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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 27, 1997
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INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
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(Exact name of registrant as specified in charter
Delaware 0- 94-3248701
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(State or other jurisdiction (CommissionFile Number) (IRS Employer
of incorporation) Identification No.)
400 S. El Camino Real, Suite 1275, San Mateo, California 94402
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 548-0808
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Not Applicable
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(Former name or former address, if changed since last report.)
This document contains 7 pages.
The Exhibit Index appears on page 6.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On August 27, 1997, International Wireless Communications
Pakistan Limited ("IWCPL"), a company organized under the laws of Mauritius in
which the Registrant then held an indirect 43.48% equity interest, consummated a
share purchase transaction pursuant to which IWCPL purchased an aggregate of
25,018,364 shares of Rupees 10 each (the "Shares") of Pakistan Mobile
Communications (Pvt) Limited ("PMCL") from Motorola International Development
Corporation ("MIDC") and Continental Communications Limited ("CCL"), two
shareholders of PMCL. (Such acquisition of the Shares is hereinafter referred to
as the "PMCL Acquisition.") PMCL is a limited liability company organized under
the laws of the Islamic Republic of Pakistan that provides cellular telephone
services in Pakistan. The Shares, which represent 46% of the outstanding
capital stock of PMCL, were purchased by IWCPL pursuant to a Share Purchase
Agreement dated July 17, 1997 between IWCPL and MIDC (the "MIDC Share Purchase
Agreement") and a Share Purchase Agreement dated July 17, 1997, between IWCPL
and CCL (together with the MIDC Share Purchase Agreement, the "Share Purchase
Agreements").
The aggregate consideration paid by IWCPL for the Shares pursuant to
the Share Purchase Agreements was US$44,441,000 in cash (the "Cash
Consideration") and 493,510 shares of the Registrant's Class A Common Stock (the
"IWCH Shares" and, together with the Cash Consideration, the "Consideration").
IWCPL provided the Consideration out of the proceeds from the sale of shares of
its capital stock to the shareholders of IWCPL, including Pakistan Wireless
Holdings Limited ("PWH"), a company organized under the laws of Mauritius that
is a wholly owned indirect subsidiary of the Registrant, and Vanguard Pakistan,
Inc. ("Vanguard Pakistan"), a wholly owned subsidiary of Vanguard Cellular
Operating Corp., a stockholder of the Registrant ("Vanguard"). Prior to the
PMCL Acquisition, IWCPL was a shell company with no operations or significant
assets.
The aggregate purchase price paid by PWH for its shares of capital
stock of IWCPL was cash in the amount of US$15,841,000 and the IWCH Shares. PWH
financed the cash portion of such purchase price by borrowing funds pursuant to
a Loan Agreement dated August 18, 1997, between PWH and certain lenders set
forth therein, including Toronto Dominion Investments, Inc., Vanguard and
certain other shareholders of the Registrant. The repayment of such borrowed
amount and interest accrued thereon is secured by PWH's interest in IWCPL and,
under certain circumstances, such borrowed amount and accrued interest are
convertible into shares of the Registrant's Series H Preferred Stock. PWH
acquired the IWCH Shares through a capital contribution of such IWCH Shares to
PWH by International Wireless Communications, Inc. ("IWC"), a Delaware
corporation that is a wholly owned direct subsidiary of the Registrant. IWC
acquired the IWCH Shares by purchasing the IWCH Shares from the Registrant for a
promissory note in the amount of US$6,159,000.
The determination of the amount of the Consideration paid by IWCPL for
the Shares was based upon arm's-length negotiations between the shareholders of
IWCPL on the one hand and MIDC and CCL on the other hand.
Upon the consummation of the PMCL Acquisition and pursuant to the
Share Purchase Agreements, IWCPL and the other shareholders of PMCL entered into
a Restated and Amended Shareholders Agreement, and a side letter regarding
capital contributions, shareholder guarantees and certain other matters (the
"PMCL Side Letter"). Pursuant to the Side Letter, IWCPL agreed to contribute
its pro-rata share of certain capital calls and shareholder loans to PMCL
through the end of 1998. The Side Letter also provided for the placement in
escrow of 2,175,510 Shares representing a 4% equity
Page 2
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interest in PMCL subject to the reduction or elimination of certain shareholder
guarantees currently provided by MIDC on or before August 27, 1998.
The shareholders of IWCPL, including PWH and Vanguard Pakistan, also
entered into an Amended and Restated Shareholders Agreement, dated August 13,
1997 (the "IWCPL Shareholders Agreement"), in connection with the PMCL
Acquisition. The agreement sets forth certain rights and obligations of such
shareholders with respect to their respective interests in IWCPL and IWCPL's
obligations to PMCL. Pursuant to the IWC Group Agreement, dated August 18, 1997
(the "IWC Group Agreement"), (i) IWC and Vanguard Pakistan agreed that each
party could exercise certain rights and perform certain duties of the other
party under the IWCPL Shareholders Agreement, if such other party was unable or
unwilling to do so, and (ii) Vanguard Pakistan entered into a voting trust
agreement whereby it granted an officer of PWH the right to vote all voting
securities of IWCPL now owned or hereafter acquired by Vanguard Pakistan during
the term of the voting trust.
Additionally, pursuant to the MIDC Share Purchase Agreement, IWCPL was
granted an option to purchase shares of Rupees 10 each of PMCL, which shares
represent a 12.69% interest in PMCL (the "Additional Shares") from MIDC for a
purchase price of $13,959,000. IWCPL exercised such option on August 27, 1997,
and consummated the purchase of such Additional Shares on September 8, 1997.
IWCPL provided the purchase price for such Additional Shares from the proceeds
of the sale of newly issued shares of its capital stock to a third party.
IWCPL's aggregate equity interest in PMCL increased from 46% to 58.69% and the
Registrant's indirect equity interest in IWCPL was reduced from 43.48% to 34.08%
as a result of such sale of shares of IWCPL to such third party. In connection
with this sale of shares of IWCPL, the shareholders of IWCPL, including such
third party, entered into a Deed of Adherence to the IWCPL Shareholders
Agreement, dated August 27, 1997 (the "Deed of Adherence").
Additional information regarding the PMCL Acquisition and the terms
thereof are set forth in the IWCPL Shareholders Agreement, the Deed of Adherence
and the Share Purchase Agreements and the exhibits thereto, which qualify the
foregoing description of the Acquisition in its entirety and are incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF THE BUSINESS ACQUIRED. Pursuant to Rule
3-05(b) of Regulation S-X, financial statements of PMCL are not
required to be provided herein as none of the conditions set
forth in Rule 1-02(w) of Regulation S-X exceed 20%.
(b) PRO FORMA FINANCIAL INFORMATION. Pursuant to Article 11 of
Regulation S-X, no pro formal financial information is required
to be provided herein as the PMCL Purchase does not represent a
significant business combination under Rule 11-01(b) of
Regulation S-X.
3
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(c) EXHIBITS.
