EXHIBIT 10.11
EXECUTION COPY
CREDIT AGREEMENT
BY AND AMONG
CRICKET COMMUNICATIONS, INC.
(AS LENDER)
AND
ALASKA NATIVE BROADBAND 1 LICENSE, LLC
(AS BORROWER)
AND
ALASKA NATIVE BROADBAND 1, LLC
(AS GUARANTOR)
December 22, 2004
CREDIT AGREEMENT
This Credit Agreement (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT") is entered into as
of December 22, 2004 (the "EFFECTIVE DATE"), by and among Cricket
Communications, Inc., a Delaware corporation ("LENDER"), Alaska Native Broadband
1 License, LLC, a Delaware limited liability company ("BORROWER"), and Alaska
Native Broadband 1, LLC, a Delaware limited liability company ("GUARANTOR," and
together with Borrower, the "LOAN PARTIES").
RECITALS
WHEREAS, subject to the terms and conditions set forth herein, Lender and
the Loan Parties wish to make and establish a line of credit for Borrower in the
aggregate amount not to exceed the Loan Commitment Amount for the purposes of
Borrower participating as a bidder and obtaining Licenses in the Auction, and to
Build-Out and operate the ANB-1 License Systems.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
SECTION 1. DEFINED TERMS
The following terms shall have the following meanings in this Credit
Agreement:
"AFFILIATE" shall mean, with respect to a Person, any other Person directly
or indirectly Controlling, Controlled by or under Common Control with such
Person at any time during the period for which the determination of affiliation
is being made.
"ACQUISITION SUB-LIMIT" shall mean $65.0 million, which shall be used
solely to participate in the Auction and to pay the net winning bids for
licenses for which Borrower is the Winning Bidder, including to make any
required deposits or down payments to the FCC in connection therewith.
"AMORTIZATION COMMENCEMENT DATE" shall mean the date that is thirty (30)
days after the Substantial Completion Date; provided, however, that if ANB has
exercised the Put (as defined in the LLC Agreement) in accordance with the terms
of the LLC Agreement prior to such Amortization Commencement Date, the
Amortization Commencement Date shall be extended to the date of the closing of
the Put as set forth in the LLC Agreement.
"ANB" shall mean Alaska Native Broadband, LLC, a Delaware limited liability
company.
"ANB NEGATIVE PLEDGE AGREEMENT" shall mean the ANB Negative Pledge
Agreement in substantially the form of Exhibit A pursuant to which ANB agrees
not to cause or permit any liens or encumbrances to attach to any or all of its
membership interests in Guarantor or, under certain circumstances, to pledge all
of its membership interests in Guarantor.
"ANB-1 LICENSE SYSTEM" shall mean the Commercial Mobile Radio Service
system(s) constructed and operated, or to be constructed and operated, by
Borrower for the purpose of providing service authorized under a License or
Licenses.
"APPLICABLE LAW" shall mean with respect to any Person, any federal, state,
local or foreign law, statute, ordinance, rule, regulation, Judgment, order,
injunction or decree or any interpretation or administration of any of the
foregoing by, any Governmental Entity, whether in effect as of the Effective
Date or thereafter, and in each case as amended, applicable to such Person or
its Affiliates or their respective assets, including, without limitation, the
FCC Rules.
"AUCTION" shall mean the auction of broadband personal communications
service licenses being conducted by the FCC designated by the FCC as Auction No.
58 and described by the FCC in Public Notice, DA 04-3005 (rel. Sep. 16, 2004)
and Public Notice, DA 04-3270 (rel. Oct. 15, 2004), as the same may be
rescheduled or modified by the FCC.
"AUCTION DATE" shall mean the date the first round of the bidding in the
Auction commences.
"AUCTION BENEFITS" shall have the meaning given to that term in the LLC
Agreement.
"AUCTION FUNDS" shall mean funds paid by the Borrower to the FCC in
accordance with FCC Rules (a) to become eligible to participate in the Auction,
(b) as a down payment or winning bid payment for any license for which Borrower
is the Winning Bidder, or (c) as an Auction related bid withdrawal payment.
"BALANCE AMOUNT" shall have the meaning set forth in Section 2.2(a)(iii).
"BIDDING CREDIT" shall mean a "bidding credit" as defined in the FCC Rules
at 47 C.F.R. Sections 24.712(b) and 24.717(b).
"BORROWER" shall have the meaning set forth in the preamble hereto.
"BORROWER CHANGE IN CONTROL EVENT" shall be deemed to have occurred if (a)
there shall be consummated (i) any consolidation or merger of Borrower in which
Borrower is not the continuing or surviving entity, other than a merger of
Borrower in which the holders of the equity securities of Borrower immediately
prior to the merger have the same proportionate ownership of the voting equity
securities of the surviving entity immediately after the merger, or (ii) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of Borrower,
(b) the member(s) of Borrower approve any plan or proposal for the liquidation
or dissolution of Borrower, or (c) Borrower ceases to be a wholly-owned
Subsidiary of Guarantor.
"BORROWER MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
the business, properties, assets, liabilities, prospects or condition (financial
or otherwise) of Borrower, except for any such effects resulting directly or
indirectly from (i) changes in the wireless industry generally, or (ii) changes
in general economic conditions or the securities markets generally.
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"BORROWER OBLIGATIONS" shall mean the collective reference to the payment
and performance by Borrower of each covenant and agreement of Borrower contained
in this Credit Agreement and the other Loan Documents to which Borrower is a
party or by which it is bound.
"BUILD-OUT" shall mean the construction and associated operation by
Borrower, if any, of a Commercial Mobile Radio Service system in accordance with
the FCC Rules, 47 C.F.R. Section 24.203.
"BUILD-OUT LOAN REQUEST" shall have the meaning set forth in Section
2.2(b).
"BUILD-OUT SUB-LIMIT" shall mean an amount equal to $4.5 million, which
shall be used by Borrower to fund the Build-Out and initial operation of the
ANB-1 License Systems, including payment of management fees, if any, to ANB and
Cricket; provided, however, that in the event the Required Capital Contributions
have not been fully expended by Borrower in paying to the FCC the amount of the
net winning bids for Licenses for which it was the Winning Bidder and any
Auction-related bid withdrawal payments, the Build-Out Sub-Limit shall be
reduced by the amount of the unused portion of the Required Capital
Contributions.
"BUSINESS" shall have the meaning given to that term in the LLC Agreement
"BUSINESS DAY" shall mean a day other than (a) a Saturday or Sunday or (b)
a day on which banking institutions are authorized or required by law or
executive order to remain closed in New York City.
"CLAIMS" shall have the meaning set forth in Section 8.4.
"COMMERCIAL MOBILE RADIO SERVICE" or "CMRS" shall mean a commercial mobile
radio service as defined in 47 C.F.R. Section 20.3.
"COMMITMENT PERIOD" shall mean the period commencing on the Effective Date
and expiring on the earliest to occur of (a) the Amortization Commencement Date,
(b) the date that the LLC Agreement is terminated by either party pursuant to
Section 13.1(b), (c) the date on which the Management Agreement has been
terminated (following the expiration of the applicable notice period) by Lender
pursuant to Section 10.2(b) thereof (other than Section 10.2(b)(iv)) or by
Borrower pursuant to Section 10.2(a)(v) thereof, (d) the date on which Borrower
enters into any contract or agreement pursuant to which (i) any direct
competitor of Lender or any entity in which any direct competitor of Lender
owns, directly or indirectly, an interest in excess of five percent (5%), is
engaged to provide management or technical services to Borrower in the nature of
those provided by Lender under the Management Agreement, or (ii) Borrower has
the right or obligation to use any trademark, service xxxx, trade name, logo,
brand or other similar intellectual property owned, licensed or otherwise
controlled by any direct competitor of Lender (other than Borrower or Guarantor)
or any entity in which any direct competitor of Lender (other than Borrower or
Guarantor) owns, directly or indirectly, an interest in excess of five percent
(5%), unless, in either case, the Lender has consented thereto or (e) the
Mandatory Prepayment Date.
"CONTROL" (including the correlative meanings of the terms "Controlled by,"
"Controlling" and "under Common Control with") as used with respect to any
Person, shall
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mean the possession, directly or indirectly, of the power to direct or cause the
direction of management policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
"CONTROL AGREEMENT" shall mean the Control Agreement(s) substantially in
the form of Exhibit B pursuant to which each of the Loan Parties shall permit
Lender to establish control of any deposit and/or securities accounts either of
them has with any banking or brokerage institution.
"CREDIT AGREEMENT" shall have the meaning set forth in the preamble hereto.
"DEFAULT RATE" shall have the meaning set forth in Section 2.3(e).
"DOWN PAYMENT AMOUNT" shall have the meaning set forth in Section
2.2(a)(ii).
"EFFECTIVE DATE" shall have the meaning set forth in the preamble hereto.
"EVENT OF DEFAULT" shall have the meaning set forth in Section 7.1.
"FCC" shall mean the Federal Communications Commission or any successor
thereto.
