the Expenses Agreement and (2) all reasonable costs and
expenses (including reasonable attorneys fees) (a) incurred by Lender in
connection with the negotiation and preparation of this Agreement and each of
the other Loan Documents and (b) incurred by Lender or the lender to Lender with
respect to the borrowing contemplated by the last sentence of Section 8.06;
provided, however, that the amounts deemed Supplemental Loans under this
sentence shall not exceed $37,500. Lender's obligation to make Supplemental
Loans (1) is conditional on Borrower being in full compliance with all the
representations, warranties and covenants of Borrower contained in the Loan
Documents, no Event of Default hereunder having occurred, and the FCC not having
threatened to revoke any PCS Licenses granted to Borrower in the F-Block Auction
and (2) shall terminate on the earlier of the maturity of the Loan (whether at
the Maturity Date, by acceleration or otherwise) or the payment in full of the
Loan. The term "Loan" shall include the Initial Loan, the Supplemental Loans,
interest (including compounded interest) and all other amounts payable to Lender
under the Loan Documents.
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(d) COMMITMENT FEES. Borrower shall pay to Lender a commitment fee of
20% per annum from the date of the Initial Loan on the total Eleven Million
Eight Hundred Thousand Dollars ($11,800,000) commitment to make Loans (including
any used portion); provided, however, that the total dollar amount of such
commitment shall not exceed 60% of the cost (net of any bidding credits) of all
PCS Licenses granted to Borrower pursuant to the C-Block Auction (in each case
reduced by any amounts deemed to be the Supplemental Loans pursuant to the third
sentence of Section 2.01(c)). The commitment fees shall be due and payable,
without interest, on the date when the commitment to make Supplemental Loans
shall terminate pursuant to clause (2) of the next to last sentence of Section
2.01(c). If the commitment fees are not paid when so due and payable, the
commitment fees shall be deemed to bear interest at twice the Applicable Rate
until the date of payment. The commitment fees shall cease to accrue on the
earlier of the Maturity Date or the payment in full of the Loan.
SECTION 2.02. THE NOTE. The Loan made by Lender pursuant hereto shall
be evidenced by the Note, representing the obligation of Borrower to pay the
aggregate unpaid principal amount of the Loan made by Lender, with interest
thereon as prescribed in Section 2.05.
SECTION 2.03. PAYMENT OF PRINCIPAL . The entire unpaid principal amount
of the Loan, together with all accrued and unpaid interest thereon, shall be due
and payable on the Maturity Date.
SECTION 2.04. OPTIONAL PREPAYMENT . Borrower may, at its option, prepay
the Loan, without premium except as provided in the Note, in whole or in part at
any time and from time to time; provided that Lender shall have received from
Borrower notice of any such prepayment at least five (5) Business Days prior to
the date of the proposed prepayment, in each case specifying the date and the
amount of prepayment. Partial payments hereunder shall be in an aggregate
principal amount of $50,000 or any integral multiple thereof. Any such
prepayments shall be applied to the payment of any accrued and unpaid interest
before any application to principal.
SECTION 2.05. INTEREST RATE AND PAYMENT DATES .
(a) INTEREST RATE AND PAYMENT. The Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether at
the Maturity Date, by acceleration or otherwise) at the Applicable Rate. All
accrued and unpaid interest on the Loan shall be compounded annually and payable
on the Maturity Date. Interest on the Loan shall be computed on the basis of a
360-day year for the actual number of days elapsed. In computing interest on the
Loan, the date of the making of the Loan shall be included and the date of
payment of the Loan shall be excluded.
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(b) DEFAULT INTEREST. Upon the occurrence, and during the continuation
of, any Event of Default, the principal amount of the Loan and any interest
accrued and unpaid thereon shall bear interest at the Applicable Rate plus 3%
per annum.
SECTION 2.06. SECURITY, OTHER.
(a) SECURITY. All amounts payable pursuant to the Loan Documents shall
be secured to the extent permitted by law by a security interest in all the
assets of Borrower.