EXHIBIT NO. DESCRIPTION
2.10A (1) Share Purchase Agreement between Motorola
International Development Corporation ("MIDC") and
International Wireless Communications Pakistan
Limited ("IWCPL"), dated July 17, 1997
2.10B (2) Share Purchase Agreement between Continental
Communications Limited ("CCL") and IWCPL, dated
July 17, 1997
2.10C (3) Restated and Amended Shareholders Agreement among
MIDC, Saif Telecom (Pvt) Ltd ("Saif") and IWCPL,
dated August 13, 1997
2.10D (4) Side Letter regarding Shareholder Obligations
among IWCPL, MIDC and Saif, dated August 13, 1997
2.10E Amended and Restated Shareholders' Agreement among
IWCPL, Pakistan Wireless Holdings Limited ("PWH"),
Vanguard Pakistan, Inc. ("Vanguard Pakistan") and
South Asia Wireless Communications (Mauritius)
Limited ("SAWC"), dated August 13, 1997
2.10F IWC Group Agreement between PWH and Vanguard
Pakistan, dated August 13, 1997; Voting Trust
Agreement between PWH and Vanguard Pakistan, dated
August 13, 1997
2.10G Deed of Adherence to IWCPL Shareholders Agreement
among IWCPL, PWH, Vanguard Pakistan and SAWC,
dated August 27, 1997
2.10H (5) License granted to Pakistan Mobile Communications
Limited ("PMCL") by the Government of Pakistan,
Ministry of Communications, dated July 6, 1992
(the "PMCL License")
2.10I Re-validation of the PMCL License, dated August 9,
1997
2.10J Letter Agreement Amending the Restated and Amended
Shareholders Agreement Among MIDC, Saif and IWCPL,
dated August 1997
10.28A Loan Agreement between IWCH, Vanguard Cellular
Financial Corporation ("Vanguard") and Toronto
Dominion Investments, Inc. ("Toronto"), dated
August 18, 1997
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10.28B Exchange Agreement between IWCH, Vanguard, Toronto
and other Noteholders and Warrantholders, dated
August 18, 1997
10.28C Amended and Restated Certificate of Incorporation
of IWCH, dated September 10, 1997
10.28D Intercreditor and Collateral Agency Agreement
dated August 18, 1997
10.28E IWCH Tranche A Senior Exchangeable Note
10.28F IWCH Warrant to Purchase Common Stock
10.28G Loan Agreement between PWH, Vanguard and Toronto,
dated August 18, 1997
10.28H PWH Tranche A Exchangeable Senior Secured Note
10.28I Pledge Agreement between PWH and Toronto, dated
August 18, 1997
10.28J Security Agreement among PWH and Toronto, dated
August 18, 1997
10.28K Stock Option Agreement between IWCH and PWH, dated
August 18, 1997
10.28L Supplement to Share Purchase Agreement between
IWCH and Continental Communications Limited, dated
August 18, 1997
10.28M Sixth Amended and Restated Investor Rights
Agreement, dated August 27, 1997
10.28N Amended and Restated Registration Rights
Agreement, dated August 27, 1997
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(1) Incorporated by reference to Exhibit No. 10.27A to the
Registrant's Quarterly Report on Form 10-Q, filed with the
Securities and Exchange Commission on August 12, 1997 (the
"Form 10-Q")
(2) Incorporated by reference to Exhibit No. 10.27B to the
Form 10-Q
(3) Incorporated by reference to Exhibit No. 10.27C to the
Form 10-Q
(4) Incorporated by reference to Exhibit No. 10.27D to the
Form 10-Q
(5) Incorporated by reference to Exhibit No. 10.27G to the
Form 10-Q
5
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERNATIONAL WIRELESS COMMUNICATIONS
HOLDINGS, INC.
Dated: September 10, 1997 By: /s/ Douglas S. Sinclair
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Douglas S. Sinclair
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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2.10A (1) Share Purchase Agreement between Motorola International
Development Corporation ("MIDC") and International Wireless
Communications Pakistan Limited ("IWCPL"), dated July 17, 1997
2.10B (2) Share Purchase Agreement between Continental Communications
Limited ("CCL") and IWCPL, dated July 17, 1997
2.10C (3) Restated and Amended Shareholders Agreement among MIDC, Saif
Telecom (Pvt) Ltd ("Saif") and IWCPL, dated August 13, 1997
2.10D (4) Side Letter regarding Shareholder Obligations among IWCPL, Saif,
MIDC and Saif, dated August 13, 1997
2.10E Amended and Restated Shareholders' Agreement among IWCPL,
Pakistan Wireless Holdings Limited ("PWH"), Vanguard Pakistan,
Inc. ("Vanguard Pakistan") and South Asia Wireless Communications
(Mauritius) Limited ("SAWC"), dated August 13, 1997
2.10F IWC Group Agreement between PWH and Vanguard Pakistan, dated
August 13, 1997; Voting Trust Agreement between PWH and Vanguard
Pakistan, dated August 13, 1997
2.10G Deed of Adherence to IWCPL Shareholders Agreement among IWCPL,
PWH, Vanguard Pakistan and SAWC, dated August 27, 1997
2.10H (5) License granted to Pakistan Mobile Communications Limited by the
Government of Pakistan, Ministry of Communications, dated July 6,
1992 (the "PMCL License")
2.10I Re-validation of the PMCL License, dated August 9, 1997
2.10J Letter Agreement Amending the Restated and Amended Shareholders
Agreement Among MIDC, Saif and IWCPL dated August 1997.
10.28A Loan Agreement between IWCH Vanguard Cellular Financial
Corporation ("Vanguard") and Toronto Dominion Investments, Inc.
("Toronto"), dated August 18, 1997
10.28B Exchange Agreement between IWCH, Vanguard, Toronto and other
Noteholders and Warrantholders, dated August 18, 1997
10.28C Amended and Restated Certificate of Incorporation of IWCH, dated
September 10, 1997
10.28D Intercreditor and Collateral Agency Agreement dated August 18,
1997
E-1
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10.28E IWCH Tranche A Senior Exchangeable Note
10.28F IWCH Warrant to Purchase Common Stock
10.28G Loan Agreement between PWH, Vanguard and Toronto, dated
August 18, 1997
10.28H PWH Tranche A Exchangeable Senior Secured Note
10.28I Pledge Agreement between PWH and Toronto, dated August 18, 1997
10.28J Security Agreement among PWH and Toronto, dated August 18, 1997
10.28K Stock Option Agreement between IWCH and PWH, dated August 18,
1997
10.28L Supplement to Share Purchase Agreement between IWCH and
Continental Communications Limited, dated August 18, 1997
10.28M Sixth Amended and Restated Investor Rights Agreement, dated
August 27, 1997
10.28N Amended and Restated Registration Rights Agreement, dated
August 27, 1997
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(1) Incorporated by reference to Exhibit No. 10.27A to the Registrant's
Quarterly Report on Form 10-Q, filed with the Securities and Exchange
Commission on August 12, 1997 (the "Form 10-Q")
(2) Incorporated by reference to Exhibit No. 10.27B to the Form 10-Q
(3) Incorporated by reference to Exhibit No. 10.27C to the Form 10-Q
(4) Incorporated by reference to Exhibit No. 10.27D to the Form 10-Q
(5) Incorporated by reference to Exhibit No. 10.27G to the Form 10-Q
E-2
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EXECUTION COPY
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AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
among
INTERNATIONAL WIRELESS COMMUNICATIONS
PAKISTAN LIMITED
PAKISTAN WIRELESS HOLDINGS LIMITED
SOUTH ASIA WIRELESS COMMUNICATIONS
(MAURITIUS) LIMITED
and
VANGUARD PAKISTAN, INC.