"FCC RULES" shall mean the Communications Act of 1934, as amended, the
rules and regulations established by the FCC and codified in Title 47 of the
Code of Federal Regulations, as the same may be modified or amended from time to
time hereafter, and effective orders, rulings, and public notices of the FCC.
"FINAL PRINCIPAL AMOUNT" shall have the meaning set forth in Section
2.3(c).
"FINANCING STATEMENTS" shall mean such UCC financing statements and other
instruments reasonably required by Lender to create, perfect and/or maintain the
security interests granted by the Loan Parties and ANB under the ANB Negative
Pledge Agreement, the Guarantor Pledge Agreement and the Security Agreement.
"FUNDING DATE" shall mean each date on which Lender makes a Loan to
Borrower.
"GAAP" shall mean United States generally accepted accounting principles,
as in effect from time to time.
"GOVERNMENTAL ENTITY" shall mean any government or political subdivision
thereof, including without limitation, any regional or municipal authority, any
governmental department, ministry, commission, board, bureau, agency, regulatory
authority, instrumentality, judicial or administrative body, having jurisdiction
over the matter or matters in question, including without limitation the FCC.
"GUARANTOR" shall have the meaning set forth in the preamble hereto.
"GUARANTOR CHANGE IN CONTROL EVENT" shall be deemed to have occurred if (a)
there shall be consummated (i) any consolidation or merger of Guarantor in which
Guarantor is not the
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continuing or surviving entity, other than a merger of Guarantor in which the
holders of the equity securities of Guarantor immediately prior to the merger
have the same proportionate ownership of the voting equity securities of the
surviving entity immediately after the merger, or (ii) any sale, lease, exchange
or other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of Guarantor, or (b) the member(s) of
Guarantor approve any plan or proposal for the liquidation or dissolution of
Guarantor.
"GUARANTOR MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
the business, properties, assets, liabilities, prospects or condition (financial
or otherwise) of Guarantor, except for any such effects resulting directly or
indirectly from (i) changes in the wireless industry generally, or (ii) changes
in general economic conditions or the securities markets generally.
"GUARANTOR OBLIGATIONS" means all liabilities and obligations of Guarantor
that may arise under or in connection with the Credit Agreement (including,
without limitation, Section 3) and the other Loan Documents to which it is a
party or by which it is bound, whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses and otherwise.
"GUARANTOR PLEDGE AGREEMENT" shall mean the Pledge Agreement in
substantially the form attached hereto as Exhibit C pursuant to which Guarantor
shall pledge to Lender all Guarantor's membership interests in Borrower as
security for the Obligations.
"INITIAL APPLICATION DATE" shall have the meaning set forth in Section 5.8.
"INITIAL LOAN DATE" shall have the meaning set forth in Section 2.2(a)(i).
"INITIAL LOAN AMOUNT" shall have the meaning set forth in Section
2.2(a)(i).
"JUDGMENT" shall mean any judgment, writ, order, injunction, award or
decree of any court, judge, justice or magistrate, including any bankruptcy
court, or arbiter, and any order of or by any other Governmental Entity.
"LENDER" shall have the meaning set forth in the preamble hereto.
"LICENSE" shall mean any license (a) issued by the FCC to the Borrower for
which Borrower is a Winning Bidder or (b) any other license issued by the FCC
(i) now to the Borrower or (ii) hereafter held by Borrower.
"LITIGATION" shall mean any claim, action, suit, proceeding, arbitration,
investigation, hearing or other activity or procedure that could result in a
Judgment, and any notice of any of the foregoing.
"LLC AGREEMENT" shall mean the Amended and Restated Limited Liability
Company Agreement of Alaska Native Broadband 1, LLC, a Delaware limited
liability company, by and between Lender and ANB dated as of the Effective Date,
as amended from time to time.
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"LOAN COMMITMENT AMOUNT" shall mean the aggregate sum of (a) the
Acquisition Sub-Limit and (b) the Build-Out Sub-Limit, which aggregate sum in no
event shall exceed $69.5 million.
"LOAN DOCUMENTS" shall mean this Credit Agreement, the Note, the Security
Agreement, the Guarantor Pledge Agreement, the Control Agreement(s), the ANB
Negative Pledge Agreement and all other agreements, instruments, certificates
and other documents at any time executed and delivered pursuant to or in
connection herewith or therewith, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time after the
Effective Date. For the avoidance of doubt, the Loan Documents shall not include
the LLC Agreement, the Management Agreement, the Trademark License Agreement or
any agreement, instrument, certificate or other document at any time executed
and delivered pursuant to or in connection with the LLC Agreement, the
Management Agreement or the Trademark License Agreement, as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time after the Effective Date.
"LOANS" shall mean the loans to Borrower evidenced by the Note, not to
exceed in the aggregate the Loan Commitment Amount. Each advance made under the
Note is a Loan.
"LOAN PARTIES" shall have the meaning set forth in the preamble hereto.
"MANAGEMENT AGREEMENT" shall mean the Management Services Agreement dated
as of the Effective Date by and between Borrower and Lender, as amended, amended
and restated, supplemented or otherwise modified from time to time.
"MANDATORY PREPAYMENT DATE" shall mean the date on which Borrower receives
a refund of Auction Funds (less any amounts retained by the FCC) because (a)
Borrower is not the Winning Bidder for any licenses or (b) Borrower is the
Winning Bidder for a license or licenses and the FCC does not grant at least one
such license to Borrower.
"MATURITY DATE" shall mean the date that is forty-eight (48) months after
the Amortization Commencement Date.
"NOTE" shall mean that certain Promissory Note in the form attached hereto
as Exhibit D, executed by Borrower in favor of Lender and delivered by Borrower
to Lender in accordance with the terms of this Credit Agreement.
"PERMITTED LIENS" shall mean (a) any and all liens and security interests
created pursuant to any of the Loan Documents, (b) liens for taxes, fees,
assessments and governmental charges not delinquent or that are being contested
in good faith by appropriate proceedings; provided, however, that Borrower shall
have set aside on its books and shall maintain adequate reserves for the payment
of same in conformity with GAAP, (c) liens, deposits or pledges made to secure
statutory obligations, surety or appeal bonds, or bonds for the release of
attachments or for stay of execution, or to secure the performance of bids,
tenders, contracts (other than for the payment of borrowed money), leases or for
purposes of like general nature in the ordinary course of business, (d) purchase
money liens on tangible personal property in the nature of office equipment
utilized in the normal operation of the business of Borrower, which liens
encumber only the equipment acquired with such indebtedness, and (e) liens for
indebtedness permitted
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under the terms of Section 6.9(b), which liens encumber only the equipment
acquired with such purchase money indebtedness.
"PERSON" shall mean any natural person, corporation, firm, unincorporated
organization, association, partnership, limited liability company, business
trust, joint stock company, joint venture organization, entity or business of
any kind.
"POPS" shall have the meaning commonly given to such term in the United
States telecommunications industry and shall be based on 2004 population
statistics provided by Claritas, Inc.
"REFUND" shall mean any Auction Funds that are refunded to Borrower.
"REFUND DATE" shall mean, for each Refund, the date on which Borrower
receives such Refund.
"REQUIRED CAPITAL CONTRIBUTIONS" shall mean the capital contributions
required to be made to Borrower by Guarantor, which shall not be less $4 million
(provided Cricket has made capital contributions to Guarantor of at least $3
million), as contemplated by the LLC Agreement. If Cricket fails to make at
least $3 million of capital contributions to Guarantor, then "Required Capital
Contributions" shall mean capital contributions made to Borrower by Guarantor,
which shall not be less than $1 million.
"SECURITY AGREEMENT" shall mean the Security Agreement dated as of the
Effective Date by and between Lender and the Loan Parties in substantially the
form attached hereto as Exhibit E.
"SUBSIDIARY" shall mean, with respect to any legal entity, any other
corporation, limited liability company, general or limited partnership, limited
liability partnership, joint venture, trust or other entity of which the
outstanding capital stock possessing a majority of voting power in the election
of directors or their equivalent is owned or controlled by such entity, directly
or indirectly.
"SUBSTANTIAL COMPLETION DATE" shall mean the date on which Guarantor has
notified Cricket, pursuant to the LLC Agreement, that the Build-Out of the ANB-1
License System for each of the Licenses satisfies the construction requirements
of Section 24.203 of the FCC Rules.
"TRADEMARK LICENSE AGREEMENT" shall mean a Trademark License Agreement that
may be entered into by Lender and Borrower, if any, at any time during the
Commitment Period.
"WINNING BIDDER" shall mean a Person who is the winning bidder in the
Auction for a license offered by the FCC therein (a) as set forth in the FCC's
post-Auction public notice identifying Auction winning bidders or (b) by virtue
of having accepted the FCC's offer of a license for the amount of its final
Auction bid therefor following the default of the winning bidder for that
license described in clause (a).
"WORKING CAPITAL" shall mean a reasonable amount of working capital
(including without limitation the payment of all fees and expenses) as
determined in accordance with the
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operating budget of Borrower, which budget is approved in accordance with the
LLC Agreement.
