EXHIBIT 10.19
CONSENT AND AGREEMENT
(Independent Wireless One)
This Consent and Agreement (this "Consent and Agreement") is entered
into as of December 17, 1999, between SPRINT SPECTRUM L.P., a Delaware limited
partnership ("Sprint Spectrum"), SPRINT COMMUNICATIONS COMPANY, L.P., a Delaware
limited partnership ("Sprint Communications"), WIRELESSCO, L.P., a Delaware
limited partnership ("Wireless Co" and together with Sprint Spectrum and Sprint
Communications, the "Sprint Parties"), and THE CHASE MANHATTAN BANK, as
administrative agent (together with any successors thereof in accordance with
the Credit Agreement hereinafter described, the "Administrative Agent") for the
lenders under that certain Credit Agreement among INDEPENDENT WIRELESS ONE
CORPORATION (the "Affiliate"), the Administrative Agent and the lenders from
time to time party thereto (the "Lenders").
Affiliate has entered into a Sprint PCS Management Agreement dated and
effective as of February 9, 1999 (the "Management Agreement") with Sprint
Spectrum providing for the design, construction and management of the Service
Area Network (as therein defined). Affiliate has also entered into the Sprint
PCS Services Agreement (as it may be amended. modified, or supplemented from
time to time, the "Services Agreement") and the Sprint Trademark and Service
Xxxx License Agreement and the Sprint Spectrum Trademark and Service Xxxx
License Agreement (together, as they may be amended, modified, or supplemented
from time to time, the "License Agreements") (the Management Agreement, the
Services Agreement and the License Agreements and all other agreements between
Affiliate or its subsidiaries, on the one hand and the Sprint Parties or any
subsidiary of Sprint Corporation on the other hand (whether entered into prior
to, on, or after the date hereof) that relate to the Service Area Network as
they may be amended, modified, or supplemented from time to time, collectively,
the "Sprint Agreements").
Affiliate has entered into or concurrently herewith is entering into
that certain Credit Agreement dated as of December ___, 1999 with the
Administrative Agent and the Lenders (such Credit Agreement, as it may be
amended, supplemented, restated, replaced or otherwise modified from time to
time, the "Credit Agreement"), to provide financing for a portion of the costs
of the design and construction of the Service Area Network and for certain other
purposes. The Credit Agreement and each note, security agreement, pledge
agreement, guaranty and any and all other agreements, documents or instruments
entered into in connection with any of the foregoing, as the same may from time
to time be amended, supplemented, restated, replaced or otherwise modified from
time to time, shall collectively be referred to as the "Loan Documents."
As a condition to the availability of credit to Affiliate under the
Credit Agreement, the Administrative Agent and the Lenders have required the
execution and delivery of this Consent and Agreement by the Sprint Parties and
have required that Affiliate acknowledge consent and agree to all terms and
provisions of this Consent and Agreement.
Sprint Spectrum holds, directly or indirectly, certain of the licenses
for the services areas managed by Affiliate as contemplated in the Management
Agreement.
All capitalized terms in this Consent and Agreement shall have the same
meanings ascribed to them in the Management Agreement unless otherwise provided
in this Consent and Agreement; provided, that the terms "Default", "Event of
Default" and "Obligations" shall have the meanings ascribed to them in the
Credit Agreement.
Accordingly, each Sprint Party and the Administrative Agent, on behalf
of itself and for the Lenders, hereby agrees as follows:
SECTION 1. Consent to Security Interest. In connection with the
transactions contemplated by the Credit Agreement and the other Loan Documents,
Affiliate has granted or will grant to the Administrative Agent, for the benefit
of the Lenders (a) a first priority security interest in and lien upon
substantially all of its assets and property, tangible and intangible, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof and accessions thereto, including but not limited to the Operating
Assets, (b) a first priority security interest in and pledge of all stock and
other equity interests in Affiliate (the "Pledged Equity"), and (c) a first
priority security interest in and lien upon the rights of Affiliate in, to and
under the Sprint Agreements. The foregoing security interests, liens and pledges
are referred to collectively as the "Security Interests" and the foregoing
assets and property in which the Administrative Agent, for the benefit of the
Lenders, has been or will be granted a first priority security interest in and
lien are referred to collectively as the "Collateral". Each Sprint Party (i)
acknowledges notice of the Credit Agreement, (ii) consents to the granting of
the Security Interests in the Collateral to the Administrative Agent, for the
benefit of the Lenders, and (iii) agrees that (A) neither it nor any subsidiary
of Sprint Corporation will challenge or contest that the Security Interests are
valid, enforceable and duly perfected first priority security interests and
liens in and to the Collateral, (B) neither it nor any subsidiary of Sprint
Corporation will argue that any such Security Interest is subject to avoidance,
limitation or subordination under any legal or equitable theory or cause of
action, and (C) so long as the Management Agreement is in effect, it will not
sell, transfer or assign all or part of the Licenses that Affiliate has the
right to use; provided, however, that notwithstanding the foregoing, a Sprint
Party may, in conjunction with a sale of the Sprint PCS Network, at any time
sell, transfer or assign all or part of the Licenses that Affiliate has the
right to use in accordance with a transaction allowed under Section 17.15.5 of
the Management Agreement, so long as the buyer, transferee or assignee, as the
case may be, agrees to be bound by the terms of this Consent and Agreement with
respect to the assets bought, transferred or assigned.
Each Sprint Party acknowledges and agrees that (i) Sections 17.15.1 and
17.15.2 of the Management Agreement do not apply to the assignment of
Affiliate's rights under the Sprint Agreements to the Administrative Agent or
the Lenders under the Loan Documents or in connection with a transaction
permitted pursuant to this Consent and Agreement to any other Person pursuant to
the Loan Documents or to any other assignment in connection with any transaction
permitted pursuant to this Consent and Agreement and (ii) Section 17.15.3 of the
Management Agreement shall not apply to any Change of Control of Affiliate in
connection with the exercise by the Administrative Agent of any of its rights or
remedies under the Loan Documents, including without limitation in connection
with the sale of the membership interests of Affiliate to any Person or to any
other Change of Control of Affiliate; provided, however, Section 17.15.3 of the
Management Agreement shall apply to any such transaction if such transaction is
not with the Administrative Agent or the Lenders or is not a transaction
permitted
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pursuant to this Consent and Agreement. It is understood that any assignment
described in this Section 1 to the Administrative Agent or the Lenders is hereby
consented to by the Sprint Parties; provided, that any subsequent assignment by
the Administrative Agent or the Lenders shall be in accordance with the terms of
this Consent and Agreement.
SECTION 2. Payments. Upon receipt of the Administrative Agent's written
instructions, each Sprint Party agrees to make all payments (if any) to be made
by it under the Sprint Agreements, subject to its rights of setoff or recoupment
with respect to such payments as permitted under Section 10.6 of the Management
Agreement, to Affiliate directly to the Administrative Agent, or otherwise as
the Administrative Agent shall direct; provided, that during the period that
Sprint Spectrum is making such payments directly to the Administrative Agent or
its designee pursuant to this Section 2, Sprint Spectrum's setoff and recoupment
rights under such Section 10.6 shall not be limited to undisputed amounts. The
Administrative Agent hereby agrees that the Administrative Agent will not give
any such written instructions for it to receive such payments directly from a
Sprint Party unless an Event of Default has occurred under the Credit Agreement
and is continuing. Such written instructions to make payments directly to the
Administrative Agent shall be effective only so long as an Event of Default is
continuing, and the Administrative Agent will revoke such instructions promptly
following the cure of such Event of Default. Any payments made by any Sprint
Party directly to, or at the direction of, the Administrative Agent shall fully
satisfy any obligation of such Sprint Party to make payments to Affiliate under
the Sprint Agreements to the extent of such payments.
SECTION 3. Notice and Effect of Event of Default, Management Agreement
Breach and Event of Termination. The Administrative Agent agrees to provide to
Sprint Spectrum a copy of any written notice that Administrative Agent sends to
Affiliate, promptly after sending such notice, that a Default or an Event of
Default has occurred and is continuing, and Sprint Spectrum agrees to provide to
the Administrative Agent a copy of any written notice that Sprint Spectrum sends
to Affiliate, promptly after sending such notice, that an Event of Termination
or an event that if not cured, or if notice is provided, will constitute an
Event of Termination (each of an Event of Termination and an event that if not
cured would constitute an Event of Termination, a "Management Agreement Breach")
has occurred. Sprint Spectrum acknowledges that the Administrative Agent has
informed it that an Event of Termination constitutes an Event of Default under
the Loan Documents, and Sprint Spectrum further acknowledges that the Management
Agreement does not prohibit Affiliate from curing such an Event of Default.
SECTION 4. Event of Default without a Management Agreement Breach.
(a) Affiliate Remains as Manager or Interim Manager Appointed.
Upon and during the continuation of an Event of Default when no Management
Agreement Breach as to which Sprint Spectrum has given the Administrative Agent
notice exists on the original date of occurrence of such Event of Default, the
Administrative Agent may, by prior written notice to Sprint Spectrum, (i) allow
Affiliate to continue to act as the Manager under the Sprint Agreements, (ii)
appoint Sprint Spectrum to act as "Interim Manager" under the Sprint Agreements,
or (iii) appoint a Person other than Sprint Spectrum to act as Interim Manager
under the Sprint Agreements. If the Administrative Agent initially allows
Affiliate to continue to act as the Manager under the Sprint Agreements, the
Administrative Agent may later, during a continuation of an Event of Default,
remove the Affiliate as Manager and take the action
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described above in clauses (ii) and (iii). The date on which a Person begins
serving as Interim Manager shall be the "Commencement Date."
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim
Manager. If the Administrative Agent appoints Sprint Spectrum as Interim
Manager, within 14 days after its appointment Sprint Spectrum shall accept the
position or designate another Person (a "Sprint Spectrum Designee") to act as
Interim Manager under the Sprint Agreements. The Administrative Agent shall
accept Sprint Spectrum and any Sprint Spectrum Designee that is then acting as
an Other Manager (other than Affiliate) to act as Interim Manager under the
Sprint Agreements. Any Sprint Spectrum Designee that is not an Other Manager
must be acceptable to the Administrative Agent, which acceptance will not be
unreasonably withheld. If, within 30 days after the Administrative Agent gives
Sprint Spectrum notice of its appointment as Interim Manager, Sprint Spectrum or
a Sprint Spectrum Designee does not agree to act as Interim Manager, then the
Administrative Agent shall have the right to appoint an Administrative Agent
Designee as Interim Manager in accordance with Section 4(c). At the discretion
of the Administrative Agent, Sprint Spectrum or the Sprint Spectrum Designee
shall serve as Interim Manager for up to six months from the Commencement Date.