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Dated as of August 13, 1997
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TABLE OF CONTENTS
Page
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1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Principles of Interpretation. . . . . . . . . . . . . . . . . . . 3
2. Business of the Company . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 PMCL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Restrictions on Transfer of Shares. . . . . . . . . . . . . . . . . . . 4
3.1 Limitation on Transfer. . . . . . . . . . . . . . . . . . . . . . 4
3.2 Transfers in Compliance with Law. . . . . . . . . . . . . . . . . 4
3.3 Affiliate Transfers . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Right of First. . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 Veto Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. Right of First Offer. . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. First Option; IWC Option Shares; Second Option Shares . . . . . . . . . 8
5.1 Exercise of First Option. . . . . . . . . . . . . . . . . . . . . 8
5.2 IWC Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 SA Put Right. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Closing of IWC Option or SA Put Right . . . . . . . . . . . . . . 9
5.5 Second Option . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 Shareholder Votes . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . 12
6.4 Board Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5 PMCL Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.6 PMCL Affairs. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.7 Management of PMCL. . . . . . . . . . . . . . . . . . . . . . . . 15
6.8 Non-Competition . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.9 Deadlock with Respect to PMCL . . . . . . . . . . . . . . . . . . 16
6.10 Directors' Access . . . . . . . . . . . . . . . . . . . . . . . . 16
7. Financial Reports and Auditing. . . . . . . . . . . . . . . . . . . . . 16
7.1 Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . 16
7.2 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . 16
7.3 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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7.4 PMCL Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
8.1 Additional Capital Contributions; Shareholder Loans . . . . . . . 17
8.2 Failure to Subscribe for Additional Shares or Provide Shareholder
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.3 Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.4 Divestment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.5 Dilution of Breaching Shareholder . . . . . . . . . . . . . . . . 20
9. Memorandum and Articles of Association. . . . . . . . . . . . . . . . . 21
10. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . 21
11. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12.1 General Obligation. . . . . . . . . . . . . . . . . . . . . . . . 22
12.2 Exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
12.3 Disclosure to Third Parties . . . . . . . . . . . . . . . . . . . 22
13. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14. U.S. Investment Company Act of 1940 . . . . . . . . . . . . . . . . . . 23
15. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.1 Legend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15.3 Discrepancies . . . . . . . . . . . . . . . . . . . . . . . . . . 24
15.4 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15.5 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 25
15.6 Term of Agreement . . . . . . . . . . . . . . . . . . . . . . . . 25
15.7 Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . . 25
15.8 Consent to Specific Performance . . . . . . . . . . . . . . . . . 25
15.9 Assignment; Binding on Transferee . . . . . . . . . . . . . . . . 25
15.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 25
15.11 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15.12 Shareholder Obligations; Further Assurances . . . . . . . . . . . 26
15.13 Exercise of Rights And Performance of Duties by IWC Group . . . . 26
15.14 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
15.14 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Annex A: Pro Rata Share of Capital Contributions and Shareholder Loans to
be made to PMCL
Exhibit A: Form of Deed of Adherence
ii
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AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT, dated as of August 13,
1997 (this "Agreement"), among INTERNATIONAL WIRELESS COMMUNICATIONS PAKISTAN
LIMITED, a Mauritius company with its registered offices at P.O. Box 1130, 3rd
Floor, 12 Remy Ollier Street, Port Louis, Mauritius (the "Company"), PAKISTAN
WIRELESS HOLDINGS LIMITED, a Mauritius corporation and wholly owned subsidiary
of International Wireless Communications, Inc. with its principal offices at 400
South El Camino Real, San Mateo, CA 94402, U.S.A. ("IWC"), VANGUARD PAKISTAN,
INC., a Delaware corporation with its principal offices at 2002 Pisgah Church
Road, Suite 300, Greensboro, NC 27405 U.S.A. ("Vanguard") and SOUTH ASIA
WIRELESS COMMUNICATIONS (MAURITIUS) LIMITED, a Mauritius corporation with its
address for correspondence at c/o Asian Infrastructure Fund Advisers Limited,
Suite 2302-03, Nine Queen's Road Central, Hong Kong ("SA Wireless").
As of the date of this Agreement, the authorized share capital of the
Company is US$77,000,000, comprised of 100,000,000 ordinary shares, nominal
value US$0.01 each ("Ordinary Shares") and 76,000,000 redeemable preference
shares, nominal value US$1.00 each ("Redeemable Preference Shares", and together
with the Ordinary Shares, the "Shares").
The Company has issued and allotted to IWC, and IWC has subscribed
for, 23,620,000 Shares, comprised of 2,000 Ordinary Shares and 23,620,000
Redeemable Preference Shares, and the Company has issued and allotted to SA
Wireless, and SA Wireless has subscribed for, 23,622,000 Shares comprised of
2,000 Ordinary Shares and 23,622,000 Redeemable Preference Shares, and the
Company has issued and allotted to Vanguard, and Vanguard has subscribed for
7,086,600 Shares, comprised of 600 Ordinary Shares and 7,086,600 Redeemable
Preference Shares.
The parties have agreed to enter into this Shareholders' Agreement to
provide for certain matters relating to the transfer of Shares and the
management and operation of the Company, IWC and Vanguard have entered into an
agreement dated as of August __, 1997 (the "IWC/Vanguard Agreement") with
respect to exercising certain rights and performing certain duties under this
Agreement. The IWC/Vanguard Agreement also provides for the creation of a
voting trust whereby IWC will vote all Shares held by Vanguard.
In consideration of the foregoing and of the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
1.1. CERTAIN DEFINITIONS. The following capitalized terms shall
have the following meanings for purposes of this Agreement:
"AFFILIATE" means, in relation to any Shareholder or in relation to
IWC Group, IWC or Vanguard, a Person controlling, controlled by or under common
control with such Shareholder. For purposes of this Agreement, "control" means
the possession, directly or
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indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"AIF" means the Asian Infrastructure Fund.
"BOARD" means the board of directors of the Company.
"BUSINESS DAY" means any day (excluding Saturday and Sunday) on which
banks in the State of New York, USA, Hong Kong and Mauritius are open for
business.
"CHARTER DOCUMENTS" means, collectively, the Memorandum of Association
and the Articles of Association of the Company.
"DIRECTOR" means a director of the Company (including any duly
appointed alternate director).
"FINANCIAL YEAR" means the financial year of the Company, which shall
end on December 31.
"IWC GROUP" means IWC and Vanguard, together as a single group.
"LENDERS" means the Lenders named in the Loan Agreement dated
August 18, 1997 among IWC and the Lenders named therein whereby IWC will obtain
funds to subscribe for Shares, which IWC hereby represents are all existing
shareholders of International Wireless Communications Holdings, Inc. ("IWCH"),
Affiliates of such shareholders or employees or directors of International
Wireless Communications, Inc.
"PERSON" means any natural person, corporation, partnership, firm,
joint venture, association, joint stock company, trust, unincorporated
association, governmental authority or other legal entity.
"PMCL" means Pakistan Mobile Communications (Pvt.) Limited, a company
incorporated under the laws of Pakistan.
"PMCL LETTER AGREEMENT" means the Letter Agreement dated August 1997
among the Shareholders of PMCL relating to its five year business plan, debt to
equity ratio, recapitalization and certain other matters.
"SECURITIES" means shares in the share capital of the Company and any
options, warrants or other securities that are directly or indirectly
convertible into, or exercisable or exchangeable for, such share capital.
