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Exhibit 10.26.11
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SECOND AMENDMENT dated as of January 27, 2000,
to the Credit Agreement (as amended, the "Credit
Agreement") dated as of September 20, 1999, among
Cricket Communications Holdings, Inc. ("Holdings"),
Cricket Communications, Inc. (the "Borrower"), the
lenders party thereto and Lucent Technologies, Inc., as
administrative agent. Capitalized terms used herein and
not defined herein shall have the meanings assigned to
such terms in the Credit Agreement.
WHEREAS Holdings and the Borrower have requested that certain
provisions of the Credit Agreement be amended in certain respects, and the
Lenders and the Administrative Agent are willing to amend such provisions on the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the mutual
agreements contained in this Amendment and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1. Amendments. (a) Section 1.01 of the Credit Agreement
is hereby amended by deleting the definition of "Cash Interest Expense" and
replacing it with the following definition:
"Cash Interest Expense" means, for any period, the sum of (a)
interest expense of the Borrower and the Subsidiary Loan Parties for
such period, determined on a consolidated basis in accordance with GAAP,
excluding (to the extent otherwise included therein) (i) amortization of
debt discounts and loan fees, (ii) interest expense in respect of any
Indebtedness that constitutes a Primary Subordinated Obligation and
(iii) any other interest that is not required to be paid during such
period or within one year after the end of such period, plus (b) the
aggregate amount of Restricted Payments made during such period pursuant
to clauses (d) or (e) of Section 6.06.
(b) Section 1.01 of the Credit Agreement is hereby amended by
inserting after the definition of "Eligible
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Assignee" and before the definition of "Eligible Secured Debt" the
following definition:
"Eligible Parent Debt" means Indebtedness of the Parent in
respect of debt securities issued in an underwritten public offering or
private placement pursuant to Rule 144A; provided that (a) such
Indebtedness shall not mature, nor shall any scheduled repayment of any
principal thereof be due, nor shall such Indebtedness be subject to any
mandatory redemption or required repurchase, conversion or exchange
(whether upon the occurrence of any contingency or otherwise, but
excluding contingent redemption offer provisions in the event of a
"change of control" or "asset sale" that are customary for similar debt
securities), in each case prior to the date that is one year after the
Maturity Date, (b) any covenants, events of default and similar
provisions relating thereto shall be reasonably satisfactory to the
Required Lenders, (c) the obligations of the Parent in respect thereof
shall not be Guaranteed by any Loan Party (except for Holdings) or
secured by any Lien (except for a Lien on the collateral account
established to fund interest payments as provided in clause (d) below)
and (d) by its terms, no interest shall be payable in respect of such
Indebtedness (other than (i) by the issuance of additional Eligible
Parent Debt or (ii) out of a collateral account funded by the Parent
from the net proceeds of the issuance of such Indebtedness in an amount
sufficient to pay such cash interest) prior to October 1, 2003 and (e)
the net proceeds of such Indebtedness (other than the portion, if any,
of such net proceeds (i) applied to fund any collateral account
established to fund interest payments as provided above or (ii) not
exceeding * * * to be used to purchase FCC Licenses (either directly as
an asset purchase or as a portion of the consideration for the
acquisition of an entity that owns an FCC License, such portion not to
exceed the value of such FCC License) which are contributed to a License
Subsidiary prior to September 30, 2000; provided that all proceeds
described in this clause (ii) shall be held in an interest-bearing
account until so used and, to the extent such proceeds and the accrued
interest thereon are not used to purchase FCC Licenses prior to
September 30, 2000, such unused proceeds and accrued interest shall be
contributed to the Borrower as common equity on September 30, 2000) are
contributed by the Parent to Holdings as common equity or are used to
repay, in an amount not to exceed $51,000,000, a promissory note issued
by the Parent to
[* * * Deleted pursuant to Confidential Treatment Request.]
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Holdings as consideration for the purchase price of equity in Holdings
and then, in each case, contributed by Holdings to the Borrower as
common equity.
(c) Section 1.01 of the Credit Agreement is hereby amended by deleting
clause (f) of the definition of "Excess Cash Flow" and replacing it with the
following:
(f) the aggregate principal amount of Long-Term Indebtedness
repaid or prepaid by the Borrower and the Subsidiary Loan Parties during
such fiscal year, excluding (i) Eligible Secured Debt prepaid pursuant
to Section 2.09(c) or (d), and (ii) repayments or prepayments of
Long-Term Indebtedness financed by incurring other Long-Term
Indebtedness; minus
(g) the aggregate amount of Restricted Payments made during such
fiscal year pursuant to clauses (d) or (e) of Section 6.06.
(d) Paragraph (a) of Section 2.08 of the Credit Agreement is hereby
deleted in its entirety and replaced by the following:
(a) Subject to adjustment pursuant to paragraph (c) of this
Section, the Borrower shall repay Borrowings on each Payment Date set
forth below in an aggregate amount equal to the percentage set forth
opposite such Payment Date multiplied by an amount equal to the sum of
all Loans made during the Availability Period (whether or not previously
repaid):
Payment Date Percentage
------------ ----------
Each of first, second, third
and fourth 2.50%
Each of fifth, sixth, seventh and
eighth 3.75%
Each of ninth, tenth, eleventh and
twelfth 5.00%
Each of thirteenth, fourteenth,
fifteenth and sixteenth
6.25%
Each of seventeenth, eighteenth,
nineteenth and twentieth
7.50%
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(e) Section 5.15 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 5.15. Intercompany Agreements. Each of Holdings and the
Borrower agrees that, prior to March 31, 2000, all intercompany
agreements and arrangements between Holdings, the Borrower or any
Subsidiary Loan Party, on the one hand, and the Parent or any other
Affiliate of Holdings, the Borrower or any Subsidiary Loan Party (other
than Holdings, the Borrower or any Subsidiary Loan Party), on the other
hand, including with respect to tax sharing, management fees or sharing
of facilities, services or employees, shall be completed on terms and
conditions reasonably satisfactory to the Required Lenders and shall be
set forth in written agreements (the "Intercompany Agreements")
reasonably satisfactory in form and substance to the Required Lenders,
and true and correct copies of such Intercompany Agreements shall have
been delivered to the Lenders.
(f) Section 6.06 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.06. Restricted Payments. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary Loan Party to,
declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, except (a) the Borrower may declare and pay
dividends with respect to its capital stock payable solely in additional
shares of its common stock, (b) Subsidiaries may declare and pay
dividends and distributions to the Borrower, (c) after the Parent pays
the ChaseTel Earnout (but in any event not prior to January 1, 2006),
the Borrower may make Restricted Payments in an aggregate amount not
exceeding the lesser of $41,000,000 and the amount of such ChaseTel
Earnout paid by the Parent (and Holdings may make Restricted Payments
with the proceeds of any such Restricted Payments received by Holdings),
provided that at the time of and after giving effect to any such
Restricted Payment (i) no Default shall have occurred and be continuing,
(ii) the Borrower shall be in compliance with Sections 6.18 and 6.19
determined on a pro forma basis as of the last day of the most recently
ended calendar quarter of the Borrower for which financial statements
are available as though such payment had been made on the first day of
each relevant period for testing compliance with such covenant, and
(iii) the ratio of Annualized EBITDA to Fixed Charges
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shall be greater than or equal to 1.0 to 1.0, (d) on or after the
earlier of April 1, 2004 and the date after the end of the Availability
Period on which the Borrower shall have repaid at least 21.25% of the
aggregate principal amount of the Loans that were outstanding at the end
of the Availability Period, the Borrower may make Restricted Payments at
the time that any scheduled interest payment is due in respect of any
Permitted Holdings Debt or Eligible Parent Debt (and, in the case of
Restricted Payments made in respect of such interest payments on
Eligible Parent Debt, Holdings may make Restricted Payments with the
proceeds of any such Restricted Payments received by Holdings), in an
aggregate amount not exceeding the aggregate amount of such interest
payment; provided that (i) at the time of and after giving effect to any
such Restricted Payment, (A) no Default shall have occurred and be
continuing and (B) the ratio of Annualized EBITDA to Fixed Charges shall
be greater than or equal to 1.0 to 1.0, (ii) such Restricted Payments
shall be applied to make such interest payment and (iii) the aggregate
amount of Restricted Payments made in reliance upon this clause (d)
shall not exceed $35,000,000 during any 12-month period, (e) on or after
the earlier of June 30, 2005 and the date after the end of the
Availability Period on which the Borrower shall have repaid at least 45%
of the aggregate principal amount of the Loans that were outstanding at
the end of the Availability Period, the Borrower may make Restricted
Payments at the time that any scheduled interest payment is due in
respect of any Permitted Holdings Debt or Eligible Parent Debt (and, in
the case of Restricted Payments made in respect of such interest
payments on Eligible Parent Debt, Holdings may make Restricted Payments
with the proceeds of any such Restricted Payments received by Holdings),
in an aggregate amount not exceeding the aggregate amount of such
interest payment; provided that (i) at the time of and after giving
effect to any such Restricted Payment, (A) no Default shall have
occurred and be continuing and (B) the ratio of Annualized EBITDA to
Fixed Charges shall be greater than or equal to 1.2 to 1.0, (ii) such
Restricted Payments shall be applied to make such interest payment and
(iii) the aggregate amount of Restricted Payments made in reliance upon
this clause (e) together with the aggregate amount of Restricted
Payments made in reliance upon clause (d) above shall not exceed
$100,000,000 during any 12-month period and (f) the Borrower and
Holdings may make Restricted Payments the proceeds of which are
contemporaneously used to purchase FCC Licenses (either
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directly as an asset purchase or as a portion of the consideration for
the acquisition of an entity that owns an FCC License, such portion not
to exceed the value of such FCC License) which are contributed to a
License Subsidiary within one Business Day of the date that such
Restricted Payments are made.
(g) Section 6.14 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.14. Amendment of Material Documents. Neither Holdings
nor the Borrower will, nor will they permit any Subsidiary Loan Party
to, amend, modify or waive any of its rights under (a) any Intercompany
Agreement, (b) its certificate of incorporation, by-laws or other
organizational documents, (c) the ChaseTel Purchase Agreement, (d) the
ChaseTel Credit Agreement or any agreement or instrument securing,
guaranteeing or evidencing any Permitted ChaseTel Financing (other than
amendments or modifications that do not adversely effect any Permitted
ChaseTel Financings) or (e) any agreement or instrument governing or
evidencing any Permitted Holdings Debt, FCC Debt or Eligible Parent
Debt.
(h) Section 6.15 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.15. Capital Expenditures. The Borrower will not permit
the aggregate amount of Capital Expenditures made by the Borrower and
its Subsidiaries in any calendar year to exceed the amount set forth
below with respect to such calendar year:
Year Amount
---- ------
1999 $ 74,000,000
2000 $585,000,000
2001 $469,000,000
2002 $484,000,000
2003 $206,000,000
2004 and thereafter $115,000,000
(i) Section 6.16 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.16. Covered POPS. The Borrower will not permit the
total number of Covered POPS at any
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time during any period set forth below to be less than the number set
forth below with respect to such period:
Period Number
------ ---------
January 1, 2000 to and
including March 31, 2000 275,000
April 1, 2000 to and
including June 30, 2000 1,150,000
July 1, 2000 to and
including September 30, 2000 1,500,000
October 1, 2000 to and
including December 31, 2000 1,500,000
January 1, 2001 to and
including March 31, 2001 7,500,000
April 1, 2001 to and
including June 30, 2001 7,500,000
July 1, 2001 to and
including September 30, 2001 11,500,000
October 1, 2001 to and
including December 31, 2001 13,300,000
January 1, 2002 to and
including December 31, 2002 13,400,000
January 1, 2003 to and
including December 31, 2003 20,500,000
January 1, 2004 to and
including December 31, 2004 21,100,000
January 1, 2005 to and
including December 31, 2005 21,600,000
January 1, 2006 and thereafter 22,000,000
(j) Section 6.17 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.17. Subscribers. The Borrower will not permit the
total number of Subscribers at any
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time during any period set forth below to be less than the number set
forth below opposite such period:
Period Number
------ ---------
January 1, 2000 to and
including March 31, 2000 16,500
April 1, 2000 to and
including June 30, 2000 23,000
July 1, 2000 to and
including September 30, 2000 36,000
October 1, 2000 to and
including December 31, 2000 56,000
January 1, 2001 to and
including March 31, 2001 145,000
April 1, 2001 to and
including June 30, 2001 216,000
July 1, 2001 to and
including September 30, 2001 323,000
October 1, 2001 to and
including December 31, 2001 475,000
January 1, 2002 to and
including December 31, 2002 725,000
January 1, 2003 to and
including December 31, 2003 1,400,000
January 1, 2004 to and
including December 31, 2004 2,000,000
January 1, 2005 to and
including December 31, 2005 2,450,000
January 1, 2006 and thereafter 2,700,000
(k) Section 6.19 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.19. Total Indebtedness to Annualized EBITDA. The
Borrower will not permit the ratio of Total Indebtedness to Annualized
EBITDA as of
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any date during any period set forth below to exceed the ratio set forth
below opposite such period:
Period Ratio
------ -----------
January 1, 2003 to and
including March 31, 2003 15.0 to 1.0
April 1, 2003 to and
including June 30, 2003 10.0 to 1.0
July 1, 2003 to and
including September 30, 2003 7.0 to 1.0
October 1, 2003 to and
including December 31, 2003 5.5 to 1.0
January 1, 2004 and thereafter 5.0 to 1.0
(l) Section 6.20 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.20. Consolidated EBITDA to Cash Interest Expense. The
Borrower will not permit the ratio of Consolidated EBITDA to Cash
Interest Expense for any period of four consecutive calendar quarters
ending during any period set forth below to be less than the ratio set
forth opposite such period:
Period Ratio
------ -----------
January 1, 2003 to and
including March 31, 2003 .90 to 1.0
April 1, 2003 to and
including June 30, 2003 1.10 to 1.0
July 1, 2003 to and
including September 30, 2003 1.20 to 1.0
October 1, 2003 to and
including December 31, 2003 1.60 to 1.0
January 1, 2004 and thereafter 3.00 to 1.0
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(m) Section 6.21 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.21. Minimum Gross Revenue. (a) After the earlier to
occur of (i) the last day of the first full calender quarter ending
after the consummation of the ChaseTel Acquisition in accordance with
Section 6.04 and (ii) September 30, 2000, the Borrower will not permit
the consolidated revenue of the Borrower and the Subsidiary Loan Parties
during any calendar quarter ending on a date set forth below to be less
than the amount set forth below opposite such date:
Calendar Quarter Ending Amount
----------------------- -----------
December 31, 1999 $ 1,330,000
March 31, 2000 $ 3,100,000
June 30, 2000 $ 5,200,000
September 30, 2000 $ 8,100,000
December 31, 2000 $21,000,000
March 31, 2001 $31,200,000
June 30, 2001 $44,700,000
September 30, 2001 $65,900,000
(b) The Borrower will not permit the consolidated revenue of the
Borrower and the Subsidiary Loan Parties during any calendar year ending
on a date set forth below to be less than the amount set forth below
opposite such date:
Calendar Year Ending Amount
-------------------- ------
December 31, 2001 $ 242,300,000
December 31, 2002 $ 554,600,000
December 31, 2003 $ 831,600,000
December 31, 2004 $1,073,200,000
December 31, 2005
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and thereafter $1,200,000,000
(n) Section 6.22 of the Credit Agreement is hereby deleted in its
entirety and replaced by the following:
SECTION 6.22. Activities of Holdings. Holdings will not engage
in any business or activity other than the ownership of all the
outstanding Equity Interests of the Borrower and activities incidental
thereto. Holdings will not own or acquire any assets (other than shares
of common stock of the Borrower, cash, Permitted Investments and, prior
to the issuance of Eligible Parent Debt, a promissory note issued by the
Parent to Holdings as consideration for the purchase price of equity in
Holdings) or incur any liabilities (other than liabilities under the
Loan Documents, liabilities imposed by law, including tax liabilities,
other liabilities incidental to its existence and liabilities in respect
of Permitted Holdings Debt, the ChaseTel Earnout or guarantees of
Eligible Parent Debt). Holdings will not create, incur, assume or permit
to exist any Lien on any asset now owned or hereafter acquired by it,
except Liens created under the Loan Documents and Permitted
Encumbrances.