SECTION 2. TERMS OF LOAN
2.1 THE LOANS.
Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this Credit Agreement, Lender agrees
to make Loans to Borrower from time to time during the Commitment Period in an
aggregate principal amount not to exceed at any time the Loan Commitment Amount;
provided, however, Lender shall have no obligation to make any Loans if ANB,
either directly or through Guarantor (but not the Bidding Manager acting on its
own volition or in accordance with the Bidding Protocol (as defined in the LLC
Agreement)), causes Borrower to bid on a license that was not a target license
as set forth in the Bidding Protocol or causes Borrower to purchase a targeted
license by bidding materially in excess of the established bid limits for such
license, in each case, without the prior written consent (which may be delivered
by electronic mail, facsimile transmission or otherwise) of Lender or of Cricket
Communications, Inc. under the Bidding Protocol (which consent shall be deemed
given by Cricket if the member of the Auction Committee (as defined in the
Bidding Protocol) appointed by Cricket has approved thereof).
2.2 PROCEDURE FOR BORROWING.
a. Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this Credit Agreement, Lender shall
make the following Loans to Borrower in accordance with the following schedule:
(i) On the date (the "INITIAL LOAN DATE") that is two (2)
Business Days prior to the date on which Borrower is required under FCC Rules to
make an upfront payment to become eligible to participate in the Auction, Lender
shall make a Loan to Borrower in the amount of up to $8.0 million, as requested
in writing by Borrower at least two (2) Business Days prior to the Initial Loan
Date (such requested Loan amount, the "INITIAL LOAN AMOUNT"), all of which
Borrower shall timely pay to the FCC in accordance with FCC Rules to become
eligible to participate in the Auction.
(ii) In the event that Borrower is a Winning Bidder, then on
the date that is two (2) Business Days prior to the date on which Borrower is
required to submit sufficient funds to bring its total amount of money on
deposit with the FCC to twenty percent (20%) of the aggregate amount of
Borrower's net winning bids (the "DOWN PAYMENT AMOUNT"), Lender shall make a
Loan to Borrower in an amount equal to the following formula (to the extent such
sum is greater than zero): (A) the Down Payment Amount, plus (B) the aggregate
amount of any bid withdrawal payment obligations incurred by Borrower in the
Auction, less (C) the Required Capital Contributions, less (D) the Initial Loan
Amount. Borrower shall use the entire proceeds of the foregoing Loan (if any)
and the Required Capital Contributions to timely pay the Down Payment Amount to
the FCC in accordance with FCC Rules.
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(iii) In the event that Borrower is a Winning Bidder, then
on the date that is two (2) Business Days prior to the date on which Borrower
shall be required to submit the then remaining balance of the aggregate amount
of its net winning bids to the FCC (the "BALANCE AMOUNT"), Lender shall make a
Loan to Borrower in an amount equal to the following formula (to the extent such
sum is greater than zero): (A) the Balance Amount, less (B) the Required Capital
Contributions to the extent that the Required Capital Contributions were not
expended in full in making the payment set forth in Section 2.2(a)(ii). Borrower
shall use the proceeds of any Loan made pursuant to this Section 2.2(a)(iii), if
any, and any remaining Required Capital Contributions to timely pay the Balance
Amount to the FCC in accordance with FCC Rules.
(iv) In no event shall Lender be required to make an
aggregate amount of Loans under this Section 2.2(a) in excess of the Acquisition
Sub-Limit.
b. Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this Credit Agreement, Lender shall
make Loans to Borrower from time to time, within five (5) Business Days of a
written request of Borrower (each, a "BUILD-OUT LOAN REQUEST") for Borrower to
fund the Build-Out and initial operation of the ANB-1 License Systems, including
Working Capital (including for expenses incurred prior to, during or after the
Auction and prior to the date on which Borrower is granted any Licenses). Each
Build-Out Loan Request shall provide the following information (i) the amount of
the Loan, which shall not exceed the reasonable amount necessary to fund
Borrower's Build-Out expenses and Working Capital for the following calendar
quarter, and (ii) wiring instructions. In no event shall Lender be obligated to
make an aggregate amount of Loans under this Section 2.2(b) in excess of the
Build-Out Sub-Limit. For the avoidance of doubt, if the aggregate amount of the
net winning bids for the Licenses purchased by Borrower in connection with the
Auction does not exceed the Required Capital Contributions, or if Borrower has
any excess proceeds from Loans under Section 2.2(a) that are not remitted to the
FCC, Borrower shall not be obligated to make Loans under this Section 2.2(b)
until Buyer has expended all of the Required Capital Contributions and any such
excess Loan proceeds other than as necessary for its reasonable Working Capital
requirements.
c. Lender's obligation to make new Loans to Borrower shall
terminate upon the expiration of the Commitment Period.
d. Borrower may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty, upon at least three (3)
Business Days' notice to Lender, specifying the date and amount of prepayment.
If any such notice is given, the amount specified in such notice, together with
accrued interest to the date of such prepayment on the amount prepaid, shall be
due and payable on the date specified therein. Amounts prepaid may not be
reborrowed. Partial or total prepayments of the Loans shall be credited first to
any charges or other amounts due to Lender under the terms of this Credit
Agreement, then to accrued interest due and payable on the Loans, then to the
principal balance outstanding.
e. Within three (3) Business Days after any Refund Date, Borrower
shall prepay to Lender the principal amount of the Loans in an amount equal to
the Refund received on such Refund Date, up to the aggregate principal amount of
all Loans previously
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made to Borrower. If timely paid in accordance with preceding sentence, Borrower
shall have no obligation to pay any unpaid accrued interest on the principal
amount of the Loans so prepaid.
2.3 INTEREST RATES AND PAYMENTS.
a. Interest shall accrue on the aggregate principal balance from
time to time outstanding hereunder at a rate equal to Twelve Percent (12.00%)
per annum, compounded quarterly.
b. All payments by Borrower hereunder and under the Loan
Documents shall be made to Lender, at its address set forth in Section 8.10 in
immediately available funds on the date on which such payment shall be due.
c. Until the Amortization Commencement Date, all interest accrued
on the aggregate outstanding principal balance of the Loans shall be added to
and become a part of the outstanding principal amount of the Loans on and as of
the last day of each calendar quarter and on and as of the day immediately prior
to the Amortization Commencement Date (such amount outstanding on the day
immediately prior to the Amortization Commencement Date, the "FINAL PRINCIPAL
AMOUNT"). Notwithstanding anything foregoing to the contrary any and all
interest that is added to the principal balance of the Loans shall not count
against the Loan Commitment Amount.
d. On each quarterly anniversary of the Amortization Commencement
Date Borrower shall pay principal installments equal to one-sixteenth (1/16) of
the Final Principal Amount together with interest installments equal to the
amount of the unpaid interest accrued on the outstanding Final Principal Amount
until the Maturity Date, at which time the entire remaining balance of principal
and accrued interest together with all other amounts due and owing under the
Loan Documents to the extent not paid shall be due and payable.
e. Notwithstanding any provision hereof to the contrary, all
outstanding principal amount of Loans and accrued interest thereon, together
with all other amounts due and owing under the Loan Documents to the extent not
paid, shall be due and payable upon the termination (following the expiration of
the applicable notice period) of the Management Agreement by Borrower pursuant
to Section 10.2(a)(v) thereof.
f. As long as any payment due under this Credit Agreement, the
Note or any of the other Loan Documents remains past due (whether at the stated
maturity, by acceleration or otherwise) for five (5) days or more, such overdue
amount shall accrue interest at a rate (the "DEFAULT RATE") equal to the lesser
of Fifteen Percent (15%) per annum or the maximum rate permitted by Applicable
Law, from the date of such non-payment until such overdue amount is paid in full
(whether after or before Judgment).
2.4 CONDITIONS PRECEDENT TO LENDER'S OBLIGATION TO MAKE ANY LOAN.
a. Lender shall not be required to make any Loan to Borrower
under this Credit Agreement unless as of the applicable Funding Date, each of
the following conditions has been satisfied to Lender's satisfaction:
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(i) Borrower shall have executed and delivered to Lender the
Note and the Security Agreement.
(ii) ANB shall have executed and delivered to Lender the ANB
Negative Pledge Agreement.
(iii) Guarantor shall have executed and delivered the
Guarantor Pledge Agreement and the Security Agreement.
(iv) The Loan Parties shall have executed and delivered such
Financing Statements and other instruments (other than the Control Agreements)
reasonably required by Lender to create, perfect and/or maintain the security
interests created pursuant to the Security Agreement.
(v) Prior to the date that is two business days prior to the
commencement of the Auction, the Loan Parties shall have executed and delivered
such Control Agreements reasonably required by Lender to create, perfect and/or
maintain the security interests created pursuant to the Security Agreement.
(vi) Lender shall have a perfected first priority security
interest in all of Guarantor's membership interests in Borrower and, if required
pursuant to the ANB Negative Pledge Agreement, all of ANB's membership interests
in Guarantor.
