--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CELLNET DATA SYSTEMS, INC.,
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
------------
INDENTURE
Dated as of June 15, 1995
------------
$235,000,000
Aggregate Principal Amount At Maturity
13% Senior Discount Notes due 2005
Series B 13% Senior Discount Notes due 2005
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
--------------- ----------
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3). . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.08; 7.10;
11.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . 10.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . 10.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1). . . . . . . . . . . . . . . . . . . . . . . N.A.
(b)(2). . . . . . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . 7.06; 10.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . 4.07; 4.08;
10.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1). . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(2). . . . . . . . . . . . . . . . . . . . . . . 10.04
(c)(3). . . . . . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . . . . . 10.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . . . . . 7.05; 10.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence). . . . . . . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2). . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . 9.05
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . 10.01
(c) . . . . . . . . . . . . . . . . . . . . . . . . 10.01
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02 Incorporation by Reference of TIA. . . . . . . . . . . 34
Section 1.03 Rules of Construction. . . . . . . . . . . . . . . . . 35
ARTICLE TWO
THE NOTES
Section 2.01 Form and Dating. . . . . . . . . . . . . . . . . . . . 35
Section 2.02 Execution and Authentication; Aggregate
Principal Amount . . . . . . . . . . . . . . . . . . 36
Section 2.03 Registrar and Paying Agent . . . . . . . . . . . . . . 37
Section 2.04 Paying Agent To Hold Assets in Trust . . . . . . . . . 38
Section 2.05 Noteholder Lists . . . . . . . . . . . . . . . . . . . 39
Section 2.06 Transfer and Exchange. . . . . . . . . . . . . . . . . 39
Section 2.07 Replacement Notes. . . . . . . . . . . . . . . . . . . 40
Section 2.08 Outstanding Notes. . . . . . . . . . . . . . . . . . . 40
Section 2.09 Treasury Notes . . . . . . . . . . . . . . . . . . . . 41
Section 2.10 Temporary Notes. . . . . . . . . . . . . . . . . . . . 41
Section 2.11 Cancellation . . . . . . . . . . . . . . . . . . . . . 41
Section 2.12 Defaulted Interest . . . . . . . . . . . . . . . . . . 42
Section 2.13 CUSIP Number . . . . . . . . . . . . . . . . . . . . . 42
Section 2.14 Deposit of Monies. . . . . . . . . . . . . . . . . . . 43
Section 2.15 Restrictive Legends. . . . . . . . . . . . . . . . . . 43
Section 2.16 Book-Entry Provisions for Global Security. . . . . . . 45
Section 2.17 Special Transfer Provisions. . . . . . . . . . . . . . 47
Section 2.18 Liquidated Damages Under Registration
Rights Agreement . . . . . . . . . . . . . . . . . . 50
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee . . . . . . . . . . . . . . . . . . 51
Section 3.02 Selection of Notes To Be Redeemed. . . . . . . . . . . 51
Section 3.03 Notice of Redemption . . . . . . . . . . . . . . . . . 52
Section 3.04 Effect of Notice of Redemption . . . . . . . . . . . . 53
Section 3.05 Deposit of Redemption Price. . . . . . . . . . . . . . 53
Section 3.06 Notes Redeemed in Part . . . . . . . . . . . . . . . . 53
ARTICLE FOUR
COVENANTS
-i-
Page
----
Section 4.01 Payment of Notes . . . . . . . . . . . . . . . . . . . 54
Section 4.02 Maintenance of Office or Agency. . . . . . . . . . . . 54
Section 4.03 Corporate Existence. . . . . . . . . . . . . . . . . . 55
Section 4.04 Payment of Taxes and Other Claims. . . . . . . . . . . 55
Section 4.05 Maintenance of Properties and Insurance. . . . . . . . 55
Section 4.06 Compliance Certificate; Notice of Default. . . . . . . 56
Section 4.07 Compliance with Laws . . . . . . . . . . . . . . . . . 57
Section 4.08 SEC Reports and Other Information. . . . . . . . . . . 57
Section 4.09 Waiver of Stay, Extension or Usury Laws. . . . . . . . 59
Section 4.10 Limitation on Restricted Payments. . . . . . . . . . . 59
Section 4.11 Limitation on Transactions with Affiliates . . . . . . 63
Section 4.12 Limitation on Indebtedness and Preferred Stock . . . . 65
Section 4.13 Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries . . . 66
Section 4.14 Limitation on Designation of Restricted and
Unrestricted Subsidiaries. . . . . . . . . . . . . . 67
Section 4.15 Change of Control. . . . . . . . . . . . . . . . . . . 69
Section 4.16 Limitation on Asset Sales. . . . . . . . . . . . . . . 71
Section 4.17 Limitation on Preferred Stock of Restricted
Subsidiaries . . . . . . . . . . . . . . . . . . . . 76
Section 4.18 Limitation on Liens. . . . . . . . . . . . . . . . . . 76
Section 4.19 Limitation on Sale and Leaseback Transactions. . . . . 77
Section 4.20 Limitation on Consolidation, Merger, Etc. of
Restricted Subsidiaries. . . . . . . . . . . . . . . 77
Section 4.21 Calculation of Original Issue Discount . . . . . . . . 78
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Merger, Consolidation and Sale of Assets . . . . . . . 78
Section 5.02 Successor Corporation Substituted. . . . . . . . . . . 80
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default. . . . . . . . . . . . . . . . . . . 81
Section 6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . 83
Section 6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . 84
Section 6.04 Waiver of Past Defaults. . . . . . . . . . . . . . . . 84
Section 6.05 Control by Majority. . . . . . . . . . . . . . . . . . 85
Section 6.06 Limitation on Suits. . . . . . . . . . . . . . . . . . 85
Section 6.07 Rights of Holders To Receive Payment . . . . . . . . . 86
Section 6.08 Collection Suit by Trustee . . . . . . . . . . . . . . 86
Section 6.09 Trustee May File Proofs of Claim . . . . . . . . . . . 87
Section 6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . 87
Section 6.11 Undertaking for Costs. . . . . . . . . . . . . . . . . 88
ARTICLE SEVEN
-ii-
Page
----
TRUSTEE
Section 7.01 Duties of Trustee. . . . . . . . . . . . . . . . . . . 88
Section 7.02 Rights of Trustee. . . . . . . . . . . . . . . . . . . 90
Section 7.03 Individual Rights of Trustee . . . . . . . . . . . . . 91
Section 7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . 91
Section 7.05 Notice of Default. . . . . . . . . . . . . . . . . . . 92
Section 7.06 Reports by Trustee to Holders. . . . . . . . . . . . . 92
Section 7.07 Compensation and Indemnity . . . . . . . . . . . . . . 92
Section 7.08 Replacement of Trustee . . . . . . . . . . . . . . . . 94
Section 7.09 Successor Trustee by Merger, Etc.. . . . . . . . . . . 95
Section 7.10 Eligibility; Disqualification. . . . . . . . . . . . . 95
Section 7.11 Preferential Collection of Claims Against
Company. . . . . . . . . . . . . . . . . . . . . . . 95
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
Section 8.01 Termination of Company's Obligations . . . . . . . . . 96
Section 8.02 Application of Trust Money . . . . . . . . . . . . . . 98
Section 8.03 Repayment to the Company . . . . . . . . . . . . . . . 98
Section 8.04 Reinstatement. . . . . . . . . . . . . . . . . . . . . 99
Section 8.05 Acknowledgment of Discharge by Trustee . . . . . . . . 99
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders . . . . . . . . . . . . . . 100
Section 9.02 With Consent of Holders. . . . . . . . . . . . . . . . 101
Section 9.03 Compliance with TIA. . . . . . . . . . . . . . . . . . 102
Section 9.04 Revocation and Effect of Consents. . . . . . . . . . . 102
Section 9.05 Notation on or Exchange of Notes . . . . . . . . . . . 103
Section 9.06 Trustee To Sign Amendments, Etc. . . . . . . . . . . . 104
ARTICLE TEN
MISCELLANEOUS
Section 10.01 TIA Controls . . . . . . . . . . . . . . . . . . . . . 104
Section 10.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . 104
Section 10.03 Communications by Holders with Other Holders . . . . . 105
Section 10.04 Certificate and Opinion as to Conditions Precedent . . 106
Section 10.05 Statements Required in Certificate or Opinion. . . . . 106
Section 10.06 Rules by Trustee, Paying Agent, Registrar. . . . . . . 107
Section 10.07 Legal Holidays . . . . . . . . . . . . . . . . . . . . 107
Section 10.08 Governing Law. . . . . . . . . . . . . . . . . . . . . 107
Section 10.09 No Adverse Interpretation of Other Agreements. . . . . 107
Section 10.10 No Recourse Against Others . . . . . . . . . . . . . . 107
-iii-
Page
----
Section 10.11 Successors . . . . . . . . . . . . . . . . . . . . . . 108
Section 10.12 Duplicate Originals. . . . . . . . . . . . . . . . . . 108
Section 10.13 Severability . . . . . . . . . . . . . . . . . . . . . 108
Section 10.14 Independence of Covenants. . . . . . . . . . . . . . . 108
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Exhibit A - Form of Initial Note . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Exchange Note. . . . . . . . . . . . . . . . . . B-1
Exhibit C - Form of Certificate To Be Delivered
in Connection with Transfers to Non-QIB
Accredited Investors . . . . . . . . . . . . . . . . C-1
Exhibit D - Form of Certificate To Be Delivered in
Connection with Transfers Pursuant
to Regulation S. . . . . . . . . . . . . . . . . . . D-1
Exhibit E - Form of Tax Sharing Agreement. . . . . . . . . . . . . . E-1
Note: This Table of Contents shall not, for any purpose,
be deemed to be part of the Indenture.
-iv-
INDENTURE, dated as of June 15, 1995, between CellNet Data Systems,
Inc., a California corporation (the "COMPANY"), and The Bank of New York, a New
York banking corporation, as Trustee (the "TRUSTEE").
The Company has duly authorized the creation of an issue of 13% Senior
Discount Notes due 2005 (the "INITIAL NOTES") and Series B 13% Senior Discount
Notes due 2005 to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement (the "EXCHANGE NOTES" and, together with the
Initial Notes, the "NOTES") and, to provide therefor, the Company has duly
authorized the execution and delivery of this Indenture. All things necessary
to make the Notes, when duly issued and executed by the Company, and
authenticated and delivered hereunder, the valid obligations of the Company, and
to make this Indenture a valid and binding agreement of the Company, have been
done.
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCRETED VALUE" means, with respect to any Note, as of any date of
determination prior to December 15, 2000, the sum of (a) $532.726 and (b) the
portion of the excess of the principal amount of each Note over the amount which
shall have been accreted thereon through such date, such amount to be so
accreted on a daily basis at the rate of 13% per annum, compounded semi-annually
on each June 15 and December 15 from the Issue Date through the date of
determination.
"ACQUIRED INDEBTEDNESS" of any Person means Indebtedness of another
Person and any of such other Person's Subsidiaries existing at the time such
other Person becomes a Subsidiary of such Person or at the time it merges or
consolidates with such Person or any of such Person's Subsidiaries or is assumed
by such Person or any Subsidiary of such Person in connection with the
acquisition of assets from such other Person and in each case not Incurred by
such Person or any Subsidiary of such Person or such other Person in connection
with, or in anticipation or contemplation of, such other Person becoming a
Subsidiary of such Person or such acquisition, merger or consolidation.
"AFFILIATE" means, when used with reference to any Person, (i) any
other Person directly or indirectly controlling, controlled by, or under direct
or indirect common control with, the referent Person or such other Person, as
the case may be, or (ii) any director, officer or partner of such Person or any
Person specified in clause (i) above. For the purposes of this definition, the
-2-
term "CONTROL" when used with respect to any specified Person means the power to
direct or cause the direction of management or policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "AFFILIATED," "CONTROLLING" and "CONTROLLED" have
meanings correlative of the foregoing. Neither Xxxxx Xxxxxx Inc. nor any of its
Affiliates shall be deemed to be an Affiliate of the Company or of any of its
Subsidiaries or Affiliates. No Wholly Owned Restricted Subsidiary of the
Company shall be deemed to be an Affiliate of the Company or of any of its
Wholly Owned Restricted Subsidiaries.
"AFFILIATE TRANSACTION" has the meaning provided in Section 4.11.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"AGENT MEMBERS" has the meaning provided in Section 2.16.
"ASSET ACQUISITION" means (a) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company or shall be merged with or into the
Company or any Subsidiary of the Company, or (b) the acquisition by the Company
or any Subsidiary of the Company of assets of any Person comprising a division
or line of business of such Person or all or substantially all of the assets of
any Person.
"ASSET SALE" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other disposition for value (for purposes of this
definition, each a "DISPOSITION") by the Company or by any of its Restricted
Subsidiaries (including, without limitation, pursuant to any Sale and Leaseback
Transaction or any merger or consolidation of any Restricted Subsidiary of the
Company with or into another Person (other than the Company or any Qualified
Restricted Subsidiary) whereby such Restricted Subsidiary shall cease to be a
Restricted Subsidiary of the Company) to any Person of (i) any property or
assets of the Company or of any Restricted Subsidiary of the Company to the
extent that any such disposition is not in the ordinary course of business of
the Company or such Restricted Subsidiary or (ii) any Capital Stock of any
Restricted Subsidiary of the Company, other than (1) any issuance and sale of
Preferred Stock of a Restricted Subsidiary pursuant to clause (xi) of the
definition of Permitted Indebtedness, (2) any disposition to the Company,
(3) any disposition to any Qualified Restricted Subsidiary, (4) any disposition
made in accordance with Section 4.10, (5) any Lien to the extent that such Lien
is granted in compliance with Section 4.18, (6) any transaction or series of
related transactions consummated in accordance with Section 5.01 (except as
otherwise provided in the last paragraph of subsection (a) of Section 4.16),
(7) any transaction or series of related transactions for fair market value
resulting in net cash proceeds to the Company or such Restricted Subsidiary of
less than $10,000,000 in any fiscal year of the Company, (8) the sale or
discount, in each case without recourse (direct or indirect), of accounts
receivable arising in the ordinary course of
-3-
business of the Company or such Restricted Subsidiary, as the case may be, but
only in connection with the compromise or collection thereof, (9) disposals or
replacements of obsolete or worn out equipment in the ordinary course of
business of the Company or such Restricted Subsidiary, as the case may be,
(10) the factoring of accounts receivable arising in the ordinary course of
business of the Company or such Restricted Subsidiary, as the case may be,
pursuant to customary business terms, (11) the licensing in the ordinary course
of business of the Company or such Restricted Subsidiary, as the case may be, of
the use of the Company's or any of such Restricted Subsidiaries' intellectual
property or FCC Licenses, (12) any transfer of equipment in the ordinary course
of business from the Company or any Restricted Subsidiary to any other
Subsidiary of the Company or (13) the disposition to any Restricted Subsidiary
of contracts in respect of Qualified Projects entered into by the Company (not
previously entered into by any Restricted Subsidiary).
"AUTHENTICATING AGENT" has the meaning provided in Section 2.02.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, as to (a) any corporate Person, the board
of directors of such Person or any duly authorized committee thereof, (b) any
partnership, limited liability company or comparably organized Person which is
ultimately controlled by a corporate general partner, managing member or other
corporation, the "Board of Directors" of such corporation as specified in clause
(a) of this definition and (c) any partnership, limited liability company or
comparably organized Person which is ultimately controlled by individuals, such
controlling individuals.
"BOARD RESOLUTION" means, with respect to any Person, a duly adopted
resolution of the Board of Directors.
"BUSINESS DAY" means a day that is not a Legal Holiday.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including
each class of Common Stock and Preferred Stock of such Person, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the discounted
rental stream payable by such Person that is required to be classified and
accounted for as a capital lease obligation under GAAP and, for purposes of this
definition, the amount of such obligation at any date shall be the capitalized
amount of such obligation at such date, determined in accordance with GAAP. The
final maturity of any such obligation shall be the date of the last
-4-
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without penalty.
"CASH EQUIVALENTS" mean (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Xxxxx'x; (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Xxxxx'x;
(iv) certificates of deposit, Eurodollar deposits, or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of not
less than $500,000,000; (v) repurchase agreements and reverse repurchase
agreements maturing within one year from the date entered into with any bank
meeting the qualifications specified in clause (iv) above; and (vi) investments
in mutual funds and money market accounts investing at least 90% of the funds in
Investments of the types described in the foregoing clauses (i) through (v).
"CHANGE OF CONTROL" means the occurrence of one or more of the
following events (whether or not approved by the Board of Directors of the
Company):
(i) the Company consolidates with or merges with or into another
Person or the Company or any of its Subsidiaries, directly or indirectly,
sells, assigns, conveys, transfers, leases or otherwise disposes of, in one
transaction or a series of related transactions, all or substantially all
of the property or assets of the Company and its Subsidiaries (determined
on a consolidated basis) to any Person or group of related Persons for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable (a "GROUP OF PERSONS"), or any Person consolidates with, or
merges with or into, the Company (whether or not in compliance with the
terms of this Indenture), in any such event pursuant to a transaction in
which immediately after the consummation thereof the Persons owning Voting
Stock of the Company having greater than 50% of the total voting power of
the outstanding Voting Stock of the Company immediately prior to the
consummation of such transaction shall cease to own, directly or
indirectly, the Voting Stock of the surviving or transferee entity or of
the Company having greater than 50% of the total voting power of the
outstanding Voting Stock of such Person; or
-5-
(ii) the approval by the holders of Capital Stock of the Company of
any Plan of Liquidation (whether or not otherwise in compliance with the
provisions of this Indenture); or
(iii) any Person or Group of Persons either (1) is or becomes, by
purchase, tender offer, exchange offer, open market purchases, privately
negotiated purchases or otherwise, the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, whether or not applicable,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire at the time of
determination, whether such right is exercisable immediately or after the
passage at the time of determination of 90 days or less), directly or
indirectly, of Voting Stock of the Company having greater than 50% of the
total voting power of the outstanding Voting Stock of the Company (for the
purpose of this clause (iii), such Person or Group of Persons will be
deemed to "beneficially own" (determined as aforesaid) any Voting Stock of
a corporation (the "SPECIFIED CORPORATION") held by any other corporation
(the "PARENT CORPORATION") if such Person or Group of Persons "beneficially
owns," directly or indirectly, Voting Stock of such parent corporation
having a majority of the voting power of the outstanding Voting Stock of
such parent corporation) or (2) otherwise has the ability to elect,
directly or indirectly, a majority of the members of the Board of Directors
of the Company; PROVIDED, HOWEVER, that for purposes of this clause (iii),
a Person shall not be deemed the beneficial owner of any securities in
respect of which beneficial ownership by such Person arises solely as a
result of a revocable proxy delivered in response to a proxy or consent
solicitation that is made pursuant to, and in accordance with applicable
law for a shareholder meeting, or, if the Company is at the time required
to file reports under Section 13 or 15 of the Exchange Act, the Exchange
Act and is not then reportable on Schedule 13D (or any successor schedule,
form or report) under the Exchange Act; or
(iv) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors
or whose nomination for election by the stockholders of the Company was
approved by a vote of a majority of the directors of the Company then still
in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors of the
Company then in office.
For purposes of the foregoing definition of Change of Control, the
transfer (by lease, assignment, sale or otherwise, in a single transaction or
series of related transactions) of all or substantially all of the properties or
assets of one or more Subsidiaries of the Company, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Company,
-6-
shall be deemed to be the transfer of all or substantially all of the properties
and assets of the Company.
"CHANGE OF CONTROL OFFER" has the meaning provided in Section 4.15.
"CHANGE OF CONTROL PAYMENT DATE" has the meaning provided in
Section 4.15.
