EX-10.47 5 w39107a5ex10-47.txt COMMITMENT LETTER 1 EXHIBIT 10.47 EXECUTION COPY GOLDMAN SACHS CREDIT PARTNERS L.P. C/O GOLDMAN, SACHS & CO. 85 BROAD STREET NEW YORK, NEW YORK 10004 COMMITMENT LETTER PERSONAL AND CONFIDENTIAL February 21, 2001 Mr. Byron R. Siliezar Vice President and Chief Financial Officer Nextel International, Inc. 10700 Parkridge Boulevard, Suite 600 Reston, Virginia 20191 Ladies and Gentlemen: We are pleased to confirm the arrangements under which Goldman Sachs Credit Partners L.P. ("GSCP" and the "ADMINISTRATIVE AGENT") is exclusively authorized by Nextel International, Inc. (the "COMPANY") to act as the sole arranger and sole syndication agent in connection with the bridge loans described herein, and, together with any other lenders set forth on Schedule I hereto and any entities that become lenders in accordance with the syndication arrangements set forth below (collectively with the Administrative Agent, the "LENDERS"), commits to provide the bridge loans described herein, in each case on the terms and subject to the conditions set forth in this letter, the attached Annex A and Annex B (together, the "COMMITMENT LETTER") and the Fee Letter (as defined below). We understand that the Company intends to use the proceeds of an issuance of senior notes, or other debt securities or preferred stock (the "PERMANENT DEBT SECURITIES") to finance network expansion and acquisitions of additional spectrum, as well as for working capital and other general corporate purposes. 1. Commitment. Each of the Lenders is pleased to confirm its commitment (each, a "COMMITMENT"), severally and not jointly, to provide the Company up to $500.0 million in aggregate principal amount of Senior Increasing Rate Bridge Loans due 2002 (the "BRIDGE LOANS") having the terms set forth on Annex B, in each case, on the terms and subject to the conditions contained in this Commitment Letter. Each Lender's Commitment is subject, in its discretion, to the conditions set forth in this Commitment Letter, including without limitation the conditions precedent set forth in Annex B hereto, and to the negotiation, execution and delivery of definitive documentation, including, without limitation, a bridge loan agreement (the "BRIDGE LOAN AGREEMENT"), satisfactory to each of the Lenders and their counsel and the satisfaction of the terms, conditions and covenants contained therein. The terms of this Commitment Letter are intended as an outline of certain of the material terms of the Bridge Loans, but do not include all of the terms, conditions, covenants, representations, warranties, default clauses and other provisions that will be contained in the Bridge Loan Agreement. The Bridge Loan Agreement shall include, in addition, provisions that are customary or typical for financings of 2 Nextel International, Inc. February 21, 2001 Page 2 this type and other provisions that the Lenders may reasonably determine to be appropriate in the context of the proposed transactions. The net proceeds from (i) any public offering or private placement of any debt or equity securities by the Company or any subsidiary of the Company (other than the Equity Financing (as defined in Annex B)), (ii) any future bank borrowings other than: (a) under the Company's existing credit facilities as in effect on the Closing Date or any refinancing thereof under a credit facility (but only to the extent that the aggregate principal amount of the refinancing indebtedness does not exceed the principal amount of the credit facility indebtedness refinanced (plus accrued interest on such credit facility indebtedness)) and (b) up to $50.0 million at any one time outstanding of additional vendor financing debt, short-term equipment financing debt or short-term working capital debt, in each case not outstanding on the date hereof and (iii) any future asset sales (subject to certain ordinary course exceptions and excluding sale-leaseback transactions involving tower assets in an amount not to exceed $200.0 million in the aggregate) by the Company or any subsidiary of the Company will immediately reduce the Commitment of the Lenders on a dollar-for-dollar basis. 2. Fees and Expenses. The fees for these services are set forth in a separate letter (the "FEE LETTER"), entered into by the Lenders and the Company. In addition, pursuant to an engagement letter (the "ENGAGEMENT LETTER"), dated as of the date hereof, between the Company and Goldman, Sachs & Co. ("GOLDMAN SACHS"), the Company has offered Goldman Sachs the right to act as sole book-running and sole lead placement agent, purchaser or underwriter in connection with the sale of the Permanent Debt Securities. 