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Exhibit 10.67
THIS INSTRUMENT IS SUBJECT TO THE SUBORDINATION AND INTERCREDITOR AGREEMENT
DATED AS OF JANUARY 28, 1999, AMONG THE CHASE MANHATTAN BANK, AS ADMINISTRATIVE
AGENT, TELCOM VENTURES, L.L.C. AND LCC INTERNATIONAL, INC., WHICH, AMONG OTHER
THINGS, CONTAINS PROVISIONS SUBORDINATING THE OBLIGATIONS OF THE MAKER OF THIS
INSTRUMENT TO THE PAYEE HEREOF TO SUCH MAKER'S OBLIGATIONS TO THE HOLDERS OF THE
SENIOR DEBT (AS DEFINED IN SAID SUBORDINATION AND INTERCREDITOR AGREEMENT), TO
WHICH PROVISIONS THE HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
AGREES.
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
$5,000,000 January 28 , 1999
FOR VALUE RECEIVED, LCC International, Inc., a Delaware corporation
("Maker"), promises to pay to the order of Telcom Ventures, L.L.C., a Delaware
limited liability company ("Payee"), on April 30, 2000 (the "Maturity Date"),
the principal amount of Five Million Dollars ($5,000,000), together with
interest on the unpaid principal balance from (i) the date hereof, in the case
of the portion of such principal balance for which the January 5, 1999 Note (as
defined below) was exchanged and (ii) the date on which Payee advances the
balance of the original principal amount of this Note, in the case of such
balance, in each of the foregoing cases said interest to be due and payable on
the Maturity Date, at a rate per annum equal to nine percent (9%) simple
interest, provided that, should an Event of Default (as defined below) exist and
be continuing for ten Business Days (as defined below), simple interest shall
instead accrue on the outstanding principal balance of this Note from the date
of such Event of Default at the rate of 12% per annum until such Event of
Default is cured or waived, all principal or interest under this Note is paid in
full or this Note is duly converted in full into Maker Common Stock (as defined
below) pursuant to the provisions of this Note. Interest shall be calculated on
the basis of a year of 365 days, as applicable, and charged for the actual
number of days elapsed. All payments hereunder shall be made in lawful money of
the United States of America (except to the extent paid in Maker Common Stock
upon Conversion of this Note as provided below).
The outstanding principal amount of this Note, together with interest
accrued thereon as provided herein, (the "Maturity Amount") shall be due and
payable in full on the Maturity Date or such earlier date on which (i) a Major
Business Transaction (as defined below) occurs or (ii) this Note may become due
following an Event of Default (as defined below) as provided below. In addition,
in
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the event this Note becomes due and payable as a result of the occurrence of a
Major Business Transaction at any time prior to August 1, 1999, additional
interest in the amount of the product of (i) $1,250 and (ii) the number of days
elapsed between February 1, 1999 and the date on which such Major Business
Transaction occurred shall be due and payable at such time.
All payments of principal and interest on this Note shall be made by
check or wire transfer of immediately available funds to an account specified by
Payee in written instructions to Maker at least three (3) Business Days prior to
the Maturity Date (or such earlier date on which this Note may become due). If
any payment of principal or interest on this Note is due on a day which is not a
Business Day, such payment shall be due on the next succeeding Business Day, and
such extension of time shall be taken into account in calculating the amount of
interest payable under this Note. "Business Day" means any day other than
Saturday, Sunday or a legal holiday in the Commonwealth of Virginia.
At any time after August 1, 1999 and prior to the Maturity Date, Maker
may prepay all or any portion of the outstanding principal balance and accrued
interest under this Note to Payee, upon at least ten (10) Business Days' notice
to Payee stating the date and amount of prepayment (both as to principal and
interest) and providing Payee with an opportunity to exercise its Conversion (as
defined below) option as set forth below. If Payee does not exercise its
Conversion option as set forth below prior to the prepayment date set forth in
the prepayment notice, Maker may proceed with such prepayment, and the
Conversion option shall be deemed to have expired with respect to the amount so
prepaid.