"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"COMPANY" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"CONSOLIDATED EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income of such
Person for such period, PLUS (ii) to the extent that any of the following shall
have been taken into account in determining such Consolidated Net Income,
(A) all income taxes of such Person and its Restricted Subsidiaries paid or
accrued in accordance with GAAP for such period (other than income taxes
attributable to extraordinary, unusual or nonrecurring gains or losses or taxes
attributable to sales or dispositions of assets outside the ordinary course of
business), (B) Consolidated Interest Expense for such Person for such period,
(C) amortization expense (including the amortization of deferred financing
charges) and depreciation expense for such Person and its Restricted
Subsidiaries for such period, and (D) other non-cash items (other than non-cash
interest) reducing Consolidated Net Income for such Person and its Restricted
Subsidiaries for such period, other than any non-cash item for such period that
requires the accrual of or a reserve for cash charges for any future period and
other than any non-cash charge for such period constituting an extraordinary
item of loss, LESS (iii) (A) all non-cash items increasing Consolidated Net
Income for such Person and its Restricted Subsidiaries for such period and
(B) all cash payments during such period relating to non-cash items that were
added back in determining Consolidated EBITDA in any prior period.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the sum of, without duplication, (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period, on a
consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" of any Person means, for any period, the
aggregate net income (or loss) of such Person and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
PROVIDED, HOWEVER, that there shall be excluded therefrom (a) net after-tax
gains
-7-
and losses from all sales or other dispositions of assets outside the ordinary
course of business, (b) net after-tax extraordinary or nonrecurring gains or
losses, (c) the net income of any Person acquired in a "pooling of interests"
transaction accrued prior to the date it becomes a Restricted Subsidiary of such
Person or is merged or consolidated with such Person or any Restricted
Subsidiary, (d) the cumulative effect of a change in accounting principles,
(e) any net income of any other Person if such other Person is not a Restricted
Subsidiary and is accounted for by the equity method of accounting, except that
such Person's equity in the net income of any such other Person for such period
shall be included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such other Person during such period to such Person
or a Restricted Subsidiary as a dividend or other distribution (subject, in the
case of a dividend or other distribution to a Restricted Subsidiary, to the
limitation that such amount so paid to a Restricted Subsidiary shall be excluded
to the extent that such amount could not at that time be paid to the Company or
a Qualified Restricted Subsidiary due to the restrictions set forth in
clause (f) below (regardless of any waiver of such conditions)), (f) any net
income of any Restricted Subsidiary if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, by contract, operation of law, pursuant to
its charter or otherwise on the payment of dividends or the making of
distributions by such Restricted Subsidiary to such Person, except that (A) such
Person's equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the aggregate
amount of cash that could have been paid or distributed during such period to
such Person or a Qualified Restricted Subsidiary as a dividend or other
distribution (provided that such ability is not due to a waiver of such
restriction) and (B) such Person's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income, (g) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of Consolidated Net
Income accrued at any time following the Issue Date, (h) income or loss
attributable to discontinued operations (including, without limitation,
operations disposed of during such period whether or not such operations were
classified as discontinued), and (i) in the case of a successor to such Person
by consolidation or merger or as a transferee of such Person's assets, any net
income or loss of the successor corporation prior to such consolidation, merger
or transfer of assets.
"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean, with respect to any
Person, on any date, without duplication, the aggregate outstanding principal
amount of Indebtedness of such Person and its Restricted Subsidiaries.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEBT TO CASH FLOW RATIO" means, as to any Person, the ratio of
(i) the Consolidated Total Indebtedness of such Person as of the date of
calculation (the "DETERMINATION DATE") to (ii) the product of (A) the
Consolidated EBITDA of such Person for the full fiscal quarter for which
-8-
financial information is available ending not more than 135 days prior to the
transaction or event giving rise to the need to calculate the Debt to Cash Flow
Ratio (such fiscal quarter, the "MEASUREMENT PERIOD") and (B) four.
For purposes of this definition, the Consolidated Total Indebtedness
of the Person as of the Determination Date shall be adjusted as if the
Indebtedness giving rise to the need to perform such calculation had been
Incurred and the proceeds therefrom had been applied on the Determination Date.
For purposes of calculating Consolidated EBITDA of the Company for the
Measurement Period immediately prior to the relevant Determination Date, (I) any
Person that is a Restricted Subsidiary on such Determination Date (or would
become a Restricted Subsidiary on such Determination Date in connection with the
transaction that requires the determination of such ratio) will be deemed to
have been a Restricted Subsidiary at all times during such Measurement Period,
(II) any Person that is not a Restricted Subsidiary on such Determination Date
(or would cease to be a Restricted Subsidiary on such Determination Date in
connection with the transaction that requires the determination of such ratio)
will be deemed not to have been a Restricted Subsidiary at any time during such
Measurement Period and (III) if the Company or any Restricted Subsidiary shall
have in any manner (x) acquired (including through an Asset Acquisition or the
commencement of activities constituting such operating business) or (y) disposed
of (including by way of an Asset Sale or the termination or discontinuance of
activities constituting such operating business) of any operating business
during the Measurement Period or after the end of such Measurement Period and on
or prior to the Determination Date, such calculation will be made on a PRO FORMA
basis in accordance with GAAP as if, in the case of an Asset Acquisition or the
commencement of activities constituting such operating business, all such
transactions had been consummated on the first day of such Measurement Period
and, in the case of an Asset Sale or termination or discontinuance of activities
constituting such operating business, all such transactions had been consummated
prior to the first day of such Measurement Period; PROVIDED, HOWEVER, that such
PRO FORMA adjustment shall not give effect to the Consolidated EBITDA of any
acquired Person to the extent that such Person's net income would be excluded
pursuant to clause (f) of the definition of Consolidated Net Income.
"DEFAULT" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DEPOSITORY" means The Depository Trust Company, its nominees and
successors.
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, is required to be
redeemed or is redeemable (at the option of the holder thereof) at any time
prior to the earlier of the repayment of all Notes or the stated maturity of the
Notes
-9-
or is exchangeable for Indebtedness at any time prior to the earlier of the
repayment of all Notes or the stated maturity of the Notes.
"EVENT OF DEFAULT" has the meaning provided in Section 6.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"EXCHANGE NOTES" has the meaning provided in the preamble to this
Indenture.
"FAIR MARKET VALUE" or "FAIR VALUE" means, with respect to any asset
or property, the price which could be negotiated in an arm's-length, free market
transaction, for cash, between an informed and willing seller and an informed
and willing and able buyer, neither of whom is under undue pressure or
compulsion to complete the transaction. Fair market value shall be determined
by the Board of Directors of the Company acting in good faith and shall be
evidenced by a Board Resolution (certified by the Secretary or Assistant
Secretary of the Company) delivered to the Trustee; PROVIDED, HOWEVER, that if
(A) the aggregate non-cash consideration to be received by the Company or any of
its Subsidiaries from any Asset Sale shall reasonably be expected to exceed
$5,000,000 or (B) the net worth of any Restricted Subsidiary to be designated as
an Unrestricted Subsidiary shall reasonably be expected to exceed $10,000,000,
in each case, upon completion of the transaction occasioning such calculation,
then fair market value shall be determined by an Independent Financial Advisor.
"FCC LICENSE" means an authorization that has been duly granted by the
Federal Communications Commission approving the control and use of specified
frequencies by the licensed Person.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"GLOBAL NOTE" has the meaning provided in Section 2.01.
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation of such other Person (whether arising by virtue
of partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement
-10-
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); PROVIDED, HOWEVER, that the term "GUARANTEE" shall not include (a)
endorsements for collection or deposit in the ordinary course of business, or
(b) commitments to make Permitted Investments in Restricted Subsidiaries. The
term "GUARANTEE" used as a verb has a corresponding meaning.
"HOLDER" or "NOTEHOLDER" means the Person in whose name a Note is
registered on the Registrar's books.
"INCUR" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "INCURRENCE," "INCURRED," "INCURRABLE" and "INCURRING" shall have meanings
correlative to the foregoing).
"INDEBTEDNESS" means with respect to any Person, without duplication,
whether contingent or otherwise, (i) any obligation for money borrowed, (ii) any
obligation evidenced by bonds, debentures, notes, or other similar instruments,
(iii) reimbursement obligations in respect of letters of credit or other similar
instruments, (iv) any obligation to pay the deferred purchase price of property
or services including Capitalized Lease Obligations, (v) the maximum fixed
redemption or repurchase price of Disqualified Capital Stock, (vi) indebtedness
of others of the types described in clauses (i) through (v) above, secured by a
lien on the assets of such Person or its Restricted Subsidiaries, valued, in
such cases where the recourse thereof is limited to such assets, at the lesser
of the principal amount of such Indebtedness or the fair market value of the
subject assets, (vii) indebtedness of others of the types described in
clauses (i) through (v) above, guaranteed by such Person or its Restricted
Subsidiaries and (viii) all obligations of such Person under Interest Swap
Obligations; PROVIDED, HOWEVER, that the amount of any Indebtedness at any date
shall be the outstanding balance of all unconditional obligations and the
maximum liability of any contingent obligations at such date. Notwithstanding
the foregoing, "INDEBTEDNESS" shall not be construed to include trade payables,
credit on open account, accrued liabilities or daylight overdrafts. For
purposes hereof, the "MAXIMUM FIXED REDEMPTION OR REPURCHASE PRICE" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock. The amount outstanding at any time of any Indebtedness issued with
original issue discount is the full amount of such Indebtedness less the
remaining unamortized portion
-11-
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal,
investment banking or consulting firm of nationally recognized standing that is,
in the reasonable and good faith judgment of the Board of Directors of the
Company, qualified to perform the task for which such firm has been engaged and
disinterested and independent with respect to the Company and its Affiliates.
"INITIAL NOTES" has the meaning provided in the preamble to this
Indenture.
"INITIAL PURCHASER" means Xxxxx Xxxxxx Inc.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST PAYMENT DATE" means the stated maturity of an installment of
interest on the Notes.
"INTEREST SWAP OBLIGATIONS" means the obligations of any Person under
any interest rate protection agreement, interest rate future, interest rate
option, interest rate swap, interest rate cap or other interest rate hedge or
arrangement.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"INVESTMENT" by any Person means any direct or indirect (i) loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other property or assets (valued at the fair market value
thereof as of the date of transfer) to other Persons or payments for property or
services for the account or use of other Persons, or otherwise); (ii) purchase
or acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidences of Indebtedness issued by any other Person (whether by merger,
consolidation, amalgamation or otherwise and whether or not purchased directly
from the issuer of such securities or evidences of Indebtedness);
(iii) guarantee or assumption of any Indebtedness or any other obligation of any
other Person (except for an assumption of Indebtedness for which the assuming
Person receives consideration at the time of such assumption in the form of
property or assets with a fair market value at least equal to the principal
amount of the Indebtedness assumed); (iv) the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or other
beneficial ownership of any Person; and (v) all other items that would be
classified as investments
-12-
(including, without limitation, purchases of assets outside the ordinary course
of business) on a balance sheet of such Person prepared in accordance with GAAP.
Notwithstanding the foregoing, the purchase or acquisition of any securities of
any other Person solely with Qualified Capital Stock shall not be deemed to be
an Investment. Investments shall exclude extensions of trade credit and
advances to customers and suppliers to the extent made in the ordinary course of
business on ordinary business terms. The amount of any non-cash Investment
shall be the fair market value of such Investment, as determined conclusively in
good faith by management of the Company unless the fair market value of such
Investment exceeds $5,000,000, in which case the fair market value shall be
determined conclusively in good faith by the Board of Directors of the Company
at the time such Investment is made. The amount of any Investment shall not be
adjusted for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"ISSUE DATE" means June 15, 1995, the date of original issuance of the
Notes.
"LEGAL HOLIDAY" has the meaning provided in Section 10.07.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or other similar encumbrance (including without
limitation, any conditional sale or other title retention agreement or lease in
the nature thereof, any option or other agreement to sell, and any filing of or
agreement to give, any security interest).
"MATERIAL SUBSIDIARY" means, at any date of determination, any
Subsidiary of the Company which together with its Subsidiaries and each
Defaulting Subsidiary (as defined below) either (A) had assets which, as of the
date of the Company's most recent quarterly consolidated balance sheet,
constituted at least 25% of the Company's total assets on a consolidated basis
as of such date, in each case determined in accordance with GAAP, or (B) had
EBITDA for the 12-month period ending on the date of the Company's most recent
quarterly consolidated statement of income which constituted at least 25% of the
Company's Consolidated EBITDA (such calculation of Consolidated EBITDA of the
Company for the purposes of this definition to be calculated without giving
effect to clause (f) of the definition of Consolidated Net Income) for such
period in each case as determined in accordance with GAAP. "DEFAULTING
SUBSIDIARY" means any Subsidiary of the Company with respect to which an event
described under clause (iv), (v), (vii), (viii) or (ix) of Section 6.01 has
occurred and is continuing, determined as if the references to the words
"Material Subsidiary" in each such clause were a reference to the words
"Subsidiary of the Company" therein.
"MATURITY DATE" means June 15, 2005.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and its successors.
-13-
"NET CASH PROCEEDS" mean, with respect to any Asset Sale, the proceeds
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents received by the Company or any of its Restricted Subsidiaries from
such Asset Sale, net of (a) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, brokerage, legal, accounting
and investment banking fees and sales commissions), (b) taxes paid or payable
after taking into account any reduction in tax liability due to available tax
credits or deductions and any tax sharing arrangements, (c) repayment of
Indebtedness (other than any intercompany Indebtedness) that is required by the
terms thereof to be repaid or pledged as cash collateral, or the holders of
which otherwise have a contractual claim which is legally superior to that of
the Holders (including a restriction on transfer) to the proceeds of the subject
assets, in connection with such Asset Sale and (d) appropriate amounts to be
provided by the Company or any Restricted Subsidiary of the Company, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary of the Company, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale.
"NET EQUITY PROCEEDS" mean (a) in the case of any sale by the Company
of Qualified Capital Stock of the Company, the aggregate net proceeds received
by the Company, after payment of expenses, commissions and the like (including,
without limitation, brokerage, legal, accounting and investment banking fees and
commissions) incurred in connection therewith, and (b) in the case of any
exchange, exercise, conversion or surrender of any outstanding Indebtedness of
the Company or any Restricted Subsidiary of the Company for or into shares of
Qualified Capital Stock of the Company, the amount of such Indebtedness (or, if
such Indebtedness was issued at an amount less than the stated principal amount
thereof, the accrued amount thereof as determined in accordance with GAAP) as
reflected in the consolidated financial statements of the Company prepared in
accordance with GAAP as of the most recent date next preceding the date of such
exchange, exercise, conversion or surrender (plus any additional amount required
to be paid by the holder of such Indebtedness to the Company or to a Qualified
Restricted Subsidiary of the Company upon such exchange, exercise, conversion or
surrender and less any and all payments made to the holders of such
Indebtedness, and all other expenses incurred by the Company in connection
therewith), in the case of each of (a) and (b) above to the extent consummated
after the Issue Date; PROVIDED, HOWEVER, that Net Equity Proceeds shall not
include or be deemed to include (A) the exchange, exercise, conversion or
surrender of any Indebtedness outstanding or Incurred on the Issue Date that is
subordinated (whether pursuant to its terms or by operation of law) to the
Notes, (B) any Net Equity Proceeds from a Public Equity Offering to the extent
utilized to redeem the Notes and (C) the issuance of equity of the Company
(including, without limitation, any warrants to acquire equity) as a unit with
the Notes on the Issue Date.
-14-
"NET PROCEEDS OFFER" has the meaning provided in Section 4.16.
"NET PROCEEDS OFFER AMOUNT" has the meaning provided in Section 4.16.
"NET PROCEEDS OFFER PAYMENT DATE" has the meaning provided in
Section 4.16.
"NET PROCEEDS OFFER TRIGGER DATE" has the meaning provided in
Section 4.16.
"NON-U.S. PERSON" means a person who is not a U.S. person, as defined
in Regulation S.
"NOTES" mean the Initial Notes and the Exchange Notes treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.
"OBLIGATIONS" mean all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFERING MEMORANDUM" means the Confidential Private Placement
Offering Memorandum dated June 14, 1995 of the Company relating to the offering
of the Notes.
"OFFICER" means, with respect to any Person, the Chairman of the Board
of Directors, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer, the Treasurer, the Controller, or the Secretary of
such Person, or any other officer designated by the Board of Directors serving
in a similar capacity.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 10.04 and 10.05, as they relate to the making of an
Officers' Certificate.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of
Sections 10.04 and 10.05, as they relate to the giving of an Opinion of Counsel.
"PAYING AGENT" has the meaning provided in Section 2.03.
"PAYMENT RESTRICTION" has the meaning provided in Section 4.13.
"PERMITTED INDEBTEDNESS" means, without duplication, each of the
following:
-15-
(i) Indebtedness Incurred by the Company under the Initial Notes and
the Exchange Notes and any Refinancing Indebtedness Incurred to Refinance
such Indebtedness;
(ii) Indebtedness Incurred by the Company under revolving credit and
letter of credit facilities and any Refinancing Indebtedness Incurred to
Refinance such Indebtedness to the extent that the aggregate principal
amount at any time outstanding of such Indebtedness and any such
Refinancing Indebtedness does not exceed $25,000,000;
(iii) Indebtedness of the Company and its Subsidiaries outstanding on
the Issue Date and reflected in the financial statements set forth in the
Offering Memorandum as in effect on the Issue Date reduced by the amount
of any scheduled amortization payments or mandatory prepayments when
actually paid or permanent reductions thereon and any Refinancing
Indebtedness Incurred to Refinance such Indebtedness;
(iv) Indebtedness of the Company or of any Restricted Subsidiary of
the Company under Interest Swap Obligations; PROVIDED, HOWEVER, that such
Interest Swap Obligations are entered into to protect the Company or such
Subsidiary from fluctuations in interest rates on Indebtedness Incurred in
accordance with this Indenture (as determined in good faith by a senior
financial officer of the Company), to the extent the notional principal
amount of such Interest Swap Obligation does not exceed the principal
amount of the Indebtedness to which such Interest Swap Obligation relates;
(v) additional Indebtedness Incurred by the Company or by any of its
Restricted Subsidiaries and any Refinancing Indebtedness Incurred to
Refinance such Indebtedness to the extent that the aggregate principal
amount at any time outstanding of such Indebtedness and any such
Refinancing Indebtedness does not exceed the greater of (x) $25,000,000 and
(y) the product of (I) Consolidated EBITDA of the Company for the most
recently ended fiscal quarter for which financial statements are available
ending not more than 135 days prior to the date of determination and
(II) four;
(vi) Indebtedness of a direct or indirect Restricted Subsidiary to the
Company for so long as such Indebtedness is held by the Company or a direct
or indirect Qualified Restricted Subsidiary in each case subject to no Lien
held by any Person other than the Company or a Qualified Restricted
Subsidiary of the Company; PROVIDED, HOWEVER, that if as of any date any
Person other than the Company or a direct or indirect Qualified Restricted
Subsidiary owns or holds any such Indebtedness or holds a Lien in respect
of such Indebtedness, such date shall be deemed the Incurrence of
Indebtedness not constituting Permitted Indebtedness under this clause (vi)
by the issuer of such Indebtedness;
-16-
(vii) Indebtedness of the Company or of a direct or indirect
Restricted Subsidiary to any direct or indirect Restricted Subsidiary of the
Company for so long as such Indebtedness is held by the Company or by a
direct or indirect Qualified Restricted Subsidiary in each case subject to
no Lien held by any Person other than the Company or a Qualified Restricted
Subsidiary; PROVIDED, HOWEVER, that (a) any Indebtedness of the Company to
any direct or indirect Subsidiary of the Company is unsecured and evidenced
by an intercompany promissory note that, other than in the case of a
foreign Restricted Subsidiary, is subordinated to the Company's obligations
under this Indenture and the Notes, and (b) if as of any date any Person
other than the Company or a direct or indirect Qualified Restricted
Subsidiary owns or holds any such Indebtedness or holds a Lien in respect
of such Indebtedness, such date shall be deemed the Incurrence of
Indebtedness not constituting Permitted Indebtedness under this clause
(vii) by the issuer of such Indebtedness;
(viii) (A) Indebtedness of any corporation that becomes a Restricted
Subsidiary after the Issue Date which Indebtedness existed at the time such
corporation becomes a Restricted Subsidiary; PROVIDED, HOWEVER, that (a)
such Indebtedness was not Incurred as a result of or in connection with or
anticipation of such corporation becoming a Restricted Subsidiary, (b)
immediately before and immediately after giving effect to such corporation
becoming a Restricted Subsidiary, the Company could Incur at least $1.00 of
additional Indebtedness in accordance with the Debt to Cash Flow Ratio test
of paragraph (b) of Section 4.12 and (c) such Indebtedness is without
recourse to the Company or to any of its Subsidiaries or to any of their
respective properties or assets other than the Person becoming a Restricted
Subsidiary or its properties and assets and (B) any Refinancing
Indebtedness Incurred to Refinance such Indebtedness;
(ix) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business;
PROVIDED, HOWEVER, that such Indebtedness is extinguished within three
Business Days of its Incurrence;
(x) (A) Indebtedness Incurred or Preferred Stock issued by any
Restricted Subsidiary, the proceeds of which will be used to finance
Qualified Projects; PROVIDED, HOWEVER, that no such Indebtedness may,
except as permitted by clause (xi) below of this definition and by
Section 4.20, be Incurred directly or indirectly by any other Restricted
Subsidiary in respect of such Indebtedness pursuant to a guarantee, pledge
of assets, assumption or otherwise or as a result of or pursuant to the
merger or consolidation of any other Restricted Subsidiary with or into the
Restricted Subsidiary Incurring the Indebtedness pursuant to this clause
(x) and (B) any Refinancing Indebtedness Incurred to Refinance such
Indebtedness;
-17-
(xi) Indebtedness Incurred by any Restricted Subsidiary pursuant to a
guarantee or assumption in respect of any Indebtedness of any other
Restricted Subsidiary Incurred by such other Restricted Subsidiary pursuant
to clause (x) of this definition (including Refinancing Indebtedness
Incurred pursuant to subclause (B) thereof); PROVIDED, HOWEVER, that no
such Indebtedness (including Refinancing Indebtedness Incurred pursuant to
subclause (B) of clause (x) of this definition) of such other Restricted
Subsidiary may be guaranteed or otherwise assumed pursuant to this clause
(xi) unless either (1) at the time of such guarantee or assumption the Debt
to Cash Flow Ratio of the Company is less than or equal to 6.0 to 1.0 or
(2) at the time of such guarantee or assumption (after giving effect
thereto) the total contribution to the Consolidated EBITDA of the Company
(such Consolidated EBITDA to be calculated for purposes of this clause (xi)
without giving effect to clause (f) of the definition of Consolidated Net
Income) for the most recently ended fiscal quarter for which financial
information is available ending not more than 135 days prior to the date of
determination of the Restricted Subsidiaries which have Incurred
Indebtedness or issued Preferred Stock pursuant to clause (x) of this
definition (which such Indebtedness or Preferred Stock is outstanding at
the time of determination) and of the Restricted Subsidiaries which have
guaranteed or otherwise assumed such outstanding Indebtedness pursuant to
this clause (xi) (which such guarantee or assumption is in effect) is not
in excess of 25% of such Consolidated EBITDA; and
(xii) Indebtedness in respect of Cash Equivalents pursuant to clause
(v) of the definition thereof.