3. Syndication. The Administrative Agent intends and reserves the right to syndicate the Commitments and/or the Bridge Loans to other Lenders who shall be selected by the Administrative Agent in its sole discretion after consultation with the Company. The Company agrees, and will cause members of management to assist in the syndication of the commitment. The Administrative Agent will lead the syndication, including determining the timing of all offers to potential Lenders and the acceptance of commitments, any title of agent or similar designations awarded to Lenders, the amounts offered and the compensation provided to each Lender from the amounts to be paid to the Administrative Agent pursuant to the terms of this Commitment Letter and the Fee Letter. The Administrative Agent will determine the final commitment allocations and will notify the Company of such determinations. Pursuant to the syndication process described herein, the rights and obligations of each Lender, including the right and obligation to make any Bridge Loan, may be assigned by such Lender, in whole or in part, to any other bank, financial institution or other investor and upon such assignment, the assignee shall become a Lender hereunder and the assigning Lender will be relieved from all obligations with respect to any Commitment assigned. To ensure an orderly and effective syndication of the Bridge Loans, you agree that, until the later of the termination of the syndication as determined by the Administrative Agent and 60 days following the date of initial funding under the Bridge Loans, you will not, and will not permit any of your subsidiaries to, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of, or engage in discussions concerning the syndication or issuance of, any debt facility or debt or preferred equity security (other than the Bridge Loans) of the Company or any of its subsidiaries, including any renewals or refinancings of any existing debt facility or debt or preferred equity security, without the prior written consent of the Administrative Agent. You also agree that the Administrative Agent shall be entitled, but not obligated, after consultation with you, to change the terms, pricing and/or structure of the Bridge Loans if the Administrative Agent determines in its discretion that such changes are advisable to insure the 3 Nextel International, Inc. February 21, 2001 Page 3 successful syndication of all of the Bridge Loans; provided that the total amount of the Bridge Loans remains unchanged. 4. Cooperation. The Company agrees to cooperate with the Administrative Agent in connection with (i) the preparation of an information package regarding the business, operations and prospects of the Company, including, without limitation, the delivery of all information relating to the transactions contemplated hereunder and all other information deemed reasonably necessary by the Administrative Agent to complete the syndication of the Commitment and/or Bridge Loans and (ii) the presentation of such information package in lender meetings and other communications with prospective Lenders in connection with the syndication of the Bridge Loans. The Company agrees to make representatives and senior management of the Company available to meet with prospective Lenders and rating agencies and to make customary "road show" presentations at such locations as the Administrative Agent may suggest. The Company shall be solely responsible for the contents of any such information package and presentation and acknowledges that the Administrative Agent will be using and relying upon the information contained in such information package and presentation without independent verification thereof. In addition, the Company represents and covenants that all information provided directly or indirectly by the Company to the Administrative Agent or the other Lenders in connection with the transactions contemplated hereunder 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 not misleading. The Company agrees to supplement such information from time to time until the Closing Date (as defined in Annex B) and, if requested by the Administrative Agent in writing, for a reasonable period thereafter (not to exceed six months) necessary to complete the syndication of the Bridge Loans, so that the representations and covenants contained in the preceding sentence remain correct. 5. Annex A. In connection with arrangements such as this, it is our policy to receive indemnification. The Company agrees to the provisions with respect to our indemnity and other matters set forth in Annex A which is incorporated by reference into this Commitment Letter. 6. Confidentiality. Please note that this Commitment Letter, the Fee Letter and any written or oral advice provided by the Lenders in connection with this arrangement is exclusively for the information of the Board of Directors and senior management of the Company and may not be disclosed to any other party or circulated or referred to publicly without the Lenders' prior written consent, except, after providing written notice to the Administrative Agent, pursuant to a subpoena or order issued by a court of competent jurisdiction or by a judicial, administrative or legislative body or committee. We hereby consent to the disclosure of the terms of this Commitment Letter (but not the Fee Letter or Engagement Letter) in connection with the Company's registration statement (No. 333-44060) on Form S-1 and in the prospectus included therein. In addition, we hereby consent to your disclosure of such advice to your officers, directors, agents and advisors who are directly involved in the consideration of the Bridge Loans to the extent such persons are obligated to hold such advice in confidence. 