Exhibit 10.13
CONSENT AND AGREEMENT
(Lucent / AirGate PCS)
This Consent and Agreement (this "Consent and Agreement") is entered into
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as of August 16, 1999, between SPRINT SPECTRUM L.P., a Delaware limited
partnership ("Sprint Spectrum"), SPRINTCOM, INC., a Kansas corporation
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("SprintCom"), SPRINT COMMUNICATIONS COMPANY, L.P., a Delaware limited
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partnership ("Sprint Communications"), WIRELESSCO, L.P., a Delaware limited
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partnership ("WirelessCo" and together with Sprint Spectrum, SprintCom and
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Sprint Communications, the "Sprint Parties"), and LUCENT TECHNOLOGIES INC., as
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administrative agent (together with any successors thereof in accordance with
the Credit Agreement hereinafter described, the "Administrative Agent") for the
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lenders under that certain Credit Agreement among AIRGATE PCS, INC. (the
"Affiliate"), the Administrative Agent and the lenders from time to time party
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thereto (the "Lenders").
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Affiliate has entered into a Sprint PCS Management Agreement dated and
effective as of July 22, 1998, 1999 (the "Management Agreement") with Sprint
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Spectrum and SprintCom 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
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Trademark and Service Mark License Agreement and the Sprint Spectrum Trademark
and Service Mark License Agreement (together, as they may be amended, modified,
or supplemented from time to time, the "License Agreements") (the Management
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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").
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Affiliate has entered into or concurrently herewith is entering into that
certain Credit Agreement dated as of August 16, 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
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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."
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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 and SprintCom hold, directly or indirectly, certain of the
licenses for the service areas managed by Affiliate as contemplated in the
Management Agreement. As used in this Consent and Agreement, the term "Sprint
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PCS" shall refer in each particular instance or application to Sprint Spectrum
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and/or SprintCom, based on which of the two entities owns the License in that
portion of the Service Area to which the subject of the instance or application
applies.
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
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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
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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 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 without limitation 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
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Interests" and the foregoing assets and property in which the Administrative
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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
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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
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notwithstanding the foregoing, a Sprint Party may 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
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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 as such terms
relate to such Licenses.
Each Sprint Party acknowledges and agrees that (i) Sections 17.15.1 and
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17.15.2 of the Management Agreement do not apply to the assignment of
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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
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Management Agreement shall not apply to any Change of Control of Affiliate in
connection with
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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
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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 pursuant to this Consent and Agreement. It is understood that any
assignment described in this Section 1 to the Administrative Agent or the
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Lenders is hereby consented to by the Sprint Parties; provided, that any
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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
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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
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Agreement, to Affiliate directly to the Administrative Agent, or otherwise as
the Administrative Agent shall direct; provided, that during the period that
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Sprint PCS is making such payments directly to the Administrative Agent or its
designee pursuant to this Section 2, Sprint PCS' setoff and recoupment rights
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under such Section 10.6 shall not be limited to undisputed amounts. The
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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
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Breach and Event of Termination. The Administrative Agent agrees to provide to
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Sprint PCS 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 PCS agrees to provide to the
Administrative Agent a copy of any written notice that Sprint PCS 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
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occurred. Sprint Spectrum and SprintCom acknowledge that the Administrative
Agent has informed them that an Event of Termination constitutes an Event of
Default under the Loan Documents, and Sprint Spectrum and SprintCom further
acknowledge 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.
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(a) Affiliate Remains as Manager or Interim Manager Appointed. Upon
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and during the continuation of an Event of Default when no Management
Agreement Breach as to which Sprint PCS has given the Administrative Agent
notice exists on the original
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date of occurrence of such Event of Default, the Administrative Agent may,
by prior written notice to Sprint PCS, (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)
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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 described
above in clauses (ii) and (iii). The date on which a Person begins serving
as Interim Manager shall be the "Commencement Date."