Upon the expiration of its initial six-month period as Interim
Manager under the Sprint Agreements, Sprint Spectrum or the Sprint Spectrum
Designee will agree, at the written request of the Administrative Agent, to
serve as Interim Manager for up to six months from such expiration date until
the Administrative Agent gives Sprint Spectrum or the Sprint Spectrum Designee
at least 30 days' written notice of its desire to terminate the relationship;
provided, that the extended period will be for 12 months rather than six months
(for a complete term of 18 months) in the event, as of the date of the initial
appointment, the aggregate number of pops that Affiliate and all Other Managers
have the right to serve under their respective management agreements with the
Sprint Parties is less than 40 million (such six or 12 month period, the
"Extension Period"). If Sprint Spectrum's or the Sprint Spectrum Designee's term
as Interim Manager is extended, then the Administrative Agent agrees that Sprint
Spectrum or the Sprint Spectrum Designee's right to be reimbursed by the
Affiliate promptly for all amounts previously expended by Sprint Spectrum or the
Sprint Spectrum Designee under Section 11.6.3 of the Management Agreement (which
expenditures were incurred in accordance with Section 9 of this Consent and
Agreement) shall no longer be subordinated to the Obligations as provided in
Section 9 in this Consent and Agreement, and Sprint Spectrum or the Sprint
Spectrum Designee's right to be reimbursed by Affiliate for any expenses it
incurs pursuant to its rights under Section 11.6.3 of the Management Agreement
as provided in the Management Agreement (which expenditures were incurred in
accordance with Section 9 of this Consent and Agreement) shall not be subject to
the subordination to the Obligations as provided in Section 9 of this Consent
and Agreement; provided, that Sprint Spectrum or the Sprint Spectrum Designee's
right to be reimbursed for amounts expended under Section 11.6.3 of the
Management Agreement that exceed in an aggregate amount 5% of Affiliate's
shareholder's or member's equity or capital account plus Affiliate's long-term
debt (i.e., notes that on their face are scheduled to mature more than one year
from the date issued), as reflected on Affiliate's books (the "Reimbursement
Limit") shall remain subordinated to the Obligations as provided in Section 9 of
this Consent and Agreement. Notwithstanding any other provision in this Section
4(b) to the contrary, Sprint Spectrum or the Sprint Spectrum Designee shall not
be required to continue to serve as Interim Manager during the Extension Period
at any time after 30 days following delivery by it to the
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Administrative Agent of written notice that Sprint Spectrum or the Sprint
Spectrum Designee needs to expend amounts under Section 11.6.3 of the Management
Agreement that Sprint Spectrum or the Sprint Spectrum Designee reasonably
believes will not be reimbursed based on the projected Collected Revenues for
the remainder of the Extension Period or reimbursed by the Lenders. If it
becomes necessary for Sprint Spectrum or the Sprint Spectrum Designee to expend
any amount that it believes will not be reimbursed or that exceeds the
Reimbursement Limit, Sprint Spectrum or the Sprint Spectrum Designee is not
required to incur such expense.
Upon the termination or expiration of the term of Sprint
Spectrum or the Sprint Spectrum Designee as Interim Manager, the Administrative
Agent shall have the right to appoint a successor Interim Manager in accordance
with Section 4(c).
(c) Administrative Agent Designee as Interim Manager. If the
Administrative Agent elects to appoint a Person other than Sprint Spectrum to
act as Interim Manager under the Sprint Agreements (an "Administrative Agent
Designee") as permitted under Sections 4(a)(iii) and 4(b), such Administrative
Agent Designee must (i) agree to serve as Interim Manager for six months unless
terminated earlier by Sprint Spectrum because of a material breach by the
Administrative Agent Designee of the terms of the Sprint Agreements that is not
timely cured or by the Administrative Agent in its discretion, (ii) meet the
applicable "Successor Manager Requirements" set forth below in Section 13, and
(iii) agree to comply with the terms of the Sprint Agreements but will not be
required to assume the existing liabilities of Affiliate. In the case of a
proposed Administrative Agent Designee, Sprint Spectrum shall provide to the
Administrative Agent within 10 Business Days after the request therefor, a
detailed description of all information reasonably requested by Sprint Spectrum
to enable Sprint Spectrum to determine if a proposed Administrative Agent
Designee satisfies the Successor Manager Requirements. Sprint Spectrum agrees to
inform Administrative Agent within 20 days after it receives such information
respecting such proposed Administrative Agent Designee from the Administrative
Agent whether such designee satisfies the Successor Manager Requirements. If
Sprint Spectrum does not so inform the Administrative Agent within such 20-day
period, then Sprint Spectrum shall be deemed to agree, for all purposes of this
Consent and Agreement, that such proposed designee satisfies the Successor
Manager Requirements. A Person that satisfies the Successor Manager Requirements
(or is deemed to satisfy such requirements) qualifies under the Management
Agreement to become a Successor Manager, unless the Administrative Agent
Designee materially breaches the terms of a Sprint Agreement while acting as
Interim Manager or no longer meets the Successor Manager Requirements. The
Administrative Agent Designee may continue to serve as Interim Manager after the
initial six-month period at the Administrative Agent's discretion, so long as
the Administrative Agent Designee continues to satisfy the Successor Manager
Requirements and it does not materially breach the terms of the Sprint
Agreements. If the Administrative Agent Designee materially breaches any Sprint
Agreement while acting as Interim Manager, then Sprint Spectrum and the
Administrative Agent have the rights set forth in Section 5; provided, that
Sprint Spectrum may not allow Affiliate to act as the Manager of the Sprint
Agreements without the Administrative Agent's consent.
SECTION 5. Event of Default Created by a Management Agreement Breach.
(a) Affiliate Remains as Manager or Interim Manager
Appointed. Upon an Event of Default created by a Management Agreement Breach
(so long as at such time an Event
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of Default not created by a Management Agreement Breach as to which
Administrative Agent has given Sprint Spectrum notice is not in existence),
Sprint Spectrum may by prior written notice to Administrative Agent (i) allow
Affiliate to continue to act as the Manager under the Sprint Agreements if
approved by the Administrative Agent, (ii) act as Interim Manager under the
Sprint Agreements, or (iii) appoint a Sprint Spectrum Designee to act as Interim
Manager under the Sprint Agreements as provided in paragraph (b) below. If
Sprint Spectrum initially allows Affiliate to continue to act as the Manager
under the Sprint Agreements, Sprint Spectrum may later remove the Affiliate as
Manager and take the action described above in clauses (ii) and (iii). The
Administrative Agent shall have no right to appoint an Interim Manager when an
Event of Default is caused by a Management Agreement Breach (unless an Event of
Default not created by a Management Agreement Breach is in existence), unless
Sprint Spectrum elects not to act as Interim Manager or to appoint a Sprint
Spectrum Designee.
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim
Manager. If Sprint Spectrum acts as Interim Manager or designates a Sprint
Spectrum Designee to act as Interim Manager under the Sprint Agreements, the
Interim Manager shall serve as Interim Manager for up to six months from the
Commencement Date, at the discretion of Sprint Spectrum. The Administrative
Agent shall accept Sprint Spectrum and any Sprint Spectrum Designee that is then
acting as an Other Manager (other than Affiliate) to act as Interim Manager
under the Sprint Agreements. Any Sprint Spectrum Designee that is not then
acting as an Other Manager must be acceptable to the Administrative Agent, which
acceptance will not be unreasonably withheld.
Upon the expiration of its initial six-month period as Interim
Manager under the Sprint Agreements. Sprint Spectrum or the Sprint Spectrum
Designee will agree to serve as Interim Manager for the Extension Period until
the Administrative Agent gives Sprint Spectrum or the Sprint Spectrum Designee
at least 30 days' written notice of its desire to terminate the relationship. If
Sprint Spectrum's or the Sprint Spectrum Designee's term as Interim Manager is
extended. then the Administrative Agent agrees that Sprint Spectrum or the
Sprint Spectrum Designee's right to be reimbursed by the Affiliate promptly for
all amounts previously expended by Sprint Spectrum or the Sprint Spectrum
Designee under Section 11.6.3 of the Management Agreement (which expenditures
were incurred in accordance with Section 9 of this Consent and Agreement) shall
no longer be subordinated to the Obligations as provided in Section 9 of this
Consent and Agreement, and Sprint Spectrum or the Sprint Spectrum Designee's
right to be reimbursed by the Affiliate for any expenses it incurs pursuant to
its rights under Section 11.6.3 of the Management Agreement as provided in the
Management Agreement (which expenditures were incurred in accordance with
Section 9 of this Consent and Agreement) shall not be subject to subordination
to the Obligations as provided in Section 9 of this Consent and Agreement;
provided, that Sprint Spectrum or the Sprint Spectrum Designee's right to be
reimbursed for amounts expended under Section 11.6.3 of the Management Agreement
in an aggregate amount that exceed the Reimbursement Limit shall remain
subordinated to the Obligations as provided in Section 9 of this Consent and
Agreement. Notwithstanding any other provision in this Section 5(b) to the
contrary, Sprint Spectrum or the Sprint Spectrum Designee shall not be required
to continue to serve as Interim Manager during the Extension Period at any time
after 30 days following delivery by it to the Administrative Agent of written
notice that Sprint Spectrum or the Sprint Spectrum Designee needs to expend
amounts under Section 11.6.3 of the Management Agreement that Sprint Spectrum or
the Sprint Spectrum Designee reasonably believes will not be
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reimbursed based on the projected Collected Revenues for the remainder of the
Extension Period or reimbursed by the Lenders. If it becomes necessary for
Sprint Spectrum or the Sprint Spectrum Designee to expend any amount that it
believes will not be reimbursed or that exceeds the Reimbursement Limit, Sprint
Spectrum or the Sprint Spectrum Designee is not required to incur such expense.
Upon the termination or expiration of the term of Sprint
Spectrum or the Sprint Spectrum Designee as Interim Manager and with the consent
of the Administrative Agent (which consent shall not be unreasonably withheld or
delayed), Sprint Spectrum shall have the right to appoint a successor Interim
Manager in accordance with Section 5(a).
(c) Administrative Agent Designee as Interim Manager.
Notwithstanding anything in paragraph (a) above to the contrary, if, after
Acceleration (as defined in Section 6(a) of this Consent and Agreement) and
within 30 days after Sprint Spectrum gives the Administrative Agent notice of a
Management Agreement Breach, Sprint Spectrum does not agree to act as Interim
Manager or does not obtain the consent of a Sprint Spectrum Designee to act as
Interim Manager under the Sprint Agreements, or if Sprint Spectrum or the Sprint
Spectrum Designee gives the Administrative Agent notice of its resignation as
Interim Manager and Sprint Spectrum fails to appoint a successor in accordance
with Section 5(b) within 30 days after such resignation, the Administrative
Agent may appoint an Administrative Agent Designee to act as Interim Manager.
