Exhibit 4.6
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT (this "Guarantee"), dated as of April __, 1998, is
executed and delivered by CellNet Data Systems, Inc., a corporation organized
under the laws of the State of Delaware ("CellNet"), and CellNet Funding, LLC, a
limited liability company organized under the laws of the State of Delaware
"Funding") for the benefit of the Holders (as hereinafter defined) from time to
time of the Preferred Securities (as hereinafter defined) of Funding.
WHEREAS, Funding intends to issue and sell exchangeable limited liability
company preferred securities ("Preferred Securities"), and, it is required for
the closing of such issuance that CellNet issue this Guarantee for the benefit
of the Holders of the Preferred Securities, as provided herein; and
WHEREAS, Funding has agreed to purchase the CellNet Preferred Stock (as
hereinafter defined) with an amount equal to -% of the proceeds received by
Funding from the issuance and sale of the Preferred Securities and its other
common limited liability company interests (the "Common Securities"); and
WHEREAS, CellNet, the holder of 100% of the Common Securities, expects to
derive substantial direct and indirect benefits from the issuance and sale by
Funding of the Preferred Securities, and therefor, desires hereby to
unconditionally and irrevocably guarantee the payment in full to the Holders of
the Guarantee Payments (as hereinafter defined) and performance of certain
obligations, as described herein.
NOW, THEREFORE, in consideration of the foregoing premises and the purchase
by each Holder of the Preferred Securities, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
CellNet executes and delivers this Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS
Capitalized terms used herein but not otherwise defined herein shall have
the meanings ascribed to such terms in the Amended and Restated Limited
Liability Company Agreement of Funding, dated as of April __, 1998 (the "LLC
Agreement"). As used in this Guarantee, the terms set forth below shall, unless
the context otherwise requires, have the following meanings.
1.1 "Exchange Agent" shall mean CellNet and its successors (or such
substitute entity as may be designated from time to time by the Manager (as
hereinafter defined), acting as agent of the Holders in effecting the exchange
of the Preferred Securities into CellNet Common Stock in such manner as may be
set forth in the LLC Agreement and the Declaration with respect to such series
of Preferred Securities.
1.2 "Declaration" shall mean the written action adopted by the Manager
pursuant to the LLC Agreement relating to the Preferred Securities.
1.3 "Dividends" shall mean, with respect to the Preferred Securities, the
cumulative distributions from Funding with respect to the Preferred Securities,
accruing and payable in the manner set forth in the Declaration with respect to
such series of Preferred Securities.
1.4 "Guarantee Payments" shall mean the following payments, without
duplication, to the extent not paid by Funding: (i) any accrued and unpaid
distributions that are required to be paid on the Preferred Securities, to the
extent Funding has funds sufficient and legally available therefor, (ii) the
Redemption Price (as herein defined), with respect to any Preferred Securities
called for redemption by Funding, to the extent Funding has funds sufficient and
legally available therefor, (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of Funding, the lesser of (a) the aggregate of the
liquidation preference and all accrued and unpaid dividends on the Preferred
Securities to the date of payment to the extent Funding has funds sufficient and
legally available therefor and (b) the amount of assets of Funding remaining for
distribution to holders of Preferred Securities upon the liquidation of Funding
and (iv) in the event that CellNet elects not to exercise its option to redeem
the CellNet Preferred Stock on the mandatory redemption date of the Preferred
Securities, the aggregate of the liquidation preference and all accrued and
unpaid dividends on the Preferred Securities on such mandatory redemption date.
1.5 "Holder" shall mean the registered holder from time to time of
Preferred Securities.
1.6 "CellNet Common Stock" shall mean the common stock of CellNet, par
value $.001 per share.
1.7 "CellNet Preferred Stock" shall mean the redeemable preferred stock -
issued by CellNet, par value $- per share.
1.8 "Manager" means CellNet, in its capacity as the manager of Funding, or
any permitted successor manager of Funding admitted as such pursuant to the
applicable provisions of the LLC Agreement.
1.9 "Redemption Price" shall mean, (i) with respect to a mandatory
redemption by Funding, 100% of the liquidation preference of the Preferred
Securities plus accumulated and unpaid dividends (whether or not earned or
declared), to the date fixed for redemption thereof, (ii) with respect to a
provisional redemption by Funding on or prior to May 1, 2001, ___% of the
liquidation
-2-
preference of the Preferred Securities to be redeemed plus accrued and unpaid
dividends, if any, to the date of redemption, in the event that the Current
Market Value of the Common Stock equals or exceeds the following Trigger
Percentages of the exchange price then in effect for at least 20 trading days
in any consecutive 30-day trading period ending on the trading day prior to
the date of mailing of the notice of Provisional Redemption, if called for
redemption in the 12-month period ending on May 1 of the indicated year:
YEAR TRIGGER PERCENTAGES
---- -------------------
1999 170%
2000 160%
2001 150%
and (iii) with respect to an optional redemption by Funding if redeemed in the
12-month period beginning on May 1 of the indicated year:
YEAR REDEMPTION PRICE
---- ----------------
2001 %
2002
2003
2004
2005
2006
2007
2008
2009
2010 100.000%
ARTICLE II
GUARANTEE
2.1 GENERAL. CellNet irrevocably and unconditionally agrees to pay in
full to the Holders of the Preferred Securities the Guarantee Payments with
respect to the Preferred Securities, as and when due (except to the extent
previously paid by Funding), regardless of any defense, right of set-off or
counterclaim which Funding may have or assert. CellNet's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
CellNet to the Holders of the Preferred Securities or by causing Funding to pay
such amounts to such Holders.