(b) NOT EXCEED MAXIMUM RATE. Notwithstanding the foregoing, neither
interest on the Loan nor commitment and other fees shall exceed the highest rate
permitted by applicable law.
ARTICLE III
GENERAL PROVISIONS CONCERNING THE LOAN
SECTION 3.01. PAYMENTS . Borrower shall make each payment of principal,
interest and fees hereunder and under the Note, without setoff or counterclaim,
not later than 11:00 a.m. New York City time, on the day when due, in lawful
money of the United States of America to Lender by wire transfer sent to an
account designated in writing from time to time by Lender, in immediately
available funds. Payments received after such time shall be deemed to have been
paid by Borrower on the next succeeding Business Day.
SECTION 3.02. PAYMENT ON NON-BUSINESS DAYS . If any payment to be made
hereunder or under the Note shall be stated to be due on a day which is not a
Business Day, such payment may be made on the next succeeding Business Day, and
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension.
SECTION 3.03. CONDITIONS; DOCUMENTATION . As a condition to the making
of the Loan, Borrower will execute and deliver or cause to be executed and
delivered to Lender such documents, instruments and certificates as Lender may
reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants as follows:
SECTION 4.01. ORGANIZATION . Borrower is a limited partnership duly
formed and validly existing and in good standing under the laws of the State of
Delaware, is duly qualified to transact business in all jurisdictions in which
the conduct of its business requires such qualification, and has full
partnership power and authority to conduct its business and to enter into and
perform its obligations under the Loan Documents.
5
SECTION 4.02. AUTHORIZATION . The execution, delivery and performance
of the Loan Documents by Borrower has been duly authorized by all necessary
partnership action on the part of Borrower. Each Loan Document has been duly
executed by Borrower and delivered by Borrower to Lender and constitutes the
legal, valid and binding obligation of Borrower, enforceable in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally and the exercise
of judicial discretion in accordance with general equitable principles.
SECTION 4.03. NO CONFLICT . The execution, delivery and performance of
each Loan Document by Borrower, and the compliance with the terms and conditions
hereof and thereof by Borrower, does not, with or without the giving of notice
or the lapse of time or both, conflict with, breach the terms or conditions of,
constitute a default under, or violate the (i) Partnership Agreement, (ii) any
agreement to which Borrower is a party, or (iii) any judgment, decree, order,
law, rule or regulation applicable to Borrower.
SECTION 4.04. LITIGATION . There is no unsatisfied judgment, award,
order, writ, injunction, arbitration decision or decree outstanding or any
litigation, proceeding, claim or investigation pending or, to the best knowledge
of Borrower, threatened against Borrower which may adversely affect the ability
of Borrower to enter into and perform its obligations under Loan Documents.
SECTION 4.05. ACCURACY OF REPRESENTATIONS AND WARRANTIES; DISCLOSURE .
The representations and warranties of the General Partner set forth in the
Partnership Agreement are true and correct in all material respects. No
representation or warranty of Borrower set forth in this Agreement, or any
certificate or written statement furnished by Borrower or Lender for use in
connection with the transactions contemplated hereby, and no representation or
warranty of the General Partner set forth in the Partnership Agreement, contains
any untrue statement of material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
misleading.
ARTICLE V
AFFIRMATIVE COVENANTS
Borrower covenants that so long as any of the Loan or any obligation of
Borrower under the Loan Documents remains outstanding, and until payment in full
of all obligations of Borrower subject hereto, Borrower shall:
SECTION 5.01. PUNCTUAL PAYMENTS . Punctually pay the interest and
principal in respect of the Loan and all other obligations under any of the Loan
Documents at the times and place and in the manner specified in the Loan
Documents.
6
SECTION 5.02. ACCOUNTING RECORDS . Maintain adequate books and records
in accordance with generally accepted accounting principles consistently applied
("GAAP"), and permit any representative of Lender, at any reasonable time, to
inspect, audit and examine such books and records, to make copies of the same,
and to inspect the properties of Borrower.