"PERMITTED INVESTMENTS" mean, without duplication, each of the
following:
(a) Investments in cash (including deposit accounts with major
commercial banks) and Cash Equivalents;
(b) Investments by the Company or by any Restricted Subsidiary in any
Person that is or will become immediately after such Investment a direct or
indirect Wholly Owned Restricted Subsidiary; PROVIDED, HOWEVER, that
(A) for purposes of calculating at any date the aggregate amount of
Investments made since the Issue Date under Section 4.10, such Investment
shall be a Permitted Investment only so long as any such Subsidiary in
which the Investment has been made meets the conditions set forth in this
clause (b), (B) no such Investment may be made in any Restricted Subsidiary
by the Company pursuant to a guarantee or other assumption of such
Restricted Subsidiary's Indebtedness, (C) no such Investment may be made in
any Restricted Subsidiary by another Restricted Subsidiary pursuant to a
guarantee or other assumption of such Restricted Subsidiary's Indebtedness
unless permitted by clause (xi) of the definition of Permitted Indebtedness
and (D) no Investment of properties, assets or contracts (other than cash
capital contributions and hardware
-18-
and equipment) may be made in any Wholly Owned Restricted Subsidiary that
is not (or will not be as a result of or in connection with or in
anticipation of the transaction in question) a Qualified Restricted
Subsidiary unless at the time of such Investment either (x) the Debt to
Cash Flow Ratio of the Company is less than or equal to 6.0 to 1.0 or (y)
the total contribution to the Consolidated EBITDA of the Company (such
Consolidated EBITDA to be calculated for purposes of this subclause (D) of
this clause (b) without giving effect to clause (f) of the definition of
Consolidated Net Income) for the most recently ended fiscal quarter for
which financial information is available ending not more than 135 days
prior to the date of determination of the Restricted Subsidiaries which are
not Qualified Restricted Subsidiaries is not in excess of 25% of such
Consolidated EBITDA;
(c) any Investments in the Company by any Subsidiary of the Company;
PROVIDED, HOWEVER, that any Indebtedness evidencing such Investment is
subordinated, pursuant to a written agreement, to the Company's obligations
in respect of the Notes and this Indenture;
(d) Investments consisting of non-cash consideration made or held by
the Company or by its Subsidiaries as a result of an Asset Sale made in
compliance with Section 4.16;
(e) Investments existing on the Issue Date;
(f) loans and advances to employees and officers of the Company and
the Restricted Subsidiaries made in the ordinary course of business in an
aggregate amount outstanding at any time not to exceed $1,000,000 for all
Investments pursuant to this clause (f);
(g) accounts receivable created or acquired in the ordinary course of
business of the Company or any Restricted Subsidiary and on ordinary
business terms;
(h) Investments arising from transactions by the Company or any
Restricted Subsidiary with trade creditors or customers in the ordinary
course of business (including any such Investment received pursuant to any
plan of reorganization or similar arrangement pursuant to the bankruptcy
or insolvency of such trade creditors or customers or otherwise in
settlement of a claim);
(i) additional Investments in an aggregate amount outstanding at any
time not to exceed $10,000,000 for all Investments pursuant to this clause
(i);
(j) Investments in joint ventures, partnerships, or other business
ventures in an aggregate amount outstanding at any time not to exceed
$15,000,000 for all Investments pursuant to this clause (j);
-19-
(k) Investments consisting of (i) licensing or sublicensing of FCC
Licenses or intellectual property of the Company or any Restricted
Subsidiary in the ordinary course of business, (ii) the transfer of
equipment from the Company or any Restricted Subsidiary to any other
Subsidiary in the ordinary course of business, and (iii) the sharing or
contribution of services of employees among any one or more of the Company
and its Subsidiaries in the ordinary course of business;
(l) loans in the ordinary course of business to employees of the
Company to purchase Capital Stock of the Company pursuant to the terms of
employee stock benefit plans; and
(m) the sale, conveyance, transfer, lease, assignment or other
disposition to any Restricted Subsidiary of contracts in respect of
Qualified Projects entered into by the Company (not previously entered into
by any Restricted Subsidiary).
"PERMITTED LIENS" mean, without duplication, each of the following:
(i) pledges or deposits by such Person under worker's compensation
laws, unemployment insurance laws or similar legislation (other than the
Employee Retirement Income Security Act of 1974, as amended), or good faith
deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or
deposits to secure public statutory obligations of such Person or deposits
to secure surety or appeal bonds to which such Person is a party, or
deposits as security for contested taxes or import duties or for the
payment of rent;
(ii) Liens imposed by law, such as landlords', carriers',
warehousemen's and mechanics' Liens or bankers' Liens incurred in the
ordinary course of business for sums which are not yet due or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and for which adequate provision has been made;
(iii) Liens for taxes not yet subject to penalties for non-payment or
which are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, if adequate reserve, as may be
required by generally accepted accounting principles, shall have been made
therefor;
(iv) Liens in favor of issuers of surety bonds or appeal bonds issued
pursuant to the request of and for the account of such Person in the
ordinary course of its business;
(v) Liens to support trade letters of credit issued in the ordinary
course of business;
-20-
(vi) survey exceptions, encumbrances, easements or reservations of, or
rights of others for, rights of way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
restrictions on the use of real property;
(vii) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default;
(viii) Liens in favor of the Company or any Qualified Restricted
Subsidiary;
(ix) Liens securing Acquired Indebtedness Incurred in accordance with
Section 4.12; PROVIDED, HOWEVER, that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the Incurrence of such Acquired
Indebtedness by the Company and were not granted as a result of, in
connection with or in anticipation of, the Incurrence of such Acquired
Indebtedness by the Company and (B) such Liens do not extend to or cover
any property or assets of the Company or of any of its Subsidiaries other
than the property or assets that secured the Acquired Indebtedness prior to
the time such Indebtedness became Acquired Indebtedness of the Company and
are no more favorable to the lienholders than those securing the Acquired
Indebtedness prior to the Incurrence of such Acquired Indebtedness by the
Company;
(x) Liens granted by the Company or by any Restricted Subsidiary to
secure Indebtedness Incurred in accordance with this Indenture which
Indebtedness represents all or part of the purchase price of assets or
property acquired or constructed in the ordinary course of business after
the Issue Date from a Person that is not an Affiliate of the Company;
PROVIDED, HOWEVER, that (A) the aggregate amount of Indebtedness secured by
such Liens shall not exceed the fair market value (or, if less, the cost)
of the assets or property so acquired or constructed and (B) such Liens
shall not encumber any other assets or property of the Company or of any
Restricted Subsidiary (except proceeds, products, attachments and
accessions) and shall attach to such assets or property within 120 days of
the acquisition of such assets or property;
(xi) Liens on the assets or property of a Person that becomes a
Restricted Subsidiary after the Issue Date to the extent that such Liens
are existing at the time such Person became a Restricted Subsidiary and
were not granted as a result of, in connection with or in anticipation of
such Person becoming a Restricted Subsidiary; PROVIDED, HOWEVER, that (A)
the Indebtedness (if any) secured thereby is Incurred in accordance with
this Indenture and (B) such Liens do not extend to or cover any assets or
property of the Company or of any Restricted Subsidiary, other than the
assets or property so acquired (together with proceeds and products thereof
and attachments and accessions thereto);
-21-
(xii) Liens to secure Capitalized Lease Obligations, including in
respect of Sale and Leaseback Transactions of property or assets to the
extent consummated in compliance with Section 4.12; PROVIDED, HOWEVER, that
such Liens do not extend to or cover any property or assets of the Company
or of any Restricted Subsidiary, other than the property or assets subject
to such Capitalized Lease Obligations;
(xiii) Liens in respect of Refinancing Indebtedness Incurred to
Refinance any of the Indebtedness set forth in clauses (ix), (x), (xi),
(xii) above and clauses (xviii), (xx), (xxi) and (xxii) below; PROVIDED,
HOWEVER, that such Liens in respect of such Refinancing Indebtedness (A)
are no less favorable to the Holders in any material respect and are not
more favorable to the lienholders in any material respect with respect to
such Liens than the Liens in respect of the Indebtedness being Refinanced
and (B) do not extend to or cover any properties or assets of the Company
or of any Restricted Subsidiary, other than the property or assets that
secured the Indebtedness being Refinanced;
(xiv) Liens to the extent granted or existing in respect of specific
items of inventory or other goods and proceeds thereof of any Person
securing such Person's Obligations in respect of bankers' acceptances
arising in the ordinary course of business if and to the extent issued or
created for the account of such Person to facilitate the purchase,
shipment, or storage of such specific items of inventory or other goods;
(xv) Liens in favor of the Trustee for the benefit of the Noteholders
arising under Section 4.18(A) hereof;
(xvi) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements of the
Company or any Restricted Subsidiary if and to the extent arising in the
ordinary course of business, including rights of offset and set-off;
(xvii) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(xviii) Liens existing on the Issue Date to the extent and in the
manner existing on the Issue Date;
(xix) Liens arising from filing UCC financing statements for
precautionary purposes in connection with true leases of real or personal
property that are otherwise permitted under the Indenture and under which
the Company or any Restricted Subsidiary is a lessee;
(xx) Liens on property or assets of a Restricted Subsidiary securing
Indebtedness Incurred by such Restricted Subsidiary in accordance with
clause (x) of the definition of Permitted Indebtedness; PROVIDED,
-22-
HOWEVER, that such Liens do not extend to or cover any property or assets
of the Company or of any Restricted Subsidiary other than the property or
assets of such Restricted Subsidiary;
(xxi) Liens on property or assets of any Restricted Subsidiary that
has Incurred Indebtedness pursuant to clause (xi) of the definition of
Permitted Indebtedness securing such Indebtedness; PROVIDED, HOWEVER, that
such Liens do not extend to or cover any other property or assets of the
Company or any other Restricted Subsidiary;
(xxii) Liens on property or assets of the Company (other than the
capital stock of its Subsidiaries) securing Indebtedness Incurred under
clause (ii) of the definition of Permitted Indebtedness; PROVIDED, HOWEVER,
that such Liens do not extend to or cover any property or assets of any
Subsidiary of the Company; and
(xxiii) Liens consisting of pledges of the Capital Stock of
Subsidiaries of the Company securing Indebtedness Incurred pursuant to
clauses (x) and (xi) of the definition of Permitted Indebtedness.
"PERMITTED STOCK REPURCHASE" means (1) the repurchase, redemption,
retirement or acquisition of Capital Stock, or warrants, options or rights to
acquire such Capital Stock, of the Company that is at the time of such
repurchase, redemption, retirement or acquisition held by an employee, officer
or director of the Company or any Subsidiary of the Company or a permitted
transferee or affiliate of such employee, officer or director pursuant to any
equity subscription agreement, stockholders' agreement, stock option agreement
or similar agreement, to the extent that such repurchase, redemption, retirement
or acquisition is effected upon the death, retirement or other termination of
such employee, officer or director and (2) the payment of any Indebtedness of
the Company issued to any such Person in connection with any such repurchase,
redemption, retirement or acquisition.
"PERSON" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
"PHYSICAL NOTES" has the meaning provided in Section 2.01.
"PLAN OF LIQUIDATION" means, with respect to any Person, a plan
(including by operation of law) that provides for, contemplates or the
effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously) (i) the sale, lease, conveyance or other
disposition of all or substantially all of the assets of such Person otherwise
than as an entirety or substantially as an entirety and (ii) the distribution of
all or substantially all of the proceeds of such sale, lease, conveyance or
other disposition and all or substantially all of the remaining assets of such
Person to holders of Capital Stock of such Person.
-23-
"PREFERRED STOCK" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"PRINCIPAL" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on the
Notes in the form set forth in Section 2.15.
"PROCEEDS PURCHASE DATE" has the meaning provided in Section 4.16.
"PRODUCTIVE ASSETS" mean assets (including assets owned directly or
indirectly through Capital Stock) of a kind used or usable in the businesses of
the Company and the Restricted Subsidiaries as they are conducted on the date of
the Asset Sale.
"PRO FORMA" means, with respect to any calculation made or required to
be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company in consultation with its independent public
accountants.
"PUBLIC EQUITY OFFERING" means a primary public offering (whether or
not underwritten, but excluding any offering pursuant to Form S-4 or S-8 under
the Securities Act) of Capital Stock (other than Disqualified Capital Stock) of
the Company pursuant to an effective registration statement under the Securities
Act.
"PUBLIC MARKET" means any time after (x) a Public Equity Offering has
been consummated and (y) at least 30% of the total issued and outstanding Common
Stock of the Company has been distributed by means of an effective registration
statement under the Securities Act or sales pursuant to Rule 144 promulgated
under the Securities Act.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"QUALIFIED INTERCOMPANY INDEBTEDNESS" means any Indebtedness of a
Restricted Subsidiary Incurred and outstanding in accordance with clauses (vi)
and (vii) of the definition of Permitted Indebtedness (but only so long as such
Indebtedness would qualify as Permitted Indebtedness under such clause (vi) or
(vii)).
-24-
"QUALIFIED INTERCOMPANY PREFERRED STOCK" means Preferred Stock of a
Subsidiary of the Company for so long as such Preferred Stock is owned and held
by the Company or a Qualified Restricted Subsidiary of the Company and in each
case not subject to any Lien held by any Person other than the Company or a
Qualified Restricted Subsidiary of the Company.
"QUALIFIED PROJECTS" mean projects for the development, manufacturing,
installation, operation, ownership, servicing, management or marketing of the
Company's wireless data communications systems, or activities reasonably related
or incidental thereto.
"QUALIFIED RESTRICTED SUBSIDIARY" means any Wholly Owned Restricted
Subsidiary of the Company which has not Incurred, and will not Incur in
connection with the transaction for which the relevant determination is being
made, any Indebtedness other than Qualified Intercompany Indebtedness or issued
any Preferred Stock other than Qualified Intercompany Preferred Stock and which
Subsidiary is not, and will not in connection with the transaction for which the
relevant determination is being made become, subject to any Payment Restriction.
"RECORD DATE" means the Record Dates specified in the Notes; PROVIDED,
HOWEVER, that if any such date is a Legal Holiday, the Record Date shall be the
first day immediately preceding such specified day that is not a Legal Holiday.
"REDEMPTION DATE," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"REDEMPTION PRICE," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"REFINANCE" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "REFINANCED" and "REFINANCING"
shall have correlative meanings.
"REFINANCING INDEBTEDNESS" means (A) any Indebtedness Incurred by the
Company to Refinance Indebtedness of the Company or of the Restricted
Subsidiaries or (B) any Indebtedness Incurred by any Restricted Subsidiary to
Refinance Indebtedness Incurred by such Restricted Subsidiary; PROVIDED,
HOWEVER, that such Indebtedness so Incurred to Refinance such other Indebtedness
(the "EXISTING INDEBTEDNESS") (1) is not in an aggregate principal amount as of
the date of the consummation of such proposed Refinancing in excess of (or if
such Indebtedness being Incurred to Refinance the Existing Indebtedness is
issued with original issue discount, at an original issue price not in excess
of) the sum of (i) the aggregate principal amount outstanding of the Existing
Indebtedness
-25-
(PROVIDED, HOWEVER, that (a) if such Existing Indebtedness was issued with
original issue discount, in excess of the accreted amount of such Existing
Indebtedness (as determined in accordance with GAAP) as of the date of such
proposed Refinancing, (b) if such Existing Indebtedness was Incurred pursuant to
a revolving credit facility or any other agreement providing a commitment for
subsequent borrowings, with a maximum commitment under the agreement governing
the Indebtedness proposed to be Incurred not in excess of the maximum commitment
amount under such Existing Indebtedness and (c) any amount of such Existing
Indebtedness owned or held by the Company or any of its Subsidiaries shall not
be deemed to be outstanding for the purposes hereof) as of the date of such
proposed Refinancing, PLUS (ii) the amount of any premium required to be paid
under the terms of the instrument governing such Existing Indebtedness and PLUS
(iii) the amount of reasonable expenses incurred by the Company or such
Subsidiary in connection with such Refinancing and (2) does not have (I) a
Weighted Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Existing Indebtedness or (II) a final maturity earlier than the
final maturity of the Existing Indebtedness; PROVIDED, FURTHER, HOWEVER, that
(x) if such Existing Indebtedness is Indebtedness of the Company, then such
Indebtedness proposed to be Incurred to Refinance the Existing Indebtedness
shall be Indebtedness solely of the Company (it being understood that if such
Indebtedness is secured by a pledge of the Capital Stock of Subsidiaries of the
Company, such Indebtedness Incurred to Refinance the Existing Indebtedness may
likewise be secured), (y) if such Existing Indebtedness is subordinate or junior
to the Notes, then such Indebtedness proposed to be Incurred to Refinance the
Existing Indebtedness shall be subordinate to the Notes at least to the same
extent and in the same manner as the Existing Indebtedness and (z) such
Indebtedness proposed to be Incurred to Refinance the Existing Indebtedness is
not Incurred more than three months prior to the complete retirement and
defeasance of the Existing Indebtedness with the proceeds thereof.
"REGISTRAR" has the meaning provided in Section 2.03.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement dated on or about the Issue Date between the Company and the Initial
Purchaser for the benefit of themselves and the Holders as the same may be
amended from time to time in accordance with the terms thereof.
"REGULATION S" means Regulation S under the Securities Act.
"RESTRICTED PAYMENT" has the meaning provided in Section 4.10.
"RESTRICTED SECURITY" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; PROVIDED, HOWEVER, that the Trustee shall be
entitled to request and conclusively rely on an Opinion of Counsel with respect
to whether any Note constitutes a Restricted Security.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
not designated to be an Unrestricted Subsidiary pursuant to Section 4.14 hereof.
-26-
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party providing for
the leasing pursuant to a capitalized lease to the Company or a Subsidiary of
any property, whether owned by the Company or any Subsidiary at the Issue Date
or later acquired, which has been or is to be sold or transferred by the Company
or such Subsidiary to such Person or to any other Person by whom funds have been
or are to be advanced on the security of such Property.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SUBSIDIARY", with respect to any Person, means (i) any corporation, a
majority of whose voting stock (defined as any class or classes of capital stock
having voting power under ordinary circumstances to elect a majority of the
Board of Directors) is owned, directly or indirectly, by the Company, by one or
more Subsidiaries, or by the Company and one or more Subsidiaries and (ii) any
other person (other than a corporation) in which the Company, one or more
Subsidiaries, or the Company and one or more Subsidiaries, directly or
indirectly, has at least a majority ownership interest entitled to vote in the
election of directors, managers or trustees thereof.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement to be entered
into between the Company and its Subsidiaries in the form attached hereto as
EXHIBIT E.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except
as otherwise provided in Section 9.03.