The occurrence of any one or more of the following events with respect to
Maker shall constitute the occurrence of a Major Business Transaction for
purposes of this Note ("Major Business Transaction"):
(a) Sale of equity securities of Maker as a result of which one "person"
or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Act of 1934, as amended), other than Payee or Affiliates of Payee, holds more
than 50% of Maker's outstanding common stock, provided that a sale of equity
securities solely by Payee or any of its Affiliates shall not be taken into
account in determining whether the foregoing threshold has been reached.
"Affiliate" means, as to any person, any other person that, directly or
indirectly, controls, is controlled by or is under common control with such
person or is a director or officer of such person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a person means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting stock, by
contract or otherwise;
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(b) Sale of all or substantially all of the assets of Maker, in one
transaction or series of related transactions, other than to Payee or Affiliates
of Payee;
(c) Occurrence with respect to Maker of an Event of Voluntary Bankruptcy
(as defined below) or an Event of Involuntary Bankruptcy (as defined below);
(d) Distributions with respect to the capital stock of Maker of more than
5% of Maker's assets, other than to Payee or Affiliates of Payee;
(e) Receipt by Maker, Microcell Management, Inc. ("MMI") or any other
subsidiary or division of Maker from any person or entity other than Payee or
any Affiliate of Payee of equity financing or debt financing having a maturity
of at least one year, in each case in an amount of at least Ten Million Dollars
($10,000,000), provided, however, if such financing is provided pursuant to the
Credit Agreement (as defined below) as amended from time to time, the provisions
of this clause (e) shall not apply until the total principal amount available to
Maker and its subsidiaries under the Credit Agreement is in excess of Twenty
Million Dollars ($20,000,000); or
(f) Sale of all or substantially all of Maker's interest in MMI or sale
or all or substantially all of Maker's interest in any other subsidiary or
division of Maker for a gross sale price of at least Ten Million Dollars
($10,000,000), other than any such sale to Payee or any Affiliate of Payee.
The occurrence of any one of more the following events with respect to
Maker shall constitute an event of default hereunder ("Event
of Default"):
(a) If Maker shall fail to pay when due any payment of principal or
interest on this Note and such failure continues for
five days;
(b) If, pursuant to or within the meaning of the United States Bankruptcy
Code or any other federal or state law relating to insolvency or relief of
debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary case or
proceeding; (ii) consent to the entry of an order for relief against it in an
involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing its inability to pay its debts
as they become due (each, an "Event of Voluntary Bankruptcy");
(c) If a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (i) is for relief against Maker in an involuntary case,
(ii) appoints a trustee, receiver, assignee, liquidator or similar official for
Maker or substantially all of Maker's properties, or (iii) orders the
liquidation of
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Maker, and in each case the order or decree is not dismissed within 60 days
(each, an "Event of Involuntary Bankruptcy"); or
(d) If any Indebtedness (as defined below) of Maker in excess of $500,000
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled prepayment), prior to the maturity date thereof. For
purposes of the foregoing, "Indebtedness" means any obligation of Maker for the
payment of borrowed money other than trade debt or operating leases incurred in
the ordinary course of business.
If any Event of Default shall have occurred and be continuing, Payee may, by
notice to Maker, declare the entire outstanding principal of this Note, and all
accrued and unpaid interest thereon, to be due and payable immediately, and upon
any such declaration the entire outstanding principal of this Note, and said
accrued and unpaid interest, shall become immediately due and payable, provided
that, if an Event of Default under clause (b) or (c) of the foregoing sentence
shall have occured, the outstanding principal of this Note, and all accrued and
unpaid interest thereon, shall immediately become due and payable without any
declaration.
At any time from and after August 1, 1999, either Maker or Payee, at its
sole and absolute option, may convert (the "Conversion"), the then outstanding
principal and accrued but unpaid interest under this Note, in whole but not in
part, into the number of shares of the Class A Common Stock, par value $.01 per
share, of Maker ("Maker Common Stock"), equal to such then outstanding principal
and accrued but unpaid interest due under this Note divided by $6.22, subject to
adjustment as provided below (the "Conversion Price"). In addition, as provided
above, Payee shall have the right to convert the portion of the outstanding
principal and interest due under this Note that Maker proposes to prepay from
and after August 1, 1999 into the number of shares of Maker Common Stock equal
to the portion of the outstanding principal and interest to be prepaid divided
by the Conversion Price. Each Conversion shall constitute payment in full of the
amount being so converted.