"SECURITY DOCUMENTS" means the Security Agreement and the Pledge
Agreement, each dated August 18, 1997, between IWC and Toronto Dominion
Investments, Inc to secure IWC's obligations under the Loan Agreement dated
August 18, 1997 among IWC and the Lenders named therein.
2
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"SHAREHOLDER" means (i) each of IWC and SA Wireless for so long as
such Shareholder remains a shareholder of the Company, and (ii) any other Person
who becomes a shareholder of the Company in accordance with the terms of this
Agreement and executes a Deed of Adherence substantially in the form attached
hereto as Exhibit A, for so long as such Person remains a shareholder of the
Company.
"SUBSIDIARY" means any corporation, partnership or other entity in
which the Company directly or indirectly holds a majority interest in the form
of shares, membership, partnership interests or otherwise.
"US DOLLARS" or "US$" means United States dollars, the lawful currency
of the United States of America.
1.2. PRINCIPLES OF INTERPRETATION.
(a) Any reference herein to any Article, Section or Exhibit
shall refer to such Article or Section of, or Exhibit to, this Agreement. The
words "herein," "hereof" and "hereunder," and words of like import, shall refer
to this Agreement as a whole and not to any particular provision hereof.
(b) All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the antecedent Person may require.
(c) The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the interpretation of
this Agreement.
2. BUSINESS OF THE COMPANY.
2.1. GENERAL. The business of the Company shall be restricted to
its holding of shares in the capital of PMCL. Unless the Shareholders
unanimously agree, the Company shall not form or establish any other
Subsidiaries.
2.2. PMCL.
(a) The Company has entered into separate share purchase
agreements with Motorola International Development Corporation ("Motorola") and
Continental Communications Limited to acquire, in the aggregate, a 46% interest
in PMCL. Under the share purchase agreement entered by and between the Company
and Motorola (the "Motorola Share Purchase Agreement"), (i) Motorola has granted
an option to the Company to acquire up to a further 12.69% interest in PMCL from
Motorola (the "First Option") and (ii) if the First Option is not exercised,
then the Company has an option (the "Second Option") to purchase from Motorola
the Second Option Shares (as defined in the Motorola Share Purchase Agreement).
(b) At the closing of the transactions contemplated by the
Motorola Share Purchase Agreement, the Company will enter into a Shareholders
Agreement
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with the other shareholders of PMCL relating to certain rights and obligations
of the shareholders of PMCL (the "PMCL Shareholders Agreement").
3. RESTRICTIONS ON TRANSFER OF SHARES.
3.1. LIMITATION ON TRANSFER. No Shareholder shall sell, give,
transfer, assign, charge, mortgage, hypothecate, pledge, encumber, grant a
security interest in or otherwise dispose of (whether by operation of law or
otherwise) (each, a "Transfer") any Securities, or any right, title or interest
therein or thereto, except as expressly permitted by this Article 3. Any
attempt to Transfer any Securities or any rights therein or thereto in violation
of this Article 3 shall be null and void AB INITIO, and the Company shall not
register any such Transfer.
3.2. TRANSFERS IN COMPLIANCE WITH LAW. Notwithstanding any other
provision of this Agreement, no Transfer may be made pursuant to this Article 3
unless (a) the transferee has agreed in writing to be bound by the terms and
conditions of this Agreement pursuant to a Deed of Adherence substantially in
the form attached hereto as Exhibit A, (b) the transferee assumes all
shareholder loans that have been made by the transferor to the Company on or
prior to the Transfer, (c) the Shareholder wishing to Transfer all or any
portion of its Ordinary Shares to a transferee also Transfers all or an
equivalent percentage, as the case may be, of its Redeemable Preference Shares
to such transferee, (d) the Shareholder wishing to Transfer all or any portion
of its Redeemable Preference Shares to a transferee also Transfers all or an
equivalent percentage, as the case may be, of its Ordinary Shares to such
transferee, (e) the Transfer complies in all respects with the applicable
provisions of this Agreement and (f) the Transfer complies in all respects with
applicable securities laws. If requested by the Company in its reasonable
discretion, an opinion of counsel to such transferring Shareholder shall be
supplied to the Company, at such transferring Shareholder's expense, to the
effect that such Transfer complies with applicable securities laws.
3.3. AFFILIATE TRANSFERS.
3.3.1 PERMITTED TRANSFEREES. Any Shareholder may
Transfer some or all of the Securities held by such Shareholder to an Affiliate
of such Shareholder without compliance with the provisions of Section 3.4;
provided that the Shareholder shall remain liable for any and all of its
obligations under this Agreement and that the Affiliate executes a deed of
adherence substantially in the form attached hereto as Exhibit A.
3.3.2 CHANGE IN STATUS. If Securities are Transferred
by a Shareholder to an Affiliate of such Shareholder and such transferee shall
at any time cease to be an Affiliate of such Shareholder, such Shareholder shall
notify the other Shareholders of such an event within five Business Days after
the occurrence of such an event, and such Securities shall be transferred
(i) back to the original Shareholder or (ii) to another Affiliate of that
Shareholder without compliance with the provisions of Section 3.4.
3.3.3 COMBINED HOLDINGS. The Securities held by a
Shareholder and such Shareholder's Affiliates shall for all purposes of this
Agreement be treated as Securities held by a single Shareholder.
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3.3.4 IWC TRANSFERS. Notwithstanding the foregoing,
(a) IWC may from time to time Transfer Securities to the Lenders pursuant to the
Security Documents, without compliance with the provisions of Section 3.3.2,
3.3.3 or 3.4, provided that Section 3.2 (other than clause (b)) is complied with
and the Lenders receiving Securities sign a deed of adherence substantially in
the form attached hereto as Exhibit A, and (b) members of the IWC Group may from
time to time Transfer Securities between them pursuant to the IWC/Vanguard
Agreement, without compliance with the provisions of Section 3.3.2, 3.3.3 or
3.4, but so long as Section 3.2 is complied with.
3.4. RIGHT OF FIRST. Each Shareholder (each, a "Transferor") who
proposes to Transfer Securities to a BONA FIDE third party (a "Third Party
Purchaser") other than pursuant to Section 3.3, grants to each other Shareholder
(a "Section 3.4 Rightholder") a right of first refusal ("Right of First
Refusal") to purchase such Section 3.4 Rightholder's pro-rata share of the
Transferor's Securities, exercisable at the option of each Section 3.4
Rightholder in accordance with Section 3.4(b).
(a) Each Transferor shall furnish to each Section 3.4
Rightholder written notice (the "Transferor Notice") of the intended
disposition, including the identity of the Third Party Purchaser, the number of
Securities to be Transferred (the "Offered Securities"), the price at which the
Securities are proposed to be Transferred and the general terms upon which such
Transfer is proposed to be made.