(vii) Lender shall have received evidence satisfactory to it
that the Financing Statements and other instruments delivered to Lender have
been filed in all appropriate filing offices and that such filed Financing
Statements perfect first priority security interests, subject to any Permitted
Lien, in favor of Lender in the property described therein.
(viii) With respect to the initial Loan under the Credit
Agreement, Lender shall have received customary reports of searches of filings
made with Governmental Entities showing that there are no liens on the assets of
any Loan Party other than Permitted Liens.
(ix) Prior to the date that is two business days prior to
the commencement of the Auction, Lender shall have received from the Loan
Parties' counsel (which counsel shall be reasonably acceptable to Lender) such
legal opinions as to due formation, due authorization, and due execution and
delivery (but not as to FCC regulatory matters) with respect to each of ANB and
the Loan Parties, as Lender shall reasonably request.
(x) Each Loan Party shall have delivered to Lender an
officer's certificate signed by an officer of each such Loan Party certifying
that as of such Funding Date:
(A) The representations and warranties of the Loan
Parties contained in Section 5 and of the Loan Parties and ANB in the Loan
Documents are true and correct in all material respects at and as of the Funding
Date as though then made.
(B) Each Loan Party is in full compliance with the
covenants set forth in Section 6, and in the case of Guarantor, Section 3.
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(C) Borrower has taken all action necessary to
authorize it to incur the Loan, such Loan is permitted under the terms of the
LLC Agreement, and the organizational documents of Borrower and such Loan does
not conflict with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, the LLC Agreement or any other agreement to
which Borrower is a party or by which it is bound.
(D) No Event of Default (or other event that if not
timely cured or corrected would, with the notice or passage of time or both,
become an Event of Default) shall have occurred or be continuing.
(E) All consents required to be received in connection
with the Loan and the Loan Documents from any Governmental Entity shall have
been received.
b. Except for the Loan of the Initial Loan Amount, Lender shall
not be required to make any Loan to Borrower under this Credit Agreement unless
Lender has repaid and discharged its existing $350,000,000 13% Senior Secured
Pay-in-Kind Notes due 2011 or Lender has obtained the requisite consent of the
holders of such Notes to make such Loans in accordance with the terms and
conditions of the indenture for such Notes.
2.5 SECURITY DOCUMENTS.
The Loans and all amounts outstanding from time to time under the Loan
Documents shall be secured by:
a. A first priority security interest (subject to Permitted
Liens) in all assets of the Loan Parties, now owned or hereafter acquired, and
all proceeds and products of such assets. Lender's security interest in the
foregoing shall be created by and subject to the provisions of the Security
Agreement.
b. A first priority security interest in the membership interests
of Borrower, and all proceeds and products thereof. Lender's security interest
in the foregoing shall be created by and subject to the provisions of the
Guarantor Pledge Agreement.
c. To the extent required by the ANB Negative Pledge Agreement, a
first priority security interest in the membership interests of Guarantor, and
all proceeds and products thereof. Lender's security interest in the foregoing,
if any, shall be created by and subject to the provisions of the ANB Negative
Pledge Agreement.
SECTION 3. GUARANTEE
3.1 GUARANTEE.
a. Guarantor hereby, unconditionally and irrevocably, guarantees
to Lender and its respective successors, indorsees, transferees and assigns, the
prompt and complete payment and performance by Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower Obligations.
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b. Guarantor waives any right or claims of right to cause a
marshalling of Borrower's assets to the fullest extent permitted by Applicable
Law.
3.2 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS.
Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against Guarantor and without notice to or further
assent by Guarantor, any demand for payment of any of the Borrower Obligations
made by Lender may be rescinded by it, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, increased, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
Lender (in accordance with the terms thereof), and the Credit Agreement and the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as Lender may deem advisable from time to time (with the
consent of Borrower, if required hereunder or thereunder), and any collateral
security, guarantee or right of offset at any time held by Lender, for the
payment of the Borrower Obligations may be sold, exchanged, waived, surrendered
or released. Lender has no obligation to protect, secure, perfect or insure any
lien at any time held by it as security for the Borrower Obligations or for the
guarantee contained in this Section 3 or any property subject thereto.
3.3 GUARANTEE ABSOLUTE AND UNCONDITIONAL.
Guarantor waives any and all notice of the creation, renewal, extension or
accrual of any of the Borrower Obligations and notice of or proof of reliance by
Lender upon the guarantee contained in this Section 3 or acceptance of the
guarantee contained in this Section 3; the Borrower Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 3; and all dealings between Borrower and Guarantor, on
the one hand, and Lender, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon the guarantee
contained in this Section 3. Guarantor waives diligence, presentment, protest,
demand for payment and notice of default notice of nonpayment, notice of
dishonor and all other notices of any kind to or upon Borrower or Guarantor with
respect to the Borrower Obligations and any exemption rights that either Loan
Party may have. Guarantor understands and agrees that the guarantee contained in
this Section 3 shall be construed as a continuing, absolute and unconditional
guarantee of payment and performance without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
Lender, (b) any defense, set off or counterclaim (other than a defense of
payment or performance in full hereunder) that may at any time be available to
or be asserted by Borrower or any other Person against Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of Borrower or
Guarantor) that constitutes, or might be construed to constitute, an equitable
or legal discharge of Borrower for the Borrower Obligations or of Guarantor
under the guarantee contained in this Section 3, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against Guarantor, Lender may, but shall be under no
obligation to, make a similar demand on or otherwise pursue
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such rights and remedies as it may have against Borrower or any other Person or
against any collateral security or guarantee for the Borrower Obligations or any
right of offset with respect thereto, and any failure by Lender to make any such
demand, to pursue such other rights or remedies or to collect any payments from
Borrower or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of Borrower or
any other Person or any such collateral security, guarantee or right of offset,
shall not relieve Guarantor of any Guarantor Obligations, and shall not impair
or affect the rights and remedies, whether express, implied or available as a
matter of law, of Lender against Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
3.4 REINSTATEMENT.
The guarantee contained in this Section 3 shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Borrower Obligations is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Borrower, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or collateral agent or
similar officer for, Borrower or any substantial part of its property, or
otherwise, all as though such payments had not been made.
3.5 PAYMENTS.
Guarantor hereby guarantees that payments hereunder will be paid to Lender
without set off or counterclaim (other than compulsory counterclaims) in United
States dollars in immediately available funds at the address of Lender set forth
in Section 8.10.
3.6 COORDINATION WITH PUT PRICE.
Notwithstanding the foregoing, Lender acknowledges and consents to the
priority of payments provided for in Section 8.5(d) of the LLC Agreement. No
payments made in accordance with the requirements of that section shall
constitute a default of Guarantor's obligations to Lender hereunder or
otherwise.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF LENDER
Lender hereby represents and warrants to the Loan Parties as follows:
4.1 ORGANIZATION AND STANDING.
Lender is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite power and
authority to execute and deliver this Credit Agreement and to perform its
obligations hereunder.
4.2 AUTHORIZATION BY LENDER.
a. This Credit Agreement has been duly and validly executed and
delivered by Lender and constitutes the legal, valid and binding obligation of
Lender enforceable
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against Lender in accordance with its terms, except as such enforceability may
be limited by (i) bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights generally or (ii) general principles of equity.
b. Neither the execution, delivery and performance of this Credit
Agreement by Lender nor the consummation by Lender of the transactions
contemplated herein will, with or without the giving of notice or the lapse of
time, or both, (i) violate any Applicable Law to which Lender is subject, (ii)
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, the certificate of incorporation or bylaws of
Lender or any material agreement or commitment to which Lender is a party or by
which Lender or any of Lender's assets, may be bound or affected, or (iii)
except with respect to Borrower's participation in the Auction and procurement
and retention of any Licenses by Borrower, and except with respect to the
exercise of certain of Lender's remedies under the Loan Documents, require
Lender to obtain any authorization, consent, approval or waiver from, or to make
any filing with, any Governmental Entity or other Person.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE LOAN PARTIES
The Loan Parties hereby jointly and severally represent and warrant to
Lender as follows:
5.1 ORGANIZATION AND STANDING OF LOAN PARTIES.
Each Loan Party is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware with all
requisite power and authority to own its properties, and conduct its business as
now being conducted, and is duly qualified to do business as a foreign limited
liability company in good standing in each jurisdiction where the ownership of
its properties or the conduct of its business makes such qualification
necessary, except in those jurisdictions where failure so to qualify will not
permanently impair title to a material amount of its properties, permits or
licenses or its rights to enforce in all material respects contracts against
others or expose it to substantial liabilities in such jurisdictions. Each Loan
Party has all licenses (other than FCC licenses), permits and authorizations
necessary for the conduct of its business.