SECTION 5.03. FINANCIAL STATEMENTS AND REPORTS . Provide to Lender the
following, in form and detail satisfactory to Lender:
(a) not later than ninety (90) days after the end of each
fiscal year of Borrower, an audited balance sheet of Borrower as of the end of
such fiscal year, and the related audited statements of operations and cash
flows of Borrower for the twelve-month period ended on the last day of such
fiscal year, in each case, prepared in accordance with GAAP, together with an
auditor's report thereon prepared by a nationally recognized firm of certified
public accountants;
(b) not later than thirty (30) days after the end of each
fiscal quarter of Borrower, an unaudited balance sheet of Borrower as of the
last day of such fiscal quarter and the related unaudited statements of
operations and cash flows of Borrower for the three (3) month period ended on
the last day of such fiscal quarter, in each case, prepared in accordance with
GAAP (subject to normal year-end adjustments and the absence of footnotes);
(c) within five (5) days of receipt by members of the
Partnership Committee, any written report (including any Business Plan or any
amendment thereto) provided to the members of the Partnership Committee
concerning the business, assets, condition (financial or otherwise) or prospects
of the Borrower or its business; and
(d) from time to time such other information as Lender may
reasonably request.
SECTION 5.04. COMPLIANCE . Maintain all PCS Licenses and all other
licenses, permits, governmental approvals, rights, privileges and franchises
necessary for the conduct of Borrower's business; conduct its business in an
orderly and regular manner and in a manner consistent with the terms of the
Partnership Agreement; and comply with the provisions of the Partnership
Agreement and all laws, rules, regulations and orders of any governmental
authority applicable to Borrower or its business.
SECTION 5.05. INSURANCE . Maintain and keep in force insurance of the
types and in amounts customarily carried in lines of business similar to
Borrower's, including but not limited to fire, extended coverage, public
liability, property damage and workers' compensation, carried with companies and
in amounts satisfactory to Lender, and deliver to Lender from time to time at
7
Lender's request schedules setting forth all insurance then in effect.
SECTION 5.06. FACILITIES . Keep all Borrower's properties useful or
necessary to Borrower's business in good repair and condition, and from time to
time make necessary repairs, renewals and replacements thereto so that
Borrower's properties shall be fully and efficiently preserved and maintained.
SECTION 5.07. TAXES AND OTHER LIABILITIES . Pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real or
personal and including federal and state income taxes, except such as Borrower
may in good faith contest or as to which a bona fide dispute may arise, provided
provision is made to the satisfaction of Lender for eventual payment thereof in
the event that it is found that the same is an obligation of Borrower.
SECTION 5.08. NOTIFICATION . Promptly give notice in writing to Lender
of (i) the occurrence of any Event of Default or any event reasonably likely to
result in the occurrence of an Event of Default, or (ii) any material adverse
change in the business, assets, condition (financial or otherwise) or prospects
of Borrower.
SECTION 5.09. SUPPLEMENTAL LOANS REPLACEMENT. At the request of Lender,
Borrower will use its best efforts to refinance the Loan.
ARTICLE VI
NEGATIVE COVENANTS
Borrower further covenants that so long as the Loan or any obligation
under the Loan Documents remains outstanding, and until payment in full of all
obligations of Borrower subject hereto, Borrower will not without the prior
written consent of Lender:
SECTION 6.01. USE OF PROCEEDS . Use any of the proceeds of the Loan
except for the purposes stated in Section 2.01 hereof.
SECTION 6.02. CONDUCT OF BUSINESS . Conduct any business other than the
Partnership Business.
SECTION 6.03. MERGER; CONSOLIDATION, ETC.. Merge, consolidate or
combine with any other Person or sell all or substantially all of Borrower's
assets or properties.