(b) Subject to Sections 3.4(c) and 3.4(d), each Section 3.4
Rightholder shall have 21 calendar days (the "Notice Period") after the receipt
of the Transferor Notice to agree irrevocably to purchase up to its pro-rata
share of the Offered Securities for the price and upon the general terms
specified in the Transferor Notice by giving written notice to the Transferor
and stating therein the quantity of the Offered Securities to be purchased (each
such Section 3.4 Rightholder exercising such right being referred to herein as a
"Section 3.4 Purchaser"). A Section 3.4 Rightholder exercising its rights
hereunder with respect to all or a portion of the Ordinary Shares to be
Transferred by the Transferor shall exercise its rights hereunder with respect
to all or an equivalent percentage, as the case may be, of the Redeemable
Preference Shares to be Transferred by the Transferor. A Section 3.4
Rightholder exercising its rights hereunder with respect to all or a portion of
the Redeemable Preference Shares to be Transferred by the Transferor shall
exercise its rights hereunder with respect to all or an equivalent percentage,
as the case may be, of the Ordinary Shares to be Transferred by the Transferor.
Failure by a Section 3.4 Rightholder to respond within such Notice Period shall
be regarded as a waiver of its Right of First Refusal with respect to the
Transfer of the Offered Securities.
(c) Each Transferor shall, promptly after the end of the
Notice Period, give written notice (the "Last-Chance Notice") to all Section 3.4
Rightholders stating whether the Offered Securities have been taken up by the
Section 3.4 Purchasers, and, if not, the number of Offered Securities not so
taken up (the "Remaining Offered Securities"). Subject to Section 3.4(d), each
Section 3.4 Purchaser shall have the right, but not the obligation, to purchase
all, but not less than all, of the Remaining Offered Securities. The right of
each Section 3.4
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Purchaser to purchase the Remaining Offered Securities shall be exercisable
irrevocably by written notice delivered to each Transferor, with a copy to the
Company, given within ten calendar days (the "Last Chance Period") after receipt
of the Last-Chance Notice. If more than one Section 3.4 Purchaser timely elects
to exercise its right to purchase the Remaining Offered Securities, the right to
purchase the Remaining Offered Securities shall be allocated pro rata among
those Section 3.4 Purchasers electing to purchase the Remaining Offered
Securities, based on the proportion that the number of Securities owned by such
Section 3.4 Purchaser bears to the total number of Securities owned by all
Section 3.4 Purchasers that elect to purchase the Remaining Offered Securities.
A Section 3.4 Rightholder exercising its rights hereunder with respect to all or
a portion of the Ordinary Shares that are Remaining Offered Securities shall
exercise its rights hereunder with respect to all or an equivalent percentage,
as the case may be, of the Redeemable Preference Shares that are Remaining
Offered Securities. A Section 3.4 Rightholder exercising its rights hereunder
with respect to all or a portion of the Redeemable Preference Shares that are
Remaining Offered Securities shall exercise its rights hereunder with respect to
all or an equivalent percentage, as the case may be, of the Ordinary Shares that
are Remaining Offered Securities. A failure of any Section 3.4 Purchaser to
exercise such right within the Last Chance Period shall be regarded as a waiver
of its right to purchase such Remaining Offered Securities as provided herein.
(d) Notwithstanding anything in this Article 3 to the
contrary, the right of the Section 3.4 Purchasers to purchase any of the Offered
Securities pursuant to this Article 3 shall be exercisable if and only if the
Section 3.4 Purchasers collectively have exercised their rights to purchase all,
but not less than all, of the Offered Securities pursuant to this Section 3.4.
Any exercise by any Shareholder of a Right of First Refusal pursuant to this
Section 3.4 shall be final and irrevocable.
(e) If the Section 3.4 Purchasers collectively have
exercised their Rights of First Refusal with respect to all of the Offered
Securities, then the closing of such sale and purchase shall take place promptly
after the final allocation with respect to such Offered Securities has been
determined, at the principal offices of the Company or such other place and time
as the relevant parties may agree. If the Section 3.4 Purchasers collectively
have not exercised their Rights of First Refusal with respect to all of the
Offered Securities, then the Transferor shall have 120 calendar days after the
end of the Last Chance Period to make the Transfer of the Offered Securities to
the Third Party Purchaser at the price and upon the terms specified in the
Transferor Notice. In the event the Transferor does not Transfer such
Securities to the Third Party Purchaser within such 120-day period, the
Transferor shall not thereafter make a Transfer of such Offered Securities
without again complying with the Right of First Offer provisions in this
Section 3.4.
(f) The exercise or non-exercise of the Right of First
Refusal by a Section 3.4 Rightholder with respect to a Transfer of Securities by
a Transferor shall not affect such Section 3.4 Rightholder's Right of First
Refusal with respect to subsequent Transfers of Securities.
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(g) A change in the beneficial ownership of any Shareholder
or any Person that controls a Shareholder shall not constitute a Transfer of
Securities that causes the Right of First Refusal to arise hereunder so long as
such Shareholder's ownership interest in the Company does not constitute the
primary asset of such Shareholder or other Person in respect of which such
change in beneficial ownership occurs.
3.5. VETO RIGHTS. If a Shareholder proposes to Transfer
Securities to a Third Party Purchaser that is engaged in a business directly
competing with that of the Company or PMCL at the time of the proposed Transfer,
non-Transferring Shareholders holding in the aggregate at least 25% of the
issued Shares shall each have the right to prohibit such Transfer,
notwithstanding compliance by the Transferor with Section 3.4. For the
avoidance of doubt, this provision shall not apply to Transfers made pursuant to
Section 3.3.1 or 3.3.4.
4. RIGHT OF FIRST OFFER. Except as provided in Articles 5 and 8,
the Company hereby grants to each Shareholder a right of first offer ("Right of
First Offer") to subscribe for such Shareholder's pro-rata share of any New
Securities (as defined in Section 4(e) below) that the Company may from time to
time propose to issue, and the provisions of this Article 4 shall apply to such
issuances.
(a) In the event that the Company proposes to undertake an
issuance of New Securities, the Company shall give written notice (the "Company
Notice") of its intention to so issue such New Securities to each Shareholder.
The Company Notice shall include the type and number of such New Securities, the
price and the general terms upon which such New Securities are proposed to be
issued, the number of such New Securities for which each Shareholder is entitled
to subscribe pursuant to this Article 4 and the identity of the Person(s) to
whom such New Securities are proposed to be issued (the "Proposed Acquirers").
(b) Each Shareholder shall have 28 calendar days after the
receipt of the Company Notice to agree irrevocably to subscribe for up to its
pro-rata share of such New Securities for the price and upon the general terms
specified in the Company Notice by giving written notice to the Company and
stating therein the number of New Securities for which such Shareholder shall
subscribe. If any Shareholder fails to exercise or waives its Right of First
Offer hereunder (a "Non-Exercising Shareholder"), the Company shall give notice
to all Shareholders who do exercise their Right of First Offer (the "Exercising
Shareholders") of such failure or waiver.
(c) Each Exercising Shareholder shall have a right of over
allotment to subscribe for up to its pro-rata portion of any New Securities not
subscribed for by a Non-Exercising Shareholder hereunder. Each Exercising
Shareholder may exercise irrevocably such right of over allotment by giving
written notice to the Company within 28 calendar days of receipt of the notice
of non-exercise or waiver from the Company described in Section 4(b) and stating
therein the number of New Securities for which such Exercising Shareholder shall
subscribe. Upon exercises of the Right of First Offer hereunder in connection
with any proposed issuance of New Securities, the Company shall simultaneously
issue such New Securities pursuant to such exercises at such time and place as
the Company shall determine. Any exercise
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by any Shareholder of a right of subscription pursuant to this Article 4 shall
be final and irrevocable.