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(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Manager.
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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
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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
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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
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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
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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
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(which expenditures were incurred in accordance with Section 9 of this
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Consent and Agreement) shall no longer be subordinated to the Obligations
as provided in Section 9 in this Consent and Agreement, and Sprint Spectrum
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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
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Management Agreement as provided in
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the Management Agreement (which expenditures were incurred in accordance
with Section 9 of this Consent and Agreement) shall not be subject to the
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subordination to the Obligations as provided in Section 9 of this Consent
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and Agreement; provided, that Sprint Spectrum or the Sprint Spectrum
Designee's right to be reimbursed for amounts expended under Section 11.6.3
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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
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the Obligations as provided in Section 9 of this Consent and Agreement.
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Notwithstanding any other provision in this Section 4(b) to the contrary,
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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
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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).
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(c) Administrative Agent Designee as Interim Manager. If the
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Administrative Agent elects to appoint a Person other than Sprint Spectrum
to act as Interim Manager under the Sprint Agreements (an "Administrative
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Agent Designee") as permitted under Sections 4(a)(iii) and 4(b), such
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Administrative Agent Designee must (i) agree to serve as Interim Manager
for six months unless terminated earlier by Sprint PCS 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
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Requirements" set forth below in Section 13, and (iii) agree to comply with
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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 PCS shall provide to the
Administrative Agent, within 10 Business Days after the request therefor, a
detailed description of all information reasonably requested by Sprint PCS
to enable Sprint PCS to determine if a proposed Administrative Agent
Designee satisfies the Successor Manager Requirements. Sprint PCS 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 PCS does not so inform the Administrative Agent
within such 20-day period, then Sprint PCS shall be deemed to agree, for
all purposes of this Consent and Agreement, that such proposed designee
satisfies the Successor Manager
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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 PCS and the Administrative Agent have the rights set
forth in Section 5; provided, that Sprint PCS may not allow Affiliate to
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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.
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(a) Affiliate Remains as Manager or Interim Manager Appointed. Upon
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an Event of Default created by a Management Agreement Breach (so long as at
such time an Event of Default not created by a Management Agreement Breach
as to which Administrative Agent has given Sprint PCS notice is not in
existence), Sprint PCS 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 (in the case of Sprint Spectrum) or
appoint Sprint Spectrum as Interim Manager (in the case of SprintCom), or
(iii) appoint a Sprint Spectrum Designee to act as Interim Manager under
the Sprint Agreements as provided in paragraph (b) below. If Sprint PCS
initially allows Affiliate to continue to act as the Manager under the
Sprint Agreements, Sprint PCS 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 PCS elects not to act as Interim Manager or to
appoint a Sprint Spectrum Designee.
(b) Sprint Spectrum or Sprint Spectrum Designee as Interim Manager.
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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
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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
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incurred in accordance with Section 9 of this Consent and Agreement) shall
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no longer be subordinated to the Obligations as provided in Section 9 of
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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
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Agreement as provided in the Management Agreement (which expenditures were
incurred in accordance with Section 9 of this Consent and Agreement) shall
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not be subject to subordination to the Obligations as provided in Section 9
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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
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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
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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
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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 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).
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(c) Administrative Agent Designee as Interim Manager. Notwithstanding
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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 PCS 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
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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 PCS because of a material breach by the
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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 PCS shall provide to the Administrative Agent, within 10 Business
Days after the request therefor, a detailed description of all information
reasonably requested by Sprint PCS to enable Sprint PCS to determine if a
proposed Administrative Agent Designee satisfies the Successor Manager
Requirements. Sprint PCS 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 PCS does
not so inform the Administrative Agent within such 20-day period, then
Sprint PCS 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 PCS and the Administrative
Agent have the rights set forth in Section 5; provided, that Sprint PCS may
not allow Affiliate to act as the Manager of the Sprint Agreements without
the Administrative Agent's consent.