7. Additional Matters. The Company may not assign any of its rights or be relieved of any of its obligations hereunder without the prior written consent of each of the Lenders. As you know, GSCP may from time to time effect transactions, for its own account or the account of customers, and hold positions in loans or options on loans of the Company and other companies that may be the subject of this arrangement. In addition, Goldman Sachs is a full service securities firm and as such may from time to time effect transactions, for its own account 4 Nextel International, Inc. February 21, 2001 Page 4 or the account of customers, and hold positions in securities or options on securities of the Company and other companies that may be the subject of this arrangement. In addition, the Administrative Agent may employ the services of its affiliates in providing certain services hereunder and may exchange with such affiliates information concerning the Company and other companies that may be the subject of this arrangement, and such affiliates shall be entitled to the benefits afforded the Administrative Agent hereunder. All payments under this Commitment Letter (including Annex A and Annex B) and the Fee Letter will be made in U.S. dollars and without withholding or deduction of any tax, assessment or other governmental charge (other than franchise taxes and taxes on overall net income) (collectively, "TAX") unless required by law; and if the Company will be required to deduct or withhold any Tax, or if any Tax is required to be paid by any Lender solely on account of services performed hereunder or under the Fee Letter, the Company will pay to such Lender such additional amounts as will be required so that the net amount received by such Lender from the Company after such deduction, withholding or payment will equal the amounts otherwise due to such Lender hereunder or under the Fee Letter, as applicable. If any goods and services tax ("GST"), value added tax ("VAT") or consumption tax is payable in respect of amounts paid or payable to any Lender for services rendered in connection with this letter (or any portion thereof), such Lender will add such GST, VAT or consumption tax to its invoices and the Company will pay to such Lender such GST, VAT or consumption tax as set forth in such invoices. The Lenders' commitment hereunder shall terminate on the earliest to occur of: (a) May 15, 2001 unless the Equity Financing shall have been consummated; (b) the consummation of an initial public offering by the Company with net cash proceeds to the Company of less than $500.0 million (provided, however, that up to $100.0 million of such net cash proceeds may instead be contributed to the Company at or prior to an initial public offering of at least $400.0 million in net cash proceeds in a cash equity contribution); (c) December 15, 2001 unless the closing of the Bridge Loans, on the terms and subject to the conditions contained herein, shall have been consummated; (d) the sale by the Company, in one or more offerings for which Goldman Sachs acts as the sole book-running and sole lead underwriter, initial purchaser and/or placement agent, of debt securities or preferred stock having an aggregate principal amount or liquidation preference, as applicable, of at least $500.0 million; (e) such time as Nextel Communications, Inc. shall cease to beneficially own at least 90% of the voting power and at least 70% of the economic interest of the Company's outstanding capital stock; (f) termination of the Engagement Letter by the Company; and (g) the occurrence of any breach or default in the performance of any of the material obligations of the Company or any of its subsidiaries or affiliates set forth in, or relating to the transactions contemplated by, the Engagement Letter. 5 Nextel International, Inc. February 21, 2001 Page 5 Please confirm that the foregoing is in accordance with your understanding by signing and returning to GSCP the enclosed copies of this Commitment Letter, together, if not previously executed and delivered, with the Fee Letter on or before the close of business, on February 21, 2001, whereupon this Commitment Letter and the Fee Letter shall become binding agreements between us. If not signed and returned as described in the preceding sentence by such date, this offer will terminate on such date. We look forward to working with you on this transaction. Very truly yours, GOLDMAN SACHS CREDIT PARTNERS L.P. By: /s/ Robert Wagner --------------------------------- Authorized Signatory Confirmed as of the date above: NEXTEL INTERNATIONAL, INC. By: /s/ Robert J. Gilker ------------------------------ Name: Robert J. Gilker Title: Vice President & General Counsel 