5.2 AUTHORIZATION BY THE LOAN PARTIES; CONSENTS.
a. Borrower has all requisite power and authority to execute,
deliver and perform its obligations under this Credit Agreement, the Note and
all other Loan Documents to which it is a party. Borrower has taken all action
necessary to authorize this Credit Agreement, the Note and all other Loan
Documents to which it is a party, and all such documents have been duly
authorized, executed and delivered by Borrower and are legal, valid and binding
obligations of Borrower enforceable in accordance with their terms, except as
such enforceability may be limited by (i) bankruptcy, insolvency, or other
similar laws affecting the enforcement of creditors' rights generally or (ii)
general principles of equity.
b. Neither the execution, delivery and performance of this Credit
Agreement, the Note or the other Loan Documents by Borrower nor the consummation
by Borrower of the transactions contemplated herein or therein will, with or
without the giving of notice or the lapse of time, or both, (i) violate any
Applicable Law to which Borrower is subject
15
(other than relating to any Loan Party's qualification as an "entrepreneur" and
a "very small business," under the FCC Rules and to holding any FCC license
under provisions of Applicable Law governing alien ownership of common carrier
radio licenses to the extent of any alien ownership directly or indirectly
attributable to Lender under the FCC Rules, as to all of which the Loan Parties
make no representation or warranty hereunder), (ii) conflict with or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
its certificate of formation or limited liability company agreement, any license
or permit of Borrower or any material contract to which Borrower is a party or
by which Borrower may be bound or affected, or (iii) except with respect to
Borrower's participation in the Auction and procurement and retention of any
Licenses by Borrower and except with respect to the exercise of certain of
Lender's remedies under the Loan Documents, require Borrower to obtain any
authorization, consent, approval or waiver from, or to make any filing with, any
Governmental Entity or other Person.
c. Guarantor has all requisite power and authority to execute,
deliver and perform its obligations under this Credit Agreement and all other
Loan Documents to which it is a party. Guarantor has taken all action necessary
to authorize this Credit Agreement and all other Loan Documents to which it is a
party, and all such documents have been duly authorized, executed and delivered
by Guarantor and are legal, valid and binding obligations of Guarantor
enforceable in accordance with their terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights generally or (ii) general principles of equity.
d. Neither the execution, delivery and performance of this Credit
Agreement or the other Loan Documents by Guarantor nor the consummation by
Guarantor of the transactions contemplated herein or therein will, with or
without the giving of notice or the lapse of time, or both, (i) violate any
Applicable Law to which Guarantor is subject (other than relating to Guarantor's
qualification as an "entrepreneur" or "very small business," under the FCC Rules
and to holding any FCC license under provisions of Applicable Law governing
alien ownership of common carrier radio licenses to the extent of any alien
ownership directly or indirectly attributable to Lender under the FCC Rules, as
to all of which the Loan Parties make no representation or warranty hereunder),
(ii) conflict with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, its certificate of formation, the LLC
Agreement, any license or permit of Guarantor or any material contract to which
Guarantor is a party or by which Guarantor may be bound or affected, or (iii)
except with respect to Borrower's participation in the Auction and procurement
and retention of any Licenses by Borrower and except with respect to the
exercise of certain of Lender's remedies under the Loan Documents, require
Guarantor to obtain any authorization, consent, approval or waiver from, or to
make any filing with, any Governmental Entity or other Person.
5.3 LITIGATION.
As of the Effective Date, to the knowledge of the Loan Parties there is no
Litigation pending against either Loan Party that (a) seeks to enjoin or obtain
damages in respect of the consummation of the transactions contemplated hereby,
including the Loans, the Auction and the Build-Out, (b) has or could have a
Borrower Material Adverse Effect or Guarantor Material
16
Adverse Effect, or (c) draws into questions the validity or enforceability of
any Loan Document or the Management Agreement.
5.4 COMPLIANCE WITH APPLICABLE LAW.
Each Loan Party has complied and presently is in compliance in all material
respects with all Applicable Law, except (i) to the extent that failure to
comply with the same does not or will not have a Borrower Material Adverse
Effect or Guarantor Material Adverse Effect and (ii) the Loan Parties make no
representation or warranty with respect to the FCC Rules relating to any Loan
Party's qualification as an "entrepreneur" or "very small business."
5.5 SUBSIDIARIES.
Borrower has no Subsidiaries. Guarantor has no Subsidiaries other than
Borrower.
5.6 ABSENCE OF DEFAULTS.
Neither Loan Party is in material default under or in material violation in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any provision of its constitutive documents or
contained in any other material agreement or instrument to which it is a party
or by which it is bound or to which any of its properties is subject.
5.7 INDEBTEDNESS.
Neither Loan Party has any indebtedness outstanding except the indebtedness
permitted pursuant to the terms of this Credit Agreement and obligations under
the Loan Documents. Neither Loan Party is in default under any such
indebtedness.
5.8 FCC QUALIFICATIONS.
ANB qualifies and, for so long as may be required under FCC Rules in order
for Borrower to retain the Auction Benefits will qualify, as an "entrepreneur"
and a "very small business" under FCC Rules, including but not limited to
Sections 1.2110(b)(1), 24.709(a)(1), and 24.720(b)(2) of the FCC Rules.
5.9 BUSINESS AND FINANCIAL EXPERIENCE.
Each of the Loan Parties by reason of its own business and financial
experience or that of its professional advisors have the capacity to protect its
own interests in connection with the transactions contemplated hereby.
5.10 ACCURACY AND COMPLETENESS OF INFORMATION.
No representation or warranty of the Loan Parties contained in this Credit
Agreement or the other Loan Documents contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not materially misleading.
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SECTION 6. COVENANTS OF THE LOAN PARTIES
Each of the Loan Parties hereby covenants and agrees with Lender as
follows:
6.1 USE OF PROCEEDS.
a. Each of the Loan Parties shall use 100% of the Loan proceeds
under this Credit Agreement solely for the following purposes: (a) to make
deposits, down payments, bid withdrawal payments, or payments for Licenses in
accordance with the Auction; and (b) to finance the Build-Out and the initial
operation of the ANB-1 License Systems, including Working Capital, as
contemplated by the LLC Agreement and the Management Agreement in connection
with Licenses.
b. If the LLC Agreement is terminated by either party pursuant to
Section 13.1(b) or if the Borrower is at any time entitled under applicable FCC
Rules to any refunds of Auction Funds, Borrower will apply as promptly as
reasonably practicable and permitted under the FCC Rules to obtain a refund of
all such refundable Auction Funds.
6.2 COMPLIANCE WITH OTHER AGREEMENTS.
Each Loan Party shall at all times observe and perform in all material
respects all of the covenants, conditions and obligations required to be
performed by it under the Management Agreement and under the Trademark License
Agreement (if any) and all other material agreements to which it is a party or
by which it is bound, except to the extent the failure to observe and perform
such covenants, conditions and obligations will not have a Borrower Material
Adverse Effect.
6.3 PAYMENT.
Borrower shall promptly pay to Lender with interest the obligations due or
to become due at the times and places and in the amount and manner specified in
this Credit Agreement, the Note and the other Loan Documents.
6.4 EXISTENCE.
Each Loan Party shall maintain: (a) its limited liability company existence
under the laws of Delaware; (b) its good standing and its right to carry on its
business and operations in Delaware and in each other jurisdiction in which the
character of the properties owned or leased by it or the business conducted by
it makes such qualification necessary and the failure to be in good standing
would preclude such Loan Party or Lender from enforcing its rights with respect
to any material assets or expose such Loan Party to any material liability; and
(c) all licenses, permits and authorizations necessary to the conduct of its
business.
6.5 COMPLIANCE WITH LAWS, TAXES, ETC.
Each Loan Party shall comply in all material respects with all Applicable
Law, such compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges imposed upon
it or upon its property except to the extent
18
contested in good faith by appropriate proceedings and for which any reserves
required by GAAP have been established. In the event any Loan Party fails to
satisfy its obligations under this Section 6.5, as to taxes, assessments and
governmental charges, Lender may but is not obligated to satisfy such
obligations in whole or in part and any payments made and expenses incurred in
doing so shall constitute principal indebtedness hereunder governed by the terms
of the Note and shall be paid or reimbursed by Borrower upon demand by Lender.
6.6 BOOKS AND RECORDS.
Each Loan Party shall at all times keep proper books and records of
accounts in which full, true and correct entries shall be made of its
transactions in accordance with GAAP consistently applied and shall permit
representatives of Lender to examine such books and records upon reasonable
request. Each Loan Party shall permit representatives of Lender to discuss its
affairs and finances with the principal officers of such Loan Party and its
independent public accountants, all at such times during such normal business
hours as Lender shall reasonably request. Borrower shall, promptly upon request
of Lender, deliver to Lender copies of all such documents, materials,
construction and operating budgets, invoices, receipts and other information
reasonably requested by Lender from time to time relating to the Build-Out and
the initial operation by Borrower of the ANB-1 License Systems.
