Exhibit 10.35
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NAVATION, INC.
30 EAST 85TH STREET, SUITE 3B
NEW YORK, NEW YORK 10028
Dated as of March 27, 2009
NextWave Wireless LLC
NextWave Wireless Inc.
12670 High Bluff Drive
San Diego, CA 92130
Attention: Board of Directors
Working Capital Facility Commitment Letter
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Ladies and Gentlemen:
You have advised Navation, Inc. ("Navation") that NextWave
Wireless Inc., a corporation organized under the laws of the State of Delaware
(the "Parent"), and NextWave Wireless LLC, a limited liability company organized
under the laws of the State of Delaware (the "Company", and together with the
Parent, "you"), are seeking financing for the Company in the form of a secured
working capital facility providing the ability to borrow up to $15 million (the
"Credit Facility" or the "Financing") to be evidenced by an issuance of notes,
as described in the Confidential Term Sheet attached hereto as Annex I (the
"Term Sheet"). All references to "dollars" or "$" in this agreement and the
attachments and annexes hereto (collectively, this "Commitment Letter") are
references to United States dollars.
Immediately following the consummation of the Financing, none
of the Parent, the Company or any of their respective subsidiaries will have any
indebtedness or preferred stock other than in connection with (i) the Company's
7% Senior Secured Notes due 2010 (the "First Lien Notes"), (ii) the Company's
Senior-Subordinated Secured Second Lien Notes due 2010 (the "Second Lien
Notes"), (iii) other indebtedness permitted under the First Lien Notes as of the
date hereof, and (iv) the Third Lien Subordinated Secured Convertible Notes due
2011 (the "Third Lien Notes"; the debt evidenced by the First Lien Notes, the
Second Lien Notes and the Third Lien Notes, collectively, the "Existing Debt").
Commitments.
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You have requested that Navation commit to the establishment
of the Credit Facility. Navation is pleased to advise you of its binding
commitment to provide the Credit Facility upon the terms and subject to the
conditions set forth or referred to in this Commitment Letter and the Term
Sheet. Navation reserves the right, prior to or after execution of the Facility
Documentation (as defined below), in consultation with you, to syndicate all or
a portion of its commitment to one or more of the Company's existing secured
note holders or their affiliates that will become parties to the Facility
Documentation (Navation and the institutions becoming or agreeing to become
parties to the Facility Documentation with respect to all or a portion of the
Credit Facility, as identified to you in writing by Navation from time to time,
the "Credit Providers").
The initial borrowing of funds under the Credit Facility shall
be subject to the execution and delivery of definitive documentation (i) with
respect to the Credit Facility (including, without limitation, note purchase
agreements, guarantees, security documentation, and collateral agency
agreements, in each case in form and substance identical to the analogous Second
Lien Documents (as such term is defined in the Conditions Annex), except for
such changes therein relating to interest rate, maturity, rights relating to
working capital collateral and other terms necessary or appropriate to reflect
the terms and conditions which are set forth herein and in the Term Sheet and
the Conditions Annex; an agreement between the Second Lien Note holders and the
Credit Providers governing their respective rights, including in respect of the
voting and amendment rights as set forth in the Term Sheet; and the
Intercreditor Amendment (as defined below)) and (ii) with respect to the
warrants as described in the Term Sheet (collectively, the "Facility
Documentation") in form and substance reasonably satisfactory to the Credit
Providers reflecting the terms and conditions set forth in the Term Sheet and in
Annex II hereto (the "Conditions Annex"). The "Intercreditor Amendment" shall be
an amendment to the existing Intercreditor Agreement, in which the liens granted
pursuant to the terms hereof on the Shared Collateral (as defined in the Term
Sheet) shall be made subject (mutatis mutandis) to the provisions of the
Intercreditor Agreement with respect to such Shared Collateral on the same basis
as the Second Priority Liens (as defined therein), it being understood that the
Credit Providers shall be entitled to exercise all the rights of a senior
creditor with respect to the Credit Facility (i.e. the Credit Facility shall not
be payment subordinated pursuant to Section 3.02 of the Intercreditor Agreement
or otherwise) and of a first priority secured creditor with respect to the
Designated Collateral (as defined in the Term Sheet), and that the liens granted
pursuant to the terms hereof on the Designated Collateral shall be first
priority liens not subject in any way to the Intercreditor Agreement. Such
amendment shall further provide that no other party shall, by reason of the
Intercreditor Agreement or the First, Second or Third Lien Documents be entitled
to any lien on the Designated Collateral.