(d) If the Shareholders waive or fail to exercise in full
the Right of First Offer set forth in Sections 4(b) and (c) with respect to
all of the New Securities within the above-mentioned time periods, then the
Company shall have 120 calendar days thereafter to sell any New Securities
with respect to which the Shareholders did not exercise their Right of First
Offer at a price and upon general terms no more favorable to the Proposed
Acquirers than those specified in the Company Notice. In the event the
Company does not sell the New Securities within such 120-day period, the
Company shall not thereafter issue or sell such New Securities without first
offering such New Securities to the Shareholders in accordance with this
Article 4.
(e) For the purposes of this Article 4, the term "New
Securities" shall mean any Securities, whether now authorized or authorized
in the future, that are offered for subscription or sale by the Company.
(f) The exercise or non-exercise of the Right of First
Offer by a Shareholder hereunder with respect to an issuance of New
Securities shall not affect such Shareholder's Right of First Offer with
respect to subsequent issuances of New Securities.
(g) Any Proposed Acquirer to whom New Securities are
issued pursuant to this Article 4 shall become a party to and shall be bound
by the restrictions on Transfer and the other restrictions and obligations
set forth in this Agreement to the same extent and with the same force and
effect as if such person were an original signatory hereto. Each Proposed
Acquirer shall, as a condition to subscribing for such New Securities,
execute a Deed of Adherence substantially in the form of Exhibit A upon or
before the consummation of the issuance of such New Securities.
5. FIRST OPTION; IWC OPTION SHARES; SECOND OPTION SHARES.
5.1. EXERCISE OF FIRST OPTION. The parties hereto agree and
acknowledge that the decision to exercise the First Option shall be made by SA
Wireless. If SA Wireless wishes to exercise the First Option, it shall notify
the other Shareholders and the Company, and each Shareholder shall cause the
Company to exercise the First Option in accordance with the provisions of
Clauses 9(a) to (d) of the Motorola Share Purchase Agreement. The parties agree
that the cost of the acquisition of the First Option Shares (as defined in the
Motorola Share Purchase Agreement) shall be funded entirely by SA Wireless
through the subscription by SA Wireless of new Shares at an aggregate
subscription price equal to the amount of the First Option Purchase Price (as
defined in the Motorola Share Purchase Agreement). The number of new Shares to
be issued to SA Wireless for this purpose shall be such number of Shares as to
cause IWC Group and SA Wireless to have a shareholding in the Company
immediately prior to or concurrently with the First Option Closing (as defined
in the Motorola Share Purchase Agreement) of 44.3% and 55.7%, respectively.
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5.2. IWC OPTION.
(a) SA Wireless hereby irrevocably and unconditionally
grants an option to IWC (the "IWC Option"), effective upon the exercise of the
First Option, exercisable on one occasion only at any time in the 12 month
period commencing from January 1, 1998 (the "IWC Option Period") to purchase
from SA Wireless such number of Shares held by SA Wireless so as to enable IWC
to have a shareholding in the Company of 50.01% (the "IWC Option Shares") on the
terms and subject to the conditions of this Section 5.2 and Section 5.4;
PROVIDED, HOWEVER, that notwithstanding the foregoing, IWC may exercise the IWC
Option on one occasion at any time prior to the commencement of the IWC Option
Period if it pays to SA Wireless the IWC Option Share Price (as defined in
Section 5.4(a)) calculated as if the IWC Option had been exercised as of January
1, 1998.
(b) Subject to this Section 5.2 and Section 5.4, IWC Group
may, at any time during the IWC Option Period, exercise the IWC Option by
serving on SA Wireless written notice of such exercise. The notice of exercise
of the IWC Option once served shall be irrevocable and binding on IWC Group and
may not be withdrawn without the prior written consent of SA Wireless.
5.3. SA PUT RIGHT.
(a) SA Wireless shall have the right (the "SA Put Right"),
effective upon the exercise of the First Option, exercisable on one occasion
only at any time in the 12 month period commencing from January 1, 1998 (the "SA
Put Period") and so long as the IWC Option has not theretofore been exercised,
to sell the IWC Option Shares to IWC, and IWC shall be obligated to purchase the
IWC Option Shares from SA Wireless on the terms and subject to the conditions of
this Section 5.3 and Section 5.4.
(b) Subject to this Section 5.3 and Section 5.4, SA
Wireless may, at any time during the SA Put Period and so long as the IWC Option
has not theretofore been exercised, exercise the SA Put Right by serving on IWC
written notice of such exercise. The notice of exercise of the SA Put Right
once served shall be irrevocable and binding on SA Wireless and may not be
withdrawn without the prior written consent of IWC.
5.4. CLOSING OF IWC OPTION OR SA PUT RIGHT.
(a) The purchase price (the "IWC Option Share Price")
payable by IWC Group for the IWC Option Shares, whether pursuant to the exercise
of the IWC Option under Section 5.2 or the exercise of the SA Put Right under
Section 5.3, shall be the sum of the amounts that have been paid by the Company
in respect of the underlying shares of PMCL that are attributable and correspond
to the IWC Option Shares (the "Underlying PMCL Shares") by way of the original
Purchase Price (as defined in the Motorola Share Purchase Agreement) per share
of the Underlying PMCL Shares, any amounts funded by the Company as additional
capital contributions or shareholder loans to PMCL in respect of the Underlying
PMCL Shares, the amounts of any loans that the Company may have made to Saif
Telecom (Pvt.) Limited, a shareholder of PMCL ("SAIF"), to enable SAIF to
respond to any shareholder loans to, or any
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capital call of, PMCL which are attributable to the Underlying PMCL Shares and
the pro rata share based on the percentage of the IWC Option Shares to the total
issued Shares of the fees, costs and expenses of third party advisers and
consultants engaged on behalf of the Company in connection with evaluating the
proposed acquisition of shares in PMCL and of any fees (if any) required to have
been paid in connection with the consummation of the acquisition by the Company
of shares in PMCL (such amounts, collectively, the "Actual Investment Cost"),
plus a return in United States dollars terms on the Actual Investment Cost
calculated at a rate equal to 40% internal rate of return. The calculation of
the internal rate of return shall be made with respect to each separate amount
that constitutes the Actual Investment Cost commencing on the date each such
separate amount was paid by the Company in respect of the Underlying PMCL
Shares. For the purposes of this Section 5.4(a), "internal rate of return"
means the discount rate which, when applied, constitutes the present value, as
of the date of closing of the sale and purchase of the IWC Option Shares, of the
Actual Investment Cost that is equal to the present value, as of the date of the
closing of the sale and purchase of the IWC Option Shares, of all the proceeds
generated from the Actual Investment Cost.
(b) Following the exercise of the IWC Option in accordance
with Section 5.2 or the exercise of the SA Put Right in accordance with Section
5.3, the closing of the sale and purchase of the IWC Option Shares shall take
place at the principal offices of the Company or such other place as IWC and SA
Wireless mutually agree on the seventh Business Day after the date of the
exercise of the IWC Option or the SA Put Right, as the case may be. At the
closing, (i) SA Wireless shall deliver share certificates to IWC totalling the
number of the IWC Option Shares, together with instruments of transfer in
respect thereof, and (ii) IWC shall pay the IWC Option Share Price in cash by
wire transfer of immediately available funds to the bank account designated by
SA Wireless in writing.