Such Administrative Agent Designee must (i) agree to serve as Interim Manager
for six months unless terminated earlier by Sprint Spectrum because of a
material breach by the Administrative Agent of the terms of the Sprint
Agreements or by the Administrative Agent in its discretion, (ii) meet the
applicable Successor Manager Requirements, and (iii) agree to comply with the
terms of the Sprint Agreements. In the case of a proposed Administrative Agent
Designee, Sprint Spectrum shall provide to the Administrative Agent, within 10
Business Days after the request therefor, a detailed description of all
information reasonably requested by Sprint Spectrum to enable Sprint Spectrum to
determine if a proposed Administrative Agent Designee satisfies the Successor
Manager Requirements. Sprint Spectrum agrees to inform Administrative Agent
within 20 days after it receives such information respecting such proposed
Administrative Agent Designee from the Administrative Agent whether such
designee satisfies the Successor Manager Requirements. If Sprint Spectrum does
not so inform the Administrative Agent within such 20-day period, then Sprint
Spectrum shall be deemed to agree, for all purposes of this Consent and
Agreement, that such proposed designee satisfies the Successor Manager
Requirements. A Person that satisfies the Successor Manager Requirements
qualifies under the Management Agreement to become a Successor Manager, unless
the Administrative Agent Designee materially breaches the terms of a Sprint
Agreement while acting as Interim Manager or no longer meets the Successor
Manager Requirements. The Administrative Agent Designee may continue to serve as
Interim Manager after the initial six-month period at the Administrative Agent's
discretion, so long as the Administrative Agent Designee continues to satisfy
the Successor Manager Requirements and it does not materially breach the terms
of the Sprint Agreements. If the Administrative Agent Designee materially
breaches any Sprint Agreement while acting as Interim Manager, then Sprint
Spectrum and the Administrative Agent have the rights set forth in Section 5;
provided, that Sprint Spectrum may not allow Affiliate to act as the Manager of
the Sprint Agreements without the Administrative Agent's consent.
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SECTION 6. Purchase and Sale of the Operating Assets. Upon the
occurrence and during the continuation of an Event of Default, the following
provisions shall govern the purchase and sale of the Operating Assets:
(a) Acceleration of the Obligations Under the Loan Documents.
In the event the Lenders accelerate the maturity of the Obligations under the
Loan Documents (an "Acceleration" and, the date thereof, an "Acceleration
Date"), the Administrative Agent shall give written notice thereof to Sprint
Spectrum. Upon receipt of notice of Acceleration, Sprint Spectrum shall have the
right, to which right Affiliate, by acknowledging this Consent and Agreement,
expressly agrees, to purchase the Operating Assets from Affiliate for an amount
equal to the greater of (i) 72% of the Entire Business Value (as defined in the
Management Agreement) of Affiliate, valued in accordance with the procedure set
forth in Section 11.7 of the Management Agreement (with the assumption that the
deemed ownership of the Disaggregated License under Section 11.7.3 of the
Management Agreement includes the transfer of the Sprint Spectrum customers as
contemplated by Section 11.4 of the Management Agreement), and (ii) the
aggregate amount of the Obligations. Sprint Spectrum shall, within 60 days of
receipt of notice of Acceleration, give Affiliate and the Administrative Agent
notice of its intent to exercise the purchase right. In the event Sprint
Spectrum gives the Administrative Agent written notice of its intent to purchase
the Operating Assets, the Administrative Agent agrees that it shall not enforce
its Security Interests in the Collateral until the earlier to occur of (i)
expiration of the period consisting of 120 days after the Acceleration Date (or
such later date that shall be provided for in the purchase agreement and
acceptable to the Administrative Agent in its discretion to close the purchase
of the Operating Assets) or (ii) receipt by Administrative Agent and Affiliate
from Sprint Spectrum of written notice that Sprint Spectrum has determined not
to proceed with the closing of the purchase of the Operating Assets for any
reason. If after the 120-day period after the Acceleration Date the Affiliate
receives any purchase offer for the Operating Assets or the Pledged Equity that
is confirmed in writing by Affiliate to be acceptable to Affiliate, Sprint
Spectrum shall have the right subject to the consent of the Administrative
Agent, to purchase the Operating Assets or the Pledged Equity, as the case may
be, on terms and conditions at least as favorable to the Affiliate as the terms
and conditions proposed in such offer so long as within 14 Business Days after
Sprint Spectrum's receipt of such other offer Sprint Spectrum offers to purchase
the Operating Assets or the Pledged Equity and so long as the conditions of
Sprint Spectrum's offer and the amount of time it will take Sprint Spectrum to
effect such purchase is acceptable to the Affiliate and Administrative Agent.
Any such offer shall be confirmed in writing by the third party offeror. In the
event Sprint Spectrum exercises its rights under this Section 6(a), (i)
Affiliate shall sell the Operating Assets or the Pledged Equity to Sprint
Spectrum, (ii) the Administrative Agent and the Lenders shall consent to such
purchase and sale provided that the proceeds thereof shall be sufficient to
repay the aggregate amount of the Obligations, and (iii) Sprint Spectrum shall
make all payments to be made under this Section 6(a) to Administrative Agent for
its application against the Obligations. The purchase right of the Sprint
Parties under this Section 6(a) shall be in substitution of the purchase rights
of the Sprint Parties under Section 11.6.1 of the Management Agreement. If
Sprint Spectrum purchases the Operating Assets or the Pledged Equity as
permitted under this Section 6(a), the Administrative Agent will release the
Security Interests in the Collateral upon payment in full of the aggregate
amount of the Obligations and the termination of all commitments to advance
credit under the Credit Agreement.
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(b) Sale of Operating Assets to Third Parties. If the Sprint Parties do not
purchase the Operating Assets from Affiliate after an Acceleration as described
above in Section 6(a), the Collateral may be sold as follows:
(i) Sale to Successor Manager. The Collateral may be sold by the
Administrative Agent (in its sole discretion) in the exercise of certain of its
rights and remedies as a secured party under the Loan Documents or by Affiliate,
at the discretion of the Administrative Agent, to a person that satisfies the
Successor Manager Requirements. Sprint Spectrum shall provide to the
Administrative Agent, with a copy to Affiliate, within 10 Business Days after
the request therefor, a detailed description of all information reasonably
requested by Sprint Spectrum to enable Sprint Spectrum to determine if a
proposed buyer satisfies the Successor Manager Requirements. Sprint Spectrum
agrees to inform the Administrative Agent and Affiliate within 20 days after it
receives such information respecting such proposed buyer from the Administrative
Agent whether such designee satisfies the Successor Manager Requirements. If
Sprint Spectrum does not so inform the Administrative Agent within such 20-day
period, then Sprint Spectrum shall be deemed to agree, for all purposes of this
Consent and Agreement, that such proposed designee satisfies the Successor
Manager Requirements. If the proposed buyer satisfies the Successor Manager
Requirements (or is deemed to satisfy such requirements) and wishes to become a
"Successor Manager", the buyer must agree to be bound by the Sprint Agreements;
provided, that buyer shall have no responsibility or liability for any liability
to any Person other than a Sprint Party and Related Party of Sprint Spectrum
arising out of Affiliate's operations prior to the date buyer becomes bound by
the Sprint Agreements. In such case the Sprint Agreements shall remain in full
force and effect with the buyer as Successor Manager and this Consent and
Agreement shall remain in full force and effect for the benefit of the Successor
Manager and any Person providing senior secured debt financing to such Successor
Manager if required by such Person. Sprint Spectrum agrees, with respect to any
past failure of Affiliate to perform any obligation under the Sprint Agreements,
that the Successor Manager shall have the same amount of time to perform such
obligation that Affiliate had under the Sprint Agreements, with the performance
period commencing on the date on which the buyer becomes a Successor Manager.
Sprint Spectrum shall permit the performance period set forth in the Management
Agreement to be extended for such period of time that Sprint Spectrum believes
is reasonable to allow Successor Manager to perform such unperformed
obligations.
(ii) Sale to Other than Successor Manager. The Collateral may be sold
pursuant to the exercise by the Administrative Agent or the Lenders of their
rights and remedies under the Loan Agreements or by the Affiliate, at the
discretion of the Administrative Agent (subject to requirements of applicable
law) to a person that does not satisfy the Successor Manager Requirements or to
a person that does not wish to become a Successor Manager, but only under the
following conditions:
(A) the Sprint Parties may terminate the Sprint Agreements with such
buyer following the closing of such purchase (and the Administrative Agent
and the buyer shall have no rights thereto or thereunder with respect to
events occurring after the closing of such purchase);
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(B) the buyer may purchase the Disaggregated License as described
below in Section 6(b)(iv) and with the Disaggregated License having the
characteristics described in the definition thereof; and
(C) the purchase agreement with the buyer contains the requirements
set forth in Section 6(c) of this Consent and Agreement.
(iii) Confidentiality Agreement. Before any potential buyer is provided
Confidential Information respecting the potential purchase of any of the
Collateral (which buyer shall be entitled to receive), the potential buyer shall
execute a confidentiality agreement in the form attached as Exhibit A with such
changes thereto as may be reasonably requested by the parties to the agreement;
provided, however, in the event the potential buyer does not satisfy the
Successor Manager Requirements or has notified the Affiliate, Sprint Spectrum or
the Administrative Agent that it does not intend to be a Successor Manager,
Confidential Information that constitutes or relates to any technical,
marketing, financial, strategic or other information concerning any of the
Sprint Parties and that does not pertain to the business of Affiliate shall not
be permitted to be provided to such potential buyer.
(iv) Sale of Disaggregated Licenses. Sprint Spectrum will sell
Disaggregated Licenses as follows when required under Section 6(b)(ii)(B):
(A) If a buyer wishes to purchase spectrum in connection with its
purchase of the Operating Assets, it will purchase such spectrum from the
Affiliate and Sprint Spectrum as follows. The buyer will purchase from the
Affiliate or its Related Parties any licenses that Affiliate or such
Related Parties own (the "Affiliate's Licenses"). If the Affiliate's
Licenses were not being used to operate the Service Area Network, Sprint
Spectrum will reimburse the buyer for the microwave relocation costs
incurred to clear the spectrum bought from the Affiliate or its Related
Parties that the buyer will need to use to operate the Service Area Network
as constructed on the date that the buyer purchases the Operating Assets.
If the buyer does not meet the FCC requirements to buy the Affiliate's
Licenses, the buyer will seek a waiver from the FCC of the restrictions
that prohibit the buyer's ownership of such licenses. While any such FCC
application is pending and while the buyer is clearing the microwave from
the Affiliate's spectrum, the buyer may continue to use Sprint Spectrum's
Spectrum on which the Service Area Network operates. Sprint Spectrum will
sell its Disaggregated Licenses as described in Sections 6(b)(iv)(B),
6(b)(iv)(C) and 6(b)(iv)(D) only in those BTAs in which (1) the Affiliate
or its Related Parties do not own a license or the obligation to sell the
license is unenforceable, (2) the FCC will not approve the transfer of the
Affiliate's License to the buyer, or (3) Sprint Spectrum determines that it
does not wish to reimburse the buyer for the cost of the microwave
relocation.
(B) If the buyer, an entity with respect to which such buyer directly
or indirectly through one or more persons owns the total voting power or at
least 50% of the total voting power or at least 50% of the total equity (a
"controlled entity"), an entity that directly or indirectly through one or
more persons has a parent entity that owns at least 50% of the voting power
or at least 50% of the total equity of both the buyer and the common
controlled entity (a "common controlled entity"), owns a license to provide
10
wireless service to at least 50% of the pops in a BTA with respect to
which such buyer proposes to purchase Spectrum (each a "Restricted
Party" with respect to such BTA), the buyer may buy only 5 MHz of
Spectrum from Sprint Spectrum for such BTA.
(C) If the buyer is not a Restricted Party for a BTA with respect
to which such buyer proposes to purchase Spectrum, and either does not
satisfy the Successor Manager Requirements (other than those set forth
in Section 13(b) of this Consent and Agreement) or does not wish to be
a Successor Manager, then the buyer may buy 5 MHz, 7.5 MHz or 10 MHz
of Spectrum from Sprint Spectrum as the buyer determines in its sole
discretion.