6.7 ASSETS AND INSURANCE.
If Borrower is a Winning Bidder in the Auction, each Loan Party shall
maintain in full force and effect from and after the first Initial Grant Date
(a) an adequate errors and omissions insurance policy, (b) such other insurance
coverage, on all properties of a character usually insured by organizations
engaged in the same or similar business against loss or damage of a kind
customarily insured against by such organizations, (c) adequate public liability
insurance against tort claims that may be asserted against such Loan Party and
(d) such other insurance coverage for other hazards as Lender may from time to
time reasonably require to protect its rights and benefits under this Credit
Agreement and the other Loan Documents. All commercial general liability and
property damage insurance policies and any other insurance policies required to
be carried hereunder by each Loan Party shall (i) be issued by insurance
companies with a then-current Xxxxxx X. Best Company, Inc. (or if no longer in
existence, a comparable rating service) general policy holder's rating of "A" or
better and financial size category of Class XII or higher and otherwise
reasonably satisfactory to Lender; (ii) designate Lender as loss payee and
additional insured; (iii) be written as primary policy coverage and not
contributing with or in excess of any coverage that Lender may carry; (iv)
provide for thirty (30) days prior written notice to Lender of any cancellation
or nonrenewal of such policy; and (v) contain contractual liability coverage
insuring performance by such Loan Party of the indemnity provisions of the Loan
Documents. Each Loan Party shall promptly deliver to Lender upon receipt and
from time to time upon Lender's request either a copy of each such policies of
insurance or certificates evidencing the coverages required hereunder.
6.8 FINANCIAL STATEMENTS AND OTHER REPORTS.
Each Loan Party shall maintain a system of accounting (as to its own
operations and financial condition) established and administered in accordance
with sound business practices
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such as to permit the preparation of financial statements in accordance with
GAAP and furnish or cause to be furnished to Lender:
a. Annual Statements. As soon as practicable following the end of
each fiscal year, but in any event within ninety (90) days after the end of each
fiscal year, the audited statement of income and audited statement of cash flows
for such fiscal year and the audited balance sheet as of the end of such fiscal
year, accompanied by the report thereon of independent certified public
accountants and accompanying notes to financial statements, on a consolidated
basis, prepared in accordance with GAAP.
b. Quarterly Statements. As soon as practicable following the end
of each fiscal quarter, but in any event within forty-five (45) days after the
end of such quarter, an unaudited statement of income and statement of cash
flows for such quarter and an unaudited balance sheet as of the end of such
quarter on a consolidated basis, prepared in accordance with GAAP.
c. Monthly Statements. As soon as possible following the end of
each calendar month in each fiscal year, but in any event within thirty (30)
days after the end of such month, a monthly report of significant operating and
financial statistics including, to the extent applicable, number of subscribers,
subscriber churn statistics, minutes of use, average revenues per subscriber,
acquisition costs and capital expenditures statistics and such additional
statistics and information as may be approved for internal use by such Loan
Party, if any.
d. Within five (5) Business Days after a Loan Party becomes aware
of their occurrence, notice of each of the following events:
(i) the commencement of any action, suit, proceeding or
arbitration against such Loan Party, or any material development in any action,
suit, proceeding or arbitration pending or threatened against such Loan Party;
(ii) any Event of Default or other breach by such Loan Party
of any covenant or agreement in this Credit Agreement or any of the other Loan
Documents; and
(iii) the receipt by either Loan Party or both Loan Parties
of any notice from the FCC, other than in the ordinary course of business
(together with a copy of such FCC notice).
e. from time to time, such other information regarding the
business, operations, affairs and financial condition of such Loan Party as
Lender may reasonably request.
6.9 INDEBTEDNESS.
Neither Borrower nor Guarantor shall, directly or indirectly, create,
incur, assume, guarantee, or otherwise become or remain directly or indirectly
liable with respect to any indebtedness, except:
a. the indebtedness created under this Credit Agreement.
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b. purchase money financing of telecommunications equipment
incurred by Borrower of up to $2.0 million in the aggregate if the terms of such
financing are more favorable to Borrower than the terms of the Loans.
c. purchase money financing for tangible personal property in the
nature of office equipment utilized in the ordinary course of business.
d. current trade obligations incurred in the ordinary course of
business and not overdue (unless the same are being contested in good faith and
by appropriate proceedings and adequate reserves are maintained therefor in
accordance with GAAP).
e. renewals, extensions, replacements, refinancings or refundings
of any of the foregoing that do not increase the principal amount of the
indebtedness so refinanced or refunded.
6.10 INVESTMENTS.
Neither Borrower nor Guarantor shall, directly or indirectly, make or own
any investment in any Person, except: (a) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having the highest rating obtainable
from either Standard & Poor's Corporation ("S&P") or Xxxxx'x Investors Service,
Inc. ("Moody's"), (c) commercial paper maturing no more than two hundred seventy
(270) days from the date of creation thereof and, at the time of acquisition,
having the highest rating obtainable from either S&P or Moody's, (d) demand
deposits, or time deposits maturing within one (1) year from the date of
creation thereof with, including certificates of deposit issued by, any office
located in the United States of any bank or trust company that is organized
under the laws of the United States or any state thereof and whose certificates
of deposit are rated P-1 or better by Moody's or A-1 or better by S&P, and (e)
Guarantor's investment in Borrower.
6.11 NEGATIVE COVENANTS.
Each Loan Party agrees that it shall not take any of the actions set forth
in this Section 6.11 without the prior written approval of Lender, which
approval may be withheld in Lender's sole and absolute discretion; provided,
however, that for so long as Cricket Communications, Inc. is a member of
Guarantor, the approval of Lender shall be deemed given with respect to any
action taken by Borrower or Guarantor that may be taken without the approval of
Cricket Communications, Inc. under the terms of the LLC Agreement or for which
Cricket Communications, Inc. has granted its approval under the terms of the LLC
Agreement:
a. Sell, lease, convey, transfer, or otherwise dispose of its
property or assets now owned or hereafter acquired except in the ordinary course
of business.
b. Conduct, transact or otherwise engage in, or commit to
transact, conduct or otherwise engage in, any business or operations other than
the Business.
21
c. Undertake any of the activities permitted by Section 6.11(b)
above or own any assets related thereto, other than through or by Borrower.
d. Enter into any transaction of merger or consolidation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or substantially all of its
business or property, whether now owned or hereafter acquired, or, except as
expressly permitted under the terms of this Credit Agreement, acquire by
purchase or otherwise all or substantially all the business or property of, or
stock or other evidence of beneficial ownership of, any Person, or acquire,
purchase, redeem or retire any membership interests in such Loan Party now or
hereafter outstanding for value.
e. Create or permit to exist at any time, any mortgage, lien,
security interest, pledge, charge or other encumbrance against any of its
property or assets now owned or hereafter acquired, or assign or sell any income
or revenues (including accounts receivable) or rights in respect thereof, except
for Permitted Liens, and shall, at its sole cost and expense, promptly take all
such action as may be necessary duly to discharge, or cause to be discharged all
such mortgages, liens, security interests, pledges, charges or other
encumbrances.
f. Become liable, directly or indirectly, contingently or
otherwise, for any obligation of any other Person by endorsement, guaranty,
surety or otherwise, except in connection with (i) the Loans and (ii)
indebtedness permitted pursuant to the terms of this Credit Agreement.
g. Enter into any agreement containing any provision that would
be violated or breached by any borrowing hereunder or by the performance of its
obligations hereunder or under any document executed pursuant hereto.
h. Own, lease, manage or otherwise operate any properties or
assets other than in connection with the Business, or incur, create, assume or
suffer to exist any indebtedness or other consensual liabilities or financial
obligations other than as may be incurred, created or assumed or as may exist in
connection with the Business (including without limitation the Loans and other
obligations incurred by such Loan Party hereunder). Notwithstanding the
foregoing, Borrower may invest excess funds in investments permitted under
Section 6.10.
i. Make any dividend, distribution or return of capital, except
expressly in accordance with its limited liability company agreement, except
that (1) Borrower may make distributions to Guarantor (and Guarantor to ANB) to
the extent that Section 8.5(d) of the LLC Agreement provides for payments to
ANB, (2) Borrower may make distributions to Guarantor (and Guarantor to its
members) for tax distributions and (3) Borrower may make distributions to
Guarantor for the payment of Guarantor's expenses to the extent consistent with
Guarantor's annual business plan and budget under the LLC Agreement.
j. Amend or modify its certificate of formation or limited
liability company agreement, including the LLC Agreement (except that the LLC
Agreement may be amended or modified in accordance with its terms).
22
6.12 REAL PROPERTY.
Neither Loan Party shall purchase or acquire any fee interest or other
estate in real property, other than a leasehold or license interest in real
property.
6.13 FURTHER ASSURANCES.
a. Borrower shall use its commercially reasonable efforts to
cause the conditions set forth in Sections 2.4(a)(v) and 2.4(a)(ix) to be
satisfied on or prior to the date that is two business days prior to the
commencement of the Auction.
b. At any time and from time to time, upon the written request of
Lender, and at the expense of the Loan Parties, each Loan Party shall promptly
and duly execute and deliver such further instruments and documents and take
such further action as Lender may reasonably determine in its sole discretion to
be necessary or advisable to further carry out and consummate the transactions
contemplated by the Loan Documents and to perfect or protect the full benefits
of this Credit Agreement and the other Loan Documents.