SECTION 2. Approval of Terms of Eligible Parent Debt. Pursuant
to clause (b) of the definition of Eligible Parent Debt, the Lenders party
hereto hereby confirm that the covenants, events of default and similar
provisions thereof contained in the Description of Notes attached hereto as
Exhibit A are reasonably satisfactory to each such Lender.
SECTION 3. Representations and Warranties. Holdings and the
Borrower hereby represent and warrant to the Lenders and the Administrative
Agent that (a) this Amendment has been duly authorized, executed and delivered
by Holdings and the Borrower and each of this Amendment and the Credit Agreement
as amended hereby constitutes a legal, valid and binding obligation of Holdings
and the Borrower, enforceable in accordance with its terms, (b) as of the date
hereof, and after giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing and (c) the representations and
warranties of Holdings and the Borrower contained in the Credit Agreement, other
than those expressly made as of a specific date, are true and correct in all
material respects as if made on the date hereof.
SECTION 4. Conditions to Effectiveness. This Amendment shall
become effective as of the date first set
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forth above only upon the occurrence of the following conditions precedent:
(a) The Administrative Agent shall have received duly executed
counterparts of this Amendment which, when taken together, bear the
signatures of all the parties hereto.
(b) The Administrative Agent and each Lender shall have received
all fees and other amounts then due and payable to it, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower in connection with
this Amendment.
SECTION 5. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Credit Agreement. Except as expressly amended hereby,
the Credit Agreement shall continue in full force and effect in accordance with
the provisions thereof. Any reference in the Credit Agreement, or in any
documents or instruments required thereunder or annexes or schedules thereto,
referring to the Credit Agreement shall be deemed to refer to the Credit
Agreement as amended by this Amendment.
SECTION 7. Expenses. The Borrower agrees to reimburse the
Administrative Agent for its out-of-pocket expenses in connection with this
Amendment, including the fees, charges and disbursements of Cravath, Swaine &
Xxxxx, counsel for the Administrative Agent.
SECTION 8. Counterparts. This Amendment may be executed in two
or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract. Delivery of an
executed counterpart of a signature page by facsimile transmission
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shall be effective as delivery of a manually executed counterpart of this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first written above.
CRICKET COMMUNICATIONS
HOLDINGS, INC.,
by
/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
CRICKET COMMUNICATIONS, INC.,
by
/s/ Xxxxxx X. Xxxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President, Legal
LUCENT TECHNOLOGIES, INC.,
individually and as Administrative
Agent,
by
/s/ Xxxx Xxxx
----------------------------------
Name: Xxxx Xxxx
Title: Director - Customer Finance
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EXHIBIT A
DESCRIPTION OF THE NOTES
The Senior Notes and the Senior Discount Notes will be issued under an
Indenture, to be dated as of the Closing Date (the "Indenture"), between the
Company, as issuer, the Guarantor and State Street Bank and Trust Company, as
Trustee (the "Trustee"). The Senior Notes and the Senior Discount Notes are
collectively referred to as the "Notes." A copy of the Indenture is available
upon request from the Company. The following summary of certain provisions of
the Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Indenture,
the Notes and the Guarantee, including the definitions of certain terms therein
and those terms made a part thereof by reference to the Trust Indenture Act of
1939, as amended. Whenever particular defined terms of the Indenture not
otherwise defined herein are referred to, such defined terms are incorporated
herein by reference. For definitions of certain capitalized terms used in the
following summary, see "-- Certain Definitions." For purposes of the Description
of Notes, references to the "Company" are references solely to Leap Wireless
International, Inc. and do not include the Company's subsidiaries, except for
purposes of financial data determined on a consolidated basis.
GENERAL
MATURITY, INTEREST AND PRINCIPAL OF THE SENIOR NOTES
The Senior Notes will be initially limited to $225 million aggregate
principal amount, and will mature on April 15, 2010. Each Senior Note will
initially bear interest at the rate shown on the front cover of this Memorandum
from the Closing Date or from the most recent Interest Payment Date to which
interest has been paid or provided for, payable semiannually in arrears on April
15 and October 15 of each year, commencing April 15, 2000, to Holders of record
at the close of business on the April 1 or October 1 immediately preceding the
Interest Payment Date. Interest payments due on the first seven Interest Payment
Dates for the Senior Notes will be secured by amounts on deposit in the Pledge
Account described below. See "-- Security" below. See "-- Registration Rights"
for a description of the circumstances under which the interest rate on the
Notes may be increased.
The Company may, subject to the covenants described below under
"-- Covenants" and applicable law, issue additional Senior Notes under the
Indenture having identical terms and conditions to the Senior Notes offered
hereby. The Senior Notes offered hereby and any additional Senior Notes
subsequently issued would be treated as a single class for all purposes of the
Indenture.
MATURITY, INTEREST AND PRINCIPAL OF THE SENIOR DISCOUNT NOTES
The Senior Discount Notes will be initially limited to $668 million
aggregate principal amount at maturity, and will mature on April 15, 2010. The
Senior Discount Notes are being offered at a discount from their aggregate
principal amount at maturity, with the initial Accreted Value per $1,000 in
principal amount of Senior Discount Notes equal to $486.68 (representing the
original price at which the Senior Discount Notes are being offered). The Senior
Discount Notes will accrete (representing the amortization of original issue
discount) on a semiannual bond equivalent basis using a 360-day year comprised
of twelve 30-day months such that the Accreted Value shall be equal to the full
principal amount at maturity of the Senior Discount Notes on April 15, 2005 (the
"Full Accretion Date"). See "Certain Federal Income Tax Considerations." No
interest is payable in cash on the Senior Discount Notes prior to the Full
Accretion Date, other than interest payable as a result of an increase in the
interest as described under the caption "-- Registration Rights." Beginning on
the Full Accretion Date, the Senior Discount Notes will accrue interest at the
rate shown on the front cover of this Memorandum from the Full Accretion Date or
from the most recent Interest Payment Date to which interest has been paid,
payable in cash semiannually in arrears on April 15 and October 15 of each year,
commencing October 15, 2005, to Holders of record on the close of business on
the April 1 or October 1 immediately
87
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preceding the Interest Payment Date. See "-- Registration Rights" for a
description of the circumstances under which the interest rate on the Notes may
be increased.
The Company may, subject to the covenants described below under
"-- Covenants" and applicable law, issue additional Senior Discount Notes under
the Indenture having identical terms and conditions to the Senior Discount Notes
offered hereby. The Senior Discount Notes offered hereby and any additional
Senior Discount Notes subsequently issued would be treated as a single class for
all purposes of the Indenture.
RANKING
The Notes will be senior, unsecured (except to the extent described under
"-- Security" below with respect to the Senior Notes) obligations of the Company
and will rank equally in right of payment with all of our existing and future
senior unsecured indebtedness and will be senior in right of payment to all
future subordinated indebtedness of the Company. The Notes (except to the extent
described under "-- Security" below with respect to the Senior Notes) will not
be secured by any assets and will be effectively subordinated to any secured
indebtedness of the Company to the extent of the value of the assets securing
such indebtedness and to all indebtedness and other liabilities (including trade
payables and lease obligations) of our subsidiaries other than any Guarantor. As
of November 30, 1999, on a pro forma as adjusted basis, after giving effect to
the offering and application of proceeds thereof, we and our subsidiaries had
approximately $241.0 million of indebtedness to which holders of the Notes would
have been effectively subordinated. See "Capitalization." The operations of the
Company are conducted through its subsidiaries and, therefore, the Company is
dependent upon cash flow from those entities to meet its obligations. None of
the Company's subsidiaries other than any Guarantor will have any direct
obligation to pay amounts due on the Notes and will not guarantee the Notes. As
of the Closing Date, Cricket Communications Holdings will be the only subsidiary
of the Company which will be a Guarantor. The Guarantee will be a senior,
unsecured obligation of the Guarantor and will rank equally in right of payment
with all existing and future senior, unsecured indebtedness of the Guarantor and
will be subordinate in right of payment to all secured indebtedness of the
Guarantor to the extent of the value of the assets securing such indebtedness.
See "Risk Factors -- Our Ability to Service the Notes Depends on Our Ability to
Get Cash from Our Subsidiaries" and "-- The Notes Will be Effectively
Subordinated to Our Secured Debt." The Company and its subsidiaries will be
permitted to incur additional secured and unsecured indebtedness. See "Risk
Factors -- We Will Have Substantial Indebtedness, and We May Incur More
Indebtedness." See "Covenants -- Limitation on Indebtedness" for a description
of additional indebtedness that may be incurred.
The Company will grant a security interest to the Trustee for the benefit
of the holders of the Senior Notes in the Pledge Account and all amounts on
deposit therein. The holders of the Senior Notes will have a claim on the
amounts on deposit in the Pledge Account and any investment and reinvestment
thereof that is prior to the claims of other creditors of the Company.
PAYMENT, DENOMINATIONS
If a holder has given wire transfer instructions to the Company, the
Company will make all principal, premium, if any, and interest payments on such
Notes in accordance with such instructions. All other principal of, premium, if
any, and interest on the Notes will be payable, and the Notes may be exchanged
or transferred, at the office or agency of the Company maintained for such
purpose in the Borough of Manhattan, the City of New York (which initially will
be the corporate trust office of the Trustee at 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000); provided that, at the option of the Company, payment of interest may be
made by check mailed to the Holders at their addresses as they appear in the
Security Register.
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The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 of principal amount at maturity of the Notes and
integral multiples thereof. See "-- Book-Entry; Delivery and Form." No service
charge will be made for any registration of transfer or exchange of Notes, but
the Company may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.
GUARANTEE
On the Closing Date, Cricket Communications Holdings will jointly and
severally with any future Guarantors, as primary obligor and not merely as
surety, unconditionally and irrevocably guarantee (the "Guarantee") the due and
punctual payment of the principal of, premium, if any, and interest on the
Notes, on an unsecured basis, in accordance with the terms thereof and of the
Indenture. The Guarantee will be limited so as not to constitute a fraudulent
conveyance under applicable law. See, however, "Risk Factors -- Fraudulent
Conveyance Considerations." After the Closing Date, the Company will cause any
future domestic Restricted Subsidiary (other than any direct or indirect
Subsidiary of Cricket Communications Holdings or any License Subsidiary) and any
Restricted Subsidiary which guarantees certain Indebtedness of the Company to
execute and deliver to the Trustee a Guarantee pursuant to which such Restricted
Subsidiary will jointly and severally with all other Guarantors, as primary
obligor and not merely as surety, unconditionally and irrevocably guarantee the
due and punctual payment of the principal of, premium, if any, and interest on
the Notes, on an unsecured basis, in accordance with the terms thereof and of
the Indenture. See "Covenants -- Limitation on Issuance of Guarantees by
Restricted Subsidiaries" and "-- Future Guarantors." If no Event of Default has
occurred and is continuing, concurrently with any sale or disposition of all of
the Capital Stock of any Guarantor or all or substantially all of the assets of
any Guarantor to any Person that is not an Affiliate of the Company, which sale
or disposition is in compliance with the covenant entitled "Limitation on Asset
Sales" described below, or upon the designation of any Guarantor as an
Unrestricted Subsidiary in compliance with the Indenture, such Guarantor will
automatically and unconditionally be released from all obligations under its
Guarantee.