6 Nextel International, Inc. February 21, 2001 Page 6 ANNEX A In the event that any of the Lenders or the Administrative Agent (each, an "INDEMNIFIED PARTY") becomes involved in any capacity in any action, proceeding or investigation brought by or against any person, including stockholders of the Company in connection with or as a result of either this arrangement or any matter referred to in this Commitment Letter or the Fee Letter (together, the "LETTERS"), the Company periodically will reimburse such Indemnified Party for its legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith. The Company also will indemnify and hold each Indemnified Party harmless against any and all losses, claims, damages or liabilities to any such person in connection with or as a result of either this arrangement or any matter referred to in the Letters, except to the extent that any such loss, claim, damage or liability results from the gross negligence or bad faith of such Indemnified Party in performing the services that are the subject of the Letters. If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient to hold it harmless, then the Company shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative economic interests of the Company and its stockholders on the one hand and such Indemnified Party on the other hand in the matters contemplated by the Letters as well as the relative fault of the Company, on the one hand, and such Indemnified Party, on the other hand, with respect to such loss, claim, damage or liability and any other relevant equitable considerations. The reimbursement, indemnity and contribution obligations of the Company under this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and conditions to any affiliate of any Indemnified Party and the partners, directors, agents, employees and controlling persons (if any), as the case may be, of such Indemnified Party and any such affiliate, and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company such Indemnified Party, any such affiliate and any such person. The Company also agrees that neither any Indemnified Party nor any of such affiliates, partners, directors, agents, employees or controlling persons shall have any liability to the Company, any person asserting claims on behalf of or in right of the Company, or any other person in connection with or as a result of either this arrangement or any matter referred to in the Letters except to the extent that any losses, claims, damages, liabilities or expenses incurred by the Company, result from the gross negligence or bad faith of such Indemnified Party in performing the services that are the subject of the Letters; provided, however, that in no event shall such Indemnified Party or such other parties have any liability for any indirect, consequential or punitive damages in connection with or as a result of such Indemnified Party's or such other parties' activities related to the Bridge Loans. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING IN CONNECTION WITH OR AS A RESULT OF EITHER THIS ARRANGEMENT OR ANY MATTER REFERRED TO IN THE LETTERS IS HEREBY WAIVED BY THE PARTIES HERETO. THE PROVISIONS OF THIS ANNEX A SHALL SURVIVE ANY TERMINATION OR COMPLETION OF THE ARRANGEMENT PROVIDED BY THE LETTERS, AND 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 LAWS. 7 Nextel International, Inc. February 21, 2001 Page 7 ANNEX B NEXTEL INTERNATIONAL, INC. SUMMARY OF TERMS AND CONDITIONS OF BRIDGE LOANS This Summary of Terms and Conditions outlines certain terms of the Bridge Loans and the Bridge Loan Agreement referred to in the Commitment Letter, of which this Annex B is a part. Certain capitalized terms used herein are defined in the Commitment Letter.
BORROWER.................The Company. LOANS....................$500.0 million in aggregate principal amount of Senior Increasing Rate Loans (the "BRIDGE LOANS"), which shall be made available, subject to the terms and conditions hereof, in a single draw equal to the amount of the Commitment. MATURITY.................One year from the date of the making of the Bridge Loans (the "MATURITY DATE"). If, upon the Maturity Date, any Bridge Loan has not been previously repaid in full, and provided no "CONVERSION DEFAULT" (as defined below) has occurred and is continuing, such Bridge Loan shall be automatically converted into a Term Loan (each a "TERM LOAN") due on the nine-year anniversary of the Maturity Date. At any time on or after the Maturity Date, at the option of the applicable Lender, the Term Loans may be exchanged in whole or in part for Senior Exchange Notes due on the nine-year anniversary of the Maturity Date (the "EXCHANGE NOTES") having an equal principal amount. The initial date of issuance of the Bridge Loans is hereinafter referred to as the "CLOSING DATE." "CONVERSION DEFAULT" shall mean any default under the Bridge Loan Agreement, any payment default under any material indebtedness, a bankruptcy default (as defined) or any payment default under the Engagement Letter or the Fee Letter. The Term Loans will be governed by the provisions of the Bridge Loan Agreement and will have the same terms as the Bridge Loans except as expressly set forth on Exhibit 1 to this Annex B. The Exchange Notes will be issued pursuant to an Indenture that will have the terms set forth on Exhibit 1 to this Annex B. INTEREST.................The Bridge Loans will initially bear interest at a rate per annum equal to (a) the bid-side yield, as of the Closing Date, on the Benchmark Security (as defined below), plus