5.5. SECOND OPTION If the First Option is not exercised and the
provisions of Clause 9 of the Motorola Share Purchase Agreement relating to the
Second Option apply, the parties hereto agree and acknowledge that the decision
to exercise the Second Option shall be made by IWC Group. If IWC Group wishes
to exercise the Second Option, it shall notify the other Shareholders and the
Company, and each Shareholder shall cause the Company to exercise the Second
Option in accordance with the provisions of Clauses 9(e) to (h) of the Motorola
Share Purchase Agreement. The parties agree that the cost of the acquisition of
the Second Option Shares shall be funded entirely by IWC Group through the
subscription by IWC Group of new Shares at an aggregate subscription price equal
to the amount of the Second Option Purchase Price (as defined in the Motorola
Share Purchase Agreement). The number of new Shares to be issued to IWC Group
for this purpose shall be such number of Shares as to cause IWC Group and SA
Wireless to have a shareholding in the Company immediately prior to or
concurrently with the closing of the sale and purchase of the Second Option
Shares of 60.8% and 39.2%, respectively.
6. MANAGEMENT.
6.1. GENERAL. From and after the date hereof, each Shareholder
shall vote its Shares at any ordinary general meeting or extraordinary general
meeting of Shareholders
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(a "Shareholders' Meeting") or in any written resolution executed in lieu of
such a meeting of Shareholders (a "Written Resolution"), and shall take all
other actions necessary, to give effect to the provisions of this Agreement
(including, without limitation, Section 6.3.2) and to ensure that the Charter
Documents do not, at any time hereafter, conflict in any respect with the
provisions of this Agreement. In addition, each Shareholder shall vote its
Shares at any Shareholders' Meeting, or act by Written Resolution with respect
to such Shares, upon any matter submitted for action by the Shareholders or with
respect to which such Shareholder may vote or act by Written Resolution, in
conformity with the specific terms and provisions of this Agreement and the
Charter Documents.
6.2. SHAREHOLDER VOTES.
(a) The following matters in relation to the Company shall
require the unanimous consent of all of the Shareholders owning 90% of the
Shares in a Written Resolution or the unanimous consent of representatives of
all of the Shareholders present at a duly convened Shareholders' Meeting:
(i) any amendment, modification or waiver of the
Charter Documents;
(ii) the formation or establishment of any Subsidiary;
(iii) any change to the scope of business of the
Company or any Subsidiary;
(iv) any sale or other disposition of all or
substantially all of the assets of the Company or any Subsidiary;
(v) the liquidation, winding up or dissolution of
the Company, the making or entry into by the Company of any general assignment,
arrangement or composition with or for the benefit of its creditors, or the
cessation by the Company to carry on its business or any material part of its
business;
(vi) the settlement, waiver or discontinuance of any
litigation or arbitration proceedings involving a claim exceeding the equivalent
of US$500,000 per claim and US$1,000,000 in the aggregate in any financial year
or the commencement of any litigation or arbitration proceedings involving a
claim exceeding the equivalent of US$500,000;
(vii) any merger, amalgamation or consolidation of
the Company or any Subsidiary with any other entity;
(viii) issuance of any Securities of the Company or
any Subsidiary other than pursuant to Articles 5 and 8;
(ix) the acquisition or disposition of any material
assets by the Company or any Subsidiary other than in the ordinary course of
business;
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(x) any of the matters referred to in the PMCL
Shareholders Agreement that require a Supermajority (as defined therein) vote of
the board of directors of PMCL (the "PMCL Board") or the shareholders of PMCL;
(xi) any decision of the Company with respect to the
(i) making of additional capital contributions to PMCL pursuant to Clause 9.2 of
the PMCL Shareholders Agreement, (ii) making of shareholder loans to PMCL
pursuant to Clause 9.3 of the PMCL Shareholders Agreement, (iii) making of
shareholder guarantees for the obligations of PMCL pursuant to Clause 9.4 of the
PMCL Shareholders Agreement, and (iv) taking action pursuant to Paragraph 6 of
the PMCL Letter Agreement; and
(xii) other than pursuant to Section 6.9 or 8.4, any
decision of the Company with respect to the sale or other disposition of all or
a part of its shares in PMCL or the exercise of rights of first refusal to
acquire shares of PMCL pursuant to Clause 12 of the PMCL Shareholders Agreement
or the exercise of rights to acquire shares of a defaulting shareholder of PMCL
pursuant to Clause 16.5 of the PMCL Shareholders Agreement.
(b) Notwithstanding the provisions of Section 6.2(a)(vi),
where litigation or arbitration proceedings are or are proposed to be brought by
or against the Company against or by any Shareholder or any Affiliate of any
Shareholder, irrespective of the amount involved, such Shareholder, and the
Directors appointed by such Shareholder to the Board, shall have no vote in
determining whether such litigation or arbitration proceedings shall be
commenced, settled or discontinued or how the same shall be conducted.
(c) Any decision of the Company to exercise its right to
postpone the Closing (as defined in the Motorola Share Purchase Agreement) of
the transactions contemplated by the Motorola Share Purchase Agreement pursuant
to Clause 11 thereof or to terminate the Motorola Share Purchase Agreement prior
to the Closing (as defined therein) pursuant to Clause 12 thereof may be made by
SA Wireless by notice to the other Shareholders, whereupon all of the
Shareholders shall cause the Company to postpone the Closing or terminate the
Motorola Share Purchase Agreement in accordance with the provisions of Clause 11
or 12, respectively, thereof.
6.3. BOARD OF DIRECTORS.
6.3.1 AUTHORITY OF BOARD. Subject only to the
provisions of this Agreement and the Charter Documents, the Board shall have
ultimate responsibility for management and control of the Company.
6.3.2 NUMBER AND COMPOSITION. The number of members
constituting the entire Board shall be six; PROVIDED, HOWEVER, that if the
Second Option is exercised and IWC funds the purchase by the Company of the
Second Option Shares pursuant to Section 5.3, then the number of members
constituting the Board shall be reduced to five. Each Shareholder shall vote
its Shares at any Shareholders' Meeting called for the purpose of filling the
positions on the Board or in any Written Resolution executed for such purpose to
elect, and shall take all other actions necessary to ensure the election to the
Board of initially, (i) three
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nominees of IWC and (ii) three nominees of SA Wireless, and if the number of
members constituting the Board is reduced to five as provided in the proviso to
the first sentence of this Section 6.3.2, then (i) three nominees of IWC and
(ii) two nominees of SA Wireless. Each Shareholder who has a right to nominate
a director (a "Nomination Right") pursuant to this Section 6.3.2 shall not be
permitted to transfer its Nomination Right in connection with any Transfer of
its Securities without the prior written consent of all other Shareholders who
have Nomination Rights at the time of such Transfer.
6.3.3 REMOVAL AND REPLACEMENT OF DIRECTORS.
(a) A Director shall be removed from the Board, with
or without cause, upon, and only upon, the affirmative vote of the Shareholders
in accordance with this Section 6.3.3. Each Shareholder shall vote its Shares
for the removal of a Director upon the request of the Shareholder that nominated
such Director. Otherwise, no Shareholder shall vote for the removal of a
Director.
(b) In the event any Director resigns or is removed in
accordance with Section 6.3.3(a), the Shareholders shall, before the transaction
of any other business by the Shareholders or the Board, elect a successor or
replacement nominated by the Shareholder that nominated such Director. Such
successor or replacement Director shall be elected on or as soon as possible
after the date of such resignation or removal.