If you or your direct or indirect subsidiaries secure
operating capital that is not required to be used to repay or prepay the
Existing Debt, including advances against royalties, pre-paid non-recurring
engineering expenses or ordinary course contract services, but, in the case of
operating capital secured from a customer in the form of such advances or
prepayments , only to the extent that such items exceed the corresponding
revenue amounts for such customer reflected in the PacketVideo Corporation
revenue plan (including the applicable supporting documents therefor) that was
incorporated into the 2009 operating plan, which forecasts revenue through March
31, 2010 and was approved by the Governance Committee of the Board of Directors
of the Company on March 27, 2009 ("Operating Capital") from a strategic
investor, asset sale or disposition or other corporate transaction, then (a) you
shall utilize such Operating Capital to repay any principal, interest, penalties
or other monetary obligations then outstanding under the Credit Facility
("Borrowed Amounts"), which repayment shall permanently reduce the commitment
under the Credit Facility by the amount of principal included in the Borrowed
Amounts and (b) to the extent that after repayment of Borrowed Amounts, if any,
additional Operating Capital remains available ("Unapplied Operating Capital"),
you, on the one hand, and Navation and the other Credit Providers, if any, on
the other hand, shall each have the right by written notice to the other parties
hereto to terminate a portion of the Credit Providers' commitments hereunder
and, if applicable, under the Facility Documentation (which termination shall be
allocated pro rata among all Credit Providers based on their then-existing
commitments), in an amount of such Unapplied Operating Capital, whether or not
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the Facility Documentation has been executed at such time. In the event all of
the Credit Providers' commitments hereunder and, if applicable, under the
Facility Documentation are terminated pursuant to this paragraph then the
warrants provided for in the Term Sheet shall not become payable, but the
expense reimbursement, indemnification and governing law and forum provisions
hereof shall survive. You hereby represent to us that (i) your receipt of funds
that may constitute Operating Capital is not required to be used to repay or
prepay the Existing Debt except to the extent that such funds relate to Asset
Sales (as defined in the Note Purchase Agreement dated October 9, 2008,
governing the Second Lien Notes, as it may be amended from time to time), (ii)
you have delivered to us a true, correct and complete copy of the PacketVideo
Corporation revenue plan (including the applicable supporting documentation
therefor setting forth the revenue by customer) that was incorporated into the
2009 operating plan approved by the Governance Committee of the Board of
Directors of the Company on March 27, 2009 and (iii) the PacketVideo revenue
plan delivered to you does not include any customer advances or prepayments.
Information.
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You hereby represent and covenant that (a) all information
(other than the financial projections (the "Projections")) that has been or will
be made available to the Credit Providers by you or any of your representatives
in connection with the transactions contemplated hereby (the "Information"),
when taken as a whole, is and will be complete and correct in all material
respects and does not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein, in the light of the circumstances under which such statements are made,
not misleading and (b) the Projections that have been or will be made available
to the Credit Providers by you or any of your representatives in connection with
the transactions contemplated hereby have been and will be prepared in good
faith based upon assumptions believed by you to be reasonable (it being
understood that projections by their nature are inherently uncertain and no
assurances are being given that the results reflected in the Projections will be
achieved). The representations and covenants contained in this paragraph shall
remain effective until the initial funding under the Facility Documentation and
thereafter the disclosure representations contained herein shall be superseded
by those contained in the Facility Documentation.
Fees and Compensation.
----------------------
As consideration for Navation's commitment with respect to the
Credit Facility, you agree to pay, or cause to be paid, to Navation in
immediately available funds the fees set forth in the Term Sheet under the
heading "Commitment Fee." Once paid, all such fees shall be fully earned and
shall not be refundable under any circumstances.
Indemnity and Expenses.
-----------------------
By your acceptance below, you hereby agree to indemnify and
hold harmless the Credit Providers and each of their respective affiliates
(including, without limitation, controlling persons) and the directors,
officers, employees, advisors and agents of the foregoing (each, an "Indemnified
Person") from and against any and all losses, claims, costs, expenses, damages
or liabilities (or actions or other proceedings commenced or threatened in
respect thereof) relating to any third party claims that arise out of or in
connection with this Commitment Letter, the Credit Facility or any of the
transactions contemplated hereby or thereby, and to reimburse each Indemnified
Person promptly upon its written demand for any legal or other expenses incurred
in connection with investigating, preparing to defend or defending against, or
participating in, any such loss, claim, cost, expense, damage, liability or
action or other proceeding (whether or not such Indemnified Person is a party to
any action or proceeding); provided that any such obligation to indemnify, hold
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harmless and reimburse an Indemnified Person shall not be applicable to the
extent determined by a final, non-appealable judgment of a court of competent
jurisdiction to have resulted primarily from the gross negligence or willful
misconduct of such Indemnified Person.