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(b) 25 basis points (the "Floor Rate"). "Benchmark Security" means, at the option of the Administrative Agent, on any date of determination, the Company's 12.75% Senior Notes due 2010 or any other debt security issued by the Company after the date of this Commitment Letter and prior to the Closing Date. If the Bridge Loans are not repaid in whole within 90 days following the Closing Date, the interest rate on the Bridge Loans will reset at the bid-side yield on the Benchmark Security at the end of such 90-day period (the "Reset Date") plus the Reset Spread (as defined below). The interest rate on the Bridge Loans will reset at the end of each 90-day period thereafter (the last day of such period being the "Step-Up Date") at the bid-side yield on the Benchmark Security as of the Step-Up Date plus the Reset Spread. "Reset Spread" means 125 basis points plus an additional 50 Basis points on each 90-day anniversary of the Reset Date. Notwithstanding the foregoing, at no time will the interest rate on the Bridge Loans be less than the Floor Rate or exceed 20.00% per annum and to the extent that the interest payable on the Bridge Loans on any interest payment date on or prior to the Maturity Date is at a rate that exceeds 18% per annum, the Company will have the option to pay such excess interest by capitalizing it to principal on the Bridge Loans. Notwithstanding the foregoing, after the occurrence and during the continuance of an Event of Default, interest will accrue on the Bridge Loans at the then applicable rate plus 200 basis points per annum. Interest will be payable at the end of each 90-day interest period in arrears and on the date of any prepayment of the Bridge Loans. MANDATORY REPAYMENT................The net proceeds from (i) any public offering or private placement of any debt or equity securities by the Company or any subsidiary of the Company, (ii) any future bank borrowings other than: (a) under the Company's existing credit facilities as in effect on the Closing Date or any refinancing thereof under a credit facility (but only to the extent that the aggregate principal amount of the refinancing indebtedness does not exceed the principal amount of the credit facility indebtedness refinanced (plus
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accrued interest on such credit facility indebtedness)) and (b) up to $50.0 million at any one time outstanding of additional vendor financing debt, short-term equipment financing debt or short-term working capital debt, in each case not outstanding on the date hereof and (iii) any future asset sales (subject to certain ordinary course exceptions) by the Company or any subsidiary of the Company will be used to redeem the Bridge Loans, in each case at 100% of the principal amount of the Bridge Loans redeemed plus accrued interest to the date of the redemption. CHANGE OF CONTROL..................Each holder of Bridge Loans will be entitled to require the Company, and the Company must offer, to repay the Bridge Loans held by such holder at a price of 100% of principal amount, plus accrued interest, upon the occurrence of a Change of Control (as defined). OPTIONAL REPAYMENT................The Bridge Loans may be prepaid, in whole or in part, at the option of the Company at any time upon five business days' written notice at a price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption. PAYMENTS.................Payments by the Company will be made by wire transfer of immediately available funds. TRANSFERABILITY AND PARTICIPATIONS...........Each of the Lenders will be free to sell or transfer all or any part of or any participation in any of the Bridge Loans to any third party selected by any such Lender in its sole discretion after consultation with the Company and to pledge any or all of the Bridge Loans to any commercial bank or other institutional lender, to the extent permitted by law. MODIFICATION OF THE BRIDGE LOANS.........Modification of the Bridge Loans may be made with the consent of Lenders holding greater than 50% of the Bridge Loans then outstanding, except that no modification or change may extend the maturity of any Bridge Loan or time of payment of interest of any Bridge Loan, reduce the rate of interest or the principal amount of any Bridge Loan, alter the redemption provisions of any Bridge Loan, or reduce the percentage of holders necessary to modify or change the Bridge Loans without the consent of Lenders holding 100% of the Bridge Loans affected thereby.