(D) If Sprint Spectrum sells a Disaggregated License to a buyer
as required under this Section 6(b)(iv), the buyer must pay a price
equal to the sum of (1) the original cost of the applicable License to
Sprint Spectrum pro rated on a pops and spectrum basis, plus (2) the
microwave relocation costs paid by Sprint Spectrum attributable to
clearing the Spectrum in the Disaggregated License, plus (3) the
amount of carrying costs to Sprint Spectrum attributable to such
original cost and microwave relocation costs from the date of this
Consent and Agreement to and including the date on which the
Disaggregated License is transferred to the buyer, based on a rate of
12 percent per annum.
(c) No Direct Solicitation of Customers. Upon the sale of the
Collateral or the Disaggregated License in accordance with this Consent and
Agreement pursuant to Section 6(b)(ii), then the Sprint Parties agree to
transfer to the buyer thereof the customers with a MIN assigned to the Service
Area covered by the Disaggregated License, but Sprint Spectrum shall retain the
customers of a national account and any resellers who are then party to a resale
agreement with Sprint Spectrum. Each Sprint Party agrees to take all actions
reasonably requested by the buyer of the Collateral to fully transfer to such
purchaser such customers. Each Sprint Party agrees that neither it nor any of
its Related Parties will directly or indirectly solicit, for six months after
the date of transfer, the customers with a MIN assigned to the Service Area
covered by the Disaggregated License; provided, that Sprint Spectrum retains the
customers of a national account and any resellers that have entered into a
resale agreement with Sprint Spectrum. Sprint Spectrum may advertise nationally,
regionally and locally, and engage direct marketing firms to solicit customers
generally. If the buyer continues to operate the purchased assets as a wireless
network in the same geographic area on a network that is technologically
compatible with Sprint Spectrum's network, the buyer and Sprint Spectrum shall
each agree to provide roaming services to the other (in the case of Sprint
Spectrum, the roaming services shall be provided to those customers of buyer in
the geographic area serviced by the Disaggregated License roaming nationally
and, in the case of buyer, the roaming services shall be provided to those
customers of Sprint Spectrum roaming in the geographic area covered by the
Disaggregated License) pursuant to a roaming agreement to be entered into
between buyer and Sprint Spectrum and to be mutually agreed upon so long as such
agreement is based on Sprint Spectrum's then standard roaming agreement used by
Sprint Spectrum in the industry and the price that each party shall pay the
other party for roaming services provided to the first party shall be a price
equal to the lesser of: (1) MFN Pricing provided by buyer to third parties
roaming in the geographic area serviced by the Disaggregated License; and (2)
the national average paid by Sprint Spectrum to third parties for Sprint
Spectrum's customers to roam in such
11
third parties' geographic areas (including Other Managers). Such obligations
with respect to roaming shall continue until such roaming agreement is
terminated pursuant to its terms. The buyer shall agree in writing that if it
continues to operate the purchased assets as a wireless network in the same
geographic area on a network that is technologically compatible with Sprint
Spectrum's network, the buyer shall, to the extent required by law, provide
resale to Sprint Spectrum in the geographic area covered by the Disaggregated
License at the MFN Pricing that buyer charges third parties who purchase resale
from buyer; provided, however, if buyer is not offering resale to any other
customers then pricing of resale provided to Sprint Spectrum shall be as
mutually agreed; and provided, further however, whether or not buyer is required
by law to offer such resale, buyer shall offer such resale (on the terms
described in this sentence) to national customers of Sprint Spectrum.
(d) Deferral of Portion of Collected Revenues. (i) Under Section 10.1.1 of
the Management Agreement, Sprint Spectrum retains 8% of the Collected Revenues
on a weekly basis (the "Retained Amount"). Following an Acceleration and for up
to two years after such Acceleration, Sprint Spectrum shall retain only one half
of the Retained Amount, and the remaining one half of the Retained Amount shall
be advanced to Affiliate (or, if so directed by the Administrative Agent
pursuant to Section 2 hereof, to the Administrative Agent) at the time the
weekly fee provided under Section 10.1.1 of the Management Agreement is paid;
provided, that after the first anniversary of the Acceleration Date, Sprint
Spectrum shall retain the entire Retained Amount if Sprint Spectrum is not
serving as the Interim Manager.
(ii) The portion of the Retained Amount advanced to Affiliate (or, if
so directed by the Administrative Agent pursuant to Section 2 hereof, to
the Administrative Agent) (the "Deferred Amount") shall be evidenced by a
promissory note executed by Affiliate contemporaneously with this Consent
and Agreement in the form of Exhibit B hereto (the "Deferred Amount Note").
(A) Amounts will be drawn on the Deferred Amount Note each time
Sprint Spectrum advances a Deferred Amount to Affiliate or the
Administrative Agent.
(B) The Deferred Amount Note will bear interest at a rate equal
to the greatest of (I) the average interest rate of Affiliate's
secured debt, (II) the average rate of Affiliate's unsecured debt, and
(III) Sprint Spectrum's cost of capital.
(C) The Deferred Amount Note shall mature on the earlier of (I)
the date on which a Successor Manager is qualified and assumes
Affiliate's rights and obligations under the Sprint Agreements. and
(II) the date on which the Operating Assets are purchased by a
third-party buyer, or on which a stock or other equity acquisition,
merger, consolidation or other transaction resulting in the indirect
transfer of the Operating Assets to a third-party buyer (an "Indirect
Transfer") is consummated.
(iii) In the event a Successor Manager assumes any of the obligations
of Affiliate under the Sprint Agreements, such Successor Manager shall also
assume the obligations under the Deferred Amount Note. In the event that
the Operating Assets are sold to a
12
third party buyer or an Indirect Transfer is consummated, the obligations of
Affiliate under the Deferred Amount Note shall be subordinate to the Affiliate's
obligations to its secured lenders.
(iv) After the two-year anniversary of the Acceleration, or earlier if
a Successor Manager is appointed or if Sprint Spectrum is not serving as the
Interim Manager, Sprint Spectrum will again retain the full Retained Amount.
SECTION 7. No Limits on Remedies. Nothing contained in this Consent and
Agreement shall limit any rights of the Administrative Agent or Lenders to
Accelerate. Except as expressly provided herein, nothing contained in this
Consent and Agreement shall limit any rights or remedies that the Administrative
Agent or the Lenders may have under the Loan Documents or applicable law. The
Administrative Agent may not sell, lease, assign, convey or otherwise dispose of
the Collateral other than as permitted under this Consent and Agreement.
SECTION 8. Rights and Obligations of Interim Manager. The Interim
Manager may collect a reasonable management fee for its services; provided, that
if Sprint Spectrum or a Related Party of Sprint Spectrum acts as Interim
Manager, such management fee shall not exceed the direct expenses relating to
Sprint Spectrum or such Related Party employees for the actual time spent by
such employees when performing the function of Interim Manager and Sprint
Spectrum's or such Related Party's out-of-pocket expenses. Such direct expenses
shall include such employees' salaries and benefits, and the out-of-pocket and
accrued expenses allocated to such employees. If Sprint Spectrum is the Interim
Manager, the management fee will be paid out of the 92% Management Fee that
Sprint Spectrum pays under the Management Agreement, and will be in addition to
the fees it receives under the Services Agreement. Sprint Spectrum shall collect
such management fee by setoff against the fees and any other amounts payable to
Affiliate under the Sprint Agreements. The Interim Manager will be required to
operate the Service Area Network in accordance with the terms of the Sprint
Agreements and will be subject to all of the requirements and obligations of
such agreements, but will not be required to assume the existing liabilities of
Affiliate.
SECTION 9. Rights to Cure. Neither the provisions of this Consent and
Agreement nor any action of either Administrative Agent or Sprint Spectrum shall
require either Administrative Agent, any Lender or Sprint Spectrum to cure any
default of Affiliate under the Sprint Agreements or to perform under the Sprint
Agreements, but shall only give it the option to do so except to the extent
otherwise required by this Consent and Agreement. Sprint Spectrum may exercise
its rights under Section 11.6.3 of the Management Agreement upon an Event of
Termination, whether such situation arises while Affiliate, Sprint Spectrum, an
Administrative Agent Designee or a Sprint Spectrum Designee is acting as Interim
Manager and notwithstanding any other provision of this Consent and Agreement;
provided, that the right to reimbursement for any expenses incurred in
connection with such cure shall be unsecured and until such time as the
Obligations have been paid in full in cash and all commitments to advance credit
under the Credit Agreement have terminated or expired, the Person or Persons
entitled thereto shall not receive such reimbursement, except as specifically
provided in Section 4(b) or Section 5(b) of this Consent and Agreement. Sprint
Spectrum shall not be permitted to deduct or setoff from its payments to
Affiliate any such amounts it is not entitled to receive under this Section and
shall not take any action of any type to attempt to collect such reimbursement
and the failure to be so reimbursed shall not constitute a Management Agreement
Breach. In the
13
event that Sprint Spectrum receives any payments or distributions that it is not
entitled to receive under this Section, such payments shall be held in trust
for, and promptly turned over to, the parties entitled thereto. If Sprint
Spectrum has designated a third party to take action under Section 11.6.3 of the
Management Agreement, before taking any such action such third party shall enter
into an agreement with Administrative Agent providing that such third party
agrees to the provisions of this Section 9 as if it were a party hereto. Until
such time as the Obligations have been paid in full in cash and all commitments
to advance credit under the Credit Agreement have terminated or expired, Sprint
Spectrum shall not be entitled to exercise any other remedies under the Sprint
Agreements, including, without limitation, the remedy of terminating the Sprint
Agreements (except to the extent permitted under Sections 6(b)(ii)(A) and 12 of
this Consent and Agreement) or the remedy of withholding any payment set forth
in Section 10 of the Management Agreement (subject to Sprint Spectrum's rights
of setoff or recoupment with respect to such payments as permitted under
Sections 2.4(b) and 5(b) of this Consent and Agreement). Until such time as the
Obligations have been paid in full in cash and all commitments to advance credit
under the Credit Agreement have terminated or expired, notwithstanding anything
to the contrary contained in Section 2.3 of the Management Agreement, in no
event shall any Person other than Affiliate or a Successor Manager be a manager
or operator for Sprint Spectrum with respect to the Service Area and neither
Sprint Spectrum nor any of its Related Parties shall own, operate, build or
manage another wireless mobility communications network in the Service Area,
except to the extent provided in Sections 2.3(a), (b), (c) or (d) of the
Management Agreement and except to the extent that the Sprint Agreements are
terminated in accordance with Section 6(b)(ii)(A) of this Agreement. The
Administrative Agent acknowledges and agrees that Sprint Spectrum shall also
have the right to cure an Event of Default or to assist Affiliate in curing an
Event of Default but only to the extent Affiliate has the right to so cure under
the Loan Documents, as applicable (it being understood that the act of Sprint
Spectrum curing an Event of Default shall not constitute an independent Event of
Default unless the act itself would otherwise constitute a Default (e.g. a sale
of assets not otherwise permitted by the Loan Documents)), including but not
limited to Sprint Spectrum's providing Affiliate the funds necessary to operate
or meet certain financial covenants in the Loan Documents. The Administrative
Agent shall have the right to cure any Management Agreement Breach.