If Maker at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) the outstanding shares of Maker Common Stock into
a greater number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be proportionately reduced, and if Maker at any time
combines (by reverse stock split or otherwise) the outstanding shares of Maker
Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased. Any
adjustment in the Conversion Price shall, in the case of a dividend or
distribution, be made as of the record date therefor and, in all other cases, be
made as of the effective date thereof. Promptly upon any adjustment of the
Conversion Price, Maker shall give written notice thereof to Payee, setting
forth in reasonable detail the calculation thereof.
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In the event of any reorganization or recapitalization of Maker or in the
event Maker consolidates with or merges into or with another entity, then and in
each such event, Payee, upon any Conversion occurring at any time after the
consummation of such reorganization, recapitalization, consolidation or merger,
shall be entitled to receive shares of Maker Common Stock or other securities or
property to which Payee would have been entitled upon such consummation if the
outstanding principal balance and interest due under this Note had been
converted in full prior to such consummation. In such case, the terms of this
Note regarding Conversion shall survive the consummation of any such
reorganization, recapitalization, consolidation or merger and shall be
applicable to the Maker Common Stock, securities or other property receivable
upon any Conversion after such consummation, with appropriate adjustments
thereto.
If Maker at any time distributes the shares of common stock or other
equity securities having general rights to elect the directors or equivalent
managers of any of its subsidiaries to the shareholders of Maker ("Subsidiary
Spin-Off Shares"), Payee shall have the right upon any Conversion hereunder to
receive a pro rata portion, based upon the proportion of the total amount
outstanding under this Note at the time of such Conversion represented by the
amount outstanding under this Note being so converted, such number of Subsidiary
Spin-Off Shares as Payee would have been entitled to receive had the total
amount outstanding under this Note been converted in full prior to such
distribution, adjusted to take into account any subdivision (by any stock split,
stock dividend, recapitalization or otherwise) or any combination (by reverse
stock split or otherwise) of the Subsidiary Spin-Off Shares which occurs at any
time following such distribution. Maker shall take such actions in connection
with such distribution as shall be reasonably necessary to implement the rights
of Payee under this paragraph.
Maker or Payee may effect a Conversion hereunder by written notice to the
other party, at any time or from time to time until the outstanding principal
and accrued but unpaid interest under this Note has been paid in full, of its
election to effect the Conversion and the portion of the outstanding principal
and accrued but unpaid interest being converted. Such Conversion shall be deemed
effective upon receipt of such notice by the recipient party. Maker shall at all
times reserve and keep available for issuance upon the Conversion of this Note,
free from any preemptive rights, such number of its authorized but unissued
shares of Maker Common Stock as will from time to time be sufficient to permit
the exercise in full by either Maker or Payee of the Conversion rights
hereunder. Maker shall deliver or cause to be delivered, to Payee, promptly
following any Conversion a certificate for the number of shares of Maker Common
Stock issued upon such Conversion. Payee shall have the right, through its
subsidiary RF Investors, L.L.C. ("RF Investors"), to include the shares of Maker
Common Stock issued pursuant to any Conversion in registrations of shares of
Maker Common Stock effected on behalf of RF Investors pursuant to the
Registration Rights Agreement, dated as of July 25,
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1996, by and among Maker, RF Investors and MCI Telecommunications Corporation.
Notwithstanding any provision of this Note to the contrary, Maker
covenants and agrees, and Payee by acceptance of this Note likewise covenants
and agrees, that the payment of the principal of, interest on and all other
amounts under this Note shall be subject to the terms of that certain
Subordination and Intercreditor Agreement, dated the date hereof, among The
Chase Manhattan Bank, Administrative Agent, Maker and Payee.