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COST AND YIELD PROTECTION.........The Lenders will receive cost and yield protection customary for facilities and transactions of this type, including, but not limited to, compensation in respect of taxes (including but not limited to gross-up provisions for withholding taxes imposed by any governmental authority and income taxes associated with all gross-up payments), changes in capital requirements, guidelines or policies or their interpretation or application, illegality, change in circumstances, reserves and other provisions deemed necessary by the Lenders to provide customary protection for U.S. and non-U.S. financial institutions. CONDITIONS PRECEDENT................The several obligations of the Lenders to make, or cause one of their respective affiliates to make, the Bridge Loans will be subject to closing conditions deemed appropriate by the Lenders, in their reasonable discretion, for financings of this kind generally and for this transaction in particular, including, without limitation, the following closing conditions: 1. Funding Notice. The Lenders shall have received not less than three business days' prior written notice of the Closing Date. 2. Equity Financing. On or prior to May 15, 2001, the Company shall have consummated (a) an initial public offering providing the Company with a minimum of $500.0 million in net cash proceeds (provided, however, that up to $100.0 million of such net cash proceeds may instead be contributed to the Company at or prior to the consummation of an initial public offering of at least $400.0 million in net cash proceeds in a cash equity contribution), and (b) an equity investment in the Company from Nextel Communications, Inc. or one of its affiliates providing the Company with a minimum (excluding any amounts contributed pursuant to clause (a) above) of $500.0 million in net cash proceeds (collectively, the "EQUITY FINANCING"). 3. Due Diligence. Each of the Lenders shall have conducted a due diligence review in form, scope and substance reasonably satisfactory to each of the Lenders and shall be satisfied with the results thereof. Such review may include but may not be limited to an examination of (i) the capitalization, corporate and ownership structure of the Company before and after giving effect to the Equity
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Financing, (ii) accounting, legal, regulatory, tax, labor, insurance, pension and environmental liabilities, actual or contingent (which, at the request of the Lenders, shall include an environmental audit satisfactory to the Lenders and their counsel), (iii) material contracts, leases and debt agreements and (iv) the general business, operations, financial condition, management, prospects and value of the Company. 4. Absence of Certain Changes. No material adverse change in the capital stock or long-term debt of the Company, and its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholders' equity, results of operations or prospects of the Company, shall have occurred since December 31, 2000 (the date of the most recent audited financial statements that have been delivered to the Lenders as of the date hereof) and no material inaccuracy in such financial statements shall exist. The Company shall have no material liabilities except those set forth on the audited balance sheet dated December 31, 2000 and those incurred in the ordinary course of business since such date in amounts that are consistent with past practice. On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization," as that term is defined by the Securities and Exchange Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities. 5. Documentation, Legal Matters, etc. The Bridge Loan Agreement and the other definitive documentation evidencing the Bridge Loans shall be prepared by counsel to the Administrative Agent and shall be in form and substance reasonably satisfactory to the Lenders. All other matters relating to the Bridge Loan Agreement, and the transactions contemplated thereby shall be reasonably satisfactory to each of the Lenders in all respects and the Lenders shall have received such additional certificates, legal and other opinions in
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form and substance reasonably satisfactory to each of the Lenders and their counsel, and such other documentation as they shall request. 6. Market Disruption. There shall not have occurred any disruption or adverse change, as determined by the Lenders in their sole discretion, in the financial or capital markets generally, or in the markets for bridge loan syndication, high yield debt or equity securities in particular or affecting the syndication or funding of bridge loans (or the refinancing thereof) that may have an adverse impact on the ability to sell or place the Permanent Debt Securities or to syndicate the Bridge Loans. 7. Financial Statements. At least 45 days prior to the Closing Date, each of the Lenders shall have received audited financial statements for the three-year period immediately preceding the Closing Date and any appropriate unaudited financial statements for any interim period or periods of the Company, any acquired business and all other recent, probable or pending acquisitions (including pro forma financial statements), as shall be necessary to meet the requirements of Regulation S-X for Form S-1 registration statements and all such financial statements shall be satisfactory in form and substance to each of the Lenders. 8. Prior Marketing of Permanent Debt Securities. The Company shall have used commercially reasonable efforts to cause the Permanent Debt Securities to be issued and sold prior to the Closing Date. The Company shall not have failed to comply with any of its obligations under the Fee Letter or Engagement Letter. 9. Litigation, etc. There shall not exist any action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority that, in the opinion of each of the Lenders, adversely affects any of the transactions contemplated hereby, or that could have a material adverse effect on the Company or any of the transactions contemplated hereby. 10. Payment of Fees and Expenses. All fees and expenses due to the Lenders, GSCP, Goldman Sachs or the Administrative Agent on or before the closing date in connection with the Bridge Loans,