"TRUST OFFICER" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture, or in the case of a
successor trustee, an officer assigned to the department, division or group
performing the corporation trust work of such successor and assigned to
administer this Indenture.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"U.S. GOVERNMENT OBLIGATIONS" mean direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
-27-
"U.S. LEGAL TENDER" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"U.S. PHYSICAL NOTES" has the meaning provided in Section 2.01.
"UNRESTRICTED SUBSIDIARY" means a Subsidiary of the Company created
after the Issue Date and so designated by a resolution of the Board of Directors
of the Company pursuant to Section 4.14 hereof.
"VOTING STOCK" means, with respect to any Person, securities of any
class or classes of Capital Stock of such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
Board of Directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Wholly Owned Subsidiary
of the Company that is a Restricted Subsidiary.
"WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than directors'
qualifying shares) which normally have the right to vote in the election of
directors are owned by such Person or any wholly owned Subsidiary of such
Person.
SECTION 1.02. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITY HOLDER" means a Holder or a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
-28-
"OBLIGOR" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(6) any reference to a statute, law or regulation means that statute,
law or regulation as amended and in effect from time to time and includes
any successor statute, law or regulation; PROVIDED, HOWEVER, that any
reference to the Bankruptcy Law shall mean the Bankruptcy Law as applicable
to the relevant case.
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING.
The Initial Notes and the Trustee's certificate of authentication
relating thereto shall be substantially in the form of EXHIBIT A hereto. The
Exchange Notes and the Trustee's certificate of authentication relating thereto
shall be substantially in the form of EXHIBIT B hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance and shall show the date of its authentication.
-29-
The terms and provisions contained in the Notes, annexed hereto as
EXHIBITS A AND B, shall constitute, and are hereby expressly made, a part of
this Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in EXHIBIT A (the "GLOBAL NOTE"), deposited
with the Trustee, as custodian for the Depository, duly executed by the Company
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Section 2.15. The aggregate principal amount of the Global
Note may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in EXHIBIT A (the "OFFSHORE
PHYSICAL NOTES"). Notes offered and sold to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) shall be issued, and Notes offered and sold in reliance on Rule 144A may be
issued, in the form of permanent certificated Notes in registered form, in
substantially the form set forth in EXHIBIT A (the "U.S. PHYSICAL NOTES"). The
Offshore Physical Notes and the U.S. Physical Notes are sometimes collectively
herein referred to as the "PHYSICAL NOTES."
SECTION 2.02. EXECUTION AND AUTHENTICATION;
AGGREGATE PRINCIPAL AMOUNT.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in
the aggregate principal amount not to exceed $235,000,000 and (ii) Exchange
Notes from time to time for issue only in exchange for a like principal amount
-30-
of Initial Notes, in each case upon a written order of the Company. Such order
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated, whether the Notes are to be Initial Notes or
Exchange Notes and whether the Notes are to be issued as Physical Notes or a
Global Note or such other information as the Trustee may reasonably request.
The aggregate principal amount of Notes outstanding at any time may not exceed
$235,000,000, except as provided in Section 2.07.
The Trustee may appoint an authenticating agent (the "AUTHENTICATING
AGENT") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof except to
the extent necessary to make interest payments on the Notes in additional Notes
in accordance with Section 4.01 hereof.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York) where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("REGISTRAR"), (b) Notes may be presented or surrendered for payment
("PAYING AGENT") and (c) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their transfer and exchange. The Company, upon
prior written notice to the Trustee, may have one or more co-Registrars and one
or more additional paying agents reasonably acceptable to the Trustee. The term
"PAYING AGENT" includes any additional Paying Agent. The Company may act as its
own Paying Agent, except that for the purposes of payments on the Notes pursuant
to Sections 4.15 and 4.16, neither the Company nor any Affiliate of the Company
may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name
and address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. Any of
-31-
the Registrar, the Paying Agent or any other agent may resign upon 30 days'
notice to the Company.
SECTION 2.04. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
SECTION 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee before each Record Date and at
such other times as the Trustee may request in writing a list as of such date
and in such form as the Trustee may reasonably require of the names and
addresses of the Holders, which list may be conclusively relied upon by the
Trustee.
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; PROVIDED, HOWEVER, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company or the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or similar governmental charge payable upon exchanges or
transfers
-32-
pursuant to Sections 2.10, 3.06, 4.15, 4.16 or 9.05, in which event the Company
shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing and (ii) selected for
redemption in whole or in part pursuant to Article Three, except the unredeemed
portion of any Note being redeemed in part.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Notes may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book entry system.
SECTION 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity of reasonable tenor,
sufficient in the reasonable judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. Every replacement Note shall constitute an
additional obligation of the Company.
SECTION 2.08. OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.09, a Note does not cease to be
outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
BONA FIDE purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
-33-
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or an Affiliate shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so considered. The Company shall notify the Trustee, in writing, when it or, to
the Company's knowledge, any of its Affiliates repurchases or otherwise acquires
Notes, of the aggregate principal amount of such Notes so repurchased or
otherwise acquired.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt of a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes and so indicates in
the Officers' Certificate. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate upon receipt of a written order of
the Company pursuant to Section 2.02 definitive Notes in exchange for temporary
Notes.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee,
or at the direction of the Trustee, the Registrar or the Paying Agent, and no
one else, shall cancel and, at the written direction of the Company, shall
dispose, in its customary manner, of all Notes surrendered for transfer,
exchange, payment or cancellation. Subject to Section 2.07, the Company may not
issue new Notes to replace Notes that it has paid or delivered to the Trustee
for cancellation. If the Company shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which special record date shall be the fifteenth day next
-34-
preceding the date fixed by the Company for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment (a
"DEFAULT INTEREST PAYMENT DATE"), and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such defaulted interest as provided in this Section;
PROVIDED, HOWEVER, that in no event shall the Company deposit monies proposed to
be paid in respect of defaulted interest later than 11:00 a.m. of the proposed
Default Interest Payment Date. At least 15 days before the subsequent special
record date, the Company shall mail (or cause to be mailed) to each Holder, as
of a recent date selected by the Company, with a copy to the Trustee, a notice
that states the subsequent special record date, the payment date and the amount
of defaulted interest, and interest payable on such defaulted interest, if any,
to be paid. Notwithstanding the foregoing, any interest which is paid prior to
the expiration of the 30-day period set forth in Section 6.01(1) shall be paid
to Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of any defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number, and, if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; PROVIDED, HOWEVER, that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company
shall promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. DEPOSIT OF MONIES.
Prior to 11:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of Control Payment Date and Net Proceeds
Offer Payment Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Net Proceeds Offer Payment Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Net Proceeds Offer Payment Date, as the case may be.
-35-
SECTION 2.15. RESTRICTIVE LEGENDS.
Each Global Note and Physical Note that constitutes a Restricted
Security shall bear the following legend (the "PRIVATE PLACEMENT LEGEND") on the
face thereof until after the third anniversary of the Issue Date, unless
otherwise agreed by the Company and the Holder thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT
WILL NOT WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE
ISSUER, OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS
FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE OR REGISTRAR),
(D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL
ISSUANCE OF THE SECURITY, IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS,
WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
-36-
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Each Global Note shall also bear the following legend on the face
thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH
NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH
SUCCESSOR DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN SECTION 2.17 OF THE INDENTURE.
SECTION 2.16. BOOK-ENTRY PROVISIONS
FOR GLOBAL SECURITY.
(a) The Global Note initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Section 2.15.
Members of, or participants in, the Depository ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee and
any Agent of the Company or the Trustee as the absolute owner of the Global Note
-37-
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any Agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Note may be transferred
or exchanged for Physical Notes in accordance with the rules and procedures of
the Depository and the provisions of Section 2.17. In addition, Physical Notes
shall be transferred to all beneficial owners in exchange for their beneficial
interests in the Global Note if (i) the Depository notifies the Company that it
is unwilling or unable to continue as Depository for the Global Note and a
successor depositary is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a written request from the Depository to issue Physical
Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Note, an equal aggregate principal amount of Physical Notes of authorized
denominations.
(e) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.17, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Section 2.15.
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
-38-
SECTION 2.17. SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS AND
NON-U.S. PERSONS. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to any
Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after the third
anniversary of the Issue Date (PROVIDED, HOWEVER, that neither the Company
nor any Affiliate of the Company has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the third anniversary
of the Issue Date) or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of EXHIBIT C hereto or (2) in the case of a
transfer to a Non-U.S. Person, the proposed transferor has delivered to the
Registrar a certificate substantially in the form of EXHIBIT D hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
written instructions given in accordance with the Depository's and the
Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and (b) the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and amount.
(b) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
-39-
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of written instructions given in accordance with the Depository's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global Note
in an amount equal to the principal amount of the Physical Notes to be
transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the requested transfer is after the third anniversary of the Issue
Date (provided, however, that neither the Company nor any Affiliate of the
Company has held any beneficial interest in such Note, or portion thereof, at
any time prior to or on the third anniversary of the Issue Date), or (ii) there
is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to
the Company and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(d) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.16 or this Section 2.17.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.
(e) TRANSFERS OF NOTES HELD BY AFFILIATES. Any certificate
(i) evidencing a Note that has been transferred to an Affiliate of the Company
within three years after the Issue Date, as evidenced by a notation on the
Assignment Form for such transfer or in the representation letter delivered in
-40-
respect thereof, for so long as such Note is held by such Affiliate, or
(ii) evidencing a Note that has been acquired from an Affiliate (other than by
an Affiliate) in a transaction or a chain of transactions not involving any
public offering, shall, until three years after the last date on which the
Company or any Affiliate of the Company was an owner of such Note, in each case,
bear a legend in substantially the following form, unless otherwise agreed by
the Company (with written notice thereof to the Trustee):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT
WILL NOT WITHIN THREE YEARS AFTER THE LAST DATE AS OF WHICH THE ISSUER
OR ANY AFFILIATE OF THE ISSUER WAS AN OWNER OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY, EXCEPT (A) TO THE ISSUER, OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON
ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN THREE YEARS AFTER THE LAST DATE AS OF WHICH THE ISSUER
OR ANY AFFILIATE OF THE ISSUER WAS AN OWNER OF THIS SECURITY, IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE
ISSUER SUCH CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER
-41-
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
SECTION 2.18. LIQUIDATED DAMAGES UNDER
REGISTRATION RIGHTS AGREEMENT.
Under certain circumstances, the Company shall be obligated to pay
certain liquidated damages to the Holders, all as set forth in Section 4 of the
Registration Rights Agreement. The terms thereof are hereby incorporated herein
by reference.
ARTICLE THREE
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01
at least 60 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If fewer than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed
or, if the Notes are not listed on a national securities exchange, by lot or by
such method as the Trustee shall deem fair and appropriate; PROVIDED, HOWEVER,
that if the Notes are redeemed pursuant to subparagraph (b) of Paragraph 6 of
the Notes, the Notes shall be redeemed solely on a PRO RATA basis. If the Notes
are listed on any national securities exchange, the Company shall notify the
Trustee of the requirements of such exchange in respect of any redemption. The
Trustee shall make the selection from the Notes outstanding and not previously
called for redemption and shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the
-42-
principal amount thereof to be redeemed. Notes in denominations of $1,000 may
be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of Notes
that have denominations larger than $1,000. Provisions of this Indenture that
apply to Notes called for redemption also apply to portions of Notes called for
redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail to each Holder whose Notes are to be redeemed, with a copy to the
Trustee and any Paying Agent. At the Company's request, the Trustee shall give
the notice of redemption in the Company's name and at the Company's expense.
The Company shall provide such notices of redemption to the Trustee at least
five days before the intended mailing date.
Each notice for redemption shall identify (including the CUSIP number)
the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption
is being made;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date, and the only remaining right of the Holders of
such Notes is to receive payment of the Redemption Price plus accrued
interest, if any, upon surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
and
-43-
(8) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding after such partial
redemption.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price plus accrued interest thereon to the Redemption Date, but
installments of interest, the maturity of which is on or prior to the Redemption
Date, shall be payable to Holders of record at the close of business on the
relevant record dates referred to in the Notes.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or before the Redemption Date and in accordance with Section 2.14,
the Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the Redemption Price plus accrued interest, if any, of all Notes to be
redeemed on that date. The Paying Agent shall promptly return to the Company
any U.S. Legal Tender so deposited which is not required for that purpose,
except with respect to monies owed as obligations to the Trustee pursuant to
Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
-44-
(a) The Company shall pay the principal of and interest on the Notes
on the dates and in the manner provided in the Notes and in this Indenture.
(b) An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or any of its Affiliates) holds, prior to 11:00 a.m. New York City
time on that date, U.S. Legal Tender designated for and sufficient to pay the
installment in full and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture or the Notes.
(c) The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and on overdue installments of interest (without
regard to any applicable grace periods) from time to time on demand at the rate
borne by the Notes plus 2% per annum. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months.
(d) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 10.02.
SECTION 4.03. CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, the Company shall do or
cause to be done, at its own cost and expense, all things necessary to preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of its Subsidiaries in accordance with the respective
organizational documents of each such Subsidiary and the material rights
(charter and statutory) and franchises of the Company and each such Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to preserve, with
respect to itself, any material right or franchise and, with respect to any of
its Subsidiaries, any such existence, material right or franchise, if the Board
of Directors of the Company shall determine in good faith that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
the Subsidiaries, taken as a whole.
-45-
SECTION 4.04. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries and (ii) all material lawful claims
for labor, materials and supplies that, if unpaid, might by law become a Lien
upon the property of it or any of its Subsidiaries; PROVIDED, HOWEVER, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate negotiations or
proceedings properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.
SECTION 4.05. MAINTENANCE OF PROPERTIES
AND INSURANCE.
(a) The Company shall, and shall cause each of its Subsidiaries to,
maintain all properties used or useful in the conduct of its business in good
working order and condition (subject to ordinary wear and tear) and make all
necessary repairs, renewals, replacements, additions, betterments and
improvements thereto and actively conduct and carry on its business; PROVIDED,
HOWEVER, that nothing in this Section 4.05 shall prevent the Company or any of
its Subsidiaries from discontinuing the operation and maintenance of any of its
properties, if such discontinuance is (i) in the ordinary course of business
pursuant to customary business terms or (ii) in the good faith judgment of the
Board of Directors or other governing body of the Company or the Subsidiary, as
the case may be, desirable in the conduct of their respective businesses and is
not disadvantageous in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for itself and
each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Company, are adequate and appropriate for the conduct of the business of the
Company and such Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the good faith judgment of the Company, for
companies similarly situated in the industry.
SECTION 4.06. COMPLIANCE CERTIFICATE;
NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 105 days after
the end of the Company's fiscal year, a certificate signed by the Chairman of
the Board of Directors, the Chief Executive Officer, the President or any Vice
President and by the Chief Financial Officer, Treasurer or any Assistant
-46-
Treasurer or the Secretary or any Assistant Secretary of the Company (PROVIDED,
HOWEVER, that one of such signatories shall be the Company's principal executive
officer, principal financial officer or principal accounting officer), as to
such Officers' knowledge of the Company's compliance with all conditions and
covenants under this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and in the event any Default of the
Company exists, such Officers shall specify the nature of such Default. The
Officers' Certificate shall also notify the Trustee should the Company elect to
change the manner in which it fixes its fiscal year end.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent certified public accountants (who shall be
a firm of established national reputation) stating (A) that their audit
examination has included a review of the terms of this Indenture and the Notes
as they relate to accounting matters, and (B) whether, in connection with their
audit examination, any Default or Event of Default has come to their attention
and if such a Default or Event of Default has come to their attention,
specifying the nature and period of existence thereof; PROVIDED, HOWEVER, that,
without any restriction as to the scope of the audit examination, such
independent certified public accountants shall not be liable by reason of any
failure to obtain knowledge of any such Default or Event of Default that would
not be disclosed in the course of an audit examination conducted in accordance
with generally accepted auditing standards.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 10.02 hereof,
by registered or certified mail or by facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware of
such occurrence.
SECTION 4.07. COMPLIANCE WITH LAWS.
The Company shall comply, and shall cause each of its Subsidiaries to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as could not singly or in the
aggregate reasonably be expected to have a material adverse effect on the
financial condition, business, prospects or results of operations of the Company
and its Subsidiaries taken as a whole.
-47-
SECTION 4.08. SEC REPORTS AND OTHER INFORMATION.
(a) After such time as the Company is required to effect an Exchange
Offer or otherwise register the resale of the Notes pursuant to the Registration
Rights Agreement or the Notes become eligible for resale pursuant to Rule 144(k)
under the Securities Act, the Company (at its own expense) shall file with the
SEC and shall file with the Trustee within 15 days after it files them with the
SEC copies of the quarterly and annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) to be filed pursuant to
Section 13 or 15(d) of the Exchange Act (without regard to whether the Company
is subject on or after such time to the requirements of such Section 13 or 15(d)
of the Exchange Act). Upon qualification of this Indenture under the TIA, the
Company shall also comply with the provisions of TIA Section 314(a).
(b) The Company shall, at the Company's expense, cause an annual
report for each fiscal year and a quarterly report for each fiscal quarter each
containing the financial information substantially similar to that which would
be required to be filed by the Company pursuant to Section 13 of the Exchange
Act if it were then subject to the reporting requirements of Section 13 of the
Exchange Act to be mailed by first class mail to each beneficial owner of Notes
(whether or not the Company is then subject to such reporting requirements of
the Exchange Act) it being understood that any discussion of financial condition
and results of operations need only be a summary of such items. In addition
(and without duplication) at the Company's expense, the Company shall cause an
annual report if furnished by it to stockholders generally and each quarterly or
other financial report if furnished by it to stockholders generally to be filed
with the Trustee and mailed to the Holders at their addresses appearing in the
register of Notes maintained by the Registrar at the time of such mailing or
furnishing to stockholders. If the Trustee (at the Company's request and
expense) is to mail the foregoing information to the Holders, the Company shall
supply such information to the Trustee at least five Business Days prior
thereto.
(c) During the period beginning on the latest date of the original
issuance of any of the Notes or the date any Note was acquired from the Company
or any Affiliate of the Company after the Issue Date and ending on the date that
is three years from such latest date, the Company covenants and agrees that it
shall, during any period in which it is not subject to Section 13 or 15(d) under
the Exchange Act or not filing the reports and other information required
thereby when so subject, make available to any Holder or beneficial owner of
Notes which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Notes from such Holder or beneficial
owner the information required pursuant to Rule 144A(d)(4) under the Securities
Act upon the request of any Holder or beneficial owner of the Notes and it will
take such further action as any Holder or beneficial owner of such Notes may
reasonably request, all to the extent required from time to time to enable such
Holder or beneficial owner to sell its Notes without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A.