You shall not be liable for any settlement of any such
proceeding effected without your written consent, but if settled with such
consent or if there shall be a final judgment against an Indemnified Person, you
shall, subject to the proviso in the preceding sentence, indemnify such
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. You shall not, without the prior written consent of any
Indemnified Person, effect any settlement of any pending or threatened
proceeding in respect of which such Indemnified Person is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (i) includes an unconditional release of such Indemnified
Person from all liability or claims that are the subject matter of such
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability, or a failure to act by or on behalf of such Indemnified Person. No
Credit Provider shall be responsible or liable to you or any of your respective
subsidiaries, affiliates or stockholders or any other person or entity for any
indirect, special, punitive or consequential damages which may be alleged as a
result of or arise out of or in connection with this Commitment Letter, the
Credit Facility, the Facility Documentation or the transactions contemplated
hereby or thereby. In addition, you hereby agree to reimburse the Credit
Providers upon demand for all reasonable out-of-pocket costs and expenses
(including, without limitation, legal fees of counsel to each of the Credit
Providers (not to exceed two such separate counsel), costs and expenses and all
costs relating to due diligence and the preparation and negotiation of all
documents relating to the transactions contemplated by this Commitment Letter)
incurred in connection with the establishment of the Credit Facility and the
transactions contemplated thereby, and the preparation, review, negotiation,
execution and delivery of this Commitment Letter and the Facility Documentation
and the administration, amendment, modification or waiver thereof (or any
proposed amendment, modification or waiver), whether or not any extensions of
credit are made under the Credit Facility. The foregoing provisions of this
paragraph shall be in addition to any rights that any Indemnified Person may
have at common law or otherwise.
Conflicts of Interest.
----------------------
You acknowledge that (and waive any conflict of interest
arising in connection with):
(a) the Credit Providers and/or their affiliates (the
"Credit Provider Group"), in their capacity as
principal or agent, are involved in a wide range of
investment activities globally (including investment
advisory; asset management; and trading) from which
conflicting interests or duties may arise and
therefore, conflicts may arise between duties of
Credit Provider Group members hereunder and other
duties or interests of Credit Provider Group members;
(b) any Credit Provider Group member may, at any time,
(i) provide services to any other person, (ii) engage
in any transaction (on its own account or otherwise)
with respect to you or any member of the same group
as you (including, without limitation, holding any
First Lien Notes, Second Lien Notes or Third Lien
Notes), (iii) serve as a member of your governing
body or of the governing body of any member of the
same group as you or any of committees of such
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respective governing bodies or (iv) act in relation
to any matter for any other person whose interests
may be adverse to you or any member of your group (a
"Third Party"), and may retain for their own benefit
any related remuneration or profit, notwithstanding
that a conflict of interest exists or may arise
and/or any Credit Provider Group member is in
possession or has come or comes into possession
(whether before, during or after the agreements
hereunder) of information confidential to you;
provided that such information shall not be shared
with any Third Party. You accept that permanent or ad
hoc arrangements/information barriers may be used
between and within divisions of the Credit Provider
Group members for this purpose and that locating
directors, officers or employees in separate
workplaces is not necessary for such purpose;
(c) information which is held elsewhere within the Credit
Provider Group but of which none of the individual
directors, officers or employees having the conduct
of transactions contemplated by this letter actually
has knowledge (or can properly obtain knowledge
without breach of internal procedures), shall not for
any purpose be taken into account in determining a
Credit Provider Group member's responsibilities to
you hereunder; and
(d) Credit Provider Group members shall not have any duty
to disclose to, or utilize for the benefit of, you,
any non-public information acquired in the course of
providing services to any other person, engaging in
any transaction (on its own account or otherwise) or
otherwise carrying on its business.
Governing Law, Etc.
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This Commitment Letter and the Credit Providers' commitment
shall not be assignable by you without the prior written consent of the Credit
Providers and any purported assignment without such consent shall be void. The
Credit Providers reserve the right to employ the services of their respective
affiliates in providing services contemplated by this Commitment Letter and to
allocate, in whole or in part, to their affiliates certain fees payable to the
Credit Providers in such manner as they and their affiliates may agree in their
sole discretion. You also agree that the Credit Providers, as applicable, may at
any time and from time to time assign all or any portion of their respective
commitments hereunder to one or more of their respective affiliates. You further
acknowledge that the Credit Providers may share with any of their affiliates,
and such affiliates may share with the Credit Providers, any information related
to you or any of your respective subsidiaries or affiliates (including, without
limitation, information relating to creditworthiness) and the transactions
contemplated hereby. The Credit Providers agree to treat, and cause any such
respective affiliate to treat, all non-public information provided to the Credit
Providers by you as confidential information in accordance with their customary
practices.