SECTION 10. Sprint Spectrum's Right to Purchase Obligations or
Operating Assets. (a) Following the Acceleration Date and until the 60-day
anniversary of the filing of a bankruptcy petition by or with respect to
Affiliate, Sprint Spectrum shall have the right to purchase all, but not less
than all, the Obligations under, and as defined in, the Credit Agreement, by
repaying the Obligations in full in cash. In the event that Sprint Spectrum
purchases the Obligations within 60 days immediately following the earlier of
(i) the Acceleration Date and (ii) the date of the filing of a bankruptcy
petition by or with respect to Affiliate, Sprint Spectrum may in lieu of
purchasing the total amount of the Obligations, purchase all Obligations other
than the accrued interest with respect thereto for a purchase price equal to the
amount of the Obligations other than such accrued interest and any fees and
expenses that are unreasonable, in which case, such accrued interest and
unreasonable fees and expenses shall remain due and owing by Affiliate to the
Lenders.
(b) In the event that the Administrative Agent acquires the
Operating Assets or takes title to the Pledged Equity, Sprint Spectrum shall
have the right to purchase the
14
Operating Assets or the Pledged Equity from the Administrative Agent during the
limited period of time provided in and otherwise in accordance with this Section
10(b) by paying to the Administrative Agent in cash an amount equal to the sum
of the aggregate amount paid (by credit against the Obligations or otherwise) by
the Administrative Agent or the Lenders for the Operating Assets or the Pledged
Equity as the case may be, plus the aggregate amount of any remaining unpaid
Obligations. The Administrative Agent shall give Sprint Spectrum notice of any
acquisition of the Operating Assets or the Pledged Equity by the Administrative
Agent promptly following the date of final consummation of such acquisition (the
"Acquisition Notice"). Sprint Spectrum shall, within 60 days of receipt of a
valid Acquisition Notice, give the Administrative Agent notice of its intent to
exercise its purchase right under this Section 10(b). In the event Sprint
Spectrum gives the Administrative Agent written notice of its intent to purchase
the Operating Assets or the Pledged Equity, the Administrative Agent agrees that
it shall provide Sprint Spectrum the right to purchase the Operating Assets or
the Pledged Equity as the case may be until the earlier to occur of (i)
expiration of the period consisting of 120 days after Sprint Spectrum's receipt
of a valid Acquisition Notice (or such later date that shall be provided for in
the purchase agreement and acceptable to the Administrative Agent in its sole
discretion to close the purchase of the Operating Assets or the Pledged Equity)
or (ii) receipt by Administrative Agent from Sprint Spectrum of written notice
that Sprint Spectrum has determined not to proceed with the closing of the
purchase of the Operating Assets or the Pledged Equity. If Sprint Spectrum at
any time purchases the Operating Assets or the Pledged Equity as permitted under
this Section 10, the Administrative Agent will release the Security Interests in
the Collateral upon payment in full of the aggregate amount of the Obligations.
Notwithstanding the foregoing, in the event that a bankruptcy petition is filed
by or with respect to Affiliate, Sprint Spectrum shall again have the right to
purchase the Operating Assets or the Pledged Equity from the Administrative
Agent by repaying the Obligations in full in cash, by giving the Administrative
Agent notice of its intent to exercise such purchase right no later than 60 days
following the date of filing of such bankruptcy petition. In the event Sprint
Spectrum gives the Administrative Agent written notice of its intent to purchase
the Operating Assets or the Pledged Equity, the Administrative Agent agrees that
it shall provide Sprint Spectrum the right to purchase the Operating Assets or
the Pledged Equity for 120 days from the date of filing of the bankruptcy
petition; provided, that if the purchase requires bankruptcy court approval,
then Sprint Spectrum shall diligently seek to obtain such approval, and such
period within which Sprint Spectrum shall consummate the purchase shall be
extended until the earliest of (i) the later of 120 days from the date of filing
of the bankruptcy petition or 5 days after Sprint Spectrum receives such
bankruptcy court approval, (ii) the date on which an order is issued by a court
with competent jurisdiction that denies Sprint Spectrum's application for such
approval and such order may no longer be appealed by Sprint Spectrum, (iii) the
date on which Sprint Spectrum gives the Administrative Agent written notice that
Sprint Spectrum has determined not to proceed with such purchase, and (iv) the
date on which an order is issued by a court with competent jurisdiction that
approves the sale of the Operating Assets or the Pledged Equity to a third party
and such order may no longer be appealed by Sprint Spectrum.
(c) If at any time during the period described in Section
10(a) or 10(b) above or thereafter the Administrative Agent receives any
purchase offer for the Operating Assets or the Pledged Equity or the
Obligations, as applicable, that is acceptable to the Administrative Agent, the
Administrative Agent shall exercise reasonable efforts to obtain the consent of
the offeror to deliver a copy of such offer to Sprint Spectrum and Sprint
Spectrum shall have the
15
right to purchase the Operating Assets, the Pledged Equity or the Obligations,
as applicable, on terms and conditions at least as favorable to the
Administrative Agent as the terms and conditions proposed in such offer so long
as within 14 Business Days after Sprint Spectrum's receipt of such other offer
Sprint Spectrum offers to purchase the Operating Assets, the Pledged Equity or
the Obligations, as applicable, and so long as the conditions of Sprint
Spectrum's offer and the amount of time it will take Sprint Spectrum to effect
such purchase is acceptable to the Administrative Agent and the Lenders.
(d) If Sprint Spectrum at any time purchases the entirety of
the Obligations as provided in this Section 10, the Administrative Agent shall
assign and transfer or cause the Lenders to assign and transfer to Sprint
Spectrum all rights and interests in, to and under all of the Loan Documents.
including but not limited to all security interests, liens, financing
statements, guaranties and other credit enhancements related to such Loan
Documents, and all rights and claims thereunder (collectively referred to as the
"Loan Document Rights"). If Sprint Spectrum purchases less than all the
Obligations (as permitted in the second sentence of Section 10(a) above), then
the Administrative Agent shall assign and transfer or cause the Lenders to
assign and transfer to Sprint Spectrum all Loan Document Rights, except that if
Sprint Spectrum receives payment in full of all Obligations due under the Loan
Documents (including the amount it did not pay the Administrative Agent, as
permitted in the second sentence of Section 10(a) above), it shall pay such
amount to the Administrative Agent unless the Administrative Agent has already
received payment of such amount.
SECTION 11. Foreclosure. Upon the Administrative Agent or any Lender or
any other Person that meets the Successor Manager Requirements acquiring the
Operating Assets and the Sprint Agreements, then such Person shall be entitled
to exercise any and all rights of Affiliate under the Sprint Agreements in
accordance with the terms of the Sprint Agreements and each Sprint Party will
thereupon comply in all respects with such exercise by such Person and perform
its obligations under the Sprint Agreements and this Consent and Agreement for
the benefit of such Person. Each Sprint Party agrees that the Administrative
Agent or any Lender may (but shall not be obligated to), subject to and in
accordance with the terms of this Consent and Agreement, assign its rights and
interests acquired in the Operating Assets and the Sprint Agreements to any
buyer or transferee thereof and, in the event the buyer wishes to become a party
to the Sprint Agreements and such buyer satisfies the Successor Manager
Requirements, such buyer shall be bound by the Sprint Agreements; provided, that
buyer shall have no responsibility or liability to any Person other than a
Sprint Party and a Related Party of a Sprint Party arising out of Affiliate's
operations prior to the date buyer becomes bound by the Sprint Agreements. In
such case the Sprint Agreements shall remain in full force and effect with the
buyer as Successor Manager and this Consent and Agreement shall remain in full
force and effect for the benefit of the Successor Manager and any Person
providing senior secured debt financing to such Successor Manager if required by
such Person. Sprint Spectrum agrees, with respect to any past failure of
Affiliate to perform any obligation under the Sprint Agreements, that the
Successor Manager shall have the same amount of time to perform such obligation
that Affiliate had under the Sprint Agreements, with the performance period
commencing on the date on which the buyer becomes a Successor Manager. Sprint
Spectrum shall permit the performance period set forth in the Management
Agreement to be extended for such period of time that Sprint Spectrum believes
is reasonable to allow Successor Manager to perform such unperformed
obligations.
16
SECTION 12. Trademarks and Service Marks. In the event the
Administrative Agent forecloses on its security interest in the License
Agreements and transfers the License Agreements to a Person who does not meet
the Successor Manager Requirements, then Sprint Spectrum shall have the right to
terminate the License Agreements and cause the Administrative Agent to release
its security interest in the License Agreements immediately prior to such
transfer.
SECTION 13. Interim Manager and Successor Manager Requirements. To
qualify as an Interim Manager or a Successor Manager, the Person must satisfy
each of the following "Successor Manager Requirements," as applicable:
(a) The Person must not during the three-year period
immediately preceding the date of determination have materially
breached any material agreement with Sprint Spectrum or its Related
Parties that resulted in the exercise of a termination right or in the
initiation of judicial or arbitration proceedings;
(b) The Person must not be one of the Persons identified on
Schedule 13 (a "Schedule 13 Person"); provided, that no Other Manager
under any Sprint PCS Management Agreement may be identified on Schedule
13;
(c) In the case of a Successor Manager, the Person must meet a
reasonable Person's credit criteria (taking into consideration the
circumstances), it being understood that such criteria is satisfied if
the financial projections contained in the business plan such Person
submits to Sprint Spectrum shows the ability to service its
indebtedness and meet the build-out requirements contained in the
Build-out Plan; and
(d) The Person must agree to be bound by the terms of the
Sprint Agreements as if an original party thereto; provided, in the
case of an Interim Manager, the Person must also execute a separate
confidentiality agreement in the form attached as Exhibit A with such
changes thereto as may be reasonably requested by the parties to the
agreement, but the Person is not required to assume the existing
liabilities of the Affiliate.
The Administrative Agent, each Lender and each of their wholly-owned
subsidiaries or entities who wholly-own such entities shall be deemed to satisfy
Sections 13(a), (b) and (c) of the preceding "Successor Management
Requirements".