-48-
SECTION 4.09. WAIVER OF STAY, EXTENSION
OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.10. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, (i) declare or pay any
dividend or make any distribution (other than dividends or distributions payable
solely in Qualified Capital Stock of the Company) on shares of the Company's
Capital Stock to holders of such Capital Stock, (ii) purchase, redeem or
otherwise acquire or retire for value any Capital Stock of the Company or of any
direct or indirect parent or Affiliate of the Company, or any warrants, rights
or options to acquire shares of any class of such Capital Stock, other than any
such Capital Stock owned by the Company or by a Qualified Restricted Subsidiary,
(iii) make any principal payment on, or purchase, defease, redeem, prepay,
decrease or otherwise acquire or retire for value, prior to any scheduled final
maturity, scheduled repayment or scheduled sinking fund payment, any
Indebtedness of the Company that is subordinate or junior in right of payment to
the Notes (other than any such Indebtedness owing to a Qualified Restricted
Subsidiary to the extent such Indebtedness is not subject to any Lien held by
any Person other than the Company or a Qualified Restricted Subsidiary), or
(iv) make any Investment (other than Permitted Investments) (each of the
foregoing prohibited actions set forth in clauses (i), (ii), (iii) and (iv)
being referred to as a "RESTRICTED PAYMENT"), if at the time of such proposed
Restricted Payment or immediately after giving effect thereto, (I) a Default or
an Event of Default has occurred and is continuing or would result therefrom, or
(II) the Company is not, or would not be, able to Incur at least $1.00 of
additional Indebtedness in accordance with subclause (I)(B)(2) of paragraph (b)
of Section 4.12, or (III) the aggregate amount of Restricted Payments (including
such proposed Restricted Payment) made subsequent to the Issue Date (the amount
expended for such purposes, if other than in cash, being the fair market value
of such property as determined reasonably and in good faith by the Board of
Directors of the Company) exceeds or would exceed the sum of:
(1) 50% of the cumulative Consolidated Net Income (or if cumulative
Consolidated Net Income shall be a loss, minus 100% of such
-49-
loss) of the Company during the period (treating such period as a single
accounting period) beginning on the first day subsequent to the Issue Date
and ending on the last day of the most recent fiscal quarter of the Company
ending immediately prior to the date of the making of such Restricted
Payment for which financial statements are available ending not more than
135 days prior to the date of determination, PLUS
(2) 100% of the aggregate Net Equity Proceeds received by the Company
from any Person (other than from a Subsidiary of the Company) from the
issuance and sale of Qualified Capital Stock of the Company subsequent to
the Issue Date and on or prior to the date of the making of such Restricted
Payment (excluding (A) any Qualified Capital Stock of the Company paid as a
dividend on any Capital Stock of the Company or of any of its Subsidiaries
and (B) any Qualified Capital Stock of the Company with respect to which
the purchase price thereof has been financed directly or indirectly using
funds (x) borrowed from the Company or from any of its Subsidiaries, unless
and until and to the extent such borrowing is repaid, or (y) contributed,
extended, guaranteed or advanced by the Company or by any of its
Subsidiaries (including, without limitation, in respect of any employee
stock ownership or benefit plan)), PLUS
(3) an amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from dividends, repayments of loans or
advances, or other transfers (including the fair market value of non-cash
property transferred), in each case to the Company or to any Qualified
Restricted Subsidiary from Unrestricted Subsidiaries (but without
duplication of any such amount included in calculating Consolidated Net
Income of the Company), or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries (in each case valued as provided in Section 4.14
hereof), not to exceed, in the case of any Unrestricted Subsidiary, the
amount of Investments previously made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary and which was treated as a
Restricted Payment hereunder, PLUS
(4) 100% of the aggregate cash received by the Company subsequent to
the Issue Date and on or prior to the date of the making of such Restricted
Payment upon the exercise of options or warrants (whether issued prior to
or after the Issue Date) to purchase Qualified Capital Stock of the
Company, PLUS
(5) without duplication of any amount included pursuant to clause (3)
above, an amount equal to the lesser of the cost or net cash proceeds
received by the Company upon the sale or other disposition of any
Investment made after the Issue Date which had been treated as a Restricted
Payment (but without duplication of any amount included in calculating
Consolidated Net Income of the Company).
-50-
(b) Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph shall not prohibit:
(1) the payment of any dividend or the making of any distribution
within 60 days after the date of declaration of such dividend or
distribution if the making thereof would have been permitted on the date of
declaration; PROVIDED, HOWEVER, that such dividend shall be deemed to have
been made as of its date of declaration or the giving of such notice for
purposes of this clause (1);
(2) the acquisition of Capital Stock of the Company or warrants,
rights or options to acquire Capital Stock of the Company either (i) solely
in exchange for shares of Qualified Capital Stock of the Company or
warrants, rights or options to acquire Qualified Capital Stock of the
Company, or (ii) through the application of net proceeds of a substantially
concurrent sale for cash (other than to a Subsidiary of the Company) of
shares of Qualified Capital Stock of the Company or warrants, rights or
options to acquire Qualified Capital Stock of the Company; PROVIDED,
HOWEVER, that no Default or Event of Default shall have occurred and be
continuing at the time of such Restricted Payment pursuant to this clause
(2) and would not result therefrom;
(3) the acquisition of Indebtedness of the Company that is
subordinate or junior in right of payment to the Notes either (i) solely in
exchange for shares of Qualified Capital Stock of the Company or for
Refinancing Indebtedness, or (ii) through the application of net proceeds
of a substantially concurrent sale for cash (other than to a Subsidiary of
the Company) of (A) shares of Qualified Capital Stock of the Company or
warrants, rights or options to acquire Qualified Capital Stock of the
Company or (B) Refinancing Indebtedness; PROVIDED, HOWEVER, that no Default
or Event of Default shall have occurred and be continuing at the time of
such Restricted Payment pursuant to this clause (3) and would not result
therefrom;
(4) the repurchase, redemption, retirement or defeasance of Preferred
Stock issued in accordance with clause (xi) of the definition of Permitted
Indebtedness by the issuer thereof if and to the extent required by the
terms of such Preferred Stock;
(5) Permitted Stock Repurchases by the Company; PROVIDED, HOWEVER,
that the aggregate amount expended for all such Permitted Stock Repurchases
by the Company shall not exceed $1,000,000 in any fiscal year; PROVIDED,
FURTHER, HOWEVER, that no Default or Event of Default shall have occurred
and be continuing at the time of such Restricted Payment pursuant to this
clause (5) and would not result therefrom; and
(6) the payment of any amounts in respect of Capital Stock of any
Person organized as a partnership, limited liability company, or similar
-51-
entity, to the extent (A) of capital contributions made to such Person by
holders of its Capital Stock other than the Company or any Restricted
Subsidiary and (B) necessary to permit the holders of such Capital Stock to
pay taxes in respect thereof; PROVIDED, FURTHER, HOWEVER, that no Default
or Event of Default shall have occurred and be continuing at the time of
such Restricted Payment pursuant to clause (A) of this subsection (6) or
would result therefrom.
(c) In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date, amounts expended pursuant to clauses (1), (2), (3)
(other than with respect to Refinancing Indebtedness) and (5) of paragraph (b)
of this Section 4.10 shall, in each case, be included in such calculation and,
if such Restricted Payment is a Restricted Payment described in clause (i) or
(ii) of paragraph (a) of this Section 4.10, then in addition, in determining the
aggregate amount of Restricted Payments made since the Issue Date, amounts
expended as aforesaid, PLUS amounts expended pursuant to clauses (i) and (j) of
the definition of Permitted Investments shall, in each case, be included in such
calculation.
(d) Not later than the date of making any Restricted Payment in
excess of $2,000,000 individually or in the aggregate with all other Restricted
Payments made since the previous certification, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment complies
with this Indenture and setting forth in reasonable detail the basis upon which
the required calculations were computed (upon which information the Trustee may
conclusively rely without any investigation whatsoever), which calculations may
be based upon the Company's latest available internal quarterly financial
statements.
SECTION 4.11. LIMITATION ON TRANSACTIONS
WITH AFFILIATES.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, enter into or permit or suffer to exist
any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with or for the benefit of any of its Affiliates (an
"AFFILIATE TRANSACTION"), other than any Affiliate Transaction that is on terms
that are fair and reasonable and no less favorable to the Company or such
Restricted Subsidiary than those that might reasonably have been obtained at
such time in a comparable transaction or series of related transactions on an
arm's-length basis from a Person that is not such an Affiliate; PROVIDED,
HOWEVER, that for any Affiliate Transaction involving value of $10,000,000 or
more, a majority of the disinterested members of the Board of Directors of the
Company (and of such Restricted Subsidiary, as the case may be) shall, prior to
the consummation of such Affiliate Transaction, have reasonably and in good
faith determined, as evidenced by a Board Resolution, that such Affiliate
Transaction meets the requirements of the foregoing clause; PROVIDED, FURTHER,
HOWEVER, that for any
-52-
Affiliate Transaction involving value of $25,000,000 or more, the Board of
Directors of the Company (and of such Restricted Subsidiary, as the case may be)
shall have received, prior to the consummation thereof, a written opinion from
an Independent Financial Advisor that such Affiliate Transaction is on terms
that are fair to the Company from a financial point of view. The foregoing
restrictions will not apply to (1) reasonable fees and compensation paid to, and
indemnity provided on behalf of, officers, directors, employees or consultants
of the Company or any Restricted Subsidiary as determined in good faith by the
Company's Board of Directors or senior management, (2) any transaction solely
between or among the Company and a Wholly Owned Restricted Subsidiary of the
Company or Wholly Owned Restricted Subsidiaries of the Company to the extent any
such transaction is otherwise in compliance with, or not prohibited by, this
Indenture, (3) any transaction solely between or among Wholly Owned Restricted
Subsidiaries of the Company to the extent that any such transaction is otherwise
in compliance with, or not prohibited by, this Indenture, (4) any transaction
otherwise permitted by the terms of Section 4.10 hereof, (5) the execution and
delivery of or payments made under the Tax Sharing Agreement or in any amendment
thereto or any replacement agreement thereof; PROVIDED, HOWEVER, that such
amendment or replacement is not more disadvantageous to the Holders or the
Company in any material respect than such agreement in the form attached hereto
as EXHIBIT E, (6) the licensing or sublicensing of use of any FCC License or
intellectual property by the Company or any Restricted Subsidiary to any
Affiliate of the Company (other than any Affiliate controlling the Company), (7)
the transfer or assignment of hardware or equipment by the Company or any
Restricted Subsidiary to any Subsidiary of the Company; PROVIDED, HOWEVER, that
the Company and its Restricted Subsidiaries continue to be able to have access,
on terms that are fair and reasonable, to such hardware and equipment to the
extent necessary for the conduct of their respective business, (8) arrangements
between the Company or any of its Restricted Subsidiaries and any Subsidiary of
the Company for the purpose of providing services of employees to such
Subsidiaries, (9) any transaction or series of related transactions between the
Company or any Wholly Owned Restricted Subsidiary on the one hand and any
Restricted Subsidiary on the other to the extent fair and reasonable to the
Company or such Wholly Owned Restricted Subsidiary and to the extent on terms
providing for fair consideration or reasonably equivalent value to the Company
or such Wholly Owned Restricted Subsidiary and (10) the sale, conveyance,
transfer, lease, assignment or other disposition to any Restricted Subsidiary of
contracts in respect of Qualified Projects entered into by the Company (not
previously entered into by any Restricted Subsidiary).
SECTION 4.12. LIMITATION ON INDEBTEDNESS
AND PREFERRED STOCK.
(a) The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness,
including, without limitation, any Acquired Indebtedness, or issue any Preferred
Stock.
-53-
(b) Notwithstanding the foregoing limitations:
(I) the Company may (A) issue Qualified Capital Stock and (B) Incur
(1) Permitted Indebtedness, (2) Indebtedness (including, without
limitation, Acquired Indebtedness) if, in the case of this subclause
(I)(B)(2), (i) no Default or Event of Default shall have occurred and be
continuing on the date of the proposed Incurrence thereof or would result
as a consequence of such proposed Incurrence and (ii) immediately after
giving PRO FORMA effect to such proposed Incurrence and the receipt and
application of the net proceeds therefrom, the Company's Debt to Cash Flow
Ratio would not exceed 7.0 to 1.0, and (3) Refinancing Indebtedness
Incurred to Refinance any such Indebtedness Incurred pursuant to clause
(I)(B)(2); and
(II) the Restricted Subsidiaries may Incur Indebtedness pursuant to
clauses (iii), (iv), (v), (vi), (vii), (viii), (ix), (x), (xi) and (xii) of
the definition of Permitted Indebtedness; PROVIDED, HOWEVER, that, other
than as provided in clause (xi) of the definition of Permitted
Indebtedness, such Indebtedness shall not be Incurred pursuant to any
assumption or guarantee by any Restricted Subsidiary in respect of any
other Restricted Subsidiary's or the Company's Indebtedness.
(c) Any Indebtedness of an entity existing at the time it becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition of capital
stock or otherwise) shall be deemed to be Incurred as of the date such entity
becomes a Restricted Subsidiary.
(d) The Company shall not, directly or indirectly, in any event Incur
any Indebtedness which by its terms (or by the terms of any agreement governing
such Indebtedness) is subordinated to any other Indebtedness of the Company
unless such Indebtedness is also by its terms (or by the terms of any agreement
governing such Indebtedness) made expressly subordinated to the Notes to the
same extent and in the same manner as such Indebtedness is subordinated to such
other Indebtedness of the Company.
(e) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness which provides
that the holder thereof may (upon notice, lapse of time or both) declare a
default thereon or cause the payment thereof to be accelerated or payable prior
to its final scheduled maturity upon the occurrence of a default with respect to
any Indebtedness of any Unrestricted Subsidiary (including any right to take
enforcement action against such Unrestricted Subsidiary).
-54-
SECTION 4.13. LIMITATION ON DIVIDEND AND
OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or permit or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on its Capital Stock; (b) make loans or advances or pay any
Indebtedness or other obligation owed to the Company or to any Restricted
Subsidiary; (c) transfer any of its property or assets to the Company or to any
Restricted Subsidiary; or (d) guarantee any Indebtedness or any other obligation
of the Company or any Subsidiary of the Company (each such encumbrance or
restriction in clause (a), (b), (c) or (d) a "PAYMENT RESTRICTION"), except for
such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) customary non-assignment provisions of
any contract or lease of any Restricted Subsidiary entered into in the ordinary
course of business of such Restricted Subsidiary; (4) any instrument governing
Acquired Indebtedness Incurred in accordance with this Indenture; PROVIDED,
HOWEVER, that such encumbrance or restriction is not, and will not be,
applicable to any Person, or the properties or assets of any Person, other than
the Person or the property or asset so acquired; (5) agreements existing on the
Issue Date to the extent and in the manner such agreements are in effect on the
Issue Date or in any amendment thereto or any replacement agreement thereof;
PROVIDED, HOWEVER, that such amendment or replacement is not more
disadvantageous to the Holders or the Company in any material respect than any
such agreement as in effect on the Issue Date; (6) restrictions imposed by
Permitted Liens solely to the extent such Liens encumber the transfer or other
disposition of the assets subject to such Liens; (7) any restriction or
encumbrance contained in contracts for the sale of assets to be consummated in
accordance with this Indenture solely in respect of the assets to be sold
pursuant to such contract; (8) Indebtedness or Preferred Stock Incurred or
issued pursuant to clauses (x) and (xi) of the definition of Permitted
Indebtedness; or (9) any encumbrance or restriction contained in Refinancing
Indebtedness Incurred to Refinance the Indebtedness Incurred pursuant to an
agreement referred to in clauses (2), (4), (5) or (8) above; PROVIDED, HOWEVER,
that the provisions relating to such encumbrance or restriction contained in any
such Refinancing Indebtedness are no less favorable to the Company in any
material respect in the good faith judgment of the Board of Directors of the
Company than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (2), (4), (5) or (8).
-55-
SECTION 4.14. LIMITATION ON DESIGNATION OF
RESTRICTED AND UNRESTRICTED
SUBSIDIARIES.
(a) The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary or any Restricted
Subsidiary to be an Unrestricted Subsidiary; PROVIDED, HOWEVER, that
(i) immediately after giving effect to such designation (treating such
designation as an Incurrence of the outstanding Indebtedness of any such
Unrestricted Subsidiary), the Company could incur $1.00 of additional
Indebtedness pursuant to subclause (I)(B)(2) of paragraph (b) of Section 4.12,
(ii) no Default or Event of Default shall have occurred and be continuing or
would arise therefrom and (iii) in the case of designation of a Restricted
Subsidiary to be an Unrestricted Subsidiary, such designation is at that time
permitted under Section 4.10 hereof. The Company shall deliver to the Trustee
a certified copy of the Board Resolution of its Board of Directors giving effect
to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and setting forth in
reasonable detail the underlying calculations. The Board of Directors of the
Company may not change the designation of a Subsidiary of the Company more than
twice in any period of five years.
(b) For purposes of determining compliance with Section 4.10 hereof,
(i) an Investment shall be deemed to have been made at the time any Restricted
Subsidiary is designated as an Unrestricted Subsidiary in an amount
(proportionate to the Company's equity interest in such Subsidiary) equal to the
net worth of such Subsidiary of the Company at the time that such Subsidiary is
designated as an Unrestricted Subsidiary; (ii) at any date the aggregate of all
Restricted Payments made as Investments since the Issue Date shall exclude and
be reduced by an amount (proportionate to the Company's equity interest in such
Subsidiary) equal to the net worth of any Unrestricted Subsidiary at the time
that such Unrestricted Subsidiary is designated a Restricted Subsidiary, not to
exceed, in the case of any such redesignation of an Unrestricted Subsidiary as a
Restricted Subsidiary, the amount of Investments previously made by the Company
and the Restricted Subsidiaries in such Unrestricted Subsidiary (in each case
(i) and (ii) "net worth" to be calculated based upon the fair market value of
the assets of such Subsidiary as of any such date of designation); and (iii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer.
(c) Notwithstanding the foregoing, the Board of Directors of the
Company may not designate any Subsidiary of the Company to be an Unrestricted
Subsidiary unless such Subsidiary has been organized or acquired after the Issue
Date or if, after such designation, (x) the Company or any other Restricted
Subsidiary (i) provides credit support for, or a guarantee of, any Indebtedness
or any other obligation (contingent or otherwise) of such Subsidiary (including
any undertaking, agreement or instrument evidencing such Indebtedness) or (ii)
is directly or indirectly liable for any Indebtedness of such Subsidiary
-56-
(including by way of recourse only to properties or assets), (y) a default with
respect to any Indebtedness of such Subsidiary (including any right which the
holders thereof may have to take enforcement action against such Subsidiary)
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity or (z) such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, any Restricted
Subsidiary which is not a Subsidiary of the Subsidiary to be so designated.
(d) Notwithstanding anything to the contrary herein, all Subsidiaries
of a Restricted Subsidiary will be Restricted Subsidiaries and all Subsidiaries
of an Unrestricted Subsidiary will be Unrestricted Subsidiaries.
SECTION 4.15. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall be
required to offer to repurchase (the "CHANGE OF CONTROL OFFER") all or a portion
of each Holder's Notes pursuant to the offer described in paragraph (b) below,
at a purchase price equal to 101% of the Accreted Value thereof on the date of
purchase (if prior to June 15, 2000) or 101% of the aggregate principal face
amount thereof plus accrued and unpaid interest, if any, to the date of
repurchase (if on or after June 15, 2000). The Change of Control Offer shall
remain open for at least 20 Business Days and until the close of business on the
second Business Day prior to the Change of Control Payment Date.
In the event of any Change of Control, the Company shall not, and
shall not cause or permit any of its Subsidiaries to, purchase, redeem or
otherwise acquire or retire any Indebtedness of the Company ranking junior or
subordinate to the Notes pursuant to any analogous provisions relating to such
Indebtedness until after the 91st day after the Change of Control Payment Date
(as such date may be extended).
(b) Within 30 days following the date upon which the Change of
Control occurred (the "CHANGE OF CONTROL DATE"), the Company shall send, by
first class mail, a notice to each Holder, with a copy to the Trustee, which
notice shall govern the terms of the Change of Control Offer. The notice to the
Holders shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Change of Control Offer. Such notice
shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes tendered and not withdrawn will be accepted
for payment;
(2) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed, other than as may be required by
law) (the "CHANGE OF CONTROL PAYMENT DATE");
-57-
(3) that any Note not tendered will continue to accrete or accrue
interest, as the case may be;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrete or accrue interest, as the case may be, after the Change
of Control Payment Date;
(5) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the second Business Day prior to the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Change of Control Payment Date, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; PROVIDED, HOWEVER, that each Note purchased (except
Notes issued in payment of interest pursuant to Section 4.01(c)) and each
new Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control.
On or before the Change of Control Payment Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Change of
Control Offer, (ii) deposit with the Paying Agent in accordance with Section
2.14 U.S. Legal Tender sufficient to pay the purchase price plus accrued
interest, if any, of all Notes so tendered and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. Upon receipt by the Paying
Agent of the monies specified in clause (ii) above and a copy of the Officers'
Certificate specified in clause (iii) above, the Paying Agent shall promptly
mail to the Holders of Notes so accepted payment in an amount equal to the
purchase price plus accrued interest, if any, and the Trustee shall promptly
authenticate and mail to such Holders new Notes equal in principal amount to any
unpurchased portion of the Notes surrendered. Any Notes not so accepted shall
be promptly mailed by the Company to the Holder thereof. For purposes of this
Section 4.15, the Trustee shall act as the Paying Agent.
-58-
Any amounts remaining after the purchase of Notes pursuant to a Change
of Control Offer shall be returned by the Trustee to the Company.
The Company shall and shall cause its Subsidiaries to comply with all
tender offer rules under state and Federal securities laws, including, but not
limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to
the extent applicable to such offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.15, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.15 by virtue
thereof.