This Commitment Letter may not be amended or any provision
hereof waived or modified except by an instrument in writing signed by Navation,
each other Credit Provider, if any, and you. This Commitment Letter may be
executed in any number of counterparts, each of which shall be an original and
all of which, when taken together, shall constitute one agreement. Delivery of
an executed counterpart of a signature page of this Commitment Letter by
facsimile transmission or by pdf shall be effective as delivery of a manually
executed counterpart of this Commitment Letter. Headings are for convenience of
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reference only and shall not affect the construction of, or be taken into
consideration when interpreting, this Commitment Letter. This Commitment Letter
is intended to be for the benefit of the parties hereto and is not intended to
confer any benefits upon, or create any rights in favor of, and may not be
relied on by, any persons other than the parties hereto and, with respect to the
indemnification provided under the heading "Indemnity and Expenses," each
Indemnified Person.
THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WILL BE REQUIRED THEREBY. Any right to trial by jury with respect
to any claim or action arising out of this Commitment Letter is hereby waived.
You hereby submit to the non-exclusive jurisdiction of the federal and New York
State courts located in The City of New York (and appellate courts thereof) in
connection with any dispute related to this Commitment Letter or any of the
matters contemplated hereby, and agree that service of any process, summons,
notice or document by registered mail addressed to you shall be effective
service of process against you for any suit, action or proceeding relating to
any such dispute. You irrevocably and unconditionally waive any objection to the
laying of such venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding has been brought in
an inconvenient forum. A final judgment in any such suit, action or proceeding
brought in any such court may be enforced in any other courts to whose
jurisdiction you are or may be subject by suit upon judgment.
Please indicate your acceptance of the terms hereof by
returning to Navation executed counterparts of this Commitment Letter. This
Commitment Letter and Navation's commitment hereunder are conditioned upon your
acceptance hereof, and Navation's receipt of an executed counterpart hereof.
Upon your execution and delivery of this Commitment Letter, you shall be bound
to the terms and agreements contained in this Commitment Letter. Unless
otherwise extended by the parties, this Commitment Letter and Navation's
commitment hereunder shall remain in full force and effect until the earlier of
the execution of the Facility Documentation, in which case the Facility
Documentation shall supercede this Commitment Letter, or June 30, 2010. The fees
and compensation, expense reimbursement, indemnification and governing law and
forum provisions hereof and in the Term Sheet shall survive termination of (i)
this Commitment Letter (or any portion hereof) and (ii) any or all of Navation's
commitment hereunder.
[Signature Page Follows]
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Navation is pleased to have been given the opportunity to
assist you in connection with the Financing.
Very truly yours,
NAVATION, INC.
By: /s/ Allen Salmasi
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Name: Allen Salmasi
Title: President
Accepted and agreed to as of the date first written above:
NEXTWAVE WIRELESS LLC
By: /s/ Francis J. Harding
--------------------------------------
Name: Francis J. Harding
Title: Executive Vice President
NEXTWAVE WIRELESS INC.
By: /s/ Francis J. Harding
--------------------------------------
Name: Francis J. Harding
Title: Executive Vice President
Signature Page to Commitment Letter
ANNEX I
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NEXTWAVE WIRELESS LLC
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SECURED WORKING CAPITAL CREDIT FACILITY
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TERM SHEET
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This term sheet (the "Term Sheet") sets forth the terms of the Secured
Working Capital Facility (the "Credit Facility") provided for under the binding
Commitment Letter, dated as of March 27, 2009, between NextWave Wireless LLC
(the "Company"), a wholly-owned subsidiary of NextWave Wireless Inc. (the
"Parent"), the Parent and Navation, Inc. ("Navation"). All capitalized terms
used but not defined herein shall have the meanings provided in the Commitment
Letter to which this Term Sheet is attached.
Borrower: The Company.
Lenders: Navation and its permitted successors and
assigns.
Collateral Agent: The Bank of New York Mellon; provided, that
the Lenders may elect to select a different
collateral agent for the Designated
Collateral in the event that counsel for the
Lenders determines that there is a conflict
of interest between the interests of
creditors having a lien in the Shared
Collateral (including creditors under the
Existing Debt) and creditors having an
interest in the Designated Collateral.
Credit Facility: Secured Working Capital Credit Facility
under which Navation has committed to extend
to the Company up to $15 million under a
working capital facility, as loans evidenced
by an issuance of notes, for the purpose of
funding the operations of the Company and
its affiliates.
Borrowings: Subject to satisfaction of the conditions to
funding provided in Annex II (the "Borrowing
Conditions"), the Company shall be permitted
to borrow up to an aggregate of $15 million
in one or more borrowings evidenced by an
issuance of notes, on or after the Initial
Borrowing Date from the Lenders. Each
borrowing under the Facility Documentation
shall be in a minimum aggregate amount of
$1,000,000, and additional increments of
$500,000. Subject to the foregoing, the
Company shall have the ability to determine
the amount of each borrowing in its sole
discretion (up to the full amount of the
availability of $15 million), provided that
no more than one borrowing shall be
permitted in a given calendar week. All
borrowings under the Facility Documentation
shall be referred to in aggregate as "Loans"
and the notes evidencing them shall be
referred to as "Notes." Borrowings under the
Credit Facility may be repaid but not
redrawn.