SECTION 6. Purchase and Sale of the Operating Assets. Upon the occurrence
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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
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event the Lenders accelerate the maturity of the Obligations under the Loan
Documents (an "Acceleration" and, the date thereof, an "Acceleration
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Date"), the Administrative Agent shall give written notice thereof to
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Sprint PCS. Upon receipt of notice of Acceleration, Sprint PCS shall have
the right, to which right Affiliate, by executing 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 PCS customers as contemplated by
Section 11.4 of the Management Agreement), and (ii) the aggregate amount of
the Obligations. Sprint PCS 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 PCS 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
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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 PCS of written notice that
Sprint PCS 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 that is confirmed in writing by Affiliate to be acceptable
to Affiliate, Sprint PCS shall have the right subject to the consent of the
Administrative Agent, to purchase the Operating Assets, 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 PCS's receipt of such other offer Sprint PCS offers to purchase the
Operating Assets and so long as the conditions of Sprint PCS's offer and
the amount of time it will take Sprint PCS 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
PCS exercises its rights under this Section 6(a), (i) the Affiliate shall
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sell the Operating Assets to Sprint PCS, (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 PCS 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
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6(a) shall be in substitution of the purchase rights of the Sprint Parties
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under Section 11.6.1 of the Management Agreement. If Sprint PCS
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purchases the Operating Assets as permitted under this Section 6(a), the
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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.
(b) Sale of Operating Assets to Third Parties. If the Sprint Parties
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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:
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(i) Sale to Successor Manager. The Collateral may be sold by
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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 PCS
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 PCS to enable Sprint PCS to
determine if a proposed buyer satisfies the Successor Manager Requirements.
Sprint PCS 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 PCS does not so inform the Administrative
Agent within such 20-day period, then Sprint PCS 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
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the Successor Manager Requirements (or is deemed to satisfy such
requirements) and wishes to become a "Successor Manager", the buyer must
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agree to be bound by the Sprint Agreements; provided, that buyer shall have
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no responsibility or liability for any liability to any Person other than a
Sprint Party and Related Party of Sprint PCS 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 PCS 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 PCS shall permit the performance
period set forth in the Management Agreement to be extended for such period
of time that Sprint PCS believes is reasonable to allow Successor Manager
to perform such unperformed obligations.
(ii) Sale to Other than Successor Manager. The Collateral may
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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);
(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 PCS 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
-10-
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 PCS 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 PCS 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
PCS 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 PCS'
Spectrum on which the Service Area Network operates. Sprint PCS 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 PCS 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 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 PCS 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 PCS as the buyer determines in its sole discretion.
(D) If Sprint PCS 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 PCS
pro rated on a pops and spectrum
-11-
basis, plus (2) the microwave relocation costs paid by Sprint PCS
attributable to clearing the Spectrum in the Disaggregated License, plus
(3) the amount of carrying costs to Sprint PCS 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 PCS shall
retain the customers of a national account and any resellers who are then
party to a resale agreement with Sprint PCS. 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 PCS retains the customers of a national account and
--------
any resellers that have entered into a resale agreement with Sprint PCS,
Sprint PCS 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
PCS's network, the buyer and Sprint PCS shall each agree to provide roaming
services to the other (in the case of Sprint PCS, 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 PCS roaming in the geographic area covered by the Disaggregated
License) pursuant to a roaming agreement to be entered into between buyer
and Sprint PCS and to be mutually agreed upon so long as such agreement is
based on Sprint PCS's then standard roaming agreement used by Sprint PCS 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 PCS to third parties for Sprint PCS's
customers to roam in such 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 PCS's network, the buyer shall, to
the extent required by law, provide resale to Sprint PCS 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 PCS 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 PCS.