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pursuant to the Commitment Letter, the Fee Letter, the Engagement Letter or otherwise shall have been paid in full. COVENANTS................The Bridge Loan Agreement will contain such covenants by the Company (with respect to the Company and its subsidiaries) as are usual and customary for financings of this kind or as otherwise deemed appropriate by the Lenders for this transaction in particular (in their sole discretion). EVENTS OF DEFAULT..................The Bridge Loan Agreement will include such events of default (and, as appropriate, grace periods) as are usual and customary for financings of this kind or as otherwise deemed appropriate by the Lenders for this transaction in particular (in their sole discretion). REPRESENTATIONS AND WARRANTIES...........The Bridge Loan Agreement will contain such representations and warranties by the Company (with respect to the Company and its subsidiaries) as are usual and customary for financings of this kind or as are otherwise deemed appropriate by each of the Lenders for this transaction in particular (in their sole discretion). TAXES, RESERVE REQUIREMENTS AND INDEMNITIES..............The Bridge Loan Agreement will provide that all payments will be made free and clear of any taxes (other than franchise taxes and taxes on overall net income), imposts, assessments, withholdings or other deductions whatsoever. Foreign Lenders will be required to furnish to the Administrative Agent appropriate certificates or other evidence of exemption from U.S. federal tax withholding. The Company will indemnify the Lenders against all increased costs of capital resulting from reserve requirements or otherwise imposed, in each case subject to customary increased costs, capital adequacy and similar provisions to the extent not taken into account in the calculation of the interest rate applicable to the Bridge Loans. INDEMNITY................The Bridge Loan Agreement will contain customary and appropriate provisions relating to indemnity and related matters in a form reasonably satisfactory to the Administrative Agent and the Lenders.
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GOVERNING LAW AND JURISDICTION.............The Bridge Loan Agreement will provide that the Company will submit to the non-exclusive jurisdiction and venue of the federal and state courts of the State of New York and will waive any right to trial by jury. New York law will govern the Loan Documents.
The foregoing is intended to summarize certain basic terms of the Bridge Loans. It is not intended to be a definitive list of all of the requirements of the Lenders in connection with the Bridge Loans. 15 EXHIBIT 1 TO ANNEX B SUMMARY OF TERMS AND CONDITIONS OF TERM LOANS AND EXCHANGE NOTES Capitalized terms used herein have the meanings assigned to them in the Summary of Terms and Conditions of Bridge Loans to which this Exhibit 1 is attached. TERM LOANS On the Maturity Date, so long as no Conversion Default has occurred and is continuing, the outstanding Bridge Loans will be automatically converted into Term Loans. The Term Loans will be governed by the provisions of the Bridge Loan Agreement and, except as expressly set forth below, will have the same terms as the Bridge Loans.
MATURITY.................The Term Loans will mature on the tenth anniversary of the Closing Date. INTEREST RATE............The Term Loans will initially bear interest at a rate per annum equal to the sum of (a) the interest rate applicable to the Bridge Loans on the Maturity Date (after giving effect to any applicable step-up) plus (b) 50 basis points. If the Term Loans are not repaid within 90 days following the Maturity Date, the interest rate on the Term Loans will increase by 50 basis points at the end of such 90-day period and will increase by an additional 50 basis points at the end of each successive 90-day period thereafter. Notwithstanding the foregoing, at no time will the interest rate in effect on the Term Loans be less than the Floor Rate or exceed 20.00% per annum. To the extent interest payable on the Term Loans on any quarterly interest payment date is at a rate that exceeds 18.00% per annum, the Company shall have the option to pay such excess interest by capitalizing to principal on the Term Loans. Notwithstanding the foregoing, after the occurrence and during the continuance of a Default or an Event of Default, interest will accrue on the Term Loans at the then applicable rate plus 200 basis points per annum. Interest on the Term Loans will be payable in arrears at the end of each fiscal quarter of the Company, on the date of any prepayment of the Term Loans and on the maturity date of the Term Loans. OPTIONAL REPAYMENT................The Term Loans may be prepaid, in whole or in part, at the option of the Company, at any time upon five business days' written notice, at a price equal to 100% of the principal amount thereof plus accrued interest to the date of redemption.