No borrowing shall be permitted prior to
June 1, 2009, and all Facility Documentation
must have been executed by the parties prior
to the making of any Loans. Borrowing
requests shall be funded within 2 business
days of submission, subject to satisfaction
of all Borrowing Conditions and the
conditions specified in "Conditions to Each
Draw" below.
Principal Amount: The "Principal Amount" of the Loans shall
mean the aggregate amount of indebtedness
outstanding from time to time under the
Credit Facility, as such amount may be
increased (as a result of accruals,
borrowings or otherwise) or decreased (as a
result of repayments) from time to time in
accordance with the terms herein.
Stated Maturity Date: The Notes under the Credit Facility will
mature and all unused commitments shall
expire on September 30, 2010.
Interest Rate: The Loans will accrue PIK interest at a rate
of 14% per annum accruing daily and
compounding quarterly on the Principal
Amount, and calculated on a 360-day year
basis. All such PIK interest shall become
part of the Principal Amount and shall be
due and payable at the time the Principal
Amount becomes due and payable.
In each case above, if at any time an event
of default has occurred and is continuing,
the then Principal Amount of the Loans
(including any accrued and capitalized PIK
interest) will thereafter accrue interest at
a rate per annum equal to the sum of 2% plus
the interest rate then otherwise in effect,
calculated on a daily basis.
Mandatory Repayment Provisions: o After the date on which the First
Lien Notes are paid in full, upon
any Asset Sale (as defined in the
Second Lien Documents, subject to
the following sentence), the Loans
will be subject to mandatory
repayment, in whole or from
time-to-time in part, from the Net
Proceeds (as defined in the Second
Lien Documents) from any such Asset
Sale, on a pari passu basis with
the Second Lien Notes, at par plus
(A) any accrued and unpaid interest
to the date of redemption, and (B)
a make-whole payment amount based
upon the present values of PIK
interest and cash interest accruals
and payments on the Notes that
would accrue or be payable at the
rates provided herein to the Stated
Maturity Date (each, the
"Applicable Repayment Price"). The
"Asset Sale" definition in the
First, Second and Third Lien
Documents shall be amended to
exclude any disposition of
Designated Collateral.
o The present values will be
calculated by discounting the
amount of each payment of PIK
interest from the date that each
such payment would have been
payable, but for the repayment, to
the repayment date at a discount
rate equal to applicable U.S.
Treasury rate, plus 50 basis
points.
Warrants: On the initial borrowing date (the "Initial
Borrowing Date") the Parent shall issue to
the Lenders, pro rata, penny warrants
providing for the issuance of an aggregate
of 7.5 million shares of Parent common stock
(the "Warrants"). Such Warrants shall be in
the same form as those previously issued to
the Second Lien Note holders. The Warrants
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will also have a 9.9% savings clause for any
Lender that requests such a limitation. The
common stock underlying the Warrants will
have the benefit of registration rights
pursuant to the Registration Rights
Agreement entered into in connection with
the October 2008 issuance of the Second Lien
Notes, pursuant to an amendment thereof in
form and substance satisfactory to the
Lenders.
Commitment Fee: On the earlier of (i) the date on which the
Company publicly announces or discloses the
execution of, and (ii) the date that is five
business days after the date of, the
Commitment Letter to which this Term Sheet
is attached, the Company shall pay Navation
a Commitment Fee equal to $750,000 in
immediately available funds.
Collateral and Guarantees: The Loans shall be guaranteed on the same
terms as those set forth in the Second Lien
Documents and the security interests granted
by guarantors in support of such guarantees
shall be subordinated only to the liens
securing the First Lien Notes for so long as
such notes are outstanding.
The Loans shall be secured by a first
priority lien (pursuant to pledge
documentation satisfactory to the Lenders)
on the accounts receivable, revenue
contracts and inventory of the Company's
subsidiary PacketVideo Corporation
("PacketVideo"), and each of PacketVideo's
subsidiaries, including any proceeds of the
foregoing (such collateral, the "Designated
Collateral"). It is understood that the
Credit Providers shall be entitled to
exercise all the rights of a senior creditor
with respect to the Credit Facility and as a
first priority secured creditor with respect
to the Designated Collateral.
In addition, the Loans and the guarantees of
the Loans shall be also be secured by a
second priority lien, pari passu with the
Second Lien Note holders and pursuant to
documentation in the same form as the
documentation governing the security
interests securing the Second Lien Notes,
over the Collateral (as such term is defined
in the Intercreditor Agreement (the "Shared
Collateral" and, together with the
Designated Collateral, the "Total
Collateral"). The ability of the Lenders to
exercise any rights or remedies with respect
to the Shared Collateral shall be subject to
the terms set forth in an Intercreditor
Agreement, as amended by the Intercreditor
Amendment (as defined in the Commitment
Letter).