2.2 WAIVER OF CERTAIN RIGHTS. CellNet hereby waives, to the fullest
extent permitted by applicable law, notice of acceptance of this Guarantee and
of any liability to which it applies or may apply, presentment, demand for
payment, protest, notice of nonpayment, notice of dishonor, notice of redemption
and all other notices and demands.
-3-
2.3 OBLIGATIONS NOT AFFECTED. The obligations, covenants, agreements and
duties of CellNet to make the Guarantee Payments as required by the terms hereof
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by Funding of any express or implied agreement,
covenant, term of condition relating to the Preferred Securities to be performed
or observed by Funding;
(b) the extension of time for the payment by Funding of all or any
portion of the Dividends, Redemption Price, liquidation distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders of Preferred Securities to enforce, assert or exercise any right,
privilege, power or remedy conferred on such Holders pursuant to the terms of
the Preferred Securities, or any action on the part of Funding granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
winding-up, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
Funding or any of the assets of Funding;
(e) any invalidity of, or defect or deficiency in, any of the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) to the fullest extent permitted by applicable law, any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor.
There shall be no obligation of any Holders of Preferred Securities to give
notice to, or obtain any consent of, CellNet with respect to the happening of
any of the foregoing.
2.4 PROCEEDING DIRECTLY AGAINST CELLNET. This Guarantee is a guarantee of
payment and not of collection. A Holder of Preferred Securities may enforce
this Guarantee with respect to the Preferred Securities directly against
CellNet, and CellNet waives any right or remedy to require that any action be
brought against Funding or any other person or entity before proceeding against
CellNet. Subject to Section 2.5 hereof, all waivers herein contained shall be
without prejudice to the right of a Holder, at its option, to proceed against
Funding, whether by separate action or by joinder. CellNet agrees that this
Guarantee shall not be discharged except by payment
-4-
of the Guarantee Payments in full (to the extent not previously paid by
Funding) and by complete performance of all obligations under this Guarantee.
2.5 SUBROGATION. CellNet shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against CellNet in respect of any amounts
paid to such Holders by CellNet under this Guarantee and shall have the right to
waive payment by Funding of any amount of Dividends in respect of which payment
has been made to the Holders by it pursuant to Section 2.1 hereof; provided,
however, that CellNet shall not (except to the extent required by mandatory
provisions of law) exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of a payment under this Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Guarantee. If any amount shall be
paid to CellNet in violation of the preceding sentence, CellNet agrees to hold
such amount in trust for the Holders and to pay over such amount promptly to the
Holders.
2.6 INDEPENDENT OBLIGATIONS. CellNet acknowledges that its obligations
hereunder are independent of the obligations of Funding with respect to the
Preferred Securities and that CellNet shall be liable as principal and sole
debtor under this Guarantee to make Guarantee Payments in full pursuant to the
terms of this Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 2.3 hereof.
2.7 TERMINATION. This Guarantee shall terminate and be of no further
force and effect as to the Preferred Securities of any series upon (a) full
payment of the Redemption Price of all outstanding Preferred Securities, or (b)
the exchange (in the manner provided in the LLC Agreement and the Declaration)
of all of the Preferred Securities for CellNet Common Stock. In addition, this
Guarantee will terminate completely upon the distribution to the holders of the
Preferred Securities of all of the assets of Funding, including the CellNet
Preferred Stock, any interest on and principal of the Treasury Strips that are
held in the Escrow Account and any CellNet Common Stock that Funding received
from CellNet as a dividend (or otherwise) and has not distributed on the
Preferred Securities or sold in the open market. Notwithstanding the foregoing,
this Guarantee shall continue to be effective or, to the fullest extent
permitted by applicable law, shall be reinstated, as the case may be, with
respect to the Preferred Securities if at any time any Holder of such Preferred
Securities must restore payment of any sums recovered on account of, or must
redeliver any securities received on account of, such Preferred Securities or
under this Guarantee for any reason whatsoever.