SECTION 6.04. ACQUISITION AND DISPOSITION OF ASSETS . Acquire, sell,
lease, exchange, transfer, mortgage, pledge, license or dispose of assets in any
transaction or series of related transactions involving consideration of a value
in excess of $100,000 in any 12-month period or $300,000 in the aggregate.
8
SECTION 6.05. INCURRENCE OF INDEBTEDNESS . Incur indebtedness for
borrowed money, or refinance, modify or extend any indebtedness of Borrower for
borrowed money.
SECTION 6.06. CAPITAL EXPENDITURE; INVESTMENTS . Make any capital
expenditure, investment or capital contribution, or any commitment to make any
capital expenditure, investment or capital contribution in an amount in excess
of $100,000 in any 12-month period or $300,000 in the aggregate.
SECTION 6.07. LOANS; GUARANTEES . Make any loan or guarantee any
indebtedness or liability of any other Person.
SECTION 6.08. PARTNERSHIP DISTRIBUTIONS . Distribute any assets or
property of Borrower to any Partner of Borrower or redeem, repurchase or
otherwise retire for value any partnership interest of any Partner of Borrower.
SECTION 6.09. MATERIAL AGREEMENTS . Enter into (i) any Affiliation
Agreement, (ii) any joint venture, partnership or other similar agreement or
(iii) any agreement, contract or lease that is entered into other than in the
ordinary course of business or that involves the furnishing or receipt of
consideration to or by Borrower with value in excess of $100,000 in any 12-month
period or $300,000 in the aggregate.
SECTION 6.10. RELATED PARTY TRANSACTION . Enter into any Related Party
Transaction.
SECTION 6.11. MODIFICATION OF PCS LICENSES. Surrender, not seek
renewal, or seek the transfer, of any PCS License held by Borrower or agree to
any material modification to any PCS License held by Borrower.
SECTION 6.12. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to
exist a security interest in, or lien upon, any of its assets of any kind, now
owned or hereafter acquired.
SECTION 6.13. SUBSIDIARY. Create or acquire any interest in any
Subsidiary.
SECTION 6.14. CHANGE IN BENEFITS. Continue to Partici- xxxx in the
F-Block Auction process or acquire any PCS License awarded to Borrower pursuant
to the F-Block Auction, if for any reason any of the benefits (including without
limitation bidding credits and instalment payment terms) available to a small
business as provided in the FCC Rules as of the date hereof shall cease to be
available to the Borrower.
9
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT . The occurrence of any of the
following events shall constitute an event of default hereunder (an "Event of
Default"):
(a) Borrower shall fail to pay any portion of the principal or interest
of the Loan or other amount payable hereunder or under the Note when due; or
(b) Any representation or warranty made by Borrower herein or in
connection with any other Loan Document, shall prove to have been incorrect in
any material respect when made; or
(c) Borrower shall default in any material respect in the timely
performance of or compliance with any term or condition contained in any Loan
Document, and such default shall not have been remedied or waived for twenty
(20) Business Days after such failure, or any Partner (other then Lender) shall
default in any material respect in the performance of or compliance with any
term or condition of the Partnership Agreement or the Expenses Agreement, and
such default shall not have been remedied within ten (10) Business Days of such
default; or
(d) Borrower shall (i) have an order for relief entered with respect to
it under any federal or state bankruptcy law or any similar law relating to the
enforcement of creditors rights generally (a "BANKRUPTCY LAW") (ii) not pay, or
admit in writing his inability to pay its debts generally as they become due,
(iii) make an assignment for the benefit of its creditors, (v) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian,
conservator, trustee, examiner, liquidator or similar official for his or any
substantial part of his property, (vi) institute any proceeding seeking an order
for relief under any Bankruptcy Law or seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (vii) take any action to authorize or effect any of
the foregoing actions, or (viii) fail to contest in good faith any appointment
or proceeding described in this Subsection 7.01(d); or
(e) A receiver, custodian, conservator, trustee, examiner, liquidator
or similar official shall be appointed for Borrower or any substantial part of
its property, or a proceeding described in Subsection 7.01(d)(v) shall be
instituted against Borrower and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60 consecutive
days;
(f) There shall have occurred an event of dissolution of the
Partnership within the meaning of Section 9.1 of the Partnership Agreement; or
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(g) The FCC shall have revoked, or has instituted proceedings to
revoke, any PCS Licenses granted to the Borrower in the F-Block Auction;
(h) The General Partner shall have Transferred any of its interest in
the Partnership; or
(i) There shall have occurred a Change of Ownership of the General
Partner within the meaning of Section 7.4 of the Partnership Agreement.