For the avoidance of doubt, the Loans
pursuant to the Credit Facility shall be
senior debt (i.e. shall not be subordinated
in right of payment to any other debt) and
shall be pari passu with the Second Lien
Notes only in respect of the Shared
Collateral.
Asset Sales: After the date on which the First Lien Notes
are paid in full, Net Proceeds from Asset
Sales must be applied to repay the Loans at
the Applicable Repayment Price specified
above, on a pari passu basis with the Second
Lien Notes.
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Conditions to Each Draw: The Borrowing Conditions relating to the
Initial Borrowing Date are set forth in
Annex II. Conditions precedent to each
borrowing under the Credit Facility
subsequent to the Initial Borrowing Date
will be (1) the absence of any continuing
default or event of default, (2) the
accuracy of all representations and
warranties, (3) receipt of a customary
borrowing notice no later than two business
days prior to the date of the proposed
borrowing, and (4) there being no legal bar
to the Lenders making the Loan.
Covenants Generally: The note purchase agreement for the Credit
Facility and Notes shall contain covenants
that are the same as those contained in the
Second Lien Documents, with such changes as
are necessary or appropriate to implement
the terms set forth in this Term Sheet.
Representations and Warranties: The note purchase agreement for the Credit
Facility and Notes shall contain
representations and warranties that are the
same as those in the Second Lien Documents,
with such changes as are necessary or
appropriate to implement the terms set forth
in this Term Sheet, and shall include in any
event a representation and warranty that no
portion of the Designated Collateral
constitutes Shared Collateral.
Events of Default: The terms shall be the same as those in the
Second Lien Documents, with such changes as
are necessary or appropriate to implement
the terms set forth in this Term Sheet.
Voting / Amendments: The holders of the Notes and the
then-existing holders of the Second Lien
Notes shall enter into an agreement that
provides for all such holders to vote as one
class in respect of the Second Lien Notes
and the Notes for the purpose of approving
different types of amendments, waivers and
modifications, except for (i) votes on
amendments, modifications and waivers of the
types described in the second proviso to
Section 10.3(a) of the purchase agreement
governing the Second Lien Notes, and (ii)
actions relating to "sacred rights"
representations, warranties, covenants,
events of default, remedies and other
provisions (all to be agreed on by, and
satisfactory in form and substance to, the
then-existing holders of the Second Lien
Notes and the holders of the Notes) relating
to the Designated Collateral or the Credit
Facility or the documentation governing the
Designated Collateral or the Credit
Facility, as to which amendments,
modifications and waivers regarding the
matters described in clauses (i) and (ii)
the holders of the Notes and the
then-existing holders of the Second Lien
Notes shall vote as separate classes.
Use of Proceeds: The proceeds from the Credit Facility shall
be used solely for the ordinary course
operations of the business and shall not be
used for any other purpose, including any
acquisition of any assets or business.
Definitive Agreements: The Facility Documentation will include, but
not be limited to, the following:
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o Secured Working Capital Notes
Purchase Agreement
o Notes
o Security Agreements (including
applicable collateral
documentation)
o Intercreditor Agreement (as
amended)
o Warrant Agreement
o Registration Rights Agreement (as
amended)
o Parent Guarantees
o Subsidiary Guarantees
o Collateral Agency Agreements
Except as otherwise specified in the
Commitment Letter or this Term Sheet, the
definitive agreements shall be on terms the
same as those in the Second Lien Documents,
with such changes as are necessary or
appropriate to implement the terms set forth
in this Term Sheet..
Intercreditor Agreement/Consents: Consent of the First, Second and Third Lien
Note holders (collectively, the "Required
Consents") is required in order to provide
for the consummation of the transactions
contemplated herein, for the grant of the
second lien security interest, for the
apportionment of Net Proceeds of Asset Sales
pro rata with the Second Lien Notes, for the
amendment of the Intercreditor Agreement,
the Registration Rights Agreement and
certain other agreements and documents, and
for certain other provisions contemplated
herein.
Disposition of Semiconductor
Business Assets: Navation shall have a right of first refusal
with regard to any disposition of NextWave's
semiconductor business assets, the existence
of which right of first refusal shall not
affect Navation's commitment under the
Commitment Letter or the Credit Facility. To
the extent that Navation, either directly or
indirectly, acquires or facilitates through
third parties the acquisition of NextWave's
semiconductor business assets, the amount of
its commitment under the Credit Facility
would be reduced by the total amount of
liabilities, obligations and expenses of the
Company or its subsidiaries actually
acquired, assumed, paid or otherwise caused
to be released in the transaction, up to $2
million. The Company understands that Mr.
Salmasi is exploring with third parties the
acquisition of the assets of the Company's
semiconductor business unit, and the Company
agrees to provide commercially reasonable
support in those discussions and assist in
the appropriate transactions and
transitions, it being understood that the
Company's level of support in such
transactions shall not provide a basis to
withhold funding under the Credit Facility.