SECTION 14. Management Agreement. Sprint Spectrum agrees that it will
not exercise its right under the Management Agreement to purchase the Operating
Assets or to sell the Disaggregated License to Affiliate if before, or after
giving effect to such exercise, there would exist a Default or Event of Default
under the Credit Agreement, unless Sprint Spectrum pays the aggregate amount of
the Obligations as a condition of the exercise of such right and the Credit
Agreement shall have been terminated in connection with such payment. Sprint
Spectrum agrees that until the Obligations have been paid in full in cash and
all commitments to advance credit under the Credit Agreement have terminated or
expired, a failure to pay any amount by any Related Party of the Affiliate under
any agreement with Sprint Spectrum or any of its Related Parties (other than the
Management Agreement, the Services Agreement or the License Agreements) shall
not constitute a Management Agreement Breach for any purpose. Subject to
17
regulatory approval in connection with any such sale, Sprint Spectrum agrees
that it shall always maintain the ability to sell the Disaggregated License in
accordance with this Consent and Agreement. Sprint Spectrum shall own at least
10 MHz of Spectrum in the Service Area until the first to occur of the following
events: (i) the Obligations have been paid in full in cash and all commitments
to advance credit under the Credit Agreement have terminated or expired, (ii)
the sale by Sprint Spectrum of the Spectrum pursuant to this Consent and
Agreement shall be effected, (iii) the sale of the Operating Assets pursuant to
this Consent and Agreement, and (iv) the termination of the Management
Agreement. Sprint Spectrum acknowledges that the financing provided pursuant to
the Loan Documents, the stock to be issued by Affiliate to InvestCorp
International, Inc., Odyssey Partners, L.P. and other affiliates and investors.
pursuant to those certain Stock Subscription Agreements, the senior subordinated
notes to be issued under that certain indenture pursuant to the terms and
conditions set forth in that certain Independent Wireless One Credit Agreement
dated as of December , 1999 by and among Affiliate, Chase Securities, Inc.,
First Union National Bank, Paribas, UDS AG and the Administrative Agent, and
that certain Project Pacific Bridge Credit Facility Commitment Letter by and
between DLJ Bridge Finance, Inc., Chase Securities, Inc., Paribas, UDS AG and
Affiliate, complies with Section 1.7 of the Management Agreement, as amended by
Addendum II to the Management Agreement ("Section 1.7"), and that Section 11.3.6
of the Management Agreement shall no longer be applicable with respect to such
financing so long as the amounts and deadlines set forth in Section 1.7 are
satisfied. Notwithstanding anything to the contrary contained in Section. 12.2
of the Management Agreement, the Administrative Agent, the Lenders, and any
Successor Manager or buyer of the Operating Assets or Disaggregated License
shall be permitted to disclose Confidential Information (as defined in the
Management Agreement) (i) to the extent required by law, rule or regulation,
(ii) to any regulator or any regulatory body regulating such entity, (iii) to
any rating agency in connection with requirements applicable to such Person and
(iv) to the lawyers and accountants for any such Persons.
SECTION 15. Administrative Agent and Eligible Assignees. The
Administrative Agent and each Lender must be an Eligible Assignee. "Eligible
Assignee" shall mean and include a commercial bank. financial institution. other
"accredited investor" (as defined in Regulation D of the Securities Act) other
than individuals, or a "qualified institutional buyer" as defined in rule 144A
of the Securities Act; provided, that prior to the 61st day after the filing of
a bankruptcy petition by or with respect to Affiliate in no event may any Person
that is engaged in or that controls, is controlled by or is under common control
with any Person engaged in, the telecommunications service business in the
United States (other than Sprint Corporation and its subsidiaries), be an
Eligible Assignee, it being understood that no small business investment
corporation that is ultimately owned by an Eligible Assignee that is subject to
Regulation Y shall be deemed to be controlled by or under common control with
such Eligible Assignee; and provided further, that after the filing of such
bankruptcy petition in no event may a Schedule 13 Person be an Eligible
Assignee.
SECTION 16. Sprint Party Representations. Each Sprint Party represents
and warrants to the Administrative Agent, as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate and partnership action, and does not and
will not require any further consents or approvals that have not been obtained,
or violate any provision of any law, regulation, order, judgment, injunction or
similar matters or materially breach any agreement presently in effect with
respect to or binding
18
on it; provided, that the transfer of Spectrum as contemplated under this
Consent and Agreement will require regulatory approval (which each Sprint Party
agrees to use its commercially reasonable efforts to obtain); (b) this Consent
and Agreement is a legal, valid and binding obligation of such Person
enforceable against it in accordance with its terms, except that (i) such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws affecting the enforcement
of creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be limited by equitable
defenses and by the discretion of the court before which any proceeding may be
brought; (c) the Sprint Agreements are in full force and effect and have not
been amended, supplemented or modified; (d) as of the date of execution hereof,
to the knowledge of the Sprint Parties, no Event of Termination has occurred and
is continuing (without regard to any requirement of the delivery of written
notice necessary to the occurrence of an Event of Termination under Section 11.3
of the Management Agreement); (e) on the date the Management Agreement was
executed Sprint Spectrum owned, and on the date hereof Sprint Spectrum owns, 10
MHz or more of Spectrum in the Service Area; and (f) the only existing
agreements or arrangements between Affiliate, on the one hand, and Sprint
Corporation or any of its subsidiaries, on the other hand, are the Management
Agreement, the Services Agreement, the License Agreements, the Asset Purchase
Agreement, as amended, the Interim Services Agreement and Addendum II to the
Management Agreement.
SECTION 17. Administrative Agent Representations. The Administrative
Agent represents and warrants to Sprint Spectrum as of the Closing Date (a) its
execution, delivery and performance of this Consent and Agreement has been duly
authorized by all necessary corporate action, and does not and will not require
any further consents or approvals that have not been obtained, or violate any
provision of any law, regulation, order, judgment, injunction or similar matters
or materially breach any agreement presently in effect with respect to or
binding on it; (b) this Consent and Agreement is a legal, valid and binding
obligation of the Administrative Agent enforceable against it in accordance with
its terms, except that (i) such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights generally, and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be limited by equitable defenses and by the discretion of the court
before which any proceeding may be brought; (c) at the time of the execution
hereof, Administrative Agent is the only Lender; and (d) as of the date of
execution hereof, to the knowledge of the Administrative Agent, no Event of
Default has occurred and is continuing.
SECTION 18. Successors and Assigns. This Consent and Agreement shall be
binding upon the successors and assigns of the parties hereto and shall inure,
together with the rights and remedies of the parties hereunder, to the benefit
of their respective successors and assigns. In the event the Sprint PCS Network
is sold in accordance with the Management Agreement, the buyer thereof will
assume the obligations of the Sprint Parties hereunder and under all the other
Sprint Agreements other than the Sprint Trademark and Service Xxxx License
Agreement; provided, however, the buyer of the Sprint PCS Network shall enter
into an agreement with Affiliate on substantially the same terms as the Sprint
Trademark and Service Xxxx License Agreement with respect to such buyers'
trademarks, service marks, brands, etc. In the event a Successor Manager becomes
a party to the Sprint Agreements as provided in this Agreement, this Consent and
Agreement shall remain in full force and effect for the benefit of the Successor
Manager and any
19
Person providing senior secured debt financing to such Successor Manager if
required by such Person.
SECTION 19. Amendment. Neither this Consent and Agreement nor any
provision herein may, be waived except pursuant to an agreement or agreements in
writing entered into by Sprint Spectrum, the Administrative Agent and Affiliate,
and neither this Consent and Agreement nor any provision herein may be amended
or modified except pursuant to an agreement or agreements in writing entered
into by Sprint Spectrum, the Administrative Agent and Affiliate. The
Administrative Agent and each Lender (and its successors and assigns) shall be
bound by any modification or amendment authorized by this Section 19. No
amendment or waiver or effective amendment or waiver entered into in violation
of this Section 19 shall be valid.
SECTION 20. APPLICABLE LAW. THIS CONSENT AND AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 21. Notices. Notices and other communications provided for in
this Consent and Agreement shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, as follows:
(a) if to Sprint PCS, to it at:
Sprint Spectrum L.P.
0000 Xxxx, 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
0000 Xxxx, 00xx xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: General Counsel
(b) if to the Administrative Agent, to it at:
Chase Manhattan Bank - Agent Bank Services
1 Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
20
with a copy to:
Chase Manhattan Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx. Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxxx
(c) if to Affiliate, to it at:
Independent Wireless One Corporation
000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxx
All notices and other communications given to any party hereto in accordance
with the provisions of this Consent and Agreement shall be deemed to have been
given on the date of receipt if delivered by hand or overnight courier service
or sent by telecopy, or on the date five (5) business days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section 21 or in
accordance with the latest unrevoked direction from such party given in
accordance with this Section 21.
SECTION 22. Counterparts. This Consent and Agreement 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.
SECTION 23. Severability. Any provision of this Consent and Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provision with valid provisions the economic effect of which is as
close as possible to that of the invalid, illegal or unenforceable provision.
SECTION 24. Amendments to Form Consent and Agreement. As of the date
this Consent and Agreement is executed, it contains provisions substantially
similar to the provisions of every other executed Consent and Agreement entered
into by Sprint Spectrum with creditors of Other Managers. If Sprint Spectrum
modifies or amends the form of Consent and Agreement
21
it enters into with another lender, then Sprint Spectrum agrees to give the
Administrative Agent written notice of such modifications and amendments and, at
the request of Administrative Agent, to amend this Consent and Agreement in the
same manner; provided, that: (a) Sprint Spectrum will not modify this Consent
and Agreement to incorporate changes made for the benefit of a lender because of
circumstances related to a particular Other Manager, subject to the limitations
set forth below; (b) the Administrative Agent must agree to make all (or none)
of the changes made for the other lender and the Other Manager, unless Sprint
Spectrum agrees to allow the Administrative Agent to make only some of the
changes; and (c) Sprint Spectrum is only required to make changes to this
Consent and Agreement based on changes made to the form of Consent and Agreement
executed in connection with loans to Other Managers that are syndicated or
intended to be syndicated (i.e., loans sold or participated, or intended to be
sold or participated, in whole or in part to at least three financial
institutions or investment funds) (a "Syndication Consent") until the later to
occur of: (i) five Syndication Consents are executed, and (ii) loans to Other
Managers are syndicated where the pops in the Service Areas of such Other
Managers, in the aggregate, exceed 10 million; provided, however, that in the
event any Syndicated Consent executed after such later date relates to a
transaction where the pops in the Service Area of the Other Manager exceed 5
million, Sprint Spectrum agrees to give the Administrative Agent the right to so
amend this Consent and Agreement, subject to the provisions of clauses (a) and
(b) above.
For purposes of subsection (a) in the preceding paragraph, Sprint
Spectrum will not deem the following changes to be made because of circumstances
related to a particular Other Manager: (i) any form of recourse to Sprint
Spectrum or other similar form of credit enhancement; (ii) any change in Sprint
Spectrum's right to purchase Operating Assets or Obligations; (iii) any change
in the Affiliate's, Administrative Agent's or Lenders' right to sell the
Collateral or purchase the Disaggregated License (including, without limitation,
any rights of first refusal and the purchase price of the Disaggregated
License); (iv) any change in the ownership status, terms of usage or amount of
Disaggregated License utilized by Affiliate; (v) any material change in the flow
of revenues between Sprint Spectrum and Affiliate excluding changes related to
the pricing of direct or indirect fees, but including any subordination of
direct or indirect fees or other amounts or costs due under the Sprint
Agreements or hereunder to Sprint Spectrum; (vi) any change to obligations
required to be assumed by, or qualifications for, any Interim or Successor
Manager, including changes in the time period or terms under which Sprint
Spectrum agrees to remain as Interim Manager; (vii) any changes in
confidentiality, non-compete or Eligible Assignee language, including changes to
Schedule 13; (viii) any clarifications of FCC compliance issues; (ix) the
issuance of legal opinions; (x) any change in the circumstances under, or
procedures by which, an Interim Manager or Successor Manager is appointed; or
(xi) any change to this Section 24.
SECTION 25. Termination. This Consent and Agreement shall terminate and be
of no further force and effect upon the first to occur of the following: (i) the
Obligations are paid in full and the Credit Agreement is terminated or assigned
to a Sprint Party; and (ii) the Sprint Agreements terminate.