SECTION 7.02. ACCELERATION; REMEDIES UPON OCCURRENCE OF EVENT OF
DEFAULT . Upon the occurrence of any Event of Default described in clause (d),
(e), (f), (g), (h) or (i) of Section 7.01, the Loan (together with accrued
interest thereon) and all other amounts owing under this Agreement, the Note and
the other Loan Documents shall automatically become due and payable, and upon
the occurrence of any other Event of Default, Lender may, by notice to Borrower,
declare the Loan (together with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. COSTS, EXPENSES AND ATTORNEYS' FEES . Borrower shall pay
to Lender immediately upon demand the full amount of all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by Lender in connection
with (a) the preparation of amendments and waivers to the Loan Documents, (b)
the enforcement of Lender's rights and/or the collection of any amounts which
become due to Lender under any of the Loan Documents, and (c) the prosecution or
defense of any action in any way related to any of the Loan Documents, including
without limitation any action for declaratory relief.
SECTION 8.02. AMENDMENTS, ETC . No amendment or waiver of any provision
of the Loan Documents nor consent to any departure by Borrower or Lender
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the other party, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 8.03. NOTICES, ETC . Except as otherwise set forth in this
Agreement, all notices and other communications provided for hereunder shall be
in writing (including telegraphic, telex or facsimile communication) and mailed
or telegraphed or telexed or sent by facsimile or delivered, to Borrower or
Lender at their respective addresses set forth on the signature page hereof;
11
or, as to any other Person, at such other address as shall be designated by such
Person in a written notice to the other parties. All such notices and
communications shall be effective when deposited in the mails, sent by telex or
sent by facsimile, respectively, except that notices and communications to
Lender pursuant to Article II or VII shall not be effective until received by
Lender.
SECTION 8.04. INDEMNIFICATION. Borrower agrees to indemnify and hold
harmless Lender and the Collateral Agent and their respective affiliates,
directors, officers, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities and
expenses (including without limitation reasonable fees and expenses of counsel)
that may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of, the preparation
for a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with the Loan Documents, the proposed or actual use
of the proceeds therefrom or any of the other transactions contemplated hereby
or thereby, whether or not such investigation, litigation or proceeding is
brought by Borrower, creditors of Borrower, an Indemnified Party or any other
Person or an Indemnified Party is otherwise a party thereto, and whether or not
the transactions contemplated hereby or by any other Loan Document are
consummated, except to the extent such claim, damage, loss, liability or
expenses is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
SECTION 8.05. NO WAIVER; REMEDIES . No failure on the part of Lender or
Borrower to exercise, and no delay in exercising, any right under any of the
Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right under any of the Loan Documents preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 8.06. ASSIGNMENTS AND PARTICIPATION . Lender may sell, assign,
transfer, negotiate or grant participation to any other party in all or part of
the obligations of Borrower outstanding under the Loan Documents without
Borrower's prior written consent. Lender may, in connection with any actual or
proposed assignment or participation, disclose to the actual or proposed
assignee or participant, any information relating to Borrower. Lender intends to
borrow the funds necessary to make Loans to Borrower under this Loan Agreement
and may assign this Agreement and the Note as security for such borrowing.