ARTICLE III
CERTAIN COVENANTS OF CELLNET
3.1 COVENANTS. So long as the Preferred Securities remain outstanding,
CellNet shall: (a) not cause or permit any Common Securities to be transferred
(other than in connection with a merger or consolidation); (b) maintain direct
or indirect ownership of all outstanding Common
-5-
Securities and any other limited liability company interests in Funding other
than the Preferred Securities (except as may be permitted in the LLC
Agreement); (c) not voluntarily liquidate, dissolve or wind-up itself (other
than in connection with a merger or consolidation) or cause Funding (other
than in connection with or after an exchange of all outstanding Preferred
Securities) to liquidate, dissolve or wind-up; (e) to remain the Manager and
to timely perform all of its duties as Manager (including the duty to cause
Funding to declare and pay dividends on all outstanding Preferred Securities
to the extent set forth in the LLC Agreement and the Certificate of
Designation) and (f) subject to the terms of the Preferred Securities, use
reasonable efforts to cause Funding to remain a Delaware limited liability
company and otherwise continue to be treated as a partnership for United
States federal income tax purposes.
ARTICLE IV
STATUS
4.1 STATUS. This Guarantee constitutes an unsecured obligation of CellNet
ranking subordinate and junior in right of payment to all other liabilities of
CellNet and senior to CellNet Common Stock.
ARTICLE V
EXCHANGE OF PREFERRED SECURITIES
5.1 ISSUANCE OF CELLNET COMMON STOCK. CellNet shall reserve and keep
available out of its authorized and unissued CellNet Common Stock (solely for
issuance upon the exchange of the Preferred Securities), free of any preemptive
or other similar rights, the number of full shares of CellNet Common Stock
deliverable to the Holders upon the exchange of all outstanding Preferred
Securities not theretofore converted by the Holders.
5.2 VALIDITY OF CELLNET COMMON STOCK. All shares of CellNet Common Stock
delivered by CellNet upon such exchange will be duly authorized, validly issued
and fully paid and nonassessable.
ARTICLE VI
MISCELLANEOUS
6.1 THIRD PARTY BENEFICIARIES. All of CellNet's obligations under this
Guarantee shall be directly enforceable by the Holders from time to time of the
Preferred Securities. Each Holder of Preferred Securities is an intended
third-party beneficiary of this Guarantee.
-6-
6.2 SUCCESSORS AND ASSIGNS. All provisions contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
CellNet and shall inure to the benefit of the Holders. Except in connection with
any permitted merger or consolidation of CellNet with or into another entity or
any permitted sale, transfer or lease of CellNet's assets to another entity,
CellNet may not assign its rights or delegate its obligations under this
Guarantee without the prior approval of the holders of at least a majority in
liquidation preference of the Preferred Securities then outstanding.
6.3 AMENDMENTS. Except with respect to any changes which do not have a
material adverse effect on the rights of any Holders of Preferred Securities (in
which case no vote will be required, provided that the board of directors of
CellNet makes a determination, evidenced by resolution, that such change will
not have a material adverse effect on the holders of Preferred Securities), this
Guarantee may be amended with respect to the Preferred Securities only with the
prior approval (obtained in the manner set forth in the LLC Agreement and the
applicable Declaration) of the Holders of not less than a majority of the
aggregate liquidation preference of the outstanding Preferred Securities.
6.4 NOTICE. Any notice, request of other communication required or
permitted to be given hereunder shall be given in writing by delivering the same
against receipt therefor by registered mail, hand delivery, facsimile
transmission (confirmed by registered mail)or telex, addressed to CellNet, as
follows (and if so given, shall be deemed given when mailed; upon receipt of
facsimile confirmation, if sent by facsimile transmission; or upon receipt of an
answer-back, if sent by telex):
CellNet Data Systems, Inc.
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
CellNet Funding, LLC
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
6.5 GENDERS. The masculine and neuter genders used here shall include the
masculine, feminine and neuter genders.
6.6 GUARANTEE NOT SEPARATELY TRANSFERABLE. This Guarantee is solely from
the benefit of the Holders and is not separately transferable from the Preferred
Securities.
-7-
6.7 GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK.
6.8 SEVERABILITY. In case any provision of this Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired.
6.9 HEADINGS. The Article and section headings herein are for convenience
only and shall not affect the construction hereof.
-8-
IN WITNESS WHEREOF, CellNet has caused this Guarantee to be duly executed
to take effect as of the day and year first above written.
CellNet Data Systems, Inc.
By:
--------------------------------
Name: Xxxx X. Xxxxx
Title: President and Chief
Executive Officer
ATTEST:
-----------------------------
Secretary
CellNet Funding, LLC
By: CellNet Data Systems, Inc.,
its manager
By:
--------------------------------
Name: Xxxx X. Xxxxx
Title: President and Chief
Executive Officer
ATTEST:
-----------------------------
Secretary
-9-