SECURITY
The Trustee will establish the Pledge Account on or before the Closing Date
in connection with the issuance of the Senior Notes. On the Closing Date, the
Company will deposit in the Pledge Account, for the benefit of the Holders of
the Senior Notes, an amount from the net proceeds of the Offering of the Senior
Notes sufficient to acquire Pledged Securities in an amount as will be
sufficient upon receipt of scheduled interest and principal payments on such
Pledged Securities to provide payment in full when due of the first seven
scheduled interest payments due on the Senior Notes. The Company expects to use
approximately $78.3 million of the net proceeds from the Offering of the Senior
Notes to acquire the Pledged Securities; however, the actual amount of the net
proceeds used to purchase the Pledged Securities will vary depending on the
interest rates on U.S. government obligations prevailing at the time of the
purchase of the Pledged Securities. The Pledged Securities will be deposited in
the Pledge Account on the Closing Date.
All amounts deposited in the Pledge Account and the Pledged Securities will
be pledged by the Company to the Trustee for the benefit of the Holders of the
Senior Notes pursuant to the Pledge Agreement. Pursuant to the Pledge Agreement,
immediately prior to an Interest Payment Date for the Senior Notes, the Company
may either deposit with the Trustee from funds otherwise available to the
Company cash sufficient to pay the interest scheduled to be paid on such date or
the Company may direct the Trustee to release from the Pledge Account proceeds
sufficient to pay interest then due on the Senior Notes. In the event the
Company exercises the former option, the Company may direct the
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Trustee to release a like amount of proceeds from the Pledge Account. The
Pledged Securities and Pledge Account also secure the repayment of the principal
amount and premium on the Senior Notes.
If an Event of Default shall have occurred and be continuing and the Senior
Notes shall have been accelerated, the Trustee shall apply the funds in the
Pledge Account in the following order of priority: first, to the Trustee for
amounts due to the Trustee under the Indenture; second, to the Holders for
amounts due and unpaid on the Senior Notes for interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Senior Notes for interest; and third, to the Holders for amounts due and
unpaid on the Senior Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Senior
Notes for principal.
Under the Pledge Agreement, once the Company makes the first six scheduled
interest payments on the Senior Notes, all of the remaining Pledged Securities,
if any, will be released from the Pledge Account and thereafter the Senior Notes
will be unsecured.
OPTIONAL REDEMPTION
OPTIONAL REDEMPTION OF SENIOR NOTES
The Senior Notes will be redeemable, at the Company's option, in whole or
in part, at any time or from time to time, on or after April 15, 2005 and prior
to maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's last address as it appears in the Security
Register, at the following Redemption Prices (expressed as percentages of
principal amount), plus accrued and unpaid interest, if any, to the Redemption
Date (subject to the right of Holders of record on the relevant Regular Record
Date that is prior to the Redemption Date to receive interest due on an Interest
Payment Date), if redeemed during the 12-month period commencing April 15, of
the years set forth below:
YEAR REDEMPTION PRICE
---- ----------------
2005.................................................... 106.250%
2006.................................................... 104.167%
2007.................................................... 102.083%
2008 and thereafter..................................... 100.000%
In addition, at any time prior to April 15, 2003, the Company may redeem up
to 35% of the aggregate principal amount of the Senior Notes originally issued
with the Net Cash Proceeds of one or more Qualified Equity Offerings, at any
time as a whole or from time to time in part, at a Redemption Price (expressed
as a percentage of principal amount) of 112.50%, plus accrued and unpaid
interest to the Redemption Date (subject to the rights of Holders of record on
the relevant Regular Record Date that is prior to the Redemption Date to receive
interest due on an Interest Payment Date); provided that at least 65% of the
aggregate principal amount of Senior Notes originally issued remains outstanding
after each such redemption and notice of such redemption is given to the Holders
within 60 days after consummation of such Qualified Equity Offering.
OPTIONAL REDEMPTION OF SENIOR DISCOUNT NOTES
The Senior Discount Notes will be redeemable, at the Company's option, in
whole or in part, at any time or from time to time, on or after April 15, 2005
and prior to maturity, upon not less than 30 nor more than 60 days' prior notice
mailed by first class mail to each Holder's last address as it appears in the
Security Register, at the following Redemption Prices (expressed as percentages
of principal amount at maturity), plus accrued and unpaid interest, if any, to
the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive
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interest due on an Interest Payment Date), if redeemed during the 12-month
period commencing April 15, of the years set forth below:
YEAR REDEMPTION PRICE
---- ----------------
2005.................................................... 107.250%
2006.................................................... 104.833%
2007.................................................... 102.417%
2008 and thereafter..................................... 100.000%
In addition, at any time prior to April 15, 2003, the Company may redeem up
to 35% of the aggregate principal amount at maturity of the Senior Discount
Notes originally issued with the Net Cash Proceeds of one or more Qualified
Equity Offerings, at any time as a whole or from time to time in part, at a
Redemption Price (expressed as a percentage of Accreted Value on the Redemption
Date) of 114.5%, plus accrued and unpaid interest to the Redemption Date
(subject to the rights of Holders of record on the relevant Regular Record Date
that is prior to the Redemption Date to receive interest due on an Interest
Payment Date); provided that 65% of the aggregate principal amount at maturity
of the Senior Discount Notes originally issued remains outstanding after each
such redemption and notice of such redemption is given to the Holders within 60
days after consummation of such Qualified Equity Offering.
SELECTION
In the case of any partial redemption, selection of the Senior Notes or
Senior Discount Notes, as the case may be, to be redeemed will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not listed
on a national securities exchange, on a pro rata basis or by such other method
as the Trustee in its sole discretion shall deem to be fair and appropriate;
provided that no Notes of $1,000 or less in principal amount of the Senior Notes
or Accreted Value of the Senior Discount Notes shall be redeemed in part. If any
Note is to be redeemed in part only, the notice of redemption relating to such
Note shall state the portion of the principal amount thereof to be redeemed. A
new Note in principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the original Note.
SINKING FUND
The Notes will not have the benefit of any sinking fund.
REGISTRATION RIGHTS
The Company will use its best efforts, at its cost, to file and cause to
become effective a registration statement with respect to a registered offer
(the "Exchange Offer") to exchange the Senior Notes and the Senior Discount
Notes, respectively, for senior notes and senior discount notes of the Company,
respectively (the "Exchange Notes"), to be issued under the Indenture with terms
identical to the Senior Notes and Senior Discount Notes, respectively (except
that the Exchange Notes will not contain the interest rate step-up provision
contained herein or bear legends restricting the transfer thereof). Upon such
registration statement being declared effective, the Company shall offer the
Exchange Notes in return for surrender of the Notes. Such offer shall remain
open for not less than 20 business days after the date notice of the Exchange
Offer is mailed to Holders. For each Senior Note or Senior Discount Note
surrendered to the Company under the Exchange Offer, the Holder will receive an
Exchange Note of equal principal amount at maturity. Interest on each Exchange
Note issued in exchange for a Senior Note shall accrue from the last Interest
Payment Date on which interest was paid on the Senior Notes so
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surrendered or, if no interest has been paid on such Senior Notes, from the
Closing Date. The Accreted Value of each Exchange Note issued in exchange for a
Senior Discount Note shall be identical to, and shall be determined in the same
manner as, the Accreted Value of the Senior Discount Notes so surrendered and
exchanged. Interest on each Exchange Note issued in exchange for a Senior
Discount Note shall be calculated and paid in the same manner as interest on the
Senior Discount Notes so surrendered and exchanged. In the event that applicable
interpretations of the staff of the SEC do not permit the Company to effect the
Exchange Offer, or under certain other circumstances, the Company shall, at its
cost, use its best efforts to cause to become effective a shelf registration
statement (the "Shelf Registration Statement") with respect to resales of the
Notes and to keep such registration statement effective until the earlier of the
expiration of the time period referred to in Rule 144(k) under the Securities
Act and the date upon which all of the Notes covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration Statement. The
Company shall, in the event of such a shelf registration, provide to each
registered Holder copies of the prospectus, notify each registered Holder when
the Shelf Registration Statement for the Notes has become effective and take
certain other actions as are required to permit resales of the Notes. A Holder
that sells its Notes pursuant to the Shelf Registration Statement generally will
be required to be named as a selling security holder in the related prospectus
and to deliver a prospectus to purchasers, will be subject to certain of the
civil liability provisions under the Securities Act in connection with such
sales and will be bound by the provisions of the Registration Rights Agreement
that are applicable to such a Holder (including certain indemnification
obligations).
In the event that the Exchange Offer is not consummated and a Shelf
Registration Statement is not declared effective on or prior to the date that is
180 days after the Closing Date, (i) the interest rate borne by the Senior Notes
shall be increased by .50% per annum over the rate shown on the cover page of
this Memorandum and (ii) interest in addition to the accrual of original issue
discount and in addition to interest otherwise due for periods after the Full
Accretion Date will accrue on the Senior Discount Notes at a rate per annum
equal to .50% of the Accreted Value thereof, in each case until the Exchange
Offer is consummated or a Shelf Registration is declared effective. In the event
of such an increase in the per annum interest rate on the Notes, the Trustee
shall provide notice thereof to the Holders upon receipt of notice from the
Company of such increase.
The Company will be entitled to close the Exchange Offer 20 business days
after the commencement thereof, provided that it has accepted all Notes
theretofore validly surrendered in accordance with the terms of the Exchange
Offer. Notes not tendered in the Exchange Offer shall bear interest at the rate
set forth on the cover page of this Memorandum and be subject to all of the
terms and conditions specified in the Indenture and to the transfer restrictions
described in "Transfer Restrictions." Holders of Notes who do not participate in
the Exchange Offer may thereafter hold a less liquid security.
The Company will be required to allow participating broker-dealers and
other persons, if any, with similar prospectus delivery requirements to use the
prospectus contained in the registration statement in connection with the resale
of Exchange Notes for a period of 180 days from the issuance of the Exchange
Notes.
This summary of certain provisions of the Registration Rights Agreement
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy of which is available from the Company upon request.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
covenants and other provisions of the Indenture. Reference is made to the
Indenture for the definition of all terms as well as any other capitalized term
used herein for which no definition is provided.
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"Accreted Value" means, as of any date prior to April 15, 2005, an amount
per $1,000 principal amount at maturity of the Senior Discount Notes that is
equal to the sum of (a) the initial offering price ($486.68 per $1,000 principal
amount at maturity of the Senior Discount Notes) of such Senior Discount Notes
and (b) the portion of the excess of the principal amount of such Senior
Discount Notes over such initial offering price which shall have been amortized
through such date, such amount to be so amortized on a daily basis and
compounded semiannually on each April 15 and October 15 at the rate of 14 1/2%
per annum from the date of original issue of the Senior Discount Notes through
the date of determination computed on the basis of a 360-day year of twelve
30-day months, and as of any date on or after April 15, 2005, the principal
amount of each Senior Discount Note.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time such Person becomes a Restricted Subsidiary or (ii) assumed in connection
with an Asset Acquisition by a Restricted Subsidiary and not Incurred in
connection with, or in anticipation of, such Person becoming a Restricted
Subsidiary or such Asset Acquisition.
"Adjusted Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
determined in conformity with GAAP; provided that the following items shall be
excluded in computing Adjusted Consolidated Net Income (without duplication):
(i) the net income of any Person that is not a Restricted Subsidiary,
except to the extent of the amount of dividends or other distributions
actually paid to the Company or any of its Restricted Subsidiaries by such
other Person during such period;
(ii) solely for the purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
the "Limitation on Restricted Payments" covenant described below (and in
such case, except to the extent includable pursuant to clause (i) above),
the net income (or loss) of any Person accrued prior to the date it becomes
a Restricted Subsidiary or is merged into or consolidated with the Company
or any of its Restricted Subsidiaries or all or substantially all of the
property and assets of such Person are acquired by the Company or any of
its Restricted Subsidiaries;
(iii) the net income of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time of
determination permitted by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Restricted Subsidiary;
(iv) any gains or losses (on an after-tax basis) attributable to sales
of assets of the Company or any Restricted Subsidiary other than in the
ordinary course of business;
(v) solely for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
the "Limitation on Restricted Payments" covenant described below, any
amount paid or accrued as dividends on Preferred Stock of the Company or
any Restricted Subsidiary owned by Persons other than the Company and any
of its Restricted Subsidiaries;
(vi) all extraordinary gains and extraordinary losses;
(vii) any compensation expense paid or payable solely with Capital
Stock (other than Disqualified Capital Stock) of the Company or any
options, warrants or other rights to acquire Capital Stock (other than
Disqualified Capital Stock) of the Company; and
(viii) the cumulative effect of a change in accounting principles.
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"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), excluding write-ups of
capital assets (other than write-ups of tangible assets in connection with
accounting for acquisitions made in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, copyrights, organizational and developmental expenses,
unamortized debt discount and expense, unamortized deferred charges and other
like intangibles (other than FCC license acquisition costs), all as set forth on
the most recent quarterly or annual consolidated balance sheet of the Company
and its Restricted Subsidiaries, prepared in conformity with GAAP and filed with
the Trustee pursuant to the "Commission Reports and Reports to Holders"
covenant.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries; provided that such Person's
primary business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such investment or (ii)
an acquisition by the Company or any of its Restricted Subsidiaries of the
property and assets of any Person other than the Company or any of its
Restricted Subsidiaries that constitute substantially all of a division or line
of business of such Person; provided that the property and assets acquired are
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the Company or
any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets of the Company or any of its Restricted
Subsidiaries outside the ordinary course of business of the Company or such
Restricted Subsidiary and, in each case, that is not governed by the provisions
of the Indenture applicable to mergers, consolidations and sales of all or
substantially all of the assets of the Company; provided that "Asset Sale" shall
not include (a) sales or other dispositions of inventory, receivables and other
current assets, (b) sales, transfers or other dispositions of assets
constituting a Restricted Payment permitted to be made under the "Limitation on
Restricted Payments" covenant, (c) sales or other dispositions of assets for
consideration at least equal to the fair market value of the assets sold or
disposed of (as determined by the Board of Directors whose good faith
determination shall be conclusive and evidenced by a Board Resolution), provided
that the consideration received consists of property or assets (other than
current assets) of a nature or type or that are used in a business (or a company
having property or assets of a nature or type, or engaged in a business) similar
or related to the nature or type of the property and assets of, or business of,
the Company and its Restricted Subsidiaries existing on the date of such sale or
other disposition or
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(d) sales or other dispositions of assets with a fair market value not in excess
of $1,000,000 per year (as certified in an Officer's Certificate).