SECTION 8.07. EFFECTIVENESS; BINDING EFFECT; GOVERNING LAW . This
Agreement and each other Loan Document shall be binding upon and inure to the
benefit of Borrower, Lender and their respective successors and assigns, except
that Borrower shall not
12
have the right to assign his rights hereunder or any interest herein without the
prior written consent of Lender. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW DOCTRINE.
SECTION 8.08. WAIVER OF JURY TRIAL . BORROWER AND LENDER HEREBY AGREE
TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING,
WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. LENDER AND BORROWER EACH ACKNOWLEDGE THAT
THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
LENDER AND BORROWER FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN.
SECTION 8.09. CONSENT TO JURISDICTION; VENUE; AGENT FOR SERVICE OF
PROCESS . All judicial proceedings brought against Borrower with respect to the
Loan Documents may be brought in any state or Federal court of competent
jurisdiction in the State of Delaware, and by execution and delivery of this
Agreement, Borrower accepts for itself and in connection with its properties,
generally and unconditionally, the nonexclusive jurisdiction of the aforesaid
courts, and irrevocably agrees to be bound by any judgment rendered thereby in
connection with the Loan Documents. Borrower irrevocably waives any right it may
have to assert the doctrine of FORUM NON CONVENIENS or to object to venue to the
extent any proceeding is brought in accordance with this Section 6.09.
SECTION 8.10. ENTIRE AGREEMENT . The Loan Documents embody the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
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SECTION 8.11. SEPARABILITY OF PROVISIONS . In case any one or more of
the provisions contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
SECTION 8.12. EXECUTION IN COUNTERPARTS . This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 8.13. INDEPENDENCE OF COVENANTS . All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default if such action is taken or
condition exists.
SECTION 8.14. SURVIVAL OF REPRESENTATIONS . All representations and
warranties of Borrower contained in any Loan Document shall survive delivery of
the Note and the making of the Loan herein contemplated.
SECTION 8.15. NON-RECOURSE TO GENERAL PARTNER. Lender shall have no
recourse against the Partnership Committee members, any Partner, any member of
the General Partner Control Group, nor any of their respective officers,
directors, employees, agents, shareholders, partners or controlling persons, nor
any of their respective assets (except to the extent such assets are also assets
of the Borrower), for the payment of any principal of or interest on the Loan,
commitment fees, or any other amount due under any Loan Document, or for the
breach of any representation, warranty, covenant or agreement (other than any
covenant or agreement set forth in Sections 6.2 and 6.4 of the Partnership
Agreement) under any Loan Document.
SECTION 8.16. RATIFICATION. If the Board of Directors of Xxxxx Corporation, an
Indiana corporation, shall not ratify the execution of the Loan Agreement dated
as of August 12, 1996, between it, as borrower, and _______________, as lender,
by August 26, 1996, Borrower shall, at the request of Lender, promptly withdraw
its application to participate in the F-Block Auction and, as soon as it has
received back its up-front deposit, promptly repay the Initial Loan. At that
time, this Agreement will terminate.
IN WITNESS OF THEIR AGREEMENT, the parties have executed this Agreement
as of the date first set forth above.
"LENDER"
XXXXX PCS CORPORATION F
By:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: President
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"BORROWER":
AER FORCE COMMUNICATIONS B, L.P.
By: AER FORCE COMMUNICATIONS CORPORATION,
its General Partner
By:
-----------------------------
Xxxxxxxx Xxxx
Title: President
EXHIBIT A
PROMISSORY NOTE
$11,800,000 August 12, 1996
FOR VALUE RECEIVED, Aer Force Communications B, L.P., a Delaware
limited partnership ("Borrower"), promises to pay to Xxxxx PCS Corporation F
("Lender") or order, by wire transfer sent to an account designated in writing
to Borrower from time to time by the holder hereof (or in such other manner or
at such other place as the holder hereof shall notify Borrower in writing), the
principal amount of Eleven Million Eight Hundred Thousand Dollars ($11,800,000)
or so much thereof as may have been loaned or deemed loaned by Lender to
Borrower pursuant to the Loan Agreement, with interest from the date hereof on
the unpaid principal balance hereunder at the rate of interest set forth in that
certain Loan Agreement of even date herewith between Borrower and Lender (the
"Loan Agreement"), including, without limitation, default interest as set forth
in Section 2.04 of the Loan Agreement. (Capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Loan
Agreement). The principal amount under this Note, and all accrued and unpaid
interest thereon, shall be due and payable on the Maturity Date, unless the
Maturity Date is extended or otherwise modified pursuant to the Loan Agreement.
