Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Leap Wireless International (LWIN) -- Ignore unavailable to you. Want to Upgrade?

To: Rono who wrote (2360)	7/5/2002 10:24:29 AM
From: RalphCramden	Read Replies (1) \| Respond to of 2737

I think you have one thing there backwards. I think what the documents mean is LU could sell the loan in its entirety to whom ever they choose, but the new "participants" would have no right to enforce the Loan Documents. Effectively, LU cannot sell, or bundle with the sale, its rights to enforce the loan provisions.

To: Rono who wrote (2360)	7/5/2002 6:11:31 PM
From: A.L. Reagan	Read Replies (1) \| Respond to of 2737

I agree with you Rono, and disagree with Ralph. The key language is: "Lenders" means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance" LU certainly could sell, i.e. assign, its interest in the VF facility to a different party who would then become the Lender, and call the shots. The acceptance relates to the new Lender accepting the duties and responsibilities of administering the loan. In this loan agreement, LU wanted the right to syndicate out parts of the loan to third parties - but if you have syndication you need one entity to be the manager of the loan in terms of enforcing covenants, etc. So you have language limiting the rights of the sub-lenders to run around enforcing loan covenants. So, without any doubt, at day one of the VF agreement, LU can sell its entire interest in the loan to a new party who would become the new Lender. The more interesting question is whether or not LU has in fact syndicated out parts of the loan. In that event, LU has the sub-lenders to answer to, who presumably (unless they were nuts) have a provision that LU in its capacity as the loan manager will not amend any condition or covenant of the VF facility without the consent of such sub-lender(s). Thus, if the VF facility has been syndicated out to say high yield debt investors, they would have some vote, and perhaps even veto power, over any relaxation of terms and conditions between LU and LWIN. But if the loan has been partially syndicated, and if LU wanted to sell its remaining interest in both the note as well as right to be the Lender, I bet that there is some provision that the new Lender has to be satisfactory to the sub-lender(s). I also agree that it is probably impossible to ferret out all of this info - other than it would be useful to know if LU has in fact syndicated any of the loan.