6.14 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 7. EVENTS OF DEFAULT AND THEIR EFFECT
7.1 EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default under this
Credit Agreement and the Note (each, an "EVENT OF DEFAULT"):
a. Failure to Pay. Borrower fails to pay when due any principal
payment, interest or other payment required under the terms of the Note that is
not cured within five (5) days after the date on which such payment is due and
payable; or
b. Breaches of Other Covenants. Either Loan Party fails to
observe or perform in any material respect any covenant, obligation, condition
or agreement contained in this Credit Agreement or any covenant, obligation,
condition or agreement under any of the other Loan Documents and such failure
shall continue for thirty (30) days after the earlier of (i) notice thereof from
Lender or (ii) the actual knowledge of such failure by either Loan Party;
provided, however, that a failure to observe any covenant set forth in Section
6.11 shall constitute an Event of Default immediately upon the occurrence
thereof and without any cure period; or
c. Bankruptcy or Insolvency Proceedings. (i) Either Loan Party
(A) applies for or consents to the appointment of a receiver, trustee,
liquidator or custodian of itself or of all or a substantial part of its
property, (B) is unable, or admits in writing its inability, to pay its debts
generally as they mature, (C) makes a general assignment for the benefit of its
or
23
any of its creditors, (D) is dissolved or liquidated in full or in part, (E)
becomes insolvent (as such term may be defined or interpreted under Applicable
Law), (F) commences 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 (G)
takes any action for the purpose of effecting any of the foregoing or (ii) a
case or proceeding under the bankruptcy laws of the United States now or
hereafter in effect or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law of any jurisdiction now or
hereafter in effect is filed against any Loan Party or all or any part of its
properties and such application is not dismissed within thirty (30) days after
the date of its filing or such Loan Party shall file any answer admitting or not
contesting such petition or application or indicates its consent to,
acquiescence in or approval of any such action or proceeding or the relief
requested is granted sooner; or
d. Representations and Warranties. Any representation or warranty
made by either Loan Party herein or in any other Loan Document is breached in
any material respect and not cured prior to the expiration of any applicable
cure period or is false or misleading in any material respect; or
e. Change in Control. The occurrence of any Borrower Change in
Control Event or Guarantor Change in Control Event; or
f. Termination of LLC Agreement. The termination of the LLC
Agreement in accordance with its terms; or
g. Loan Documents. Any Loan Document ceases to be in full force
and effect or any lien in favor of Lender ceases to be, or is not, valid,
perfected and prior to all other liens and security interests (other than
Permitted Liens); or
h. Termination of Management Agreement. The termination
(following the expiration of any applicable notice period) of the Management
Agreement by Lender pursuant to Section 10.2(b) thereof (other than Section
10.2(b)(iv) thereof); or
i. Loss of Status. ANB or any Loan Party admits, or it is
determined in an order, notice or ruling of the FCC, that ANB has ceased to
qualify as an "entrepreneur" and a "very small business" under FCC Rules,
including but not limited to, Sections 1.2110(b), 24.709(a)(1) and 24.720(b)(2)
of the FCC Rules, if such qualification is then required under FCC Rules in
order for Borrower to retain the Auction Benefits; or
j. Cross Default. Any Loan Party (i) defaults in making payments
of any indebtedness permitted under Section 6.9 on the scheduled due date with
respect thereto; (ii) defaults in making any payment of any interest on such
indebtedness beyond the period of grace, if any, provided in the instrument or
agreement under which such indebtedness was created; or (iii) defaults in the
observance or performance of any other agreement or condition relating to such
indebtedness or contained in any instrument or agreement evidencing, securing or
relating thereto, which default permits the lender thereunder to declare such
indebtedness to be due and payable prior to its stated maturity; provided,
however, that any such default by a Loan Party shall not be an Event of Default
hereunder if and to the extent that, and for so long as, such Loan
24
Party's default is proximately caused by Cricket's failure to satisfy its
funding obligations under this Agreement or the LLC Agreement.
7.2 REMEDIES UPON EVENT OF DEFAULT.
a. If any Event of Default shall occur, then Lender may do any or
all of the following: (i) terminate or reduce the commitment of Lender to make
Loans to Borrower under this Credit Agreement, (ii) declare all obligations of
Borrower hereunder and under the Note to be immediately due and payable,
whereupon the Borrower Obligations hereunder and under the Note shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, anything in this
Credit Agreement or in any other Loan Document to the contrary notwithstanding
and (iii) enforce its rights under any one or more of the Loan Documents in
accordance with Applicable Law; provided that upon the occurrence of any Event
of Default under Section 7.1(c), 7.1(e) or 7.1(i), the commitment of Lender
shall immediately terminate and all Borrower Obligations shall automatically
become immediately due and payable without notice or demand of any kind.
b. Upon the occurrence of any Event of Default and at any time
thereafter so long as any Event of Default shall be continuing, Lender may
proceed to protect and enforce this Credit Agreement, the Note and the other
Loan Documents by suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or aid of any power herein granted,
or for foreclosure hereunder, or for the appointment of a receiver or receivers
for the collateral subject to the applicable Loan Documents or for the recovery
of judgment for the indebtedness secured thereby or for the enforcement of any
other proper, legal or equitable remedy available under Applicable Law.
c. Borrower shall pay to Lender forthwith upon demand any and all
expenses, costs and other amounts due hereunder or under the other Loan
Documents before, after or during the exercise of any of the foregoing remedies,
including without limitation all reasonable legal fees and other reasonable
costs and expenses incurred by Lender by reason of the occurrence of any Event
of Default, the enforcement of this Credit Agreement and the other Loan
Documents and/or the preservation of Lender's rights hereunder and under the
other Loan Documents.
SECTION 8. MISCELLANEOUS
8.1 ENTIRE AGREEMENT; AMENDMENT.
This Credit Agreement (including the attached Exhibits) constitutes the
sole understanding of the parties with respect to the subject matter hereof, and
supersedes all prior oral or written agreements, commitments or understandings
with respect to such matters. No amendment, modification or alteration of the
terms or provisions of this Credit Agreement shall be binding unless the same
shall be in writing and duly executed by the parties hereto.
25
8.2 SUCCESSORS AND ASSIGNS.
This Credit Agreement may not be assigned by either Loan Party without the
consent of Lender, which consent may be withheld in its sole and absolute
discretion. Lender may assign this Credit Agreement to an Affiliate of Lender
without the consent of the Loan Parties, provided that such Affiliate of Lender
agrees to be bound by all of the terms hereof, provided further that, unless
Borrower otherwise consents in its sole and absolute discretion, Lender shall
remain obligated under this Credit Agreement to make all Loans required
hereunder. No such permitted assignment shall relieve any party hereto of any
liability for a breach of this Credit Agreement by such party or its assignee.
This Credit Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs or successors in interest.
8.3 RIGHTS AND REMEDIES.
Unless otherwise provided herein, the rights and remedies of Lender
hereunder and under the other Loan Documents shall not be mutually exclusive,
and the exercise of one or more remedies by Lender pursuant to this Credit
Agreement, the other Loan Documents or Applicable Law shall not preclude the
exercise by Lender of any other remedy.
8.4 INDEMNITY; REIMBURSEMENT OF LENDER.
a. Each Loan Party agrees to indemnify, defend and hold Lender
harmless from and against any and all claims, demands, losses, judgments and
liabilities (including but not limited to, liabilities for penalties) of any
nature ("CLAIMS"), and to reimburse Lender for all reasonable costs and
expenses, including but not limited to attorneys' fees and expenses, arising
from any of the Loan Documents or the exercise of any right or remedy granted to
Lender hereunder or thereunder, other than any Claim (including of Borrower)
arising from Lender's gross negligence, willful misconduct or bad faith, or from
Lender's failure to comply with its obligations under this Agreement. In no
event shall Lender be liable for any matter or thing in connection with the Loan
Documents other than to account for moneys actually received by Lender in
accordance with the terms hereof. In addition, in no event shall Lender be
liable for any indirect, incidental, consequential or special damages (including
without limitation damages for harm to business, lost revenues, lost savings, or
lost profits suffered by any of the Loan Parties or other Persons), regardless
of the form of action, whether in contract, warranty, strict liability, or tort,
including without limitation negligence of any kind whether active or passive,
and regardless of whether Lender or the Loan Parties knew of the possibility
that such damages could result.
b. All indemnities contained in this Section 8.4 and elsewhere in
this Credit Agreement shall survive the expiration or earlier termination of
this Credit Agreement.
8.5 HIGHEST LAWFUL RATE.
Anything herein to the contrary notwithstanding, the obligations of
Borrower on the Note shall be subject to the limitation that payments of
interest shall not be required, for any period for which interest is computed
hereunder, to the extent that contracting for or receipt thereof would be
contrary to provisions of any Applicable Law to Lender limiting the highest rate
of interest that may be lawfully contracted for, charged or received by Lender,
as determined by a final
26
Judgment of a court of competent jurisdiction. Any interest paid in excess of
such highest rate shall be applied to the principal balance of the Borrower
Obligations.