Each payment under this Note shall first be credited against accrued
and unpaid interest, and the remainder shall be credited against principal. This
Note may be prepaid in whole or in part at any time, after five (5) Business
Days written notice of Borrower's intention to make any such prepayment, which
notice shall specify the date and amount of such prepayment. Partial payment
hereunder shall be in an aggregate principal amount of Fifty Thousand Dollars
($50,000) or any integral multiple thereof. The written notice of Borrower to
make a prepayment hereunder shall create an obligation of Borrower to pay the
amount specified on the date specified in such notice. Any prepayment shall be
without penalty except that interest shall be paid to the date of payment on the
principal amount prepaid.
Principal and interest shall be payable in lawful money of the
United States of America.
Upon the occurrence of an Event of Default under the Loan Agreement
the holder hereof may, at its option, without notice to or demand upon Borrower
or any other party, except as otherwise provided in the Loan Agreement, declare
immediately due and payable the entire principal balance hereof together with
all accrued and unpaid interest hereon, plus any other amounts then owing
pursuant to this Note or the Loan Agreement, whereupon the same shall be
immediately due and payable. On each anniversary of the date of any default
hereunder and while such default is continuing, all
16
interest which has become payable and is then delinquent shall, without curing
the default hereunder by reason of such delinquency, be added to the principal
amount due under this Note, and shall thereafter bear interest at the same rate
as is applicable to principal. In no event shall such interest or other amounts
be charged under this Note which would violate any applicable usury law.
If any default occurs in any payment due under this Note, Borrower
promises to pay all reasonable costs and expenses, including reasonable
attorneys' fees and expenses, incurred by each holder hereof in collecting or
attempting to collect the indebtedness under this Note, whether or not any
action or proceeding is commenced, and hereby waives the right to plead any and
all statutes of limitation as a defense to a demand hereunder to the full extent
permitted by law. None of the provisions hereof and none of the holders' rights
or remedies hereunder on account of any past or future defaults shall be deemed
to have been waived by the holders' acceptance of any past due installments or
by any indulgence granted by the holder to Borrower.
Borrower waives presentment, demand, protest and notice thereof or
of dishonor, and agree that they shall remain liable for all amounts due
hereunder notwithstanding any extension of time or change in the terms of
payment of this Note granted by any holder hereof, any change, alteration or
release of any property now or hereafter securing the payment hereof or any
delay or failure by the holder hereof to exercise any rights under this Note or
the Loan Agreement.
All amounts payable by Borrower pursuant to the Loan Documents shall
be secured by a security interest in all of the assets of Borrower. Lender's
recourse against any Partner of the Lender (and certain others) for the payment
of the principal of, interest on or other sums payable under this Note shall be
limited as set forth in Section 8.15 of the Loan Agreement.
Each Loan, or other credit extension made under this Note will be
evidenced by a written record made by Lender indicating the amount and date of
such transaction. Such records of Lender shall be deemed by Borrower and Lender
to be sufficient evidence of loans made, or credit extended under this Note.
This Note shall be governed by, and construed in accordance with,
the laws of the State of Delaware without giving effect to its choice of law
doctrine.
IN WITNESS WHEREOF, Borrower has caused this Note to be duly
executed the day and year first above written.
AER FORCE COMMUNICATIONS B, L.P.
By: Aer Force Communications Corporation,
its General Partner
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By:
--------------------------
Name: Xxxxxxxx Xxxx
Title: President
18