"Average Life" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (a)
the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of the Board of Directors.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the Closing Date, including, without limitation, all Common Stock
and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, Personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of the
rental obligations under a Capitalized Lease.
"Change of Control" means such time as (i) a "person" or "group" (within
the meaning of Section 13(d) or 14(d)(2) under the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 35% of the total voting power of the Voting Stock of the Company on a
fully diluted basis; or (ii) individuals who on the Closing Date constitute the
Board of Directors (together with any new directors whose election by the Board
of Directors or whose nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the members of the Board of
Directors then in office who either were members of the Board of Directors on
the Closing Date or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the members of the
Board of Directors then in office.
"Closing Date" means the date on which the Notes are originally issued
under the Indenture.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non voting) of such Person's equity, other than Preferred Stock of
such Person, whether now outstanding or issued after the Closing Date, including
without limitation, all series and classes of such common stock.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income (i) Consolidated Interest Expense,
(ii) income taxes (other than income taxes (either positive or negative)
attributable to extraordinary and non-recurring gains or losses or sales of
assets), (iii) depreciation expense, (iv) amortization expense, and (v) all
other non-cash items reducing Adjusted Consolidated Net Income (other than items
that will require cash payments and for which an accrual or reserve is, or is
required by GAAP to be, made), less all non-cash items increasing Adjusted
Consolidated Net Income, all as determined on a consolidated basis for the
Company and its Restricted Subsidiaries in conformity with GAAP; provided that,
if any Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,
Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in
accordance with GAAP) by an amount equal to (a) the amount of the Adjusted
Consolidated Net Income attributable to such Restricted Subsidiary multiplied by
(b) the percentage ownership interest in the income of such Restricted
Subsidiary not owned on the last day of such period by the Company or any of its
Restricted Subsidiaries.
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"Consolidated Interest Expense" means, for any period, the aggregate amount
of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Notes, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding on such Transaction Date to
(ii) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters for which financial statements of the Company have been filed
with the Trustee pursuant to the "Commission Reports and Reports to Holders"
covenant described below (such four fiscal quarter period being the "Reference
Period"); provided that, in making the foregoing calculation, (a) pro forma
effect shall be given to any Indebtedness that is to be Incurred or repaid on
the Transaction Date as if such Incurrence or repayment had occurred on the
first day of such Reference Period; (b) pro forma effect shall be given to Asset
Dispositions and Asset Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Disposition) that occur during such
Reference Period or thereafter but on or prior to the Transaction Date as if
they had occurred and such proceeds had been applied on the first day of such
Reference Period; and (c) pro forma effect shall be given to asset dispositions
and asset acquisitions (including giving pro forma effect to the application of
proceeds of any asset disposition) that have been made by any Person that has
become a Restricted Subsidiary or has been merged with or into the Company or
any Restricted Subsidiary during such Reference Period or thereafter but on or
prior to the Transaction Date and that would have constituted Asset Dispositions
or Asset Acquisitions had such transactions occurred when such Person was a
Restricted Subsidiary as if such asset dispositions or asset acquisitions were
Asset Dispositions or Asset Acquisitions that occurred on the first day of such
Reference Period, provided that to the extent that clause (b) or (c) of this
sentence requires that pro forma effect be given to an Asset Acquisition or
Asset Disposition, such pro forma calculation shall be based upon the four full
fiscal quarters immediately preceding the Transaction Date of the Person, or
division or line of business of the Person, that is acquired or disposed for
which financial information is available and shall be prepared in good faith by
the Company on a basis consistent with Regulation S-X under the Securities Act.
"Consolidated Net Worth" means, at any date of determination, stockholders'
equity as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries filed
with the Trustee pursuant to the "Commission Reports and Reports to Holders"
covenant described below (which shall be as of a date not more than 90 days
prior to the date of such computation, and which shall not take into account
Unrestricted Subsidiaries), less any amounts attributable to Disqualified Stock
or any equity security convertible into or exchangeable for Indebtedness, the
cost of treasury stock and the principal amount of any promissory notes
receivable from the sale of the Capital Stock of the Company or any of its
Restricted Subsidiaries, each item to be determined in conformity with GAAP
(excluding the effects of foreign currency exchange adjustments under Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 52).
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"Cricket Communications Holdings" means Cricket Communications Holdings,
Inc.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Disinterested Director" means, with respect to any transaction, including
an acquisition of FCC wireless licenses, a member of the Board of Directors who
is not an officer or employee of the Company and would not be a party to, or
have a financial interest in, such transaction. For purposes of this definition,
no person would be deemed not to be a Disinterested Director solely because such
person holds Capital Stock of the Company.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in "Limitation on Asset Sales" and
"Repurchase of Notes upon a Change of Control" covenants described below and
such Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to the
"Limitation on Asset Sales" and "Repurchase of Notes Upon a Change of Control"
covenants described below.
"fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Board of Directors, whose determination shall be conclusive if
evidenced by a Board Resolution; provided that the fair market value of any FCC
wireless licenses for purposes of the definition of "Qualified Proceeds" shall
be as determined in good faith by the Board of Directors, including a majority
of the Disinterested Directors, which determination shall be conclusive if
evidenced by a Board Resolution.
"FCC" means the Federal Communications Commission.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Closing Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations contained or referred to in
the Indenture shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance with
the terms of the covenants and with other provisions of the Indenture shall be
made without giving effect to (i) the amortization of any expenses incurred in
connection with the offering of the Notes and (ii) except as otherwise provided,
the amortization of any amount required or permitted by Accounting Principles
Board Opinion Nos. 16 and 17.
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"Guarantees" mean any guarantees by the Guarantors of the obligations of
the Company under the Indenture and the Notes.
"guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly Guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "guarantee" shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb has a corresponding meaning.
"Guarantor" means any Subsidiary of the Company that executes a Guarantee
in accordance with the provisions of the Indenture and their respective
successors and assigns.
"Holder" means any record Holder of a Note.
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an "Incurrence" of Indebtedness by reason of a Person becoming a
Restricted Subsidiary; provided that neither the accrual of interest nor the
accretion of original issue discount shall be considered an Incurrence of
Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication):
(i) all indebtedness of such Person for borrowed money;
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(iii) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with
respect thereto, but excluding obligations with respect to letters of
credit (including trade letters of credit) securing obligations (other than
obligations described in (i) or (ii) above or (v), (vi) or (vii) below)
entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if drawn upon, to the
extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement);
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or
taking delivery and title thereto or the completion of such services,
except Trade Payables;
(v) all Capitalized Lease Obligations;
(vi) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided that the amount of such Indebtedness shall be the lesser of (a)
the fair market value of such asset at such date of determination and (b)
the amount of such Indebtedness;
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(vii) all Indebtedness of other Persons guaranteed by such Person to
the extent such Indebtedness is guaranteed by such Person; and
(viii) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate Agreements.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date (or in the case of a revolving credit or other
similar facility, the total amount of funds outstanding and/or available on the
date of determination) of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided (1) that
the amount outstanding at any time of any Indebtedness issued with original
issue discount is the face amount of such Indebtedness less the unamortized
portion of the original issue discount of such Indebtedness at the time of its
issuance as determined in conformity with GAAP, (2) money borrowed at the time
of the Incurrence of any Indebtedness in order to pre-fund the payment of
interest on such Indebtedness shall be deemed not to be "Indebtedness" so long
as such money is held to secure the payment of such interest, (3) contingent
obligations arising in connection with the acquisition of any business or
Person, based on the future performance of such business or Person, shall not
constitute Indebtedness except to the extent such obligations are not paid
within seven business days of the date such contingency is resolved under GAAP
and are recorded as a liability on the books of the Company and its Subsidiaries
and (4) liabilities for federal, state, local or other taxes shall not
constitute Indebtedness.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of guarantee or
similar arrangement; but excluding advances to customers in the ordinary course
of business that are, in conformity with GAAP, recorded as accounts receivable
on the balance sheet of the Company or its Restricted Subsidiaries) or capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person and shall include (i) the designation
of a Restricted Subsidiary as an Unrestricted Subsidiary and (ii) the fair
market value of the Capital Stock (or any other Investment), held by the Company
or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to
be a Restricted Subsidiary, including without limitation, by reason of any
transaction permitted by clause (iii) of the "Limitation on the Issuance and
Sale of Capital Stock of Restricted Subsidiaries" covenant. For purposes of the
definition of "Unrestricted Subsidiary" and the "Limitation on Restricted
Payments" covenant described below, (a) the amount of or a reduction in an
Investment shall be equal to the fair market value thereof at the time such
Investment is made or reduced and (b) in the event the Company or any Restricted
Subsidiary makes an Investment by transferring assets to any Person and as part
of such transaction receives Net Cash Proceeds, the amount of such Investment
shall be the fair market value of the assets less the amount of Net Cash
Proceeds so received, provided that the Net Cash proceeds are applied in
accordance with clause (a) and (b) of the "Limitation on Asset Sales" covenant.
"License Subsidiary" means a Wholly Owned Subsidiary of the Company
directly owned by the Company formed for the purpose of holding wireless
licenses granted by the FCC.
"Licensed Domestic POPS" means the number of potential customers in the
geographic areas within the United States covered by wireless licenses granted
by the FCC and owned by the Company or
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any of its domestic Restricted Subsidiaries based on population statistics
published in a recognized demographic data source using as a basis for its
population estimates the most recent U.S. Census Bureau Data.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof or any agreement to
give any security interest).
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (i) with respect to any Asset Sale, the proceeds
of such Asset Sale in the form of cash or cash equivalents, including payments
in respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (a) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (b) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (c) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (1) is
secured by a Lien on the property or assets sold or (2) is required to be paid
as a result of such sale and (d) appropriate amounts to be provided by the
Company or any Restricted Subsidiary of the Company as a reserve against any
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP and
(ii) with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary of the Company)
and proceeds from the conversion of other property received when converted to
cash or cash equivalents, net of attorney's fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees incurred in connection with such issuance or sale and
net of taxes paid or payable as a result thereof.
"Offer to Purchase" means an offer by the Company to purchase Notes from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating:
(i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata
basis;
(ii) the purchase price and the date of purchase (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed) (the "Payment Date");
(iii) that any Note not tendered will continue to accrue interest or
original issue discount pursuant to its terms;
(iv) that, unless the Company defaults in the payment of the purchase
price, any Note accepted for payment pursuant to the Offer to Purchase
shall cease to accrue interest or original issue discount on and after the
Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the
Offer to Purchase will be required to surrender the Note, together with the
form entitled "Option of the Holder to Elect Purchase" on the reverse side
of the Note completed, to the Paying Agent at the address specified in
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the notice prior to the close of business on the Business Day immediately
preceding the Payment Date;
(vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only in part will
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered; provided that each Note purchased shall be in an
integral multiple of $1,000 of the principal amount at maturity of the
Notes and each new Note issued shall be in a principal amount at maturity
of $1,000 or integral multiples thereof.
On the Payment Date, the Company shall (a) accept for payment on a pro rata
basis Notes or portions thereof validly tendered pursuant to an Offer to
Purchase: (b) deposit with the Paying Agent money sufficient to pay the purchase
price of all Notes or portions thereof so accepted; and (c) deliver, or cause to
be delivered, to the Trustee all Notes or portions thereof so accepted together
with an Officer's Certificate specifying the Notes or portions thereof accepted
for payment by the Company. The Paying Agent shall promptly mail to the Holders
of Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Holders a new Note equal in
principal amount to any unpurchased portion of the Note surrendered; provided
that each Note purchased shall be in an integral multiple of $1,000 of the
principal amount at maturity of the Notes and each new Note issued shall be in a
principal amount at maturity of $1,000 or integral multiples thereof. The
Company will publicly announce the results of an Offer to Purchase as soon as
practicable after the Payment Date. The Trustee shall act as the Paying Agent
for an Offer to Purchase. The Company will comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable, in the event that the Company
is required to repurchase Notes pursuant to an Offer to Purchase. To the extent
that the provisions of any applicable federal or state securities laws or
regulations conflict with the provision of the Indenture relating to an Offer to
Purchase, the Company will comply with such laws or regulations and will not be
deemed to have breached such provisions of the Indenture by virtue thereof.
"Officer's Certificate" of any Person means a certificate signed on behalf
of such Person by the principal executive officer, the principal accounting
officer or the principal financial officer of such Person.
"Permitted Cricket Holdings Shares and Options" means the issuance by
Cricket Communications Holdings, Inc. of (i) shares of its common stock upon the
exercise of that certain warrant to be issued to Chase Telecommunications
Holdings, Inc. for a number of shares not to exceed 1% of its outstanding common
stock and (ii) options for common stock issued pursuant to stock option plans of
Cricket Communications Holdings, which have been approved by the Board of
Directors and shares of common stock issued upon exercise of such options.
"Permitted Investment" means:
(i) an Investment in the Company or a domestic Restricted Subsidiary
or a Person which will, upon the making of such Investment, become a
domestic Restricted Subsidiary or be merged or consolidated with or into or
transfer or convey all or substantially all its assets to, the Company or a
domestic Restricted Subsidiary; provided that such person's primary
business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such Investment;
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(ii) Temporary Cash Investments;
(iii) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP;
(iv) stock, obligations or securities received in satisfaction of
judgments;
(v) Investments in prepaid expenses, negotiable instruments held for
collection, and lease, utility and worker's compensation, performance and
other similar deposits made in the ordinary course of business;
(vi) Interest Rate Agreements and Currency Agreements designed solely
to protect the Company and its Restricted Subsidiaries against fluctuations
in interest rates or foreign currency exchange rates;
(vii) loans or advances to officers or employees of the Company or any
Restricted Subsidiary that do not in the aggregate exceed $3 million at any
time outstanding;
(viii) Investments in Restricted Subsidiaries of the Company in Chile
not to exceed $100 million in the aggregate after the Closing Date;
(ix) Investments existing on the Closing Date;
(x) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made in compliance with the
"Asset Sale" covenant; and
(xi) Investments in securities received in satisfaction of accounts
receivable pursuant to any plan of reorganization or similar arrangement
upon the bankruptcy of the obligor on such accounts receivable.