SECTION 4.16. LIMITATION ON ASSET SALES.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, consummate an Asset Sale
unless (i) the Company or the applicable Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as determined in
good faith by the Company's Board of Directors) and (ii) at least 85% of the
consideration received by the Company or such Restricted Subsidiary, as the case
may be, from such Asset Sale shall be cash or Cash Equivalents and is received
at the time of the consummation of any such Asset Sale; PROVIDED, HOWEVER, that
the amount of (x) any liabilities (as shown on the Company's most recent balance
sheet or in the notes thereto) of the Company or any Restricted Subsidiary
(other than (i) Indebtedness subordinate in right of payment to the Notes, (ii)
contingent liabilities, (iii) liabilities or Indebtedness to Affiliates of the
Company and (iv) non-recourse Indebtedness or other non-recourse liabilities)
that are assumed by the transferee of any such assets and (y) to the extent of
the cash received, any notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash within 60 days of receipt, shall
be deemed to be cash for purposes of this provision; PROVIDED, FURTHER, HOWEVER,
that the 85% limitation referred to above shall not apply to any sale, transfer
or other disposition of assets in which the cash portion of the consideration
received therefor, determined in accordance with the foregoing proviso, is equal
to or greater than what the after-tax net proceeds would have been had such
transaction complied with the aforementioned 85% limitation. Upon the
consummation of an Asset Sale, the Company shall apply, or cause such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
360 days of receipt thereof either (A) to reinvest in Productive Assets, or (B)
to prepay or repay Indebtedness of the Company which ranks PARI PASSU with the
Notes or to prepay or repay any Indebtedness of a Restricted Subsidiary of the
Company (other than any non-recourse Indebtedness) in an amount not to exceed
the product of (A) the amount of such Net Cash Proceeds and (B) a fraction, the
numerator of which is the total aggregate principal amount of such PARI PASSU
Indebtedness or such Indebtedness of Restricted Subsidiaries and the denominator
of which is the aggregate of all such Indebtedness plus the aggregate Accreted
Value (if the Net
-59-
Proceeds Offer Payment Date is prior to June 15, 2000) or the aggregate
principal amount (if the Net Proceeds Offer Payment Date is on or after June 15,
2000) of the Notes then outstanding. On the 361st day after an Asset Sale or
such earlier date, if any, as the Board of Directors of the Company or of such
Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in clauses (A) and (B) of the preceding sentence (each a "NET
PROCEEDS OFFER TRIGGER DATE"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (A) and (B) of the preceding sentence (each a "NET PROCEEDS
OFFER AMOUNT") shall be applied by the Company or such Subsidiary to make an
offer to purchase (the "NET PROCEEDS OFFER") on a date (the "NET PROCEEDS OFFER
PAYMENT DATE") not less than 30 nor more than 60 days following the applicable
Net Proceeds Offer Trigger Date, from all Holders on a PRO RATA basis that
amount of Notes equal to the Net Proceeds Offer Amount at a price in cash equal
to 100% of the Accreted Value of the Notes on the Net Proceeds Offer Payment
Date (if prior to June 15, 2000) or 100% of the principal amount thereof (if the
Net Proceeds Offer Payment Date is on or after June 15, 2000) to be purchased,
plus accrued and unpaid interest thereon, if any, to the date of purchase;
PROVIDED, HOWEVER, that if at any time any non-cash consideration received by
the Company or any Subsidiary of the Company, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for cash,
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder and the Net Cash Proceeds thereof shall be applied in accordance with
this Section 4.16. To the extent that the Accreted Value of Notes on the Net
Proceeds Offer Payment Date (if prior to June 15, 2000) or the aggregate
principal amount of Notes (if the Net Proceeds Offer Payment Date is on or after
June 15, 2000) tendered pursuant to the Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company may use any remaining proceeds of such Asset
Sale for general corporate purposes (but subject to the terms of this
Indenture). Upon completion of a Net Proceeds Offer, the Net Proceeds Offer
Amount relating to such Net Proceeds Offer shall be deemed to be zero for
purposes of any subsequent Asset Sale.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less
than $5,000,000, the application of the Net Cash Proceeds constituting such Net
Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as
such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds
Offer Amounts arising subsequent to the Issue Date of the Notes from all Asset
Sales by the Company and its Subsidiaries in respect of which a Net Proceeds
Offer has not been made aggregates at least $5,000,000, at which time the
Company or such Restricted Subsidiary shall apply all Net Cash Proceeds
constituting all Net Proceeds Offer Amounts that have been so deferred to make a
Net Proceeds Offer (each date on which the aggregate of all such deferred Net
Proceeds Offer Amounts is equal to $5,000,000 or more shall be deemed to be a
Net Proceeds Offer Trigger Date).
In connection with any Asset Sale with respect to assets having a book
value in excess of $5,000,000 or as to which it is expected that the
-60-
aggregate consideration therefor to be received by the Company or any Restricted
Subsidiary will exceed $5,000,000 in value, such transaction or series of
transactions shall be approved, prior to the consummation thereof, by the Board
of Directors of the Company.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Subsidiaries as an entirety to a
Person in a transaction permitted under Section 5.01, the successor corporation
shall be deemed to have sold the properties and assets of the Company and its
Subsidiaries not so transferred for purposes of this covenant, and shall comply
with the provisions of this covenant with respect to such deemed sale as if it
were an Asset Sale; PROVIDED, HOWEVER, that to the extent that the Company is
required to make an offer to repurchase the Notes pursuant to Section 4.15 in
connection with any transaction that would otherwise be within the terms of this
paragraph, the Company need not comply with the provisions of this paragraph.
In addition, the fair market value of such properties and assets of the Company
or its Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds
for purposes of this covenant.
(b) Subject to the deferral of the Net Proceeds Offer Trigger Date
contained in the second paragraph of subsection (a) above, each notice of a Net
Proceeds Offer pursuant to this Section 4.16 shall be mailed or caused to be
mailed, by first class mail, by the Company not more than 25 days after the Net
Proceeds Offer Trigger Date to all Holders at their last registered addresses as
of a date within 15 days of the mailing of such notice, with a copy to the
Trustee. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Net Proceeds Offer and shall
state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to
Section 4.16 and that all Notes tendered will be accepted for payment;
PROVIDED, HOWEVER, that if the Accreted Value of Notes on the Net Proceeds
Offer Payment Date (if prior to June 15, 2000) or the aggregate principal
amount of Notes (if the Net Proceeds Offer Payment Date is on or after
June 15, 2000) tendered in a Net Proceeds Offer plus accrued interest at
the expiration of such offer exceeds the aggregate amount of the Net
Proceeds Offer, the Company shall select the Notes to be purchased on a PRO
RATA basis (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $1,000 or multiples thereof
shall be purchased);
(2) the purchase price (including the amount of accrued interest, if
any, or the Accreted Value) and the purchase date (which shall be 20
Business Days from the date of mailing of notice of such Net Proceeds
Offer, or such longer period as required by law) (the "PROCEEDS PURCHASE
DATE");
-61-
(3) that any Note not tendered will continue to accrue interest or
accumulate Accreted Value, as the case may be;
(4) that, unless the Company defaults in making payment therefor, any
Note accepted for payment pursuant to the Net Proceeds Offer shall cease to
accrete or accrue interest, as the case may be, after the Proceeds Purchase
Date;
(5) that Holders electing to have a Note purchased pursuant to a Net
Proceeds Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day prior to the Proceeds
Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the second Business Day prior to the
Proceeds Purchase Date, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased; and
(7) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; PROVIDED, HOWEVER, that each Note purchased and each
new Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof.
On or before the Proceeds Purchase Date, the Company shall (i) accept
for payment Notes or portions thereof tendered pursuant to the Net Proceeds
Offer which are to be purchased in accordance with item (b)(1) above,
(ii) deposit with the Paying Agent in accordance with Section 2.14 U.S. Legal
Tender sufficient to pay the purchase price plus accrued interest, if any, of
all Notes to be purchased and (iii) deliver to the Trustee Notes so accepted
together with an Officers' Certificate stating the Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail to the
Holders of Notes so accepted payment in an amount equal to the purchase price
plus accrued interest, if any. For purposes of this Section 4.16, the Trustee
shall act as the Paying Agent.
The Company shall and shall cause its Subsidiaries to comply with all
tender offer rules under state and Federal securities laws, including, but not
limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder, to
the extent applicable to such offer. To the extent that the provisions of any
securities laws or regulations conflict with the foregoing provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
foregoing provisions of this Indenture by virtue thereof.
-62-
SECTION 4.17. LIMITATION ON PREFERRED
STOCK OF RESTRICTED SUBSIDIARIES.
The Company shall not cause or permit any Restricted Subsidiary to
issue any Preferred Stock (other than to the Company or to a Qualified
Restricted Subsidiary) or permit any Person (other than the Company or a
Qualified Restricted Subsidiary) to own or hold any Preferred Stock of any
Restricted Subsidiary; PROVIDED, HOWEVER, that (A) this covenant shall not
prohibit the issuance of any Preferred Stock by any Restricted Subsidiary
pursuant to clause (x) of the definition of Permitted Indebtedness and (B) if as
of any date any Person other than the Company or a Qualified Restricted
Subsidiary owns or holds any Preferred Stock of a Restricted Subsidiary (other
than any Preferred Stock permitted to be issued pursuant to clause (x) of the
definition of Permitted Indebtedness) or holds any Lien in respect of any such
Preferred Stock, such date shall be deemed the date of an issuance of Preferred
Stock by a Restricted Subsidiary that is not in compliance with this Section
4.17.
SECTION 4.18. LIMITATION ON LIENS.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or permit or suffer
to exist or remain in effect any Liens upon any properties or assets of the
Company or of any Restricted Subsidiary whether owned on the Issue Date or
acquired after the Issue Date, or on any income or profits therefrom, or assign
or otherwise convey any right to receive income or profits thereon, other than
(A) Liens granted by the Company on property or assets of the Company securing
Indebtedness of the Company that is permitted under Section 4.12 hereof;
PROVIDED, HOWEVER, that the Company makes or causes to be made effective
provision whereby the Notes will be secured equally and ratably with (or, in the
case of any Indebtedness that is subordinate or junior to the Notes, prior to)
such Liens, (B) Permitted Liens and (C) Cash Equivalents pursuant to clause (vi)
of the definition thereof to the extent the operation of this covenant with
respect to such Investments would cause a violation of the margin rules of the
Board of Governors of the Federal Reserve System.
SECTION 4.19. LIMITATION ON SALE AND
LEASEBACK TRANSACTIONS.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, enter into any Sale and Leaseback
Transaction, except that the Company or any Restricted Subsidiary may enter into
a Sale and Leaseback Transaction if (i) immediately prior thereto, and after
giving effect to such Sale and Leaseback Transaction (the Indebtedness
thereunder being equivalent to the capitalized amount thereof that would appear
on the balance sheet of the Company or such Restricted Subsidiary in accordance
with GAAP) the Company could Incur at least $1.00 of additional secured
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.12
hereof above
-63-
and (ii) the transaction constitutes an Asset Sale effected in accordance with
the requirements of Section 4.16 hereof.
SECTION 4.20. LIMITATION ON CONSOLIDATION,
MERGER, ETC. OF RESTRICTED
SUBSIDIARIES.
The Company shall not, directly or indirectly, cause or permit any
Restricted Subsidiary to, directly or indirectly, merge or consolidate with or
into, or sell, assign, transfer, lease or otherwise dispose of all or
substantially all of such Subsidiary's assets to, any other Restricted
Subsidiary unless, at the time of such merger or consolidation or sale,
assignment, transfer, lease or other disposition (and after giving effect
thereto), (1) the Debt to Cash Flow Ratio of the Company is less than or equal
to 6.0 to 1.0 or (2) the resulting, surviving or transferee Restricted
Subsidiary is a Qualified Restricted Subsidiary or (3) the resulting, surviving
or transferee Restricted Subsidiary is a Restricted Subsidiary that is not a
Qualified Restricted Subsidiary and the total contribution to the Consolidated
EBITDA of the Company (such Consolidated EBITDA to be calculated for purposes of
this Section 4.20 without giving effect to clause (f) of the definition of
Consolidated Net Income) for the most recently ended fiscal quarter for which
financial information is available ending not more than 135 days prior to the
date of determination of such resulting, surviving or transferee Restricted
Subsidiary is not in excess of 25% of such Consolidated EBITDA. In addition,
all such transactions permitted pursuant to this Section 4.20 must also comply
with Article Five.
SECTION 4.21. CALCULATION OF ORIGINAL
ISSUE DISCOUNT.
The Company shall file with the Trustee promptly at the end of each
calendar year a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on outstanding Notes as of
the end of such year.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. MERGER, CONSOLIDATION
AND SALE OF ASSETS.
(a) The Company shall not, in a single transaction or a series of
related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise
-64-
dispose of) all or substantially all of the Company's and the Company's
Subsidiaries' properties and assets (determined on a consolidated basis for the
Company and the Company's Subsidiaries taken as a whole) whether as an entirety
or substantially as an entirety to any Person or adopt a Plan of Liquidation
unless:
(i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, transfer, lease, conveyance or other
disposition of the properties and assets of the Company and of the
Company's Subsidiaries substantially as an entirety, or in the case of a
Plan of Liquidation, the Person to which assets of the Company and of the
Company's Subsidiaries have been transferred (x) shall be a corporation
organized and validly existing under the laws of the United States or any
State thereof or the District of Columbia and (y) shall expressly assume,
by supplemental indenture (in form and substance satisfactory to the
Trustee), executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest on all of
the Notes and the performance of every covenant of the Notes, this
Indenture and the Registration Rights Agreement on the part of the Company
to be performed or observed;
(ii) immediately after giving effect to such transaction and the
assumption contemplated by clause(i)(2)(y) above (including giving effect
to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be
Incurred in connection with or in respect of such transaction), the Company
(in the case of clause (1) of the foregoing clause (i)) or such Person (in
the case of clause (2) thereof) (1) shall not have a Debt to Cash Flow
Ratio greater than 90% of the Debt to Cash Flow Ratio of the Company
immediately prior to such transaction and (2) shall be able to Incur at
least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow
Ratio test of subclause (I)(B)(2) of paragraph (b) of Section 4.12;
(iii) immediately before and immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above
(including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness Incurred or anticipated to be Incurred and any Lien
granted in connection with or in respect of the transaction) no Default and
no Event of Default shall have occurred or be continuing; and
(iv) the Company or such Person shall have delivered to the Trustee
(A) an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, sale, assignment, transfer, lease, conveyance,
other disposition or Plan of Liquidation and, if a supplemental indenture
is required in connection with such transaction, such supplemental
indenture, comply with the applicable provisions of this Indenture and
-65-
that all conditions precedent in this Indenture relating to such
transaction have been satisfied and (B) a certificate from the Company's
independent certified public accountants stating that the Company has made
the calculations required by clause (ii) above in accordance with the
terms of this Indenture and the Notes after the consummation of such
transaction.
Notwithstanding clause (ii)(2) above, (A) any Restricted Subsidiary of
the Company may consolidate with, or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to the Company or to a Qualified Restricted Subsidiary and (B) the
Company or any of its Subsidiaries may consolidate with or merge with or into
any Person that has conducted no business and incurred no Indebtedness or other
liabilities if such transaction is solely for the purpose of effecting a change
in the state of incorporation of the Company or such Subsidiary.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties and assets of one or
more Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
(c) For all purposes of this Indenture and the Notes (including the
provisions of this Section 5.01 and as described in Sections 4.10, 4.14 and
4.18), Subsidiaries of the Company or any surviving or transferee entity will,
upon such transaction or series of transactions, become Restricted Subsidiaries
or Unresricted Subsidiaries as provided pursuant to Section 4.14 and all
Indebtedness, and all Liens on property or assets, of the Company and the
Restricted Subsidiaries immediately prior to such transaction or series of
transactions will be deemed to have been incurred upon such transaction or
series of transactions.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, merger, conveyance, lease or transfer in
accordance with Section 5.01 of this Indenture, the successor Person formed by
such consolidation or into which the Company is merged or to which such
conveyance, lease or transfer is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if such successor had been named as the Company herein and
thereafter (except in the case of a lease) the predecessor corporation will be
relieved of all further obligations and covenants under this Indenture and the
Notes.
-66-
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
"EVENTS OF DEFAULT", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) the failure to pay interest on any Note for a period of 30 days
or more after such interest becomes due and payable; or the failure to pay
additional interest under the Registration Rights Agreement pursuant to
Section 4 thereof for a period of 30 days or more after such additional
interest become due and payable; or
(ii) the failure to pay the principal or Accreted Value on any Note,
when such principal or Accreted Value becomes due and payable, at maturity,
upon redemption, pursuant to a Net Proceeds Offer, a Change of Control
Offer or otherwise; or
(iii) a default in the observance or performance of any other covenant
or agreement contained in this Indenture, which default continues for a
period of 45 days after the Company receives written notice specifying the
default (and requiring that such default be remedied) from the Trustee or
from Holders of not less than 25% in aggregate principal amount of
outstanding Notes; or
(iv) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any Material Subsidiary
(or the payment of which is guaranteed by the Company or any Material
Subsidiary), whether such Indebtedness or guarantee now exists, or is
created after the Issue Date, which default (a) is caused by a failure to
pay at final maturity or when due principal on such Indebtedness within
the grace period provided in such Indebtedness (which failure continues
beyond any applicable grace period) (a "PAYMENT DEFAULT") or (b) results in
the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated,
aggregates $5,000,000 or more; or
(v) one or more judgments in an aggregate amount in excess of
$5,000,000 (which are not paid or covered by third-party insurance by
-67-
financially sound insurers that have not finally disclaimed coverage) being
rendered against the Company or any of its Material Subsidiaries and such
judgment or judgments remain undischarged, or unstayed or unsatisfied for a
period of 60 days after such judgment or judgments become final and non-
appealable; or
(vi) as a consequence of the occurrence or continuation of any event
or condition (other than the passage of time), the Company or any Material
Subsidiary has become obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly scheduled dates of payment in
an aggregate principal amount of at least $5,000,000 or one or more Persons
have the right to require the Company or any Material Subsidiary to
purchase or repay such Indebtedness; or
(vii) the Company or any Material Subsidiary (A) commences a voluntary
case or proceeding under any Bankruptcy Law with respect to itself, (B)
consents to the entry of a judgment, decree or order for relief against it
in an involuntary case or proceeding under any Bankruptcy Law, (C) consents
to the appointment of a Custodian of it or for substantially all of its
property, (D) consents to or acquiesces in the institution of a bankruptcy
or an insolvency proceeding against it, (E) makes a general assignment for
the benefit of its creditors, or (F) takes any corporate action to
authorize or effect any of the foregoing; or
(viii) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Material Subsidiary in an
involuntary case or proceeding under any Bankruptcy Law, which shall (A)
approve as properly filed a petition seeking reorganization, arrangement,
adjustment or composition in respect of the Company or any Material
Subsidiary, (B) appoint a Custodian of the Company or any Material
Subsidiary or for substantially all of its property or (C) order the
winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(ix) any holder of at least $5,000,000 in aggregate principal amount
of Indebtedness of the Company or any Material Subsidiary shall commence
judicial proceedings to foreclose upon assets of the Company or any
Material Subsidiary having an aggregate fair market value, individually or
in the aggregate, of at least $5,000,000 or shall have exercised any right
under applicable law or applicable security documents to take ownership of
any such assets in lieu of foreclosure.
The Company shall provide an Officers' Certificate to the Trustee
promptly upon any officer of the Company obtaining knowledge of any Default or
Event of Default (PROVIDED, HOWEVER, that pursuant to Section 4.06 such officers
shall provide such certification at least annually whether or not they know of
-68-
any Default or Event of Default) that has occurred and, if applicable, describe
such Default or Event of Default and the status thereof.
SECTION 6.02. ACCELERATION.
(a) If an Event of Default (other than an Event of Default specified
in clauses (vii) and (viii) of Section 6.01 with respect to the Company) occurs
and is continuing, then and in every such case the Trustee or the Holders of not
less than 25% in aggregate principal amount of the then outstanding Notes may
declare the Accreted Value of (if prior to June 15, 2000) or all the unpaid
principal of, premium, if any, and accrued and unpaid interest on (if on or
after June 15, 2000), all the Notes then outstanding to be due and payable, by a
notice in writing to the Company (and to the Trustee, if given by Holders)
specifying the Event of Default and that it is a "notice of acceleration" (the
"ACCELERATION NOTICE") and upon such declaration the Accreted Value of (if prior
to June 15, 2000) or such principal amount, premium, if any, and accrued and
unpaid interest (if on or after June 15, 2000) will become immediately due and
payable, notwithstanding anything contained in this Indenture or the Notes to
the contrary. If an Event of Default specified in clauses (vii) and (viii) of
Section 6.01 with respect to the Company occurs, the Accreted Value of (if prior
to June 15, 2000) or all unpaid principal of, and premium, if any, and accrued
and unpaid interest on (if on or after June 15, 2000), the Notes then
outstanding will IPSO FACTO become due and payable without any declaration or
other act on the part of the Trustee or any Holder.