-12-
(d) Deferral of Portion of Collected Revenues. (i) Under Section
------------------------------------------ -------
10.1.1 of the Management Agreement, Sprint PCS 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 PCS
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 PCS shall retain the entire
Retained Amount if Sprint PCS 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 PCS 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 PCS' 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 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 PCS is not serving
as the Interim Manager, Sprint PCS will again retain the full Retained
Amount.
-13-
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 PCS 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 PCS pays
under the Management Agreement, and will be in addition to the fees it receives
under the Services Agreement. Sprint PCS 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 PCS shall
require either Administrative Agent, any Lender or Sprint PCS 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 PCS 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
------------ ------------
PCS 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 event that Sprint PCS 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 PCS
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
-14-
commitments to advance credit under the Credit Agreement have terminated or
expired, Sprint PCS 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 PCS'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 PCS with respect to the Service Area and neither Sprint
PCS 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 PCS 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 PCS 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 PCS'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 PCS'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 PCS
shall have the right to purchase the Obligations under, and as defined in, the
Credit Agreement, by repaying the Obligations in full in cash. In the event
that Sprint PCS 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 PCS 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, Sprint PCS shall have the right to purchase the Operating Assets 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, plus the aggregate amount of any remaining unpaid
Obligations. Administrative Agent shall give Sprint PCS notice of any
acquisition of the Operating Assets by the Administrative Agent promptly
following the date of final consummation of such acquisition (the "Acquisition
-----------
Notice"). Sprint PCS shall, within 60 days of receipt of a valid Acquisition
- ------
Notice, give the Administrative Agent notice of its intent to
-15-
exercise its purchase right under this Section 10(b). In the event Sprint PCS
-------------
gives the Administrative Agent written notice of its intent to purchase the
Operating Assets, the Administrative Agent agrees that it shall provide Sprint
PCS the right to purchase the Operating Assets until the earlier to occur of (i)
expiration of the period consisting of 120 days after Sprint PCS' 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 (ii) receipt by
Administrative Agent from Sprint PCS of written notice that Sprint PCS has
determined not to proceed with the closing of the purchase of the Operating
Assets. If Sprint PCS at any time purchases the Operating Assets 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 PCS shall again have
the right to purchase the Operating Assets 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.
(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 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 PCS and Sprint PCS shall have the right to purchase the Operating Assets
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 PCS's receipt of such other
offer Sprint PCS offers to purchase the Operating Assets or the Obligations, as
applicable, and so long as the conditions of Sprint PCS's offer and the amount
of time it will take Sprint PCS to effect such purchase is acceptable to the
Administrative Agent and the Lenders.
(d) If Sprint PCS 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 PCS
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 PCS 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
PCS all Loan Document Rights, except that if Sprint PCS 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
-16-
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 PCS 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 PCS shall permit the performance period set forth in the Management
Agreement to be extended for such period of time that Sprint PCS believes is
reasonable to allow Successor Manager to perform such unperformed obligations.
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 PCS 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
-17-
such Person submits to Sprint PCS 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 PCS 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 PCS 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
PCS 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 PCS 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
regulatory approval in connection with any such sale, Sprint PCS agrees that it
shall always maintain the ability to sell the Disaggregated License in
accordance with this Consent and Agreement. Sprint PCS 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 PCS 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 PCS acknowledges that the financing provided pursuant to the Loan
Documents, the senior subordinated discount notes to be issued under that
certain Indenture pursuant to the terms and conditions set forth in the
Registration Statement on Form S-1 filed by Affiliate on May 24, 1999, with the
Securities and Exchange Commission, as such Registration Statement may be
amended from time to time, between Affiliate and Bankers Trust Company, as
trustee thereunder, and the initial public offering of common stock of Affiliate
contemplated by the registration statement of Affiliate filed with the
Securities and Exchange Commission on May 24, 1999, as amended, comply with
Section 1.7 of the Management Agreement, as amended by Addendum II and Addendum
- -----------
III of 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
-18-
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 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 PCS owned, and on the date hereof
Sprint PCS 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
promissory note dated as of July 22, 1998, made by AirGate Wireless, L.L.C. in
favor of SprintCom in the face amount of $7.7 million and the sublease, dated as
of June 24, 1999, by and between SprintCom and AirGate Wireless, L.L.C.