"Permitted Liens" means:
(i) Liens for taxes, assessments, governmental charges or claims that
are being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made;
(ii) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security;
(iv) Liens incurred or deposits made (including deposits made to the
FCC) to secure the performance of tenders, bids, leases, statutory or
regulatory obligations, bankers' acceptances, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money);
(v) easements, rights-of-way, municipal and zoning ordinances and
similar charges, encumbrances, title defects or other irregularities that
do not materially interfere with the ordinary course of business of the
Company or any of its Restricted Subsidiaries;
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(vi) Liens (including extensions and renewals thereof) upon real or
personal property acquired after the Closing Date; provided that (a) such
Lien is created solely for the purpose of securing Indebtedness Incurred,
in accordance with the "Limitation on Indebtedness" covenant described
below, (1) to finance the cost (including the cost of design, development,
acquisition, construction, installation, integration or improvement) of the
item of property or assets subject thereto and such Lien is created prior
to, at the time of or within six months after the later of the acquisition,
the completion of construction or the commencement of full operation of
such property or (2) to refinance any Indebtedness previously so secured,
(b) the principal amount of the Indebtedness secured by such Lien does not
exceed 100% of such cost and (c) any such Lien shall not extend to or cover
any property or assets other than such item of property or assets and any
improvements on such item;
(vii) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries, taken as a whole;
(viii) any interest or title of a lessor in the property subject to
any Capitalized Lease or operating lease;
(ix) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(x) Liens on property of, or on shares of Capital Stock or
Indebtedness of, any Person existing at the time such Person becomes, or
becomes a part of, any Restricted Subsidiary; provided that such Liens do
not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets acquired;
(xi) Liens in favor of the Company or any Restricted Subsidiary;
(xii) Liens arising from the rendering of a final judgment or order
against the Company or any Restricted Subsidiary of the Company that does
not give rise to an Event of Default;
(xiii) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to
such letters of credit and the products and proceeds thereof;
(xiv) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xv) Liens encumbering customary initial deposits and margin deposit,
and other Liens that are either within the general parameters customary in
the industry and incurred in the ordinary course of business, in each case,
securing Indebtedness under Interest Rate Agreements and Currency
Agreements and forward contracts, options, future contracts, futures
options or similar agreements or arrangements designed solely to protect
the Company or any of its Restricted Subsidiaries from fluctuations in
interest rates, currencies or the price of commodities;
(xvi) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business;
(xvii) Liens on or sales of receivables;
(xviii) Liens on wireless licenses issued by the FCC to secure
obligations in favor of the FCC;
(xix) Liens on cash set aside at the time of the Incurrence of any
Indebtedness, or government securities purchased with such cash, in either
case to the extent such cash or government securities
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prefund the payment of interest on such Indebtedness and are held in an
escrow account or similar arrangement to be applied for such purpose;
(xx) Liens on the Capital Stock of License Subsidiaries to secure
Indebtedness under credit facilities with any vendor, supplier or
contractor (or any financial institution providing financing arranged by or
on behalf of such vendor, supplier or contractor) permitted to be incurred
under the "Limitation on Indebtedness" covenant;
(xxi) Liens on promissory notes evidencing intercompany loans from the
Company to Restricted Subsidiaries to secure Indebtedness under credit
facilities with any vendor, supplier or contractor (or any financial
institution providing financing arranged by or on behalf of such vendor,
supplier or contractor) permitted to be Incurred under the "Limitation on
Indebtedness" covenant; and
(xxii) Liens that secure Indebtedness with an aggregate principal
amount not in excess of $10 million at any time outstanding.
"Pledge Account" means an account established with a securities
intermediary for the benefit of the Trustee pursuant to the terms of the Pledge
Agreement for the deposit of certain of the net cash proceeds from the Senior
Notes and the Pledged Securities to be purchased by the Company with such net
cash proceeds and all proceeds therefrom.
"Pledge Agreement" means the Collateral Pledge and Security Agreement,
dated as of the Closing Date, made by the Company in favor of the Trustee
governing the security interest in, and the disbursement of funds from, the
Pledge Account, as such agreement may be amended, restated, supplemented or
otherwise modified from time to time.
"Pledged Securities" means the U.S. Government Obligations to be purchased
by the Company with a portion of the proceeds from the issuance and sale of the
Senior Notes and held by the Trustee in the Pledge Account in accordance with
the Pledge Agreement.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
now outstanding or issued after the Closing Date, including, without limitation,
all series and classes of such preferred stock or preference stock.
"Qualified Equity Offering" means an underwritten primary public offering
or private placement of Capital Stock (other than Disqualified Stock) of the
Company resulting in aggregate Net Cash Proceeds to the Company of $50 million
or more; provided, however, that no public offering or private placement
consummated on, or within 180 days after, the Closing Date shall constitute a
Qualified Equity Offering.
"Qualified Proceeds" means (i) Net Cash Proceeds received by the Company on
or after the Closing Date from the issuance and sale of its Capital Stock (other
than Disqualified Stock) to a Person that is not a Subsidiary of the Company and
(ii) 80% of the fair market value on the date of acquisition of FCC wireless
licenses acquired by the Company or its Restricted Subsidiaries after the
Closing Date to the extent the consideration paid therefor is Capital Stock of
the Company (other than Disqualified Stock).
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group, a division of the XxXxxx-Xxxx
Companies.
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and
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payable and (ii) with respect to any scheduled installment of principal of or
interest on any debt security, the date specified in such debt security as the
fixed date on which such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Temporary Cash Investment" means any of the following:
(i) direct obligations of the United States of America or any agency
thereof or obligations fully and unconditionally guaranteed by the United
States of America or any agency thereof, in each case (other than with
respect to Pledged Securities) maturing within one year after the date of
acquisition;
(ii) time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof issued
by a bank or trust company which is organized under the laws of the United
States of America, any state thereof or any foreign country recognized by
the United States, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $50 million (or the foreign
currency equivalent thereof) and has outstanding debt which is rated "A"
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under
the Securities Act) or any moneymarket fund sponsored by a registered
broker dealer or mutual fund distribution;
(iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) above entered
into with a bank meeting the qualifications described in clause (ii) above;
(iv) commercial paper, maturing not more than 270 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the
Company) organized and in existence under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Xxxxx'x or "A-1" (or
higher) according to S&P; and
(v) securities with maturities of six months or less from the date of
acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or Xxxxx'x.
"Trade Payables" means, with respect to any Person, any accounts payable or
any other indebtedness or monetary obligation to trade creditors created,
assumed or guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; provided that (a) any guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be
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deemed an "Incurrence" of such Indebtedness and an "Investment" by the Company
or such Restricted Subsidiary (or both, if applicable) at the time of such
designation; (b) either (1) the Subsidiary to be so designated has total assets
of $1,000 or less or (2) if such Subsidiary has assets greater than $1,000, such
designation would be permitted under the "Limitation on Restricted Payments"
covenant described below and (c) if applicable, the Incurrence of Indebtedness
and the Investment referred to in clause (a) of this proviso would be permitted
under the "Limitation on Indebtedness" and "Limitation on Restricted Payments"
covenants described below. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary, provided that immediately after giving
effect to such designation (x) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately after such designation would, if Incurred at
such time, have been permitted to be Incurred (and shall be deemed to have been
Incurred) for all purposes of the Indenture and (y) no Default or Event of
Default shall have occurred and be continuing. Any such designation by the Board
of Directors shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which full faith and credit of the United States of America is pledged and which
are not callable at the Company's option.
"Voting Stock" means with respect to any Person, Capital Stock of any class
or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Warrants" means the Warrants issued on the Closing Date.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person. Notwithstanding the foregoing Cricket Communications Holdings shall be
deemed Wholly Owned by the Company as long as the Company owns not less than 85%
of its outstanding Capital Stock on a fully diluted basis.
COVENANTS
The Indenture will contain, among others, the following covenants.
LIMITATION ON INDEBTEDNESS
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (other than the Notes issued on the
Closing Date and Indebtedness existing on the Closing Date); provided that the
Company may Incur Indebtedness if, after giving effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds therefrom, the
Consolidated Leverage Ratio would be greater than zero and less than 6 to 1.
(b) Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the following:
(i) Indebtedness under one or more credit facilities in an aggregate
principal amount not to exceed $300 million, less any amount of such
Indebtedness permanently repaid as provided under the "Limitation on Asset
Sales" covenant described below;
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(ii) Indebtedness owed (a) by a Restricted Subsidiary to the Company
or (b) by the Company or a Restricted Subsidiary to any Restricted
Subsidiary; provided that (1) if the Company or any Guarantor is the
obligor on such Indebtedness, such Indebtedness shall be evidenced by a
promissory note expressly subordinated to the Notes and any Guarantees and
if any Restricted Subsidiary is the obligor on any such Indebtedness to the
Company or a Guarantor such Indebtedness shall be evidenced by a promissory
note which is unsubordinated except to secured Indebtedness permitted under
the Indenture, and (2) any event which results in any Restricted Subsidiary
which is an obligor on such Indebtedness ceasing to be a Restricted
Subsidiary or any subsequent transfer of such Indebtedness (other than to
the Company or another Restricted Subsidiary) shall be deemed, in each
case, to constitute an Incurrence of such Indebtedness not permitted by
this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness (other
than Indebtedness Incurred under clause (i), (ii), (iv), (vi), (viii) or
(x) of this paragraph) and any refinancings thereof in an amount not to
exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); provided that Indebtedness the proceeds of
which are used to refinance or refund the Notes or Indebtedness that is
pari passu with, or subordinated in right of payment to, the Notes or the
Guarantees shall only be permitted under this clause (iii) if (a) in case
the Notes are refinanced in part or the Indebtedness to be refinanced is
pari passu with the Notes or any Guarantees, such new Indebtedness, by its
terms or by the terms of any agreement or instrument pursuant to which such
new Indebtedness is outstanding, is expressly made pari passu with, or
subordinate in right of payment to, the remaining Notes or such Guarantees,
(b) in case the Indebtedness to be refinanced is subordinated in right of
payment to the Notes and the Guarantees, such new Indebtedness, by its
terms or by the terms of any agreement or instrument pursuant to which such
new Indebtedness is issued or remains outstanding, is expressly made
subordinate in right of payment to the Notes and the Guarantees at least to
the extent that the Indebtedness to be refinanced is subordinated to the
Notes and the Guarantees and (c) such new Indebtedness, determined as of
the date of Incurrence of such new Indebtedness, does not mature prior to
the Stated Maturity of the Indebtedness to be refinanced or refunded, and
the Average Life of such new Indebtedness is at least equal to the
remaining Average Life of the Indebtedness to be refinanced or refunded;
and provided further that in no event may Indebtedness of the Company or
any Guarantor be refinanced by means of any Indebtedness of any Restricted
Subsidiary that is not a Guarantor pursuant to this clause (iii);
(iv) Indebtedness (a) in respect of performance, surety or appeal
bonds provided in the ordinary course of business, (b) under Currency
Agreements and Interest Rate Agreements; provided that such agreements (1)
are designed solely to protect the Company or its Restricted Subsidiaries
against fluctuations in foreign currency exchange rates or interest rates
and (2) do not increase the Indebtedness of the obligor outstanding at any
time other than as a result of fluctuations in foreign currency exchange
rates or interest rates or by reason of fees, indemnities and compensation
payable thereunder; or (c) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted
Subsidiary of the Company (other than guarantees of Indebtedness Incurred
by any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary of the Company for the purpose of financing such
acquisition), in a principal amount not to exceed the gross proceeds
actually received by the Company or any Restricted Subsidiary in connection
with such disposition;
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(v) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (a) used to purchase Notes tendered in an Offer to
Purchase made as a result of a Change in Control or (b) deposited to
defease the Notes as described below under "Defeasance";
(vi) Guarantees of the Notes and guarantees of Indebtedness of the
Company by any Restricted Subsidiary provided the guarantee of such
Indebtedness is permitted by and made in accordance with the "Limitation on
Issuance of Guarantees by Restricted Subsidiaries" covenant described
below;
(vii) Indebtedness (including guarantees of such indebtedness)
Incurred to finance the cost (including the cost of design, development,
site acquisition, construction, installation, integration or improvement)
of equipment, inventory or telecommunications network assets acquired
(including by way of Capital Lease and acquisitions of Capital Stock of a
Person that becomes a Restricted Subsidiary to the extent of the fair
market value of the equipment, inventory or network assets so acquired) by
the Company or any Restricted Subsidiary after the Closing Date;
(viii) Indebtedness of the Company not to exceed, at any one time
outstanding, two times Qualified Proceeds received by the Company to the
extent such Qualified Proceeds have not been used pursuant to clause (C)(2)
of the first paragraph of, or clauses (iii), (iv), (vii), (viii) or (ix) of
the second paragraph of, the "Limitation on Restricted Payments" covenant
described below to make a Restricted Payment; provided that such
Indebtedness does not mature prior to the Stated Maturity of the Notes and
has an Average Life longer than the Notes;
(ix) Acquired Indebtedness of Restricted Subsidiaries of the Company
to the extent that the Company could have Incurred such Indebtedness in
accordance with the first paragraph of this covenant on the date such
Indebtedness becomes Acquired Indebtedness of such Restricted Subsidiary;
and
(x) Indebtedness Incurred by the Company not otherwise permitted to be
Incurred pursuant to clauses (i) through (ix) above, which together with
all other Indebtedness Incurred pursuant to this clause (x), has an
aggregate principal amount not in excess of $20 million at any time
outstanding.