8.6 COUNTERPARTS.
This Credit Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original and all of which shall
constitute the same instrument.
8.7 MODIFICATION AND WAIVER.
The parties by mutual written agreement may (a) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, or (c) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall only be valid if
set forth in an instrument in writing signed on behalf of such party. No waiver
by Lender in any one case shall require Lender to give any subsequent waiver.
8.8 PAYMENTS ON BUSINESS DAYS.
Whenever any payment to be made hereunder or under any Note shall be stated
to be due on a day other than a Business Day, such payment may be made on the
next succeeding Business Day and such extension of time shall in such case be
included in computing interest, if any, in connection with such payment.
8.9 EXPENSES.
Except as specifically provided herein, each party hereto shall pay all
costs and expenses incurred by it or on its behalf in connection with this
Credit Agreement and the transactions contemplated hereby, including, without
limiting the generality of the foregoing, fees and expenses of its own
consultants, accountants and counsel. Notwithstanding the foregoing, Borrower
shall pay, immediately when due, all present and future stamp and other like
duties and applicable taxes, if any, to which this Credit Agreement may be
subject or give rise.
8.10 NOTICES.
All notices and other communications given to or made upon any party hereto
in connection with this Credit Agreement shall, except as otherwise expressly
herein provided, be in writing and mailed via certified mail, sent by Federal
Express or other similar express delivery service for next day delivery, faxed
(with a confirming copy sent by such express delivery service for next day
delivery) or hand delivered to the respective parties, as follows:
If to Lender: Cricket Communications, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxx Xxxxxxxxx
Fax: (000) 000-0000
27
With a copy (which shall Xxxxxx & Xxxxxxx LLP
not constitute notice) to: 00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
If to Borrower: Alaska Native Broadband 1 License, LLC
c/o ASRC Wireless Services
0000 X Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy (which shall Xxxxxxxx & Xxxxx LLP
not constitute notice) to: Citigroup Center
0000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
If to Guarantor: Alaska Native Broadband 1, LLC
c/o ASRC Wireless Services
0000 X Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
With a copy (which shall Xxxxxxxx & Xxxxx LLP
not constitute notice) to: Citigroup Center
0000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
or in accordance with any subsequent written direction delivered in accordance
with this Section from the recipient party to the sending party. All such
notices and other communications shall, except as otherwise expressly herein
provided, be effective upon delivery if delivered by hand; in the case of
certified mail, three Business Days after the date sent; in the case of any fax,
when received; or in the case of express delivery service, the day after
delivery of the notice to such service with charges prepaid.
8.11 SEVERABILITY.
In case any one or more of the provisions contained in this Credit
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect by a court or other authority of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect
28
any other provision hereof and this Credit Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
and, in lieu of each such illegal, invalid or unenforceable provision, there
shall be added automatically as a part of this Credit Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable, it being the intent of the parties
to maintain the benefit of the bargain for all parties.
8.12 REFORMATION.
a. If the FCC should (i) change any FCC Rule in a manner that
would adversely affect the enforceability of this Credit Agreement or any of the
other Loan Documents, (ii) directly or indirectly reject or take action to
challenge the enforceability of this Credit Agreement or any of the other Loan
Documents or (iii) take any other steps whatsoever, on its own initiative or by
petition from another Person, to (A) challenge or deny the transactions
contemplated hereby or thereby, (B) challenge or deny the eligibility of
Borrower to realize the Auction Benefits as a result of the transactions
contemplated hereby or thereby or (C) challenge or deny the eligibility of
Borrower to hold any License, or to avoid unjust enrichment repayment
obligations (as provided in 47 C.F.R. Section 1.2111) in connection with
acquiring or holding any License, as a result of the transactions contemplated
hereby or thereby, then the parties shall promptly consult with each other and
negotiate in good faith to reform and amend this Credit Agreement and the other
Loan Documents so as to eliminate or amend to make unobjectionable any portion
that is the subject of any FCC action, provided, that the relative economic and
other rights and benefits expected to be derived by the parties hereunder are
preserved. Neither party shall take any action that is reasonably likely to
contribute to such FCC action.
b. If the FCC should determine that a portion of this Credit
Agreement or any of the other Loan Documents, after having been reformed
pursuant to paragraph (a) above, continues to violate FCC Rules, then such
provisions shall be null and void and the remainder of this Credit Agreement and
the other Loan Documents shall continue in full force and effect, provided, that
the relative economic and other rights and benefits expected to be derived by
the parties hereunder are preserved.
8.13 GOVERNING LAW.
This Credit Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware applicable to agreements made and to be
performed wholly within such jurisdiction.
8.14 ARBITRATION.
a. Arbitration. Any controversy or claim arising out of or
relating to this Credit Agreement or any of the other Loan Documents, or the
breach thereof, shall be settled by arbitration administered by the American
Arbitration Association in accordance with its Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. Within 15 days after the commencement of
arbitration, each party shall select one Person to act as arbitrator and the two
selected shall select a third arbitrator within 10 days of their appointment. If
the arbitrators selected by the parties are
29
unable or fail to agree upon the third arbitrator, the third arbitrator shall be
selected by the American Arbitration Association. The place of arbitration shall
be Denver, Colorado or such other place as the parties may agree. The
arbitrators shall be knowledgeable in the wireless telecommunications industry
and public auctions of FCC licenses.
b. Interim Relief. Any party may apply to the arbitrators seeking
injunctive relief until the arbitration award is rendered or the controversy is
otherwise resolved. Either party also may, without waiving any remedy under this
Credit Agreement or any of the other Loan Documents, seek from any court having
jurisdiction any interim or provisional relief that is necessary to protect the
rights or property of that party, pending the establishment of the arbitral
tribunal (or pending the arbitral tribunal's determination of the merits of the
controversy).
c. Discovery. Consistent with the expedited nature of
arbitration, each party will, upon the written request of the other party,
promptly provide the other with copies of documents relevant to the issues
raised by any claim or counterclaim on which the producing party may rely in
support of or in opposition to any claim or defense. Any dispute regarding
discovery, or the relevance or scope thereof, shall be determined by the
arbitrators, which determination shall be conclusive. All discovery shall be
completed within 45 days following the appointment of the arbitrators.
d. Depositions. At the request of a party, the arbitrators shall
have the discretion to order examination by deposition of witnesses to the
extent the arbitrators deems such additional discovery relevant and appropriate.
Depositions shall be limited to a maximum of three per party and shall be held
within 20 days of the making of a request. Each deposition shall be limited to a
maximum of four hours duration. All objections are reserved for the arbitration
hearing except for objections based on privilege and proprietary or confidential
information.
e. Award. The award shall be made within 90 days of the filing of
the notice of intention to arbitrate, and the arbitrators shall agree to comply
with this schedule before accepting appointment. However, this time limit may be
extended by agreement of the parties and the arbitrators if necessary.
f. Consent to Consolidation of Arbitrations. Each party
irrevocably consents to consolidating any arbitration proceeding under this
Credit Agreement and/or any of the other Loan Documents with any other
arbitration proceedings involving any party that may be then pending that are
brought under the LLC Agreement, the Trademark License Agreement, the Management
Agreement or that certain Agreement of even date herewith by and among Lender,
Council Tree Communications, Inc., a Delaware corporation, and, for purposes of
Section 3(l) only, Leap Wireless International, Inc., a Delaware corporation (to
the extent provided therein).
8.15 LENDER'S DISCRETION.
Unless this Credit Agreement shall otherwise expressly provide, Lender
shall have the right to make any decision, grant or withhold any consent, and
exercise any other right or remedy hereunder in its sole and absolute
discretion.
30
8.16 HEADINGS.
The descriptive headings in this Credit Agreement are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have signed this Credit Agreement,
or have caused this Credit Agreement to be signed in their respective names by
an officer, hereunto duly authorized, on the date first written above.
CRICKET COMMUNICATIONS, INC. ALASKA NATIVE BROADBAND 1 LICENSE, LLC
By Alaska Native Broadband 1, LLC
By: /s/ Xxxxxx X. Xxxxxx Its sole member
---------------------------------
Name: Xxxxxx X. Xxxxxx By Alaska Native Broadband, LLC
Title: SVP Its Manager
By ASRC Wireless Services, Inc.,
Its Manager
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: President
ALASKA NATIVE BROADBAND 1, LLC
By Alaska Native Broadband, LLC
Its Manager
By ASRC Wireless Services, Inc.,
Its Manager
By: /s/ Xxxxxx Xxxxx
------------------------------------
Name: Xxxxxx Xxxxx
Title: President
32
EXHIBITS:
A. FORM OF ANB NEGATIVE PLEDGE AGREEMENT
B. FORM OF CONTROL AGREEMENT
C. FORM OF GUARANTOR PLEDGE AGREEMENT
D. FORM OF NOTE
E. FORM OF SECURITY AGREEMENT