5
Board Nomination Arrangement: The Board of Directors of the Company has
adopted a resolution, which shall not be
revoked or rescinded, which provides that
Mr. Allen Salmasi shall be nominated to the
Board, and shall serve as Chairman of the
Board of Directors, for another term
commencing at the general shareholders
meeting planned for June 2009.
Assignments/Participations: On the terms as contemplated by the
Commitment Letter and in the form attached
as Annex III thereto.
Lenders' Counsel: Up to two legal counsels, each of which
shall represent one or more Lenders.
Governing Law and Forum: New York
6
ANNEX II
--------
CONDITIONS TO BORROWING
-----------------------
The initial borrowing of funds under the Commitment Letter and
the Credit Facility are subject to the conditions set forth in the Commitment
Letter and satisfaction of each of the conditions precedent set forth below. All
capitalized terms used but not defined herein shall have the meanings provided
in the Commitment Letter to which this Annex II is attached.
1. All of the conditions set forth under "Borrowings" in the Term Sheet
shall have been satisfied (including the requirement that no borrowing occur
prior to June 1, 2009) and there shall be no legal bar to the Lenders making the
Loan.
2. The representations and warranties contained in the Commitment
Letter and in the Facility Documentation shall be true and accurate as of the
date of the initial borrowing of funds as though made as of such date. No
default or event of default shall exist (or shall result from the entry into the
Facility Documentation, the borrowings thereunder or the consummation of the
transactions contemplated thereby or by the Commitment Letter) under any
financing agreement (including without limitation the Existing Debt
Documentation) or any other material agreement to which the Parent or any of its
subsidiaries is a party or is otherwise bound.
3. No portion of the Designated Collateral shall constitute Collateral
(as defined in the Intercreditor Agreement).
4. All Facility Documentation shall be in form and substance
satisfactory to the Credit Providers, and the Credit Providers shall have
received duly executed counterparts of the Facility Documentation.
5. The Warrants, as defined in and contemplated by the Term Sheet,
shall have been issued.
6. The Parent and its subsidiaries and the transactions contemplated by
the Commitment Letter shall be in compliance, in all material respects, with all
applicable foreign and U.S. federal, state and local laws and regulations,
including all applicable environmental laws and regulations. All governmental,
shareholder and third party approvals necessary or advisable in connection with
the Financing and the other transactions contemplated by the Commitment Letter
(including, without limitation, stock exchange approvals) and the continuing
operations of the business of the Parent and its subsidiaries shall have been
obtained and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Financing and the other transactions contemplated by the Commitment
Letter and no law or regulation shall be applicable which could reasonably be
expected to have such effect.
7. The Credit Providers shall have received all opinions, certificates,
resolutions, corporate and public records, insurance certificates (and related
endorsements), such documentation as may be necessary or appropriate to create a
perfected, first priority lien on the Designated Collateral and a perfected,
second priority lien in the Shared Collateral described under "Collateral and
Guarantees" in the Term Sheet, subject to customary permitted liens to be agreed
7
upon, and any other closing documentation as the Credit Providers shall
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to the Credit Providers. There shall be no restriction, whether
contractual (as a violation of, or default or event of default or other adverse
consequence under, the applicable contract or any other agreement of the Parent
or its subsidiaries) or under any applicable law, on the hypothecation and
pledge of the revenue contracts of PacketVideo Corporation as described under
"Collateral and Guarantees" in the Term Sheet, or on the ability of the Credit
Providers to realize or foreclose on, or sell or otherwise transfer, or
otherwise exercise their rights in respect of, such revenue contracts and the
proceeds thereof.
8. The Parent and the Company shall have provided the documentation and
other information to the Credit Providers that is required by regulatory
authorities under applicable "know your customer" and anti-money-laundering
rules and regulations.
9. The Collateral Agent under the Second Lien Notes shall have a
perfected, second priority lien on and security interest in all assets as
required in the Term Sheet under the heading "Collateral and Guarantees." The
Credit Providers shall have a perfected, first priority lien on and security
interest in the Designated Collateral and a perfected, second priority lien on
and security interest in the Shared Collateral, all as required in the Term
Sheet under the heading "Collateral and Guarantees."
10. All costs, fees, expenses (including, without limitation, legal
fees and expenses) and other compensation payable to the Credit Providers, and
to the Collateral Agent under the Second Lien Notes and, if applicable, to the
Collateral Agent or Collateral Agents under the Credit Facility, shall have been
paid to the extent due.