(b) Notwithstanding any other provisions of this "Limitation on
Indebtedness" covenant, (i) the Company and its domestic Restricted Subsidiaries
may not Incur Indebtedness pursuant to paragraph (a) or clauses (i) through (x)
of this "Limitation on Indebtedness" covenant, if after giving effect to the
Incurrence of such Indebtedness, the aggregate principal amount of Indebtedness
of the Company and its domestic Restricted Subsidiaries would exceed the sum of
(1) the product of $75.00 multiplied by Licensed Domestic POPS plus (2) the
principal amount of Indebtedness Incurred on or after the Closing Date, the
proceeds of which are used to make Investments which constitute Permitted
Investments pursuant to clause (viii) of the definition of "Permitted
Investments" in an aggregate principal amount not to exceed $100 million (such
sum being the "Aggregate Limitation"), provided that the Company and its
domestic Restricted Subsidiaries may Incur Indebtedness pursuant to paragraph
(a) or clauses (i) through (x) of this "Limitation on Indebtedness" covenant in
excess of the Aggregate Limitation in an aggregate principal amount not to
exceed the product of $10.00 multiplied by Licensed Domestic POPS, to the extent
the payment of principal of, premium if any, interest and other payment
obligations in respect of such Indebtedness is expressly subordinate to the
prior payment in full in cash of the Notes or any Guarantee, as the case may be,
and any other Indebtedness of the Company or its domestic Restricted
Subsidiaries, as the case may be, permitted to be Incurred under the Indenture
and designated by the Company or such Restricted Subsidiary as senior
indebtedness; and (ii) Cricket Communications Holdings may not Incur any
Indebtedness other than the Guarantee of the Notes and
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guarantees of (1) Indebtedness of Cricket Communications, Inc. and (2)
Indebtedness of the Company to the extent the proceeds of such Indebtedness are
contributed to Cricket Communications Holdings.
(c) Notwithstanding any other provision of this "Limitation on
Indebtedness" covenant, the maximum amount of Indebtedness that the Company or a
Restricted Subsidiary may Incur pursuant to this "Limitation on Indebtedness"
covenant shall not be deemed to be exceeded, with respect to any outstanding
Indebtedness due solely to the result of fluctuations in the exchange rates of
currencies.
(d) For purposes of determining any particular amount of Indebtedness under
this "Limitation on Indebtedness" covenant, (i) guarantees, Liens or obligations
with respect to letters of credit supporting Indebtedness otherwise included in
the determination of such particular amount shall not be included and (ii) any
Liens granted pursuant to the equal and ratable provisions referred to in the
"Limitation on Liens" covenant described below shall not be treated as
Indebtedness. For purposes of determining compliance with this "Limitation on
Indebtedness" covenant, in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described in the above
clauses, the Company, in its sole discretion, shall classify and from time to
time may reclassify such item of Indebtedness and only be required to include
the amount and type of such Indebtedness in one of such clauses.
LIMITATION ON RESTRICTED PAYMENTS
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly:
(i) declare or pay any dividend or make any distribution on or with
respect to the Company's or such Restricted Subsidiary's Capital Stock
(other than (a) dividends or distributions payable solely in shares of the
Company's or such Restricted Subsidiary's Capital Stock of the same class
(other than Disqualified Stock) or in options, warrants or other rights to
acquire shares of such Capital Stock and (b) pro rata dividends or
distributions on Common Stock of any Restricted Subsidiary held by minority
interest holders) held by Persons other than the Company or any of its
Restricted Subsidiaries;
(ii) purchase, call for redemption or redeem, retire or otherwise
acquire for value any shares of Capital Stock of (a) the Company or any
Guarantor or any Unrestricted Subsidiary (including options, warrants or
other rights to acquire such shares of Capital Stock) held by any Person or
(b) a Restricted Subsidiary other than a Guarantor (including options,
warrants or other rights to acquire such shares of Capital Stock) held by
any Affiliate of the Company (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more
of the Capital Stock of the Company;
(iii) make any voluntary or optional principal payment, or voluntary
or optional redemption, repurchase, defeasance, or other acquisition or
retirement for value, of Indebtedness of the Company or any Guarantor that
is subordinated in right of payment to the Notes or any Guarantee; or
(iv) make any Investment, other than a Permitted Investment, in any
Person (such payments or any other actions described in clauses (i) through
(iv) being collectively "Restricted Payments") if, at the time of, and
after giving effect to, the proposed Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing, or would result from such Restricted Payment;
(B) after giving pro forma effect to such Restricted Payment as if
such Restricted Payment had been made at the beginning of the applicable
four-fiscal quarter period, the
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Company could not Incur at least $1.00 of Indebtedness under the first
paragraph of the "Limitation on Indebtedness" covenant; or
(C) the aggregate amount of all Restricted Payments (the amount, if
other than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a
Board Resolution) made after the Closing Date shall exceed the sum of:
(1) 50% of the aggregate amount of the Adjusted Consolidated Net
Income (or, if the Adjusted Consolidated Net Income is a loss, minus
100% of the amount of such loss) (determined by excluding income
resulting from transfers of assets by the Company or a Restricted
Subsidiary to an Unrestricted Subsidiary) accrued on a cumulative
basis during the period (taken as one accounting period) beginning on
the first day of the fiscal quarter immediately following the Closing
Date and ending on the last day of the last fiscal quarter preceding
the Transaction Date for which reports have been filed with the
Trustee pursuant to the "Commission Reports and Reports to Holders"
covenant; plus
(2) the aggregate Qualified Proceeds received by the Company
(except to the extent such Qualified Proceeds are used to Incur
Indebtedness pursuant to clause (viii) under the "Limitation on
Indebtedness" covenant) or from the issuance to a Person who is not a
Subsidiary of the Company of any options, warrants or other rights to
acquire Capital Stock of the Company (in each case, exclusive of any
Disqualified Stock or any options, warrants or other rights that are
redeemable at the option of the holder, or are required to be
redeemed, prior to the Stated Maturity of the Notes); plus
(3) an amount equal to the net reduction in Investments (other
than reductions in Permitted Investments) in any Person resulting
from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to the
Company or any Restricted Subsidiary or from the Net Cash Proceeds
from the sale of any such Investment (except, in each case, to the
extent any such payment or proceeds are included in the calculation
of Adjusted Consolidated Net Income), or from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each
case as provided in the definition of "Investments"), not to exceed,
in each case, the amount of Investments previously made by the
Company or any Restricted Subsidiary in such Person or Unrestricted
Subsidiary.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date of
declaration thereof if, at said date of declaration, such payment would
comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (iii) of the second paragraph of part (a) of the "Limitation
on Indebtedness" covenant;
(iii) the repurchase, redemption or other acquisition of Capital Stock
of the Company (or options, warrants or other rights to acquire such
Capital Stock) in exchange for, or out of the proceeds of a substantially
concurrent offering of, shares of Capital Stock (other than Disqualified
Stock) of the Company other than to a Subsidiary of the Company;
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company or any Guarantor which is subordinated in right
of payment to the Notes or the Guarantees in exchange for, or out of the
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proceeds of, a substantially concurrent offering of, shares of the Capital
Stock of the Company (other than Disqualified Stock);
(v) payments or distributions to dissenting stockholders that are not
Affiliates of the Company or any of its Subsidiaries pursuant to applicable
law pursuant to or in connection with a consolidation, merger or transfer
of assets that complies with the provisions of the Indenture applicable to
mergers, consolidations and transfers of all or substantially all of the
property and assets of the Company;
(vi) the purchase, redemption, acquisition, cancellation or other
retirement for value of shares of Capital Stock of the Company to the
extent necessary in the good faith judgment of the Board of Directors of
the Company, to prevent the loss or secure the renewal or reinstatement of
any material license or franchise held by the Company or any Restricted
Subsidiary from any governmental agency;
(vii) the purchase, redemption, retirement or other acquisition for
value of Capital Stock of the Company or Cricket Communications Holdings,
or options to purchase such shares, held by directors, employees or former
directors or employees of the Company or any Restricted Subsidiary (or
their donees, trusts for their benefit or the benefit of their family
members, their estates or beneficiaries under their estates) upon death,
disability, retirement, termination of employment or pursuant to the terms
of any agreement under which such shares of Capital Stock or options were
issued; provided that the aggregate consideration paid for such purchase,
redemption, acquisition, cancellation or other retirement of such shares of
Capital Stock or options after the Closing Date does not exceed (a) $2
million in any fiscal year or (b) $5 million in the aggregate, plus in the
case of each of clause (a) and clause (b), the aggregate of Net Cash
Proceeds received by the Company from the issuance of Capital Stock to
directors, employees or former directors or employees of the Company or any
Restricted Subsidiary, provided that the amount of any such Net Cash
Proceeds that are utilized for any such purchase, redemption, retirement or
other acquisition shall be excluded from clause (C)(2) of the first
paragraph of this "Limitation on Restricted Payments" covenant;
(viii) Investments in any Person that is primarily engaged in a
business that is related, ancillary or complementary to the business of the
Company and its Restricted Subsidiaries on the date of such Investment;
provided that the aggregate amount of such Investments (after taking into
account the amount of all other Investments made pursuant to this subclause
(viii)) does not exceed the sum of (a) $10,000,000 and (b) the amount of
Qualified Proceeds received by the Company, except to the extent such
Qualified Proceeds are used to Incur Indebtedness pursuant to clause (viii)
under the "Limitation on Indebtedness" covenant or to make Restricted
Payments pursuant to clause (C)(2) of the first paragraph, or clauses (iii)
or (iv) of this paragraph, of this "Limitation on Restricted Payments"
covenant;
(ix) Investments acquired in exchange for Capital Stock (other than
Disqualified Capital Stock) of the Company;
(x) the redemption by the Company of any of the Warrants pursuant to
the mandatory disposition or redemption provisions thereof or any purchase
of any fractional share of Common Stock (or other Capital Stock of the
Company issuable upon exercise of the Warrants) in connection with an
exercise of the Warrants;
(xi) repurchases of Capital Stock deemed to occur upon the exercise of
stock options or warrants if such Capital Stock represents a portion of the
exercise price thereof;
(xii) other Restricted Payments in an aggregate amount not to exceed
$10 million;
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provided that, except in the case of clauses (i) and (iii), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof and an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof, or an Investment referred to in clause (ix)
thereof or repurchases of Capital Stock referred to in clause (xi) thereof), and
the Qualified Proceeds from any issuance of Capital Stock referred to in clauses
(iii), (iv) and (viii), shall be included in calculating whether the conditions
of clause (C) of the first paragraph of this "Limitation on Restricted Payments"
covenant have been met with respect to any subsequent Restricted Payments. In
the event the proceeds of an issuance of Capital Stock of the Company are used
for the redemption, repurchase or other acquisition of the Notes, or
Indebtedness that is pari passu with the Notes, then the Qualified Proceeds of
such issuance shall be included in clause (C) of the first paragraph of this
"Limitation on Restricted Payments" covenant only to the extent such proceeds
are not used for such redemption, repurchase or other acquisition of
Indebtedness.
LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES
The Company will not, and will not permit any Restricted Subsidiary to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Restricted Subsidiary owned by the
Company or any other Restricted Subsidiary, (ii) pay any Indebtedness owed to
the Company or any other Restricted Subsidiary, (iii) make loans or advances to
the Company or any other Restricted Subsidiary or (iv) transfer any of its
property or assets to the Company or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Closing Date in the Indenture, Pledge Agreement or
any other agreements in effect on the Closing Date, and any amendments,
extensions, refinancings, renewals or replacements of such agreements;
provided that the encumbrances and restrictions in any such amendments,
extensions, refinancings, renewals or replacements are no less favorable in
any material respect to the Holders than those encumbrances or restrictions
that are then in effect and that are being extended, refinanced, renewed or
replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or assets of
such Person acquired by the Company or any Restricted Subsidiary, existing
at the time of such acquisition and not incurred in contemplation thereof,
which encumbrances or restrictions are not applicable to any Person or the
property or assets of any Person other than such Person or the property or
assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this
"Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries" covenant, (a) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a
lease, license, conveyance or contract or similar property or asset, (b)
existing by virtue of any transfer of, agreement to transfer, option or
right with respect to, or Lien on, any property or assets of the Company or
any Restricted Subsidiary not otherwise prohibited by the Indenture or (c)
arising or agreed to in the ordinary course of business, not relating to
any Indebtedness, and that do not, individually or in the aggregate,
detract from the value of property or assets of the Company or any
Restricted Subsidiary in any manner material to the Company or any
Restricted Subsidiary;
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(v) with respect to a Restricted Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary; or
(vi) contained in the terms of any Indebtedness of a Restricted
Subsidiary, or any agreement pursuant to which such Indebtedness was
issued, if the encumbrance or restriction applies only in the event of a
payment default or a default with respect to a financial covenant contained
in such Indebtedness or agreement, if the encumbrance or restriction is not
materially more disadvantageous to the Holders of the Notes than is
customary in comparable financings (as determined by the Company) and if
the Company determines that any such encumbrance or restriction will not
materially affect the Company's ability to make principal or interest
payments on the Notes.
Nothing contained in this "Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries" covenant shall prevent the
Company or any Restricted Subsidiary from (1) creating, incurring, assuming or
suffering to exist any liens otherwise permitted in the "Limitation on Liens"
covenant or (2) restricting the sale or other disposition of property or assets
of the Company or any of its Restricted Subsidiaries that secure Indebtedness of
the Company or any of its Restricted Subsidiaries.
LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES
The Company will not sell, and will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell, any shares of Capital Stock of a
Restricted Subsidiary (including options, warrants or other rights to purchase
shares of such Capital Stock) except (i) to the Company or a Wholly Owned
Restricted Subsidiary; (ii) issuances of director's qualifying shares or sales
to foreign nationals of shares of Capital Stock of foreign Restricted
Subsidiaries, to the extent required by applicable law; (iii) Permitted Cricket
Holdings Shares and Options; (iv) if, immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary, provided any Investment in such Person remaining after
giving effect to such issuance or sale would have been permitted to be made
under the "Limitation on Restricted Payments" covenant, if made on the date of
such issuance or sale, or (iv) issuances and sales of Common Stock of any
Restricted Subsidiary, provided that the Company or such Restricted Subsidiary
applies the Net Cash Proceeds of any such sale in accordance with clause (a) or
(b) of the "Limitation on Asset Sales" covenant described below.
LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED SUBSIDIARIES
The Company will not permit any Restricted Subsidiary, directly or
indirectly, to guarantee any Indebtedness of the Company or any Guarantor
("Guaranteed Indebtedness"), unless (i) such Restricted Subsidiary (a) is a
Guarantor or (b) simultaneously executes and delivers a supplemental indenture
to the Indenture providing for a Guarantee of payment of the Notes by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives, and will not
in any manner whatsoever claim or take the benefit or advantage of, any rights
of reimbursement, indemnity or subrogation or any other rights against the
Company or any other Restricted Subsidiary as a result of any payment by such
Restricted Subsidiary under its Guarantee; provided that this paragraph shall
not be applicable to (a) any guarantee by a Restricted Subsidiary existing on
the Closing Date or in respect of Indebtedness Incurred pursuant to clause (i)
or (vii) of the second paragraph of the "Limitation on Indebtedness" covenant or
(b) any guarantee of any Restricted Subsidiary that existed at the time such
Person became a Restricted Subsidiary and was not Incurred in connection with,
or in contemplation of, such Person becoming a Restricted Subsidiary. If the
Guaranteed Indebtedness is (1) pari passu with the Notes or any Guaranty, then
the guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Guarantee or (2) subordinated to the Notes or any Guaranty,
then the guarantee of
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such Guaranteed Indebtedness shall be subordinated to the Guarantee at least to
the extent that the Guaranteed Indebtedness is subordinated to the Notes.
Notwithstanding the foregoing, any Guarantee executed by a Restricted
Subsidiary pursuant to this provision shall provide by its terms that it shall
be automatically and unconditionally released and discharged upon (i) any sale,
exchange or transfer, to any Person not an Affiliate of the Company, of all of
the Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all of the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by the Indenture) or (ii) the release or
discharge of the guarantee which resulted in the creation of such Guarantee,
except a discharge or release by or as a result of payment under such guarantee.
LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES
The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, enter into, renew or extend any transaction (including,
without limitation, the purchase, sale, lease or exchange of property or assets,
or the rendering of any service) with any holder (or any Affiliate of such
holder) of 5% or more of any class of Capital Stock of the Company or with any
Affiliate of the Company or any Restricted Subsidiary, except upon fair and
reasonable terms no less favorable to the Company or such Restricted Subsidiary
than could be obtained, at the time of such transaction or, if such transaction
is pursuant to a written agreement, at the time of the execution of the
agreement providing therefor, in a comparable arm's-length transaction with a
Person that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (a) approved by a majority of the Disinterested Directors or (b)
for which the Company or a Restricted Subsidiary delivers to the Trustee a
written opinion of a nationally recognized investment banking firm stating that
the transaction is fair to the Company or such Restricted Subsidiary from a
financial point of view; (ii) any transaction solely between the Company and any
of its Wholly Owned Restricted Subsidiaries or solely between Wholly Owned
Restricted Subsidiaries; (iii) the payment of reasonable and customary regular
fees to directors of the Company who are not employees of the Company; (iv) any
payments or other transactions pursuant to any tax-sharing agreement between the
Company and any other Person with which the Company files a consolidated tax
return or with which the Company is part of a consolidated group for tax
purposes; or (v) any Restricted Payments not prohibited by the "Limitation on
Restricted Payments" covenant. Notwithstanding the foregoing, any transaction
covered by the first paragraph of this "Limitation on Transactions with
Stockholders and Affiliates" covenant and not covered by clauses (ii) through
(v) of this paragraph, (1) must be approved in the manner provided for in clause
(i)(a) above and a certified Board Resolution to such effect delivered to the
Trustee, if the aggregate amount of such transaction exceeds $2 million, and (2)
must be determined fair in the manner provided for in clause (i)(b) above, if
the aggregate amount of such transaction exceeds $10 million.
LIMITATION ON LIENS
The Company will not, and will not permit any Restricted Subsidiary to,
create, incur, assume or suffer to exist any Lien on any of its assets or
properties of any character, or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary, without making effective provision for all of the
Notes and the Guarantees and all other amounts due under the Indenture to be
directly secured equally and ratably with (or, if the obligation or liability to
be secured by such Lien is subordinated in right of payment to the Notes, prior
to) the obligation or liability secured by such Lien.
The foregoing limitation does not apply to (i) Liens existing on the
Closing Date; (ii) Liens granted after the Closing Date on any assets or Capital
Stock of the Company or its Restricted Subsidiaries created in favor of the
Holders; (iii) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company or a Wholly Owned
Restricted Subsidiary to secure
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Indebtedness owing to the Company or such other Restricted Subsidiary; (iv)
Liens securing Indebtedness which is permitted to be Incurred under clause (i)
of the "Limitation on Indebtedness" covenant; (v) Liens securing Indebtedness
which is Incurred to refinance secured Indebtedness which is permitted to be
Incurred under clause (iii) of the second paragraph of the "Limitation on
Indebtedness" covenant; provided that such Liens do not extend to or cover any
property or assets of the Company or any Restricted Subsidiary other than the
property or assets securing the Indebtedness being refinanced; (vi) Liens on the
Capital Stock of, or any property or assets of, a Restricted Subsidiary securing
Indebtedness of such Restricted Subsidiary (or obligations in respect thereof)
or Indebtedness of any Restricted Subsidiary guaranteed by such Restricted
Subsidiary permitted under the "Limitation on Indebtedness" covenant; or (vii)
Permitted Liens.
Notwithstanding the foregoing, the Company will not create, incur or suffer
to exist any Lien on the capital stock of Cricket Communications Holdings.
LIMITATION ON SALE-LEASEBACK TRANSACTIONS
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any sale-leaseback transaction involving any of its assets or
properties whether now owned or hereafter acquired, whereby the Company or a
Restricted Subsidiary sells or transfers such assets or properties and then or
thereafter leases such assets or properties or any part thereof or any other
assets or properties which the Company or such Restricted Subsidiary, as the
case may be, intends to use for substantially the same purpose or purposes as
the assets or properties sold or transferred.
The foregoing restriction does not apply to any sale-leaseback transaction
if (i) the lease is for a period, including renewal rights, of not in excess of
three years; (ii) the lease secures or relates to industrial revenue or
pollution control bonds; (iii) the transaction is solely between the Company and
any Wholly Owned Restricted Subsidiary or solely between Wholly Owned Restricted
Subsidiaries; or (iv) the Company or such Restricted Subsidiary, within twelve
months after the sale or transfer of any assets or properties is completed,
applies an amount not less than the net proceeds received from such sale in
accordance with clause (a) or (b) or of the second paragraph of the "Limitation
on Asset Sales" covenant described below.
FUTURE SUBSIDIARY GUARANTORS
The Company will cause each domestic Restricted Subsidiary other than any
direct or indirect Subsidiary of Cricket Communications Holdings or any License
Subsidiary to execute and deliver a Guarantee pursuant to which each such
Subsidiary will, jointly and severally, Guarantee irrevocably and
unconditionally all principal, premium, if any, and interest on the Notes on an
unsecured basis.
LIMITATION ON ASSET SALES
The Company will not, and will not permit any Restricted Subsidiary to,
consummate any Asset Sale, unless (i) the consideration received by the Company
or such Restricted Subsidiary is at least equal to the fair market value of the
assets sold or disposed of as evidenced by a Board Resolution filed with the
Trustee, and (ii) at least 75% of the consideration received consists of cash or
Temporary Cash Investments, provided that the amount of any (a) liabilities (as
shown on the Company's or such Restricted Subsidiary's most recent balance
sheet) of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes or
any Guarantee) that are assumed by the transferee of any such assets pursuant to
an agreement that irrevocably releases the Company or such Restricted Subsidiary
from further liability shall be deemed to be cash for purposes of this
provision.
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In the event and to the extent that the Net Cash Proceeds received by the
Company or any of its Restricted Subsidiaries from one or more Asset Sales
occurring on or after the Closing Date in any period of 12 consecutive months
exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of the
date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been filed
with the Trustee pursuant to the "Commission Reports and Reports to Holders"
covenant), then the Company shall or shall cause the relevant Restricted
Subsidiary to (i) within 12 months after the date Net Cash Proceeds so received
exceed 10% of Adjusted Consolidated Net Tangible Assets (a) apply an amount
equal to such excess Net Cash Proceeds to permanently repay unsubordinated
Indebtedness of the Company or any Guarantor or Indebtedness of any other
Restricted Subsidiary, in each case owing to a Person other than the Company or
any of its Restricted Subsidiaries or (b) invest an equal amount, or the amount
not so applied pursuant to clause (a) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such agreement), in
property or assets (other than current assets) of a nature or type or that are
used in a business (or in a company having property and assets of a nature or
type, or engaged in a business) similar or related to the nature or type of the
property and assets of, or the business of, the Company and its Restricted
Subsidiaries existing on the date of such investment and (ii) apply (no later
than the end of the 12-month period referred to in clause (i)) such excess Net
Cash Proceeds (to the extent not applied pursuant to clause (i)) as provided in
the following paragraph of this "Limitation on Asset Sales" covenant. The amount
of such excess Net Cash Proceeds required to be applied (or to be committed to
be applied) during such twelve-month period as set forth in clause (i) of the
preceding sentence and not applied as so required by the end of such period
shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
"Limitation on Asset Sales" covenant totals at least $10,000,000, the Company
must commence, not later than the fifteenth Business Day of such month, and
consummate an Offer to Purchase from the Holders on a pro rata basis an
aggregate principal amount of Notes equal to the Excess Proceeds on such date,
at a purchase price equal to 100% of the principal amount of the Senior Notes or
Accreted Value of the Senior Discount Notes, plus, in each case, accrued
interest (if any) to the Payment Date.
ADDITIONAL HOLDING COMPANIES
The Company shall not create any subsidiary which directly or indirectly
owns (i) Capital Stock of Cricket Communications Holdings or (ii) Capital Stock
of Cricket Communications, Inc., other than Cricket Communications Holdings.
REPURCHASE OF NOTES UPON A CHANGE OF CONTROL
The Company must commence, within 30 days of the occurrence of a Change of
Control, and consummate an Offer to Purchase for all Notes then outstanding, at
a purchase price equal to 101% of the principal amount of the Senior Notes or
Accreted Value of the Senior Discount Notes, plus accrued interest (if any) to
the Payment Date.
There can be no assurance that the Company will have sufficient funds
available at the time of any Change of Control to make any debt payment
(including repurchases of Notes) required by the foregoing covenant (as well as
may be contained in other securities of the Company which might be outstanding
at the time). The above covenant requiring the Company to repurchase the Notes
will, unless consents are obtained, require the Company to repay all
indebtedness then outstanding which by its terms would prohibit such Note
repurchase, either prior to or concurrently with such Note repurchase.
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COMMISSION REPORTS AND REPORTS TO HOLDERS
The Company will furnish to each of the Holders of Notes within the time
period specified in the SEC's rules and regulations (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on forms 10-Q and form 10-K as if the Company were required to
file such financial information, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
financial condition and results of operations of the Company and any
consolidated Subsidiaries and, with respect to the annual information only,
reports thereon by the Company's independent public accountants (which shall be
firms of established national reputation) and (ii) all information that will be
required to be filed with the SEC on form 8-K as if the Company were required to
file such reports. In addition, whether or not required by the rules and
regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability within the
time period specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available to
security analysts and prospective investors upon request for so long as any
Notes remain outstanding. In addition, the Company shall furnish to the Holders
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT
The following events will be defined as "Events of Default" in the
Indenture:
(a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30
days; provided that a failure to make any of the first six scheduled
interest payments on the Senior Notes on the applicable Interest Payment
Date will constitute an Event of Default if such default continues for a
period of three days;
(c) failure by the Company or any Guarantor to comply with the
provisions of the Indenture relating to mergers, consolidations and
transfers of all or substantially all of the assets of the Company or the
failure to make or consummate an Offer to Purchase in accordance with the
"Limitation on Asset Sales" or "Repurchase of Notes upon a Change of
Control" covenant;
(d) the Company or any Restricted Subsidiary fails to perform or
breaches any other covenant or agreement of the Company in the Indenture,
in the Notes or in the Pledge Agreement (other than a default specified in
clause (a), (b) or (c) above) and such default or breach continues for a
period of 30 consecutive days after written notice by the Trustee or the
Holders of 25% or more in aggregate principal amount of the Senior Notes or
the Holders of 25% or more of the aggregate principal amount at maturity of
the Senior Discount Notes, as the case may be;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Restricted Subsidiary having an outstanding principal
amount of $5 million or more in the aggregate for all such issues of all
such Persons, whether such Indebtedness now exists or shall hereafter be
created, (1) an event of default that has caused the holder thereof to
declare such Indebtedness to be due and payable prior to its Stated
Maturity and such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (2) the failure to make a principal payment at the
final (but not any interim) fixed maturity and such defaulted payment shall
not have been made, waived or extended within 30 days of such payment
default;
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(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $5 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Restricted Subsidiary and shall not be
paid or discharged, and there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $5 million during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (1) relief in respect of the Company or any Restricted Subsidiary
in an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, (2) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Company or any Restricted Subsidiary or for all or substantially all
of the property and assets of the Company or any Restricted Subsidiary or
(3) the winding up or liquidation of the affairs of the Company or any
Restricted Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 30 consecutive days;
(h) the Company or any Restricted Subsidiary (1) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under any such law, (2) consents to the appointment of
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any Restricted
Subsidiary or for all or substantially all of the property and assets of
the Company or any Restricted Subsidiary or (3) effects any general
assignment for the benefit of creditors;
(i) the Pledge Agreement shall cease to be in full force and effect or
enforceable in accordance with its terms, other than in accordance with its
terms;
(j) except upon the release of any Guarantee in accordance with the
Indenture, (1) any Guarantee ceases to be in full force and effect or is
declared null and void or (2) any Guarantor denies that it has any further
liability under the Guarantee or gives notice to that effect; or
(k) there shall have occurred any loss, suspension, revocation or
non-renewal of the wireless licenses of the Company and its Restricted
Subsidiaries covering 50% or more of the total potential customers covered
by all of the wireless licenses of the Company and its Restricted
Subsidiaries.