(b) After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Notes has been obtained, the Holders
of not less than a majority in aggregate principal amount of the Notes then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default (other than the nonpayment of
principal of and premium, if any, and interest on the Notes which has become due
solely by virtue of such acceleration) have been cured or waived and if the
rescission would not conflict with any judgment or decree. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of the Accreted Value of, principal of or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
-69-
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Subject to Sections 2.09, 6.07 and 9.02, prior to the declaration of
acceleration of the Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes by written notice to the Trustee may on behalf
of all of the Holders waive any past Default or Event of Default and its
consequences, except a Default in the payment of the Accreted Value of,
principal of or interest on any Note as specified in clauses (i) and (ii) of
Section 6.01 or a Default in respect of any term or provision of this Indenture
that may not be modified or amended without the consent of each Holder affected
as provided in Section 9.02. In case of any such waiver, the Company, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Notes, respectively. This paragraph of this
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Notes, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any law
or this Indenture that the Trustee determines may be unduly prejudicial to the
rights of another Noteholder, or that may involve the Trustee in personal
liability; PROVIDED, HOWEVER, that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. This
Section 6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such
Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
SECTION 6.06. LIMITATION ON SUITS.
A Noteholder may not pursue any remedy with respect to this Indenture
or the Notes unless:
-70-
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) Holders of at least 25% in principal amount of the outstanding
Notes make a written request to the Trustee to pursue the remedy;
(3) such Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within 45 days after
receipt of the request and the offer of satisfactory indemnity; and
(5) during such 45-day period the Holders of a majority in principal
amount of the outstanding Notes do not give the Trustee a direction which,
in the opinion of the Trustee, is inconsistent with the request.
A Noteholder may not use this Indenture to prejudice the rights of
another Noteholder or to obtain a preference or priority over such other
Noteholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture or of the Notes,
the right of any Holder to receive payment of the Accreted Value of or the
principal of and interest on a Note, on or after the respective due dates
expressed in such Note, or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
express prior written consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified
in clause (i) or (ii) of Section 6.01 of this Indenture occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee of
an express trust against the Company or any other obligor on the Notes for the
whole amount of the Accreted Value of or the principal and accrued interest
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest at the rate set forth in Section 4.01 and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
-71-
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relating to the Company or any
other obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Noteholder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, taxes, disbursements and advances of the
Trustee, its agent and counsel, and any other amounts due the Trustee under
Section 7.07. The Company's payment obligations under this Section 6.09 shall
be secured in accordance with the provisions of Section 7.07 hereunder. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
Accreted Value or principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes
for Accreted Value or principal and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Noteholders pursuant to this Section 6.10.
-72-
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.07, or a suit by a Holder or group of Holders of
more than 10% in principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture that are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
-73-
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.02, 6.04 or 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01 and
Section 7.02.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and
to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 10.04 and 10.05.
The Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care.
-74-
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee security
or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with
such request, order or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) Delivery of reports, information and documents to the Trustee
under Section 4.05 is for informational purposes only and the Trustee's
receipt of the foregoing shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, and it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
-75-
statement of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to a Trust Officer, the Trustee shall mail to each Noteholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal of, or interest on, any Note, including an accelerated
payment, a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Proceeds Purchase Date pursuant to a Net
Proceeds Offer and a Default in compliance with Article Five hereof, the Trustee
may withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Noteholders. The foregoing sentence of this Section 7.05 shall be in
lieu of the proviso to Section 315(b) of the TIA and such proviso to Section
315(b) of the TIA is hereby expressly excluded from this Indenture and and the
Notes, as permitted by the TIA.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 of each year beginning with 1996, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Noteholder a brief report dated as of such date that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Sections 313(b), (c)
and (d).
A copy of each report at the time of its mailing to Noteholders shall
be mailed to the Company and filed with the SEC and each stock exchange, if any,
on which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA Section
313(d).
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation for its services as has been agreed to in writing signed by the
Company and Trustee. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or
made by it in connection with the performance of its duties under this
Indenture. Such expenses shall include the reasonable fees and expenses of the
Trustee's agents and counsel.
-76-
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders, Affiliates and directors and
officers for, and hold them harmless against, any and all loss, liability,
damage, claim or expense (including reasonable fees and expenses of counsel),
including taxes (other than taxes based on the income of the Trustee) incurred
by them except for such actions to the extent caused by any negligence, bad
faith or willful misconduct on their part, arising out of or in connection with
the acceptance or administration of this trust including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. At the Trustee's
sole discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; PROVIDED, HOWEVER, that any
settlement of a claim shall be approved in writing by the Trustee.
Alternatively, the Trustee may at its option have separate counsel of its own
choosing and the Company shall pay the reasonable fees and expenses of such
counsel.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(vii) or (viii) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
-77-
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Noteholder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; PROVIDED, HOWEVER, that
such corporation shall be otherwise qualified and eligible under this
Article Seven.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the
case of a corporation included in a bank holding company system, the related
bank holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition.
In addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital
-78-
requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA
Section 310(b); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. The provisions of TIA
Section 310 shall apply to the Company, as obligor of the Notes.
SECTION 7.11. PREFERENTIAL COLLECTION OF
CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company, as
obligor on the Notes.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 and the Trustee's and the Paying
Agent's obligations under Sections 8.03 and 8.04 shall survive) when (i) all
outstanding Notes theretofore authenticated and issued have been delivered
(other than destroyed, lost or stolen Notes that have been replaced or paid) to
the Trustee for cancellation and the Company has paid or caused to be paid all
sums payable hereunder or (ii) the Company has called for redemption pursuant to
this Indenture and the Notes all of the Notes under arrangements satisfactory to
the Trustee, the amounts described in Section 8.01(a) below have been deposited,
the conditions in clauses (i) and (ii) of the proviso in Section 8.01(a) have
been satisfied and the Officers' Certificate and Opinion of Counsel described in
Section 8.01(e) have been delivered. In addition, the Company may terminate all
of its obligations under this Indenture if:
(a) The Company irrevocably deposits, or causes to be deposited, with
the Trustee, in trust for the benefit of the Holders pursuant to an
irrevocable trust and security agreement in form and substance reasonably
satisfactory to the Trustee (i) U.S. Legal Tender, (ii) U.S. Government
Obligations or (iii) a combination thereof, in an amount sufficient after
payment of all Federal, state and local taxes or other charges or
assessments in respect thereof payable by the Trustee, which through the
payment of interest and principal will provide, not later than one day
before the due date of payment in respect of the Notes, U.S. Legal Tender
in an amount which, in the opinion of a nationally recognized firm of
-79-
independent certified public accountants expressed in a written
certification thereof (in form and substance reasonably satisfactory to the
Trustee) delivered to the Trustee, is sufficient to pay the principal of,
premium, if any, and interest on the Notes then outstanding on the dates on
which any such payments are due and payable in accordance with the terms of
this Indenture and of the Notes; PROVIDED, HOWEVER, that (i) the Trustee in
its capacity as trustee of the irrevocable trust, shall pay such money or
the proceeds of such U.S. Government Obligations to the Trustee; (ii) the
Trustee shall have been irrevocably instructed to apply such money or the
proceeds of such U.S. Government Obligations to the payment of said
principal and interest with respect to the Notes; and (iii) such money or
the proceeds of such U.S. Government Obligations shall have been on deposit
with the Trustee for a period of at least 90 days;
(b) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit and such deposit will not result in
a Default or Event of Default under this Indenture or a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Subsidiary of the Company is a party or by which it or its
property is bound;
(c) The Company shall have delivered to the Trustee an Opinion of
Counsel from independent counsel reasonably satisfactory to the Trustee or
a tax ruling from the Internal Revenue Service to the effect that the
Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and defeasance and will be subject to
Federal income tax in the same amounts and in the same manner and at the
same time as would have been the case if such deposit and defeasance had
not occurred;
(d) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, such
U.S. Legal Tender or the proceeds of such U.S. Government Obligations will
not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally; and
(e) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each in form and substance reasonably
satisfactory to the Trustee, each stating that all conditions precedent
relating to the satisfaction and discharge of this Indenture have been
complied with;
PROVIDED, HOWEVER, that no deposit under clause (a) above shall be effective to
terminate the obligations of the Company under the Notes or this Indenture prior
to 90 days following any such deposit.
Notwithstanding the foregoing paragraph the Company's obligations in
Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.12, Article Three, Sections 4.01, 4.02,
-80-
4.03, Sections 7.07, 7.08, 8.03 and 8.04 shall survive until the Notes are no
longer outstanding. Thereafter, the Company's obligations in Section 7.07 and
the Trustee's and the Paying Agent's obligations under Sections 8.03 and 8.04
shall survive.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations specified above.
Notwithstanding anything in this Article Eight to the contrary, the
Company's obligations pursuant to Section 7.07 of this Indenture shall not be
discharged until all amounts then due and payable to the Trustee thereunder
shall have been paid.
The Company shall pay any taxes or other expenses incurred by any
trust created pursuant to this Article Eight.
SECTION 8.02. APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Section 8.01, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the Accreted
Value of or the principal of and interest on the Notes. The Trustee shall be
under no obligation to invest said U.S. Legal Tender or U.S. Government
Obligations except as it may agree in writing with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.
SECTION 8.03. REPAYMENT TO THE COMPANY.
Subject to Section 8.01, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying
Agent shall pay to the Company upon request any money held by them for the
payment of Accreted Value, principal or interest that remains unclaimed for one
year; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any payment, may at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein which shall be at least 30
days from the date of such publication or mailing any unclaimed balance of such
money then remaining will be repaid to the Company. After payment to the
Company, Noteholders
-81-
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person.
SECTION 8.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with Section 8.01 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with Section 8.01; PROVIDED, HOWEVER, that if the Company has made any payment
of interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
SECTION 8.05. ACKNOWLEDGMENT OF DISCHARGE
BY TRUSTEE.
After (i) the conditions of Section 8.01 have been satisfied, (ii) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i), above, relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified in
Section 8.01.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Noteholder:
(i) to cure any ambiguity, defect or inconsistency; PROVIDED,
HOWEVER, that such amendment or supplement does not adversely affect the
rights of any Holder;
-82-
(ii) to effect the assumption by a successor Person of all obligations
of the Company under the Notes, this Indenture and the Registration Rights
Agreement in connection with any transaction complying with Article Five of
this Indenture;
(iii) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(iv) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(v) to make any change that would provide any additional benefit or
rights to the Holders;
(vi) to provide for issuance of the Exchange Notes (which will have
terms substantially identical in all material respects to the Initial Notes
except that the transfer restrictions contained in the Initial Notes will
be modified or eliminated, as appropriate), and which will be treated
together with any outstanding Initial Notes, as a single issue of
securities; or
(vii) to make any other change that does not adversely affect the
rights of any Holder under this Indenture;
PROVIDED, HOWEVER, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.01.
SECTION 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes, may amend or supplement this Indenture or the Notes without
notice to any other Holder. Subject to Section 6.07, the Holder or Holders of
not less than a majority in aggregate principal amount of the then outstanding
Notes may waive compliance by the Company with any provision of this Indenture
or the Notes without notice to any other Holder. No amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, however, shall, without the
prior written consent of each Holder of each Note affected thereby:
(i) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(ii) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any Note;
-83-
(iii) reduce the principal amount or Accreted Value (or rate of
accretion) of or change or have the effect of changing the fixed maturity
of any Note, or change the date on which any Note may be subject to
redemption or repurchase, or reduce the redemption or repurchase price
therefor;
(iv) make any Note payable in money other than that stated in the
Note;
(v) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Note on or after the due date thereof or to bring suit to enforce such
payment, or permitting holders of not less than a majority in aggregate
principal amount of the Notes to waive Defaults or Events of Default, other
than ones with respect to the payment of principal of or interest on the
Notes; or
(vi) amend, modify or change the obligation of the Company to make or
consummate any Change of Control Offer in the event of a Change of Control
or make or consummate any Net Proceeds Offer in respect of any Asset Sale
that has been consummated, or modify any of the provisions or definitions
with respect thereto, or waive a Default in the performance of any
obligation in respect of any such Change of Control Offer or Net Proceeds
Offer, or consent to a departure from any of the terms of such Change of
Control Offer or Net Proceeds Offer.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect; PROVIDED, HOWEVER, that this
Section 9.03 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.
-84-
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, supplement
or waiver becomes effective upon receipt by the Trustee of such Officers'
Certificate and evidence of consent by the Holders of the requisite percentage
in principal amount of outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (i)
through (viii) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; PROVIDED, HOWEVER, that any such waiver shall not
impair or affect the right of any Holder to receive payment of principal of and
interest on a Note, on or after the respective due dates expressed in such Note,
or to bring suit for the enforcement of any such payment on or after such
respective dates without the consent of such Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
-85-
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; PROVIDED, HOWEVER, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision shall control; PROVIDED, HOWEVER, that this Section
10.01 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.
SECTION 10.02. NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company:
CellNet Data Systems, Inc.
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: General Counsel
-86-
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00 Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Trustee
Administration
Telecopier Number: (000) 000-0000
Each of the Company and the Trustee by written notice to the other may
designate additional or different addresses for notices to such Person. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; and five (5)
calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address shall not be deemed to have
been given until actually received by the addressee).
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be sufficiently given to
him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 10.03. COMMUNICATIONS BY HOLDERS
WITH OTHER HOLDERS.
Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 10.04. CERTIFICATE AND OPINION AS
TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
-87-
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 10.05. STATEMENTS REQUIRED IN
CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.07, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 10.06. RULES BY TRUSTEE, PAYING
AGENT, REGISTRAR.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Noteholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
SECTION 10.07. LEGAL HOLIDAYS.
A "LEGAL HOLIDAY" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York or at such place of payment are not required to be open. If a payment date
is a Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 10.08. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
-88-
CONFLICT OF LAWS. Each of the parties hereto agrees to submit to the
jurisdiction of the courts of the State of New York in any action or proceeding
arising out of or relating to this Indenture.
SECTION 10.09. NO ADVERSE INTERPRETATION
OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.10. NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder or incorporator, as such,
of the Company or of the Trustee shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creations.
Each Noteholder by accepting a Note waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Notes.
SECTION 10.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 10.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 10.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
SECTION 10.14. INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture and the Notes shall be
given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
-89-
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-90-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
CELLNET DATA SYSTEMS, INC.
By: /s/ Xxxx Xxxxx
______________________________________
Name: X. Xxxxx
Title: CFO
THE BANK OF NEW YORK, as Trustee
By: /s/ Xxxxxx Xxxxxxx
______________________________________
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
EXHIBIT A
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS
SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL
AMOUNT OF THIS SECURITY, (1) THE ISSUE PRICE IS $450.398; (2) THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT IS $1,199.602; (3) THE ISSUE DATE IS JUNE 15, 1995; AND
(4) THE YIELD TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS 15.04049098%.
CUSIP No.:
CELLNET DATA SYSTEMS, INC.
13% SENIOR DISCOUNT NOTE DUE 2005
No. $
CELLNET DATA SYSTEMS, INC., a California corporation (the "Company",
which term includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of
Dollars, on June 15, 2005.
Interest Payment Dates: June 15 and December 15, commencing
December 15, 2000
Record Dates: June 1 and December 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
CELLNET DATA SYSTEMS, INC.
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Dated: Title:
Certificate of Authentication
This is one of the 13% Senior Discount Notes due 2005 referred to in
the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By: ______________________________________
A-1
Authorized Signatory
Date of Authentication:
A-2
(REVERSE OF SECURITY)
13% Senior Discount Note due 2005
1. INTEREST. CELLNET DATA SYSTEMS, INC., a California corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Cash interest on the Notes will not accrue
prior to June 15, 2000. Interest on the Notes will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from
June 15, 2000. The Company will pay interest semi-annually in arrears on each
Interest Payment Date, commencing December 15, 2000. Interest will be computed
on the basis of a 360-day year of twelve 30-day months and, in the case of a
partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes plus 2% per annum and on overdue installments of interest (without regard
to any applicable grace periods) to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York (the
"Trustee") will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.
4. INDENTURE. The Company issued the Notes under an Indenture,
dated as of June 15, 1995 (the "Indenture"), between the Company and the
Trustee. This Note is one of a duly authorized issue of Initial Notes of the
Company designated as its 13% Senior Discount Notes due 2005 (the "Initial
Notes"). The Notes are limited in aggregate principal amount to $235,000,000.
The Notes include the Initial Notes and the Exchange Notes, as defined below,
issued in exchange for the Initial Notes pursuant to the Indenture. The
Initial Notes and the Exchange Notes are treated as a single class of securities
under the Indenture. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"),
as in effect on the date of the Indenture. Notwithstanding anything to the
contrary herein, the Notes are subject to all such terms, and Holders of Notes
are referred to the Indenture and said Act for a statement of them. The Notes
are general unsecured obligations of the Company.
A-3
5. INDENTURE. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time in accordance with its terms.
6. REDEMPTION. (a) OPTIONAL REDEMPTION. The Notes will be
redeemable, at the Company's option, in whole at any time or in part from time
to time, on and after June 15, 2000 at the following redemption prices
(expressed as percentages of the aggregate principal amount) if redeemed during
the twelve-month period commencing on June 15 of the year set forth below, plus,
in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
YEAR PERCENTAGE
2000 ............................ 106.500%
2001 ............................ 104.330
2002 ............................ 102.170
2003 and thereafter ............... 100.000
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERING. In the event
that the Company consummates a Public Equity Offering after which there is a
Public Market, the Company may, at its option, redeem prior to June 15 , 1998,
from the proceeds of such Public Equity Offering received by the Company, up to
25% of the aggregate principal amount of the Notes originally issued at a
redemption price equal to 113% of the Accreted Value plus accrued interest, if
any, to the date of redemption; PROVIDED, HOWEVER, that (1) such redemption may
only be effected to the extent that immediately after such redemption not less
than 75% in aggregate principal amount of the Notes originally issued remain
outstanding (it being expressly agreed that, for purposes of determining whether
this condition is satisfied, Notes owned (beneficially or otherwise) by the
Company or any of its Affiliates shall not be deemed to be outstanding) and (2)
such redemption is effected not more than once and not more than 60 days after
the consummation of such Public Equity Offering.
The Notes are not entitled to the benefit of any sinking fund.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest or accumulate Accreted Value, as the
case may be, from and after such Redemption Date and the only right of the
Holders of such Notes will be to receive payment of the Redemption Price plus
accrued interest, if any.
8. OFFERS TO PURCHASE. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
A-4
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement among the Company and the Holders of the Initial Notes, the Company
will be obligated upon the occurrence of certain events (which could be as late
as three years after the Issue Date) to consummate an exchange offer pursuant to
which the Holder of this Note shall have the right to exchange this Note for the
Company's Series B 13% Senior Discount Notes due 2005 (the "Exchange Notes"),
which have been registered under the Securities Act, in like principal amount
and having terms identical in all material respects as the Initial Notes. The
Holders of the Initial Notes shall be entitled to receive certain additional
interest payments in the event such exchange offer is not consummated and upon
certain other conditions, all pursuant to and in accordance with the terms of
the Registration Rights Agreement.
10. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, and (except Notes issued as payment of Interest) in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
12. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
13. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for
A-5
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect the rights of any Holder of a Note.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and the Restricted Subsidiaries to, among other
things, Incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, issue Preferred Stock of its
Restricted Subsidiaries, and on the ability of the Company and its Subsidiaries
to merge or consolidate with any other Person or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of the Company's and its
Subsidiaries' assets or adopt a plan of liquidation. Such limitations are
subject to a number of important qualifications and exceptions. Pursuant to
Section 4.06 of the Indenture, the Company must annually report to the Trustee
on compliance with such limitations.
16. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
17. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has received indemnity reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest when due,
for any reason or a Default in compliance with Article Five of the Indenture) if
it determines that withholding notice is in their interest.
18. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
19. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
A-6
20. AUTHENTICATION. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. GOVERNING LAW. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws.
22. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: CellNet Data Systems, Inc., 000 Xxxxxxxx
Xxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000, Attn: General Counsel.