16 EXCHANGE NOTES At any time on or after the Maturity Date, upon five or more business days prior notice, the Term Loans may, at the option of a Lender, be exchanged for a principal amount of Exchange Notes equal to 100% of the aggregate principal amount of the Term Loans so exchanged (plus any accrued interest thereon not required to be paid in cash) in connection with a transfer of Exchange Notes to an unaffiliated third party. No Exchange Notes will be issued until the Company receives requests to issue at least $25.0 million in aggregate principal amount of Exchange Notes. The Company will issue Exchange Notes under an indenture which complies with the Trust Indenture Act of 1939, as amended (the "INDENTURE"). The Company will appoint a trustee reasonably acceptable to the holders of the Exchange Notes. The Indenture will be fully executed and delivered on the Closing Date and the Exchange Notes will be fully executed and deposited into escrow on the Closing Date.
MATURITY.................The Exchange Notes will mature on the tenth anniversary of the Closing Date. INTEREST RATE............Each Exchange Note will bear interest at a fixed rate equal to the greater of (a) the interest rate on the Term Loans on the date of issuance of such Exchange Notes and (b) the bid side yield on the Benchmark Security, on the date prior to the date of issuance of the Exchange Notes, provided that in no event will the interest rate in effect on the Exchange Notes be less than the Floor Rate or exceed 20.00% per annum. To the extent interest payable on the Exchange Notes on any quarterly interest payment date is at a rate that exceeds 18.00% per annum, the Company shall have the option to pay such excess interest by capitalizing to principal on the Exchange Notes. OPTIONAL REDEMPTION...............Exchange Notes will be non-callable until the fifth anniversary of the Closing Date. Thereafter, each Exchange Note will be callable at par plus accrued interest plus a premium equal to one half of the coupon on such Exchange Note, which premium shall decline ratably on each yearly anniversary of the Closing Date to zero on the date that is two years prior to the maturity of the Exchange Notes. DEFEASANCE PROVISIONS OF EXCHANGE NOTES...........Customary. MODIFICATION.............Customary. REGISTRATION RIGHTS...................The Company will cause to become effective prior to the Maturity Date a shelf registration statement with respect to the Exchange Notes (a "SHELF REGISTRATION STATEMENT"). If a Shelf Registration Statement is filed, the Company will
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keep such registration statement effective and available (subject to customary exceptions) until it is no longer needed to permit unrestricted resales of the Exchange Notes. If within 90 days from the Closing Date (the "EFFECTIVENESS DATE") a Shelf Registration Statement for the Exchange Notes has not been declared effective, then the Company will pay liquidated damages in the form of increased interest of 50 basis points per annum on the principal amount of Exchange Notes and Term Loans outstanding to holders of such Exchange Notes and Term Loans who are unable freely to transfer Exchange Notes from and including the 91st day after the Closing Date to but excluding the effective date of such Shelf Registration Statement. On the 90th day after the Effectiveness Date, the liquidated damages shall increase by 50 basis points per annum, and on each 90 day anniversary of the Effectiveness Date thereafter, shall increase by 50 basis points per annum, to a maximum increase in interest of 200 basis points per annum (such damages to be payable by capitalizing principal or Term Loans or in the form of additional Bridge Loans or Exchange Notes, as applicable, if the interest rate thereon exceeds 18.00%). The Company will also pay such liquidated damages for any period of time (subject to customary exceptions) following the effectiveness of a Shelf Registration Statement that such Shelf Registration Statement is not available for sales thereunder. All accrued liquidated damages will be paid on each quarterly interest payment date. COVENANTS................The indenture relating to the Exchange Notes will include covenants similar to those contained in the indenture governing the Benchmark Security. EVENTS OF DEFAULT........The indenture relating to the Exchange Notes will provide for Events of Default similar to those contained in the indenture governing the Benchmark Security. COUNSEL FOR THE LENDERS..............Latham & Watkins.
The foregoing is intended to summarize certain basic terms of the Term Loans and Exchange Notes. It is not intended to be a definitive list of all of the requirements of the Lenders in connection with the Term Loans and Exchange Notes.