If an Event of Default (other than an Event of Default specified in clause
(g) or (h) above that occurs with respect to the Company) occurs and is
continuing under the Indenture, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Senior Notes or the Holders of at least 25% in
aggregate principal amount at maturity of the Senior Discount Notes, as the case
may be, then outstanding, by written notice to the Company (and to the Trustee
if such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the principal of all outstanding Senior Notes or the
Accreted Value of all outstanding Senior Discount Notes, as the case may be,
together with premium, if any, and all accrued and unpaid interest thereon to be
immediately due and payable. Upon a declaration of acceleration, such principal
of, premium, if any, and accrued interest shall be immediately due and payable.
In the event of a declaration of acceleration because an Event of Default set
forth in clause (e) above has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (e) shall be
remedied or cured by the Company or the relevant Subsidiary or waived by the
holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event of Default specified in clause
(g) or (h) above occurs with respect to
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the Company, the principal of, premium, if any, and accrued interest on the
Notes then outstanding shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. At any time after declaration of acceleration, but before a judgment or
decree for the payment of the money due has been obtained by the Trustee, the
Holders of at least a majority in principal amount of the outstanding Senior
Notes or the Holders of at least a majority in aggregate principal amount at
maturity of the outstanding Senior Discount Notes by written notice to the
Company and to the Trustee, may waive all past defaults and rescind and annul a
declaration of acceleration and its consequences if (i) all existing Events of
Default, other than the nonpayment of the principal of, premium, if any, and
interest on the Notes that have become due solely by such declaration of
acceleration, have been cured or waived and (ii) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction. For
information as to the waiver of defaults, see "-- Modification and Waiver."
The Holders of at least a majority in aggregate principal amount of the
outstanding Senior Notes or Holders of at least a majority in aggregate
principal amount at maturity of the outstanding Senior Discount Notes, as the
case may be, may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or the Indenture, that may involve the Trustee
in personal liability, or that the Trustee determines in good faith may be
unduly prejudicial to the rights of Holders of Notes not joining in the giving
of such direction and may take any other action it deems proper that is not
inconsistent with any such direction received from Holders of Notes. A Holder
may not pursue any remedy with respect to the Indenture or the Notes unless: (i)
the Holder gives the Trustee written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of outstanding
Senior Notes or the Holders of at least a majority in aggregate principal amount
at maturity of the outstanding Senior Discount Notes, as the case may be, make a
written request to the Trustee to pursue the remedy; (iii) such Holder or
Holders offer the Trustee indemnity satisfactory to the Trustee against any
costs, liability or expense; (iv) the Trustee does not comply with the request
within 60 days after receipt of the request and the offer of indemnity; and (v)
during such 60-day period, the Holders of a majority in aggregate principal
amount of the outstanding Notes do not give the Trustee a direction that is
inconsistent with the request. However, such limitations do not apply to the
right of any Holder of a Note to receive payment of the principal of, premium,
if any, or interest on, such Note or to bring suit for the enforcement of any
such payment, on or after the due date expressed in the Notes, which right shall
not be impaired or affected without the consent of the Holder.
The Indenture will require certain officers of the Company to certify, on
or before a date not more than 90 days after the end of each fiscal year, that a
review has been conducted of the activities of the Company and its Restricted
Subsidiaries and the Company's and its Restricted Subsidiaries' performance
under the Indenture and that the Company has fulfilled all obligations
thereunder, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default and the nature and status thereof. The
Company will also be obligated to notify the Trustee of any default or defaults
in the performance of any covenants or agreements under the Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company will not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its property
and assets (as an entirety or substantially an entirety in one transaction or a
series of related transactions) to, any Person or permit any Person to merge
with or into the Company unless: (i) the Company shall be the surviving or
continuing Person, or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or that acquired or leased
such property and assets of the Company shall be a corporation
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organized and validly existing under the laws of the United States of America or
any jurisdiction thereof and shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, all of the obligations of the
Company on all of the Notes and under the Indenture; (ii) immediately after
giving effect to such transaction on a pro forma basis, no Default or Event of
Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction on a pro forma basis, the Company or any Person
becoming the successor obligor of the Notes shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company immediately
prior to such transaction, provided that this clause (iii) shall only apply to a
sale of less than all of the assets of the Company; (iv) immediately after
giving effect to such transaction on a pro forma basis the Company, or any
Person becoming the successor obligor of the Notes, as the case may be, could
Incur at least $1.00 of Indebtedness under the first paragraph of the
"Limitation on Indebtedness" covenant described above; provided that this clause
(iv) shall not apply to a consolidation or merger or sale of all (but not less
than all) of the assets of the Company if all Liens and Indebtedness of the
Company or any Person becoming the successor obligor on the Notes, as the case
may be, and its Restricted Subsidiaries outstanding immediately after such
transaction would, if Incurred at such time, have been permitted to be Incurred
(and all such Liens and Indebtedness, other than Liens and Indebtedness of the
Company and its Restricted Subsidiaries outstanding immediately prior to such
transaction, shall be deemed to have been Incurred) for all purposes of the
Indenture; (v) if the Company is not the surviving or continuing Person, each
Guarantor shall have delivered a written instrument in form satisfactory to the
Trustee confirming its Guarantee; and (vi) the Company delivers to the Trustee
an Officer's Certificate (attaching the arithmetic computations to demonstrate
compliance with clauses (iii) and (iv)) and an Opinion of Counsel, in each case
stating that such consolidation, merger or transfer and such supplemental
indenture, if any, complies with this provision and that all conditions
precedent provided for herein relating to such transaction have been complied
with; provided, however, that clauses (iii) and (iv) above do not apply if, in
the good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose of
such transaction is to change the state of incorporation of the Company; and
provided further that any such transaction shall not have as one of its purposes
the evasion of the foregoing limitations.
The Company will not permit any Guarantor (other than any Guarantor whose
Guarantee is to be released in accordance with the terms of the Guarantee and
the Indenture in connection with any transaction complying with the provisions
described in the "Limitation on Assets Sales" covenant described above) to, in a
single transaction or a series of related transactions, (i) consolidate with or
merge with or into any other Person (other than a Guarantor which is a Wholly
Owned Restricted Subsidiary) or (ii) directly or indirectly, transfer, sell,
lease or otherwise dispose of all or substantially all of its assets, unless:
(a) the Guarantor shall be the surviving or continuing Person, or the Person (if
other than the Guarantor) formed by such consolidation or into which the
Guarantor is merged or that acquired or leased such property and assets of the
Guarantor shall be organized under the laws of the United States of America or
any jurisdiction thereof and shall expressly assume, by a supplemental
indenture, executed and delivered to the Trustee, all of the Guarantor's
obligations under the Indenture; (b) immediately after giving effect to such
transaction on a pro forma basis, no Default or Event of Default shall have
occurred and be continuing; (c) immediately after giving effect to such
transaction on a pro forma basis, the Company or any Person becoming a successor
obligor on the Notes, as the case may be, could Incur at least $1.00 of
additional Indebtedness under the first paragraph of the "Limitation on
Indebtedness" covenant described above; and (d) the Company shall have delivered
to the Trustee an Officer's Certificate (attaching the arithmetic computations
to demonstrate compliance with clause (c)) and an Opinion of Counsel, in each
case stating that such consolidation, merger or transfer and such supplemental
indenture , if any, complies with this provision and that all conditions
precedent provided for herein relating to such transaction have been complied
with.
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DEFEASANCE
DEFEASANCE AND DISCHARGE
The Indenture will provide that the Company and the Guarantors will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Senior Notes and/or the Senior Discount Notes on the 123rd day
after the deposit referred to below, and the provisions of the Indenture will no
longer be in effect with respect to the Notes (except for, among other matters,
certain obligations to register the transfer or exchange of the Notes, to
replace stolen, lost or mutilated Notes, to maintain paying agencies and to hold
monies for payment in trust) if, among other things, (i) the Company has
deposited with the Trustee, in trust, money and/or U.S. Government Obligations
that through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of, premium, if any, and accrued interest on the Notes on the
Stated Maturity of such payments in accordance with the terms of the Indenture
and the Notes, (ii) the Company has delivered to the Trustee (a) either (1) an
Opinion of Counsel to the effect that Holders will not recognize income, gain or
loss for federal income tax purposes as a result of the Company's exercise of
its option under this "Defeasance" provision and will be subject to federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit, defeasance and discharge had not
occurred, which Opinion of Counsel must be based upon (and accompanied by a copy
of) a ruling of the Internal Revenue Service to the same effect unless there has
been a change in applicable federal income tax law after the Closing Date such
that a ruling is no longer required or (2) a ruling directed to the Trustee
received from the Internal Revenue Service to the same effect as the
aforementioned Opinion of Counsel and (b) an Opinion of Counsel to the effect
that the creation of the defeasance trust does not violate the Investment
Company Act of 1940 and after the passage of 123 days following the deposit
(except with respect to any trust funds for the account of any Holder who may be
deemed an "insider" for purposes of the United States Bankruptcy Code, after one
year following the deposit); the trust funds will not be subject to the effect
of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code or Section 15 of the New
York Debtor and Creditor Law, (iii) immediately after giving effect to such
deposit on a pro forma basis, no Default or Event of Default shall have occurred
and be continuing on the date of such deposit or during the period ending on the
123rd day after the date of such deposit, and such deposit shall not result in a
breach or violation of, or constitute a default under, any other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound, and (iv) if at such time
the Notes are listed on a national securities exchange, the Company has
delivered to the Trustee an Opinion of Counsel to the effect that the Notes will
not be delisted as a result of such deposit, defeasance and discharge.
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT
The Indenture further will provide that the provisions of the Indenture
will no longer be in effect with respect to clauses (iii) and (iv) under
"Consolidation, Merger and Sale of Assets" and all the covenants described
herein under "Covenants," clauses (c) and (d) under "Events of Default" with
respect to such clauses (iii) and (iv) under "Consolidation, Merger and Sale of
Assets" and such covenants and clauses (e) and (f) under "Events of Default"
shall be deemed not to be Events of Default, upon, among other things, the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
that through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of, premium, if any, and accrued interest on the Notes on the
Stated Maturity of such payments in accordance with the terms of the Indenture
and the Notes, the satisfaction of the provisions described in clauses (ii)(b),
(iii) and (iv) of the preceding paragraph and the delivery by the Company to the
Trustee of an Opinion of Counsel to the effect that, among other things, the
Holders will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and defeasance of certain covenants and Events of
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Default and will be subject to federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such deposit
and defeasance had not occurred.
DEFEASANCE AND CERTAIN OTHER EVENTS OF DEFAULT
In the event the Company exercises its option to omit compliance with
certain covenants and provisions of the Indenture with respect to the Notes as
described in the immediately preceding paragraphs and the Notes are declared due
and payable because of the occurrence of an Event of Default that remains
applicable, the amount of money and/or U.S. Government Obligations on deposit
with the Trustee will be sufficient to pay amounts due on the Notes at the time
of their Stated Maturity but may not be sufficient to pay amounts due on the
Notes at the time of the acceleration resulting from such Event of Default.
However, the Company will remain liable for such payments.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Senior Notes or the Holders of not
less than a majority in aggregate principal amount at maturity of the
outstanding Senior Discount Notes, as the case may be; provided, however, that
no such modification or amendment may, without the consent of each Holder
affected thereby, (i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, (ii) reduce the principal of, or premium,
if any, or interest on, any Note, (iii) change the place or currency of payment
of principal of, or premium, if any, or interest on, any Note, (iv) impair the
right to institute suit for the enforcement of any payment on or after the
Stated Maturity (or, in the case of a redemption, on or after the Redemption
Date) of any Note, (v) reduce the above-stated percentage of outstanding Notes
the consent of whose Holders is necessary to modify or amend the Indenture, (vi)
waive a default in the payment of principal of, premium, if any, or interest on
the Notes or (vii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults.
NO PERSONAL LIABILITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS OR
EMPLOYEES
The Indenture provides that no recourse for the payment of the principal
of, premium, if any, or interest on any of the Notes or for any claim based
thereon or otherwise in respect thereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Pledge Agreement, the
Indenture, or in any of the Notes or because of the creation of any Indebtedness
represented thereby, shall be had against any incorporator, stockholder,
officer, director, employee or controlling person of the Company or of any
successor Person thereof. Each Holder, by accepting the Notes, waives and
releases all such liability.
CONCERNING THE TRUSTEE
The Indenture provides that, except during the continuance of a Default,
the Trustee will not be liable, except for the performance of such duties as are
specifically set forth in such Indenture. If an Event of Default has occurred
and is continuing, the Trustee will use the same degree of care and skill in its
exercise as a prudent person would exercise under the circumstances in the
conduct of such person's own affairs.
The Indenture and provisions of the Trust Indenture Act of 1939, as
amended, incorporated by reference therein contain limitations on the rights of
the Trustee, should it become a creditor of the Company, to obtain payment of
claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The Trustee is permitted
to engage in other transactions; provided, however, that if it acquires any
conflicting interest, it must eliminate such conflict or resign.
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