11. The documentation governing the First Lien Notes (such
documentation, the "First Lien Documents"), the Second Lien Notes (such
documentation, the "Second Lien Documents"), and the Third Lien Notes (such
documentation, the "Third Lien Documents" and, together with the First Lien
Documents and the Second Lien Documents, collectively the "Existing Debt
Documentation") shall have been amended, in a manner satisfactory in form and
substance to the Credit Providers, to permit the entry into the Credit Facility
and the consummation of the transactions contemplated thereby, the incurrence of
the debt under the Credit Facility and the guarantees thereof, and the security
interests securing the Credit Facility, to reflect the provisions under the
heading "Voting / Amendments" in the Term Sheet, to exclude any requirement that
the proceeds of dispositions of the Designated Collateral (whether as an Asset
Sale or otherwise) become Shared Collateral or be applied to payment of any
Existing Debt or other amounts owing under the Existing Debt Documentation, and
to reflect the other terms and conditions set forth herein and in the Term
Sheet. The Required Consents (as defined in the Term Sheet) shall have been
obtained.
8
ANNEX III
---------
FORM OF ASSIGNMENT
------------------
This ASSIGNMENT, dated as of ___________, is entered into between
___________ ("Assignor") and ___________ ("Assignee").
The parties hereto hereby agree as follows:
Section 1. Assignment. Assignor hereby assigns to Assignee, and
Assignee hereby assumes from Assignor, a portion of Assignor's rights and
obligations in its capacity as Credit Provider under the Working Capital Credit
Facility Commitment Letter, dated as of March 27, 2009, from Navation, Inc. to
NextWave Wireless LLC and NextWave Wireless Inc. (collectively, together with
the attachments and annexes thereto, the "Commitment Letter"; capitalized terms
defined therein and not herein being used herein as therein defined), consisting
of a $___________ principal amount of the commitment to provide the Credit
Facility, and a ratable share of the other rights and obligations of Assignor
thereunder, in each case to the extent related to such principal amount (the
"Assigned Interest").
Section 2. Representations, Warranties and Covenants of
Assignor. Assignor represents and warrants to Assignee that (i) it has full
power and authority, and has taken all actions necessary for it, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and (ii) it is the legal and beneficial owner of its Assigned Interest and that
such Assigned Interest is free and clear of any adverse claims, and (iii) the
person signing, executing and delivering this Assignment on behalf of the
Assignor is an authorized signer for the Assignor and is authorized to execute,
sign and deliver this Assignment. [Assignor agrees to pay Assignee $___________
in immediately available funds (the "Assignment Fee") in consideration for
Assignee's agreement to enter into this Assignment, constituting the ratable
share of the Commitment Fee, specified in the Term Sheet and payable under the
Commitment Letter to Assignor, that is allocable to the Assigned Interest.
Assignor shall pay the Assignment Fee to Assignee promptly upon, and in any
event no later than one business day after the date of, Assignor's receipt of
such Commitment Fee or any portion thereof in an amount equal to or greater than
the amount of the Assignment Fee.]
Section 3. Representations and Warranties of Assignee. Assignee (a)
represents and warrants to Assignor that (i) it has full power and authority,
and has taken all actions necessary for Assignee, to execute and deliver this
Assignment and to consummate the transactions contemplated hereby, and (ii) the
person signing, executing and delivering this Assignment on behalf of the
Assignor is an authorized signer for the Assignor and is authorized to execute,
sign and deliver this Assignment.
Section 4. Conditions to Effectiveness; Determination of Effective
Date. The effective date of this Assignment (the "Effective Date") shall be the
date hereof, provided that, and as a condition thereto, each of Assignor and
Assignee shall have received from the other a duly executed counterpart of this
Assignment.
Section 5. Effect. As of the Effective Date, (a) Assignee shall be a
party to the Commitment Letter and have the rights and obligations of a Credit
Provider under the Commitment Letter to the extent provided herein in respect of
the Assigned Interest, and (b) Assignor shall, to the extent provided in this
Assignment, relinquish its rights and be released from its obligations under the
9
Commitment Letter to the extent related solely to the Assigned Interest.
Section 6. Miscellaneous. This Assignment shall be governed by, and be
construed and interpreted in accordance with, the law of the State of New York.
This Assignment may be executed in any number of counterparts and by different
parties in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart. Delivery of an executed
signature page of this Assignment by facsimile transmission or electronic
transmission shall be as effective as delivery of a manually executed
counterpart of this Assignment.
[SIGNATURE PAGES FOLLOW]
10
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
-----------------------------------
as Assignor
By:
-------------------------------
Name:
Title:
-----------------------------------
as Assignor
By:
-------------------------------
Name:
Title:
[Signature page - Assignment]
Accepted and agreed to as of
the date first written above:
NEXTWAVE WIRELESS LLC
By:
--------------------------------------
Name: Francis J. Harding
Title: Executive Vice President
NEXTWAVE WIRELESS INC.
By:
--------------------------------------
Name: Francis J. Harding
Title: Executive Vice President
[Signature page - Assignment]