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SECTION 17. Administrative Agent Representations. The Administrative
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Agent represents and warrants to Sprint PCS, 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 Mark License
Agreement; provided, however, the buyer of the Sprint PCS Network shall enter
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into an agreement with Affiliate on substantially the same terms as the Sprint
Trademark and Service Mark 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 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
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provision herein may be waived except pursuant to an agreement or agreements in
writing entered into by Sprint PCS, 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 PCS, 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
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or effective amendment or waiver entered into in violation of this Section 19
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shall be valid; provided, however, that no consent of Affiliate shall be
necessary for any amendment or modification to this Consent and Agreement made
pursuant to and in accordance with Section 25 hereof.
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SECTION 20. APPLICABLE LAW. THIS CONSENT AND AGREEMENT SHALL BE
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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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SECTION 21. Notices. Notices and other communications provided for in
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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.
4900 Main, 12th Floor
Kansas City, Missouri, 64112
Telephone No.: (816) 559-1000
Telecopier No.: (816) 559-1290
Attention: Chief Executive Officer
with a copy to:
4900 Main, 11th Floor
Kansas City, Missouri, 64112
Telephone No.: (816) 559-1000
Telecopier No.: (816) 559-2591
Attention: General Counsel
(b) if to the Administrative Agent, to it at:
283 King George Road
Building A
Warren, New Jersey 07059
Telephone No.: (908) 559-8294
Telecopier No.: (908) 559-1711
Attention: Assistant Treasurer, Customer Finance
(c) if to Affiliate, to it at:
Harris Tower
233 Peachtree Street, NE, Suite 1700
Atlanta, Georgia 30303
Telephone No.: (404) 522-8004
Telecopier No.: (404) 522-1030
Attention: General Counsel
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
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(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
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from such party given in accordance with this Section 21.
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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
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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. Termination. This Consent and Agreement shall terminate
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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; and
(ii) the Sprint Agreements terminate.
SECTION 25. Amendments to Form Consent and Agreement. As of the date
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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 PCS with creditors of Other Managers. If Sprint PCS modifies or
amends the form of Consent and Agreement it enters into with another lender,
then Sprint PCS 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
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PCS 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 PCS agrees to allow the Administrative
Agent to make only some of the changes; and (c) Sprint PCS 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 PCS 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 PCS will
not deem the following changes to be made because of circumstances related to a
particular Other Manager: (i)
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any form of recourse to Sprint PCS or other similar form of credit enhancement;
(ii) any change in Sprint PCS'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 PCS; (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 PCS 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 25.
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[The remainder of this page is intentionally left blank.]
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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: _________________________________________
Bernard A. Bianchino
Chief Business Development Officer
SPRINTCOM, INC.
By: _________________________________________
Bernard A. Bianchino
Vice President
WIRELESSCO, L.P.
By: _________________________________________
Bernard A. Bianchino
Chief Business Development Officer
SPRINT COMMUNICATIONS COMPANY, L.P.
By: _________________________________________
Thomas E. Weigman, Senior Vice President,
Consumer Market Strategy and Communications
LUCENT TECHNOLOGIES INC.
for itself and as Administrative Agent
By: _________________________________________
Name:
Title:
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Acknowledgment, Consent and Agreement of Affiliate
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__________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
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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.
AIRGATE PCS, INC.
By: ________________________________________
Thomas M. Dougherty,
President and Chief Executive Officer
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Acknowledgement, Consent and Agreement of Affiliate's Stockholder
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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 PCS may purchase the Operating Assets under Sections 6
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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.
AIRGATE, L.L.C.
By:
------------------------------------
Shelley L. Spencer, Manager
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