This Note shall be pari passu with the terms of the indebtedness between
Maker and MCI Telecommunications Corporation pursuant to the (i) Subordinated
Note due 2000, dated June 28, 1994, of Maker (as successor to LCC, L.L.C.) to
MCI Telecommunications Corporation in the principal amount of $20,000,000 and
(ii) Subordinated Note due 2000, dated June 28, 1994, of Maker (as successor to
LCC, L.L.C., successor to Telcom Ventures, L.L.C.) to MCI Telecommunications
Corporation in the principal amount of $30,000,000.
Presentment, demand, protest and all other notices of any kind from or to
be given by Payee are hereby expressly waived. No failure or delay on the part
of Payee in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. No waiver by Payee of a breach of any term,
provision or condition of this Note will constitute a waiver of any succeeding
breach of the same or any other provision hereof. No waiver, amendment,
modification or termination of any provision of this Note shall be effective
unless signed in writing by the party to be charged thereby.
The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to Payee at law or in equity or otherwise. In
the event it is necessary for any person or entity to take any legal action to
enforce any of the terms, provisions or conditions of this Note, the prevailing
party will be entitled to recover from the losing party all reasonable
attorneys' fees and all costs and expenses relating to such legal action.
Notwithstanding anything else to the contrary herein, the effectiveness
of any Conversion shall be delayed in the event and to the extent, but only to
the extent (and notice of Conversion shall be deemed revised to the extent
necessary to permit Maker to comply with this sentence), that shareholder
approval would be required for such Conversion (taken together with any issuance
of Maker Common Stock which would be considered under laws or applicable rules
and regulations of The Nasdaq Stock Market together with such Conversion in
determining whether shareholder approval is required) or in the event the
issuance of Maker Common Stock is subject to a filing under the
Xxxx-Xxxxx-Xxxxxx Antitrust
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Improvements Act of 1976, as amended (the "HSR Act"), unless and until such
shareholder approval has been obtained or until the termination or expiration of
any waiting periods under the HSR Act, respectively. Maker shall use its best
efforts to obtain all necessary shareholder approvals to such Conversion,
including without limitation submitting such matters to a vote of the
shareholders of the Corporation at the next annual meeting of shareholders to be
held after the date hereof. Maker shall, and by its acceptance of this Note,
Payee agrees to, use its reasonable efforts to make any filings required under
the HSR Act as promptly as practicable and to cooperate with any requests for
additional information made by any governmental agency in connection therewith,
provided, that, in the event that despite such reasonable efforts by Maker and
Payee any approvals required under the HSR Act are not obtained within nine
months from the original contemplated date of the Conversion, the party electing
to make the Conversion may elect to abandon the Conversion, in which event this
Note shall continue to remain outstanding.
All notices and other communications provided for hereunder shall be in
writing and mailed, telecopied or delivered, if to Payee, at Telcom Ventures,
L.L.C., 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: President and General Counsel, Facsimile (000) 000-0000; and if to
Maker, at LCC International, Inc., 0000 Xxxxx Xxxxxx Xxxxx, XxXxxx, Xxxxxxxx
00000, Attention: Xxxxx X. Xxxxxx, Facsimile (000) 000-0000; or as to each such
party, at such other address as shall be designated by such party in a written
notice to the other party. All such notices and communications shall be
effective when received as indicated by confirmation of such receipt set forth
on a return receipt, telecopier confirmation, or other form of receipt
confirmation.
This Note shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Virginia, regardless of the laws that might
otherwise govern under applicable principles of conflicts of law.
Whenever used herein, the words "Maker" and "Payee" shall be deemed to
include their respective successors and assigns.
This Note supersedes in its entirety and is being exchanged for all
amounts due under that certain Subordinated Promissory Note executed and
delivered by Maker, dated January 5, 1999, in favor of Payee (the "January 5,
1999 Note"), and Payee by acceptance of this Note agrees that this Note
supersedes in its entirety and is being exchanged for the January 5, 1999 Note
and that no amounts are or hereafter will become due and owing under the January
5, 1999 Note.
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IN WITNESS WHEREOF, the undersigned has duly executed this Note, or has
caused this Note to be duly executed on its behalf, as of the day and year first
hereinabove set forth.
[SEAL] LCC INTERNATIONAL, INC.
By: /S/ XXXXXXX XXXXX
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Name: Xxxxxxx Xxxxx
Title: Chief Financial Officer
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