[The remainder of this page is intentionally left blank.]
22
IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Agreement to be executed by their respective authorized officers as of the date
and year first above written.
SPRINT SPECTRUM L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
Chief Business Development Officer
WIRELESSCO, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: /s/ Xxx X. Xxxxxx
-----------------------------------
Xxx X. Xxxxxx
Vice President - Law
THE CHASE MANHATTAN BANK
for itself and as Administrative Agent
By: /s/ [signature illegible]
-----------------------------------
Name:
Title: Vice President
23
Acknowledgment, Consent and Agreement of Affiliate
The undersigned Affiliate (i) has reviewed this Consent and Agreement,
(ii) acknowledges, consents and agrees to the terms and provisions of this
Consent and Agreement, and (iii) agrees to be bound by the terms and provisions
of this Consent and Agreement, including, without limitation, such terms and
provisions that affect Affiliate, its assets or its rights under the Management
Agreement. Without limiting the generality of the foregoing: (i) Affiliate
acknowledges and agrees that the right to appoint an Interim Manager is intended
to allow the right and ability to preserve and/or protect the Collateral or its
value and the Service Area Network or its value and (ii) Affiliate acknowledges
and agrees that in the event of the sale of the Collateral by the Administrative
Agent, the value of the Collateral may be dependent on the right of the Person
purchasing the Collateral to assume or be a party to the Sprint Agreements and
acknowledges that any sale of the Collateral in accordance with Sections 6 and
10 hereof, the other provisions of this Consent and Agreement and, to the extent
not inconsistent with this Consent and Agreement, the Loan Documents is agreed
to be a commercially, reasonable disposition of the Collateral by Administrative
Agent.
INDEPENDENT WIRELESS ONE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: President & Chief Executive Officer
Acknowledgement, Consent and Agreement of Affiliate's Stockholder
The undersigned, being the sole stockholder of Affiliate, agrees that
such stockholder (i) has reviewed this Consent and Agreement, (ii) acknowledges,
consents and agrees to the terms and provisions of this Consent and Agreement,
particularly as they modify the price (as set forth in the Management Agreement)
pursuant to which Sprint Spectrum may purchase the Operating Assets under
Sections 6 and 10 hereof, and as they require the Affiliate and its Related
Parties to sell Affiliate's Licenses under Section 6 hereof, and (iii) agrees to
take such action as is necessary to cause the Affiliate and its Related Parties
to comply with the terms and provisions of this Consent and Agreement.
IWO HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: President & Chief Executive Officer
EXHIBIT A TO C&A
CONFIDENTIALITY AGREEMENT
THIS CONFIDENTIALITY AGREEMENT ("Agreement") is entered into as of _______,
200_, by and between Sprint Spectrum L.P. ("Sprint Spectrum"), a Delaware
limited partnership, whose address is 0000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, _____________ ("Manager"), a _________________, whose address is
_________________, ("Lender"), a ____________, whose address is _____________
and __________ ("Potential Buyer"), a ____________, whose address is
__________________, to assure the protection and preservation of the
confidential and/or proprietary nature of information to be disclosed or made
available to each other relating to the possible purchase by the Potential Buyer
of the assets of the Manager and the possible affiliation of the Potential Buyer
with Sprint Spectrum as a manager of the Sprint PCS network presently managed by
the Manager (the "Transaction").
NOW, THEREFORE, in reliance upon and in consideration of the following
undertakings, the parties, for themselves, or for any corporation, partnership,
association, joint stock company, limited liability company, limited liability
partnership, or trust directly or indirectly controlling, controlled by or under
common control of such party, or a more than 50% owned subsidiary of such party
(its "Affiliates"), agree as follows:
1. Scope. For purposes of this Agreement, the "Proprietary Information" of
a party disclosing information (the "Discloser") means all information, whether
communicated orally, in writing, by graphical representation, electronically or
otherwise, relating to standards, guidelines, plans, policies and programs
regarding the operation and management of the Discloser or any of its Affiliates
and all technical, marketing, financial, strategic and other information
regarding the Discloser or any of its Affiliates. Oral discussions about
Proprietary Information are Proprietary Information. Proprietary Information
includes all such information whether delivered to the party receiving the
information (the "Recipient") directly by the Discloser or indirectly through an
Affiliate, agent or lender of the Discloser or Recipient, or by another party to
this Agreement.
2. Limitation. The term "Proprietary Information" does not include
information that: (a) is now or is in the future in the public domain through no
fault of the Recipient; (b) prior to disclosure pursuant to this Agreement is
properly within the legitimate possession of the Recipient; (c) subsequent to
disclosure pursuant to this Agreement, is disclosed to the Recipient by a third
party with respect to which the Recipient has no knowledge that such disclosure
by such third party would result in a breach of an agreement of confidentiality;
(d) is independently developed by the Recipient through parties who have not
had, either directly or indirectly, access to or knowledge of such Proprietary
Information; (e) is approved for disclosure by prior written permission of an
authorized signatory of Discloser; and (f) is obligated to be produced (I) by
law, rule or regulation, (II) by the requirements of any rating agency, stock
exchange or association applicable to the Recipient, (III) under order of a
court of competent jurisdiction, or (IV) pursuant to a similar requirement of a
governmental agency or regulatory body regulating such entity, so long as to the
extent practicable the party required to disclose the information provides the
other party with prior written notice of any required disclosure pursuant to
such law, order or requirement. In addition, and notwithstanding any other
provision of this Agreement to the
contrary, a Recipient may disclose Proprietary Information (y) to a financial
institution or accredited investor (as that term is defined in Rule 501(a) under
the Securities Act of 1933) that is considering providing financing to the
Recipient and which financial institution or accredited investor has agreed to
keep the Proprietary Information confidential in accordance with an agreement at
least as restrictive as this Agreement; and (z) to the lawyers and accountants
for the Recipient.
3. Use. Each party agrees to use the Proprietary Information received
from another party to evaluate the Transaction and thereafter to operate the
assets and business, if any, acquired pursuant to the Transaction. No other
rights, and particularly licenses, trademarks, inventions, copyrights, patents,
or any other intellectual property rights are implied or granted under this
Agreement or by the conveying of Proprietary Information between the parties.
Each party agrees that a Recipient may disclose Proprietary Information received
by it subject to the confidentiality provisions of this Agreement, to its
Affiliates, and to the lawyers and accountants for such Recipient. In addition,
Sprint Spectrum may disclose Proprietary Information, subject to, the
confidentiality provisions of this Agreement, to any entity (i) for which it is
building a wireless network, or (ii) for which it has an obligation to associate
the wireless network of the entity to the Sprint Spectrum network.
4. Reproduction. Proprietary Information supplied is not to be
reproduced in any form except as required to accomplish the intent of this
Agreement.
5. Duty of Care. All Proprietary Information may be disclosed by the
Recipient to only such of the Recipient's employees (and agents who have a
non-disclosure obligation at least as restrictive as this Agreement) who need to
know such information for purposes of this Agreement and to such third parties
as the Discloser has consented to hereunder or by prior written approval. In
addition, the Recipient must provide the same care to avoid disclosure or
unauthorized use of the Proprietary Information as it provides to protect its
own similar proprietary information.
6. Ownership. All proprietary Information, unless otherwise specified
in writing, (a) remains the property of the Discloser, and (b) must be used by
the Recipient only for the purpose intended. Upon termination of this Agreement,
all copies of written, recorded, graphical or other tangible Proprietary
Information must either be returned to the Discloser, or destroyed (i) after the
Recipient's need for it has expired or (ii) upon the request of the Discloser.
At the request of the Discloser, the Recipient will furnish a certificate of an
officer of the recipient certifying that any Proprietary Information not
returned to Discloser has been destroyed.
7. Term. A Recipient may not disclose Proprietary Information to any
third person, except as provided in this Agreement, for a period of three (3)
years after the date of its disclosure to the Recipient (the "Term"). This
Agreement may be terminated at any time during the Term by mutual agreement of
the parties or upon sixty (60) days' written notice to the other parties; except
that early termination of this Agreement will not relieve the Recipient of its
obligations under this Agreement with respect to Proprietary Information
exchanged prior to the effective date of termination. All of the obligations
undertaken by each party as a Recipient will survive and continue after any
termination of this Agreement for the Term.
2
8. Right to Disclose. Each party warrants that it has the right to
disclose all Proprietary Information that it will disclose to another party
pursuant to this Agreement, and each party agrees to indemnify and hold harmless
the other from all claims by a third party related to the wrongful disclosure of
such third party's information. Otherwise, neither party makes any
representation or warranty, express or implied, with respect to any Proprietary
Information.
9. Right to Enjoin Disclosure. The parties acknowledge that a
Recipient's unauthorized disclosure or use of Proprietary Information may result
in irreparable harm. Therefore, the parties agree that, in the event of
violation or threatened violation of this Agreement, without limiting any other
rights and remedies of each other, a temporary restraining order and/or an
injunction to enjoin disclosure of Proprietary Information may be sought against
the party who has breached or threatened to breach this Agreement and the party
who has breached or threatened to breach this Agreement will not raise the
defense of an adequate remedy at law.
10. Disclosure to Third Parties. All media releases and public
announcements or disclosures by any party relating to this Agreement, its
subject matter, or the purpose of this Agreement are to be coordinated with and
consented to by the other parties in writing prior to the release or
announcement.
11. No Partnership or Joint Venture Formed. The exchange of any
Proprietary Information between the parties is not intended to be interpreted
that the parties have formed or will form a partnership, joint venture or other
relationship. Any business relationship between the parties, if any, must be
governed by separate agreement.
12. Liability. Except as expressly provided hereunder, no party to this
Agreement shall be responsible or liable for a breach of this Agreement by any
other party hereto.
13. General. (a) This Agreement is governed and construed under the
laws of the State of Missouri and there are no understandings, agreements or
representations, express or implied, not specified herein. (b) For purposes of
this project, this Agreement represents the entire understanding between the
parties, and the terms of this Agreement supersede the terms of any prior
agreements or understandings, written or oral. (c) This Agreement may not be
amended except in a writing signed by the parties. (d) The provisions of this
Agreement are to be considered as severable, and in the event that any provision
is held to be invalid or unenforceable, the parties intend that the remaining
provisions will remain in full force and effect. (e) Captions in this Agreement
are for ease of reference only and should not be considered in the construction
of this Agreement. (f) There are no third party beneficiaries to this Agreement.
(g) Failure by a party to enforce or exercise any provision, right or option
contained in this Agreement will not be construed as a present or future waiver
of such provision, right or option. (h) THE EXISTENCE OF THIS AGREEMENT AND THE
NATURE OF THE DISCUSSIONS BETWEEN THE PARTIES MAY NOT BE DISCLOSED BY ANY PARTY
WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTIES, EXCEPT TO THE EXTENT
REQUIRED BY LAW, RULE OR REGULATION.
3
IN WITNESS THEREOF, the parties have executed this Agreement as of the
effective date stated above.