A-7
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _____________________________, agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Dated: __________________ Signed: ____________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee: ____________________________
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) June 15, 1998, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer:
A-8
[CHECK ONE]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
(3) __ to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended) that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter can
be obtained from the Trustee); or
(4) __ outside the United states to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act of 1933, as amended;
or
(5) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act of 1933, as amended; or
(6) __ pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(7) __ pursuant to another available exemption from the registration
requirements of the Securities Act of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; PROVIDED, HOWEVER, that if box (3), (4), (5) or (7)
is checked, the Company or the Trustee may require, prior to registering any
such transfer of the Notes, in its sole discretion, such written legal opinions,
certifications (including an investment letter in the case of box (3) or (4))
and other information as the Trustee or the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, as amended.
A-9
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Dated: __________________ Signed: ____________________________
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee: __________________________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: __________________ ____________________________
NOTICE: To be executed by
an executive officer
A-10
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated: __________________ ____________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee: ____________________________________
A-11
EXHIBIT B
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, THIS
SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL
AMOUNT OF THIS SECURITY, (1) THE ISSUE PRICE IS $450.398; (2) THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT IS $1,199.602; (3) THE ISSUE DATE IS JUNE 15, 1995; AND
(4) THE YIELD TO MATURITY (COMPOUNDED SEMI-ANNUALLY) IS 15.04049098%.
CUSIP No.:
CELLNET DATA SYSTEMS, INC.
SERIES B 13% SENIOR DISCOUNT NOTE DUE 2005
No. $
CELLNET DATA SYSTEMS, INC., a California corporation (the "Company",
which term includes any successor entity), for value received promises to pay to
or registered assigns, the principal sum of
Dollars, on June 15, 2005.
Interest Payment Dates: June 15 and December 15, commencing
December 15, 2000
Record Dates: June 1 and December 1
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
CELLNET DATA SYSTEMS, INC.
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Dated: Title:
Certificate of Authentication
This is one of the Series B 13% Senior Discount Notes due 2005
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By: ______________________________________
B-1
Authorized Signatory
Date of Authentication:
B-2
(REVERSE OF SECURITY)
Series B 13% Senior Discount Note due 2005
1. INTEREST. CELLNET DATA SYSTEMS, INC., a California corporation
(the "Company"), promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Cash interest on the Notes will not accrue
prior to June 15, 2000. Interest on the Notes will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from
June 15, 2000. The Company will pay interest semi-annually in arrears on each
Interest Payment Date, commencing December 15, 2000. Interest will be computed
on the basis of a 360-day year of twelve 30-day months and, in the case of a
partial month, the actual number of days elapsed.
The Company shall pay interest on overdue principal and on overdue
installments of interest from time to time on demand at the rate borne by the
Notes plus 2% per annum and on overdue installments of interest (without regard
to any applicable grace periods) to the extent lawful.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York (the
"Trustee"), will act as Paying Agent and Registrar. The Company may change any
Paying Agent, Registrar or co-Registrar without notice to the Holders.
4. INDENTURE. The Company issued the Notes under an Indenture,
dated as of June 15, 1995 (the "Indenture"), between the Company and the
Trustee. This Note is one of a duly authorized issue of Exchange Notes of the
Company designated as its Series B 13% Senior Discount Notes due 2005 (the
"Exchange Notes"). The Notes are limited in aggregate principal amount to
$235,000,000. The Notes include the 13% Senior Discount Notes due 2005 (the
"Initial Notes") and the Exchange Notes, issued in exchange for the Initial
Notes pursuant to the Indenture. The Initial Notes and the Exchange Notes are
treated as a single class of securities under the Indenture. Capitalized terms
herein are used as defined in the Indenture unless otherwise defined herein.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture.
Notwithstanding anything to the contrary herein, the Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and said Act for
a statement of them. The Notes are general unsecured obligations of the
Company.
B-3
5. INDENTURE. Each Holder, by accepting a Note, agrees to be bound
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time in accordance with its terms.
6. REDEMPTION. (a) OPTIONAL REDEMPTION. The Notes will be
redeemable, at the Company's option, in whole at any time or in part from time
to time, on and after June 15, 2000 at the following redemption prices
(expressed as percentages of the aggregate principal amount) if redeemed during
the twelve-month period commencing on June 15 of the year set forth below, plus,
in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
YEAR PERCENTAGE
2000 ............................ 106.500%
2001 ............................ 104.330
2002 ............................ 102.170
2003 and thereafter ............... 100.000
(b) OPTIONAL REDEMPTION UPON PUBLIC EQUITY OFFERING. In the event
that the Company consummates a Public Equity Offering after which there is a
Public Market, the Company may, at its option, redeem prior to June 15, 1998,
from the proceeds of such Public Equity Offering received by the Company, up to
25% of the aggregate principal amount of the Notes originally issued at a
redemption price equal to 113% of the Accreted Value plus accrued interest, if
any, to the date of redemption; PROVIDED, HOWEVER, that (1) such redemption may
only be effected to the extent that immediately after such redemption not less
than 75% in aggregate principal amount of the Notes originally issued remain
outstanding (it being expressly agreed that, for purposes of determining whether
this condition is satisfied, Notes owned (beneficially or otherwise) by the
Company or any of its Affiliates shall not be deemed to be outstanding) and (2)
such redemption is effected not more than once and not more than 60 days after
the consummation of such Public Equity Offering.
The Notes are not entitled to the benefit of any sinking fund.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest or accumulate Accreted Value, as the
case may be, from and after such Redemption Date and the only right of the
Holders of such Notes will be to receive payment of the Redemption Price plus
accrued interest, if any.
8. OFFERS TO PURCHASE. Sections 4.15 and 4.16 of the Indenture
provide that, after certain Asset Sales (as defined in the Indenture) and upon
the occurrence of a Change of Control (as defined in the Indenture), and subject
B-4
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, and (except Notes issued as payment of Interest) in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for one year, the Trustee and the Paying Agent will
pay the money back to the Company. After that, all liability of the Trustee
and such Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, or comply with Article Five of the Indenture or make any other change
that does not adversely affect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and the Restricted Subsidiaries to, among other
things, Incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, make certain Investments, create or incur liens,
enter into transactions with Affiliates, create dividend or other payment
restrictions affecting Restricted Subsidiaries, issue Preferred Stock of its
Restricted Subsidiaries, and on the ability of the Company and its Subsidiaries
to merge or consolidate with any other Person or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of the
B-5
Company's and its Subsidiaries' assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and exceptions.
Pursuant to Section 4.06 of the Indenture, the Company must annually report to
the Trustee on compliance with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.
16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture or the Notes unless it has received indemnity reasonably satisfactory
to it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the Notes then
outstanding to direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of Notes notice of any continuing Default or
Event of Default (except a Default in payment of principal or interest when due,
for any reason or a Default in compliance with Article Five of the Indenture) if
it determines that withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company shall have any liability for
any obligation of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
19. AUTHENTICATION. This Note shall not be valid until the Trustee
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. This Note and the Indenture shall be governed by
and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to
principles of conflict of laws.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
B-6
22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: CellNet Data Systems, Inc., 000 Xxxxxxxx
Xxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000, Attn: General Counsel.
B-7
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ___________________________________, agent to
transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Dated: __________________ Signed: _______________________________
(Sign exactly as name appears
on the other side of this Note)
Signature Guarantee: ________________________________
B-8
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:
Section 4.15 [ ]
Section 4.16 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated: _________________ _____________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed.
Signature Guarantee: _____________________________
B-9
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
TRANSFERS TO NON-QIB ACCREDITED INVESTORS
___________, ____
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: CellNet Data Systems, Inc. (the "Company")
13% SENIOR DISCOUNT NOTES DUE 2005 (THE "NOTES")
Ladies and Gentlemen:
In connection with our proposed purchase of $_______ aggregate
principal amount of the Notes, we confirm that:
1. We have received a copy of the Offering Memorandum (the "Offering
Memorandum"), dated June 12, 1995, relating to the Notes and such other
information as we deem necessary in order to make our investment decision.
We acknowledge that we have read and agreed to the matters stated in the
section entitled "Transfer Restrictions" of the Offering Memorandum.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture
dated as of June 15, 1995 relating to the Notes (the "Indenture") and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities
Act").
3. We understand that the Notes have not been registered under the
Securities Act, and that the Notes may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on
behalf of any accounts for which we are acting as hereinafter stated, that
if we should sell any Notes within three years after the original issuance
of the Notes, we will do so only (A) to the Company or any subsidiary
thereof, (B) inside the United States in accordance with Rule 144A under
the Securities Act to a "qualified institutional buyer" (as defined
therein), (C) inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
C-1
Regulation D under the Securities Act) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you a
signed letter substantially in the form of this letter, (D) outside the
United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from registration provided by
Rule 144 under the Securities Act (if available), or (F) pursuant to an
effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing any of the Notes from us a notice
advising such purchaser that resales of the Notes are restricted as stated
herein.
4. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certification, written
legal opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Notes, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment, as the case may be.
6. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By: ___________________________________
Authorized Signature
C-2
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
PURSUANT TO REGULATION S
______________, ____
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: CellNet Data Systems, Inc. (the "Company")
13% SENIOR DISCOUNT NOTES DUE 2005 (THE "NOTES")
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
D-1
You, the Company and counsel for the Company are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:___________________________
Authorized Signature
D-2
EXHIBIT E
CELLNET DATA SYSTEMS
TAX ALLOCATION AGREEMENT
This Agreement is made as of January 1, 1995 between CELLNET DATA
SYSTEMS, INC. ("Parent") and CELLNET DATA SERVICES, INC. ("Holding" or
"Subgroup Common Parent").
WHEREAS, each Subgroup Member (as defined in Section 3.1 hereof) is
currently a member of an affiliated group (the "Group") within the meaning of
Section 1504 of the Internal Revenue Code of 1986, as amended, (the "Code")
of which Parent is the common parent corporation; and
WHEREAS, Parent and Holding desire to establish a method for allocating
the consolidated tax liability of the Group among the members of the Group
and for reimbursing Parent for the payment of such liability;
NOW, THEREFORE, in consideration of the promises and of the mutual
agreements and covenants contained herein, Parent and Holding hereby agree as
follows:
1. DEFINITIONS. As used in this Agreement, defined terms shall have the
meaning ascribed to such terms herein, unless the context otherwise
requires.
2. CONSOLIDATED FEDERAL INCOME TAX RETURNS. Each Subgroup Member agrees to be
included in, and Parent agrees to file a consolidated Federal income tax
return for each taxable year ("Applicable Period") in which Parent and each
Subgroup Member are eligible to file consolidated returns as an affiliated
group of corporations, as such term is defined in Section 1504 of the Code.
3. COMPUTATIONS.
3.1 For purposes of making the computations described herein Subgroup
Common Parent and all lower (with respect to Subgroup Common Parent)
tier entities (individually and collectively referred to as
"Subsidiary" or "Subsidiaries") in which Subgroup Common Parent has
direct or indirect ownership shall be treated as an affiliated group
of corporations ("Subgroup"), the common parent of which is Subgroup
Common Parent, provided, however, that Subgroup shall only include any
Subsidiary to the extent that such Subsidiary meets the test of
affiliation under Section 1504 of the Code as it would apply to such
Subgroup. Subgroup Common Parent and each Subsidiary which is a
member of the Subgroup shall sometimes be referred to individually as
a "Subgroup Member". A Subsidiary which is a member of the Subgroup
shall, for purposes of this Agreement, continue to be treated as a
member of the Subgroup, notwithstanding any transfer of its stock to
any member of the Group which is not a member of the Subgroup.
3.2 For each Applicable Period, Parent shall compute an estimated and an
actual Federal income tax liability for Subgroup. For purposes of
computing Subgroup's estimated and actual liabilities, Subgroup shall
be treated as if it were a separate affiliated group of corporations
which had filed a separate consolidated return for each period and all
prior taxable periods (taking into account all limitations which would
be applicable to Subgroup, including Sections 382 and 383 of the
Code), and which was never affiliated with the Group.
4. LIABILITY OF SUBGROUP TO PARENT.
4.1 ESTIMATED LIABILITY. If Parent's good faith calculation under
Section 3.2 hereof with respect to Subgroup results in an estimated
Federal income tax liability for Subgroup with respect to the
Applicable Period, then in that event Subgroup Common Parent shall pay
such computed estimated income tax liability to Parent in such amounts
and at such times as Subgroup Common Parent would have been required
to pay the Internal Revenue Service, if Subgroup were a separate
affiliated group of corporations making separate estimated
consolidated payments of tax and filing a separate consolidated tax
return. Notwithstanding the foregoing, Subgroup Common Parent's
payments of estimated tax through any date (including any date on
which Parent requests an extension of time for filing the Group's
consolidated Federal Income Tax Return) with respect to an Applicable
Period shall not exceed the amount of tax Parent is required to have
paid to the Internal Revenue Service on or before such date.
4.2 ACTUAL LIABILITY.
4.2.1 After the end of each Applicable Period, Parent shall
compute Subgroup's actual liability under Section 3.2
hereof. The provisions of the second sentence of
Section 4.1 hereof shall not limit the Subgroup's actual
liability.
4.2.2 If it is finally determined that Subgroup's actual liability
for the Applicable Period exceeds the amount of Subgroup
Common Parent's estimated tax payments to Parent for such
Applicable Period then, in that event, Subgroup Common
Parent shall pay to Parent the excess of its actual
liability over its estimated tax payments for such
Applicable Period. However, if Subgroup Common Parent's
estimated tax payments to Parent for the Applicable Period
exceed Subgroup's finally determined actual liability, the
excess shall be refunded or applied against Subgroup's
liability for the following Applicable Period, at the option
of Parent.
4.2.3 If Parent's calculation with respect to Subgroup results in
a net operating loss for the Applicable Period that could be
carried back under the principles of Section 3.2 hereof and
Sections 172 and 1502 of the Code and the regulations
thereunder to a prior taxable period or periods of Subgroup
with respect to which Subgroup Common Parent previously made
payments to Parent
-2-
pursuant to Section 4.1 hereof or Section 4.2.2 hereof,
then, in that event, Parent shall pay Subgroup Common
Parent an amount equal to the tax refund to which
Subgroup Common Parent would have been entitled (but
not in excess of the aggregate amounts previously paid to
Parent under Section 4.1 hereof as adjusted by Section 4.2.2
hereof with respect to the three preceding taxable years,
reduced by the aggregate refunds paid to Subgroup under this
Section 4.2.3 hereof with respect to such years) under the
separate consolidated return principles of Section 3.2
hereof.
4.2.4 If Parent's calculation with respect to Subgroup results in
a net operating loss for any Applicable Period that could
not be carried back under the principles of Section 3.2
hereof and Sections 172 and 1502 of the Code and the
regulations thereunder to a prior taxable period or periods
of Subgroup with respect to which Subgroup Common Parent
previously made payments to Parent pursuant to Section 4.1
hereof or Section 4.2.2 hereof, then, in that event, such
net operation loss shall be a net operating loss carryover
to be used by Parent in computing Subgroup's Federal income
tax liability pursuant to Section 3.2 hereof for future
taxable periods, under the law applicable to net operating
loss carryovers in general, as such law applies to the
relevant taxable period.
4.2.5 Any adjustment other than a net operating loss carryback
described in Section 4.2.3 hereof or a net capital loss or
credit carryback described in Section 4.2.7 hereof, for
whatever reason (including, without limitation, audits or
amended returns), to any item affecting a calculation of tax
liabilities under Section 3.2 hereof and Section 4.2 hereof,
shall be given effect by Parent in redetermining the amount
payable by or due to Subgroup Common Parent pursuant to this
Agreement as if such adjustment were part of the original
determination hereunder, including any interest that would
be due to or from the Internal Revenue Service, under the
separate consolidated return principles of Section 3.2
hereof as a result of such adjustment.
4.2.6 Payments under Sections 4.2.2 and 4.2.3 hereof shall be made
on the date that Parent files the Group's consolidated
Federal income tax return for the taxable year involved.
Payments under Section 4.2.5 hereof shall be made promptly
(not later than seven days) after the final determination of
any adjustment to which Section 4.2.5 hereof relates.
4.2.7 Principles similar to those of Sections 4.2.3 and 4.2.4
hereof shall apply in the case of net capital loss and
credit carryovers.
5. ALLOCATION OF SUBGROUP LIABILITY. Subject to the provisions of Section 7.2
hereof, Subgroup Common Parent may allocate its liability under this
Agreement among members of the Subgroup.
-3-
6. ELECTIONS. All elections relating to the filing of a consolidated Federal
income tax return which are required or are available (as well as elections
applicable to the computation of Subgroup's estimated and actual
liabilities under Section 3.2 hereof) shall be made by Parent. Each
Subsidiary shall execute such consents and other documents as are necessary
in connection therewith. In making elections applicable to the computation
of Subgroup's estimated and actual liabilities under Section 3.2 hereof,
Parent shall make such elections in a reasonable manner so as to minimize
the tax liability of Subgroup, provided, however, that such elections shall
be consistent with the elections made and positions taken in computing the
Group's actual Federal income tax liabilities for its Federal income tax
returns.
7. LIABILITY FOR TAXES; REFUNDS.
7.1 Parent, as the common parent and agent of the Group, shall be
responsible for and shall pay, any consolidated Federal income tax
liability of the Group and has the sole right to any refunds from the
Internal Revenue Service.
7.2 Notwithstanding any other provision of this Agreement each Subsidiary
shall be jointly and severally liable to Parent for Subgroup Common
Parent's obligations under this Agreement, and all members of the
Group which are not members of the Subgroup shall be jointly and
severally liable to Subgroup Common Parent for Parent's obligations
under this Agreement.
7.3 Except to the extent Subgroup Common Parent or a Subsidiary is
required to make any payment under this Agreement, Parent shall
indemnify each Subgroup Member and hold it harmless against all
Federal income tax liabilities relating to taxable years of such
Subgroup Member during which such Subgroup Member is or was a member
of the Group.
8. RELIANCE ON INCOME PROJECTIONS. For purposes of making the estimated tax
liability computations required by this Agreement, Parent may rely on the
same income and loss projections it generally uses in its overall tax
planning.
9. STATE AND LOCAL INCOME TAX RETURNS. The foregoing principles shall apply
in similar fashion to any consolidated or combined foreign, state or other
local income tax returns which the Group may elect or be required to file.
10. EFFECTIVE TERM OF THIS AGREEMENT. With respect to each Subgroup Member,
this Agreement shall be effective for the Group's 1995 taxable period and
all subsequent taxable periods (excluding any period of time in 1995 in
which such Subgroup Member was not a member of the Group) until the date on
which (i) such Subgroup Member ceases to be a member of the Group under
applicable Federal law, (ii) the Group no longer remains in existence
within the meaning of Treasury Regulation Section 1.1502-75(a), or
(iii) the Group is no longer eligible to file, or is no longer eligible to
join in the filing of, a consolidated return for Federal income tax
purposes. After such date, (i) Parent and such Subgroup Member,
respectively, shall remain
-4-
fully responsible for any payments either was required to make under
this Agreement in respect of all computations regarding Applicable
Periods during which such Subgroup Member was a member of the Group,
and (ii) all other obligations of such Subgroup Member and Parent
under this Agreement shall terminate unless otherwise agreed.
11. PURPOSE AND EFFECT. This agreement is entered into by the parties solely
in recognition of the mutual benefits resulting from filing a Federal (or
foreign or state or other local) consolidated tax return. The respective
amounts of tax liability allocated to Parent and each Subgroup Member for
purposes of computing such corporations' eaming and profits for Federal (or
foreign or state or other local) income tax purposes may differ from those
determined in accordance with this Agreement. Furthermore, any amount
treated for Federal (or foreign or state or other local) income tax
purposes, on account of such a difference, as a contribution to capital or
a distribution with respect to stock, or a combination thereof, as the case
may be, shall be treated as a contribution to capital, a distribution with
respect to stock, or a combination thereof, solely for Federal (or foreign
or state or other local) income tax purposes.
12. ADDITIONAL PARTIES. Parent and Holding intend to use their best efforts to
procure the adoption and execution of this Agreement by each present and
future Subsidiary. Upon such execution, each Subsidiary shall be a party
hereto in all respects as if such Subsidiary had been an original party
hereto.
13. BINDING AGREEMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, Parent and Holding have executed this Agreement by the
authorized officers thereof as of the date first above written.
CELLNET DATA SYSTEMS, INC.
By: _________________________
CELLNET DATA SERVICES, INC.
By: _________________________
-5-
The undersigned do hereby adopt and agree to become a party to the above
Agreement as of the dates indicated below.
CELLNET DATA SERVICES (KC), INC.
By: ___________________________ Date: January 1, 1995
CN WAN CORP.
By: ___________________________ Date: January 1, 1995
[Others to be added]
-6-