Sprint Spectrum L.P. [Manager]
---------------------------
By: By:
------------------------- ---------------------------
Name: Name:
Title: Title:
[Potential Buyer] [Lender]
By: By:
------------------------- ---------------------------
Name: Name:
Title: Title:
4
EXHIBIT B TO C&A
DEFERRED AMOUNT NOTE
December ___, 1999
Kansas City, Missouri
FOR VALUE RECEIVED, Independent Wireless One Corporation (the "Maker"),
promises to pay to the order of Sprint Spectrum L.P. ("Sprint PCS"), or its
successors and assigns, the principal sum or sums as may be advanced by the
holder hereof from time to time to Maker or on Maker's behalf to The Chase
Manhattan Bank or its successors and assigns (the "Administrative Agent")
pursuant to Section 6(d) of that certain Consent and Agreement dated as of
December , 1999, among the Sprint Parties (as defined in the Consent) and the
Administrative Agent (as amended, the "Consent"). Such sum or sums, if advanced,
shall be advanced from and only from the eight percent (8%) of the Collected
Revenues (as such term is defined in that certain Management Agreement between,
among others, Maker and Sprint PCS, dated February 9, 1999 (such Management
Agreement, as amended from time to time, being the "Management Agreement")
retained by Sprint PCS pursuant to Section 10.1.1 of the Management Agreement in
an amount as set forth in Section 6(d) of the Consent. Such advanced sum or sums
shall be noted by the holder hereof in its records or, at its option, on a
schedule attached to this note, which records or schedule shall be rebuttably
presumptive evidence of the principal owing and unpaid on this note. The holder
hereof may also note on such records or schedule the interest due and payable on
the principal amount or amounts remaining unpaid hereunder from time to time
from the date hereof until payment in full. Interest shall be charged on the
amounts owed under this note at a rate equal to the greatest of the then current
(i) average interest rate of Maker's secured debt, (ii) average interest rate of
Maker's unsecured debt, and (iii) Sprint PCS' cost of capital. Interest shall
accrue and accumulate from the date the indebtedness is incurred (e.g.,
principal is advanced and expenses are incurred) until all amounts due hereunder
are paid in full.
Payments hereunder shall be due on the first (1st) day of each calendar
month, commencing on the first day of the calendar month following the date the
initial advance is made hereunder. The advances hereunder shall be payable in
consecutive equal monthly installments of principal and interest, due and
payable on the first day of each month, such that all principal and interest
owing hereunder shall be fully paid in twelve (12) equal monthly payments
(provided that the last such payment shall be in the amount necessary to repay
the entire unpaid principal amount hereof, together with all accrued and unpaid
interest hereon). Each time an additional amount is advanced hereunder, the then
current unpaid principal amount hereof, together with all accrued and unpaid
interest hereon, shall be re-amortized and the installment due dates rolled
forward, such that the entire amount of principal and accrued unpaid interest
shall be paid in full in twelve (12) equal monthly payments. Notwithstanding the
foregoing, if Maker is in default or breach with regard to its obligations to
the Administrative Agent or the Lenders (as defined in the Consent), then the
payments due hereunder shall be deferred and shall not be due or payable until
such default or breach is cured, at which time the entire unpaid balance of
principal and all interest accrued thereon shall be paid in full in twelve (12)
equal monthly payments. Notwithstanding any provision in this note to the
contrary, this note shall mature and principal and interest shall be payable in
full on the earliest to occur of (i) the date on which a Successor Manager (as
such term is defined in the Management Agreement) is qualified
and assumes Maker's rights and obligations under the Management Agreement and
related agreements entered into between Maker and Sprint PCS, (ii) the date on
which the Operating Assets (as such term is defined in the Management Agreement)
are purchased by a third-party buyer, (iii) the date on which a stock or other
equity acquisition, merger, consolidation or other transaction resulting in the
indirect transfer of the Operating Assets to a third-party buyer is consummated,
or (iv) there is a Change of Control (as such term is defined in the Management
Agreement). In the event that the Operating Assets are purchased by a
third-party buyer, or a stock or other equity acquisition, merger, consolidation
or other transaction resulting in the indirect transfer of the Operating Assets
to a third-party buyer is consummated, the obligations of Maker hereunder shall
be paid after Maker pays its obligations to its secured lenders, but before any
amounts are paid to any other creditors, or to Maker or any of its equity
holders.
Maker shall have the privilege, without penalty or premium, of
prepaying all or any part of this note at any time. Any prepayment shall be
applied first to unpaid interest accrued hereunder, and then applied to
principal installments in the inverse order of maturity.
This note shall be in default upon the occurrence of any one of the
following events:
(a) If any payment due hereunder is not made within five (5) days
of when it becomes due and payable;
(b) If the Management Agreement is terminated;
(c) If Maker becomes insolvent, howsoever evidenced, or if Maker
fails to pay its debts as they become due; or
(d) If a receiver is appointed for any of the property of Maker
or Maker makes an assignment for the benefit of creditors or a
proceeding is filed by or against Maker under any law relating to
bankruptcy, insolvency or reorganization or under any similar law.
If this note is in default and shall be continuing, then upon and after
such default, so long as such default shall be continuing, the holder hereof
shall have the right, exercisable at such holder's discretion, to declare the
entire unpaid principal amount and all accrued interest due hereunder
immediately due and payable without notice to Maker.
No provision of this note shall be construed to mean that Maker has
paid or contracted to pay, directly or indirectly, under any circumstances
whatsoever, any sum in excess of that which lawfully may be charged or
contracted for under any applicable laws relating to interest. If for any reason
interest in excess of the highest lawful rate is at any time to be paid
hereunder, any such excess shall constitute and shall be treated as a payment on
the principal amount due hereunder and shall operate to reduce the principal
amount due hereunder by such amount (without any prepayment penalty).
Each payment made hereunder shall be applied first to interest accrued
to the date of such payment and then to the remaining principal amount due. Each
payment made hereunder shall be payable at such place as the legal holder hereof
designates from time to time in writing in lawful money of the United States of
America. If any payment of principal or interest on this
2
note is due on a Saturday, Sunday or legal holiday under Missouri law, such
payment shall be made on the next succeeding business day. Maker authorizes and
agrees that payments due the holder of this note under this note may be made by
right of setoff.
If the holder of this note exercises a purchase right under the terms
of the Management Agreement as modified by the Consent, such holder shall be
entitled to a credit at the closing of such purchase against the purchase price
in an amount equal to the amount owed under this note.
If any payment due hereunder, or any portion thereof, is not paid when
due, or if all unpaid principal and accrued interest due hereunder shall become
due and payable by the legal holder's exercise of the foregoing right to
accelerate upon default, then the same, and each of the same, shall thereafter
bear interest from the date of such nonpayment or exercise, as appropriate,
until payment in full at a rate per annum equal to the current rate per annum
plus an additional four percent (4%).
To the full extent permitted by law, Maker and all endorsers, sureties,
guarantors and other persons who may become liable for the payment hereof
severally waive demand, presentment, protest, notice of dishonor or nonpayment,
notice of protest, and any and all lack of diligence in the enforcement or
collection hereof and hereby consent to any renewals, extensions, or other
indulgences, and releases of any of them, all without notice to any of them.
No delay or omission of the holder of this note to exercise any right
or power hereunder shall impair such right or power or be a waiver of any
default or an acquiescence therein. Any single or partial exercise of any such
right or power shall not preclude any or further exercise of any other right. No
waiver is valid unless in writing signed by the holder of this note and then
only to the extent specifically set forth in such writing. All remedies
hereunder or by law afforded are cumulative and are available to the holder of
this note until this note and other liabilities of the undersigned hereunder
have been paid in full. If this note is placed in the hands of an attorney for
collection, by suit or otherwise, or to enforce its collection or to protect any
security for its payment, Maker shall pay all costs and expenses thereof
together with reasonable attorneys' fees.
This note is binding upon Maker and its successors and inures to the
benefit of the holder hereof and its successors, transferees and assigns. Maker
agrees that any transferee of this note has the rights of a holder in due course
stated in and in accordance with Article 3 of the Uniform Commercial Code in
effect in the State of Missouri. This note is made and executed under and is
governed by and shall be enforced under the internal laws of Missouri.
IN WITNESS WHEREOF, Maker has caused this note to be executed and
sealed by its officer by authority of its Board of Directors.
INDEPENDENT WIRELESS ONE CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
3
Schedule
Date Amount Advanced Amount Paid Interest Balance
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4
SCHEDULE 13
1. Each of the following persons shall be a "Schedule 13 Person"
under the terms of the Consent and Agreement:
(a) Each of the following "Named Companies":
. AT&T
. MCI/WorldCom
. GTE
. Qwest
. AirTouch
. Ameritech
. Xxxx Atlantic
. Xxxx South
. SBC Communications
. US West
. Any person that is a successor of a Named Company
(b) Any person that directly or indirectly through one or more persons
controls, is controlled by or is under common control with a Named Company,
including any person that is controlled directly or indirectly by more than one
Named Company when aggregating their control (e.g., if Xxxx South and GTE
together control the person, such person is treated as being controlled by a
Named Company and is therefore a Schedule 13 Person). The term "control"
(including its correlative meanings "controlled by" and "under common control
with") as used in this Schedule 13 means owns at least 50% of the voting power
or at least 50% of the total equity of the person.
2. (a) Sprint Spectrum may from time to time designate an entity
engaged in the business of providing telecommunications services to be a Named
Company; provided, that: (i) Sprint Spectrum may only list 10 Persons as Named
Companies at any time (i.e., Sprint Spectrum must remove one Person from the
list for each Person it adds to the list); (ii) Sprint Spectrum may only revise
the list of Named Companies once during each calendar quarter, but not later
than 10 Business Days after Sprint Spectrum receives written notice from the
Administrative Agent that (A) an Event of Default has occurred, (B) the
Administrative Agent is exercising one or more of its remedies under the Loan
Documents, and (C) Sprint PCS has 10 Business Days during which it may revise
the list of Named Companies; and (iii) the list of Named Companies will be the
same for all Consents and Agreements between Sprint Spectrum and the lenders to
Sprint Spectrum's affiliates.
(b) The effect of any designation of an entity as a Named Company that
has not been a Named Company at any time prior to such designation shall apply
only to the qualification of an entity that becomes a Schedule 13 Person to be
an Interim Manager, Successor Manager or Eligible Assignee that commences after
the time of such designation, and shall not apply to or affect for any purpose
any agreement, document, instrument or transaction that was consummated prior to
the time of such designation, except that: (i) if an Administrative Agent,
Lender or Secured Creditor or any subsidiary or owner of such entities becomes a
Schedule 13 Person, such person shall no longer (A) satisfy the "Successor
Manager Requirements" of Section 13 of the Consent and Agreement, and therefore
may not thereafter become an Interim Manager or a Successor Manager (but if then
an Interim Manager or a Successor Manager, may continue in such capacity except
as provided in clause (ii) below), and (B) be an Eligible Assignee, and
therefore may not thereafter acquire any additional interests in the Obligations
or the Loan Documents (but may continue to hold loans and commitments under the
Loan Documents held immediately prior to becoming a Schedule 13 Person and fund
such commitments at any time); and (ii) any person that is acting as an Interim
Manager that becomes a Schedule 13 Person no longer qualifies to become a
Successor Manager and must resign as Interim Manager upon finding a replacement
acceptable to the person responsible for appointing the Interim Manager.
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