6.3.4 ALTERNATE DIRECTORS. A Director may at any time
appoint another person (including another Director) to be his alternate
Director, and may at any time terminate such appointment. Any person so
appointed shall be entitled to receive notices of and to attend and vote at
meetings of the Board and count towards a quorum and shall automatically vacate
his office on the expiration of the term for, or the happening of the event,
until which he is by the terms of his appointment to hold office or if the
appointor in writing terminates the appointment or if the appointor himself
ceases for any reason to hold office as a Director. An appointment of an
alternate Director shall not prejudice the right of the appointor to receive
notices of and to attend and vote at meetings of the Board, and the powers of
the alternate Director shall automatically be suspended during such time as the
Director appointing him is himself present in person at a meeting of the Board.
6.4. BOARD MEETINGS.
6.4.1 NOTICE. Meetings of the Board may be called by
the Chairman of the Board or any two Directors. Not less than 14-days' notice
of any Board meeting shall be given to all Directors; PROVIDED, HOWEVER, that
such notice period may be reduced if approved by all of the Directors in
writing. The venue for Board meetings shall be the principal offices of the
Company unless otherwise approved by the Board.
6.4.2 QUORUM. All meetings of the Board shall require a
quorum consisting of at least three Directors, including at least one Director
nominated by IWC and at least one Director nominated by SA Wireless.
Notwithstanding the foregoing, if such a quorum is not present within one hour
from the time appointed for the meeting, the meeting shall adjourn
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to such place and time (which is at least 14 days later) as those Directors who
did attend shall decide or, if no such decision is reached, at the same place
and time 14 days later, at which time any three Directors present shall
constitute a quorum; PROVIDED that not less than seven days' notice of such
adjourned meeting of the Board shall be given to all the Directors.
6.4.2 TELEPHONIC MEETINGS. Directors may participate in
a meeting of the Board by means of conference telephone or similar
communications equipment whereby all persons participating in the meeting can
hear each other at the same time.
6.4.4 VOTING. The adoption of any resolution of the
Board shall require the affirmative vote of Directors holding a majority of the
votes held by Directors present at a duly constituted meeting of the Board at
which a quorum is present. The Chairman of the Board shall have no casting
vote.
6.4.5 WRITTEN RESOLUTION. By notice and copy to all
Directors, resolutions may be adopted in writing by a majority of Directors.
6.5. PMCL BOARD. The parties agree that (a) so long as the
beneficial ownership of Shares owned by SA Wireless is not less than 30% of the
total issued Shares, AIF shall have the right to directly nominate two directors
to the PMCL Board where the PMCL Board has eight members but if the number of
directors constituting the PMCL Board is increased to 10, then AIF shall have
the right to directly nominate three directors to the PMCL Board, and (b) if the
beneficial ownership of Shares owned by SA Wireless is less than 30%, but more
than 15%, of the total issued Shares, then AIF shall have the right to directly
nominate one director to the PMCL Board where the PMCL Board has eight members
and two directors to the PMCL Board where the PMCL Board has 10 members. The
parties further agree that IWC shall have the right to directly nominate all
other directors to the PMCL Board which the Company may from time to time have
the right to elect to the PMCL Board. Each of the Shareholders shall cause the
Company to vote its shares in PMCL for the election of the SA Wireless nominees
nominated in accordance with this Section 6.5.
6.6. PMCL AFFAIRS.
(a) If any of the matters referred to in Section 6.2(a)(x)
that can be resolved by maintaining the status quo fails to obtain a unanimous
vote of the Shareholders, then the Shareholders shall cause the Company acting
in its capacity as a shareholder of PMCL or the nominees of the Company on the
PMCL Board, as the case may be, to vote at the applicable shareholders' meeting
of PMCL or applicable PMCL Board meeting, as the case may be, to maintain the
status quo.
(b) Except for the matters referred to in Section 6.2, the
Shareholders and the Board shall discuss matters concerning the business of PMCL
with a view to achieving a unanimous position of IWC Group and SA Wireless in
respect of decisions of the shareholders of PMCL or of the PMCL Board. If a
unanimous position cannot be reached then (i) in the case of a PMCL shareholder
decision, the Company in its capacity as a shareholder of PMCL shall vote the
shares held by it in PMCL in such manner to reflect the differing positions
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of IWC Group, on the one hand, and SA Wireless, on the other hand, and (ii) in
the case of a PMCL Board decision, each of IWC Group and SA Wireless shall be
free to direct their nominees on the PMCL Board to vote as IWC Group or SA
Wireless, as the case may be, may determine.
(c) With respect to a unanimous decision of the
Shareholders in respect of the matters referred to in Section 6.2(a)(x), (xi)
or (xii), if at any meeting of the PMCL Board, any nominee of any Shareholder to
the PMCL Board shall not vote on any matter in accordance with the specific
resolution of the Shareholders on such matter thereby resulting in the PMCL
Board passing a resolution contrary to such specific resolution of the
Shareholders, then the Shareholder nominating such nominee shall be deemed to
have committed a material breach of this Agreement.
6.7. MANAGEMENT OF PMCL. The parties hereto acknowledge and
agree that IWC or an Affiliate wishes to enter into a management services
agreement with PMCL pursuant to which IWC or its Affiliate will provide such
management services as are required to ensure the proper day-to-day management
and operation of PMCL and at such a level and to such an extent so as to enable
IWC and its Affiliates to comply with the requirements of the U.S. Investment
Company Act of 1940 so as not to be deemed an "investment company" thereunder.
The parties hereto acknowledge that any such management services agreement will
be in a form to be agreed between IWC and SA Wireless and will require a
Supermajority vote of the shareholders of PMCL. SA Wireless hereby agrees to
take all such actions to support and encourage the shareholders of PMCL to vote
in favor of PMCL entering into any such management services agreement.
6.8. NON-COMPETITION. With respect to Clause 14.1(b) of the PMCL
Shareholders Agreement, if another consortium is formed without SA Wireless or
an Affiliate thereof as contemplated in subclause (y) of the second paragraph of
Clause 14.1(b) and such consortium is successful in bidding for a license or
other rights that are offered by the Government of Pakistan, then IWC Group
agrees that as soon as it is practicable, it will transfer to SA Wireless or an
Affiliate designated by it part of the equity interest of IWC Group in such
consortium, which shall reflect the then current shareholding of IWC Group and
SA Wireless in the Company. The purchase price of such equity interest in the
consortium to be transferred by IWC Group to SA Wireless or its Affiliate shall
be equal to the subscription price per share that IWC Group originally paid for
such interest, plus any additional capital contributions or shareholder loans
subsequently made by IWC Group in respect of such interest. Notwithstanding the
foregoing, IWC Group shall not be required to make any transfer to SA Wireless
of equity interests in such consortium if such transfer would result in (i) a
violation of any order, decree, award or injunction of any governmental or
administrative authority; (ii) the revocation, restriction or imposition of
conditions on the license or rights that have been acquired by the consortium;
or (iii) a violation of the PMCL Shareholders Agreement.
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6.9. DEADLOCK WITH RESPECT TO PMCL.
(a) If the requisite vote of the Shareholders pursuant to
Section 6.2(a)(x), 6.2(a)(xi) or 6.2(a)(xii) cannot be obtained or there occurs
an irreconcilable difference of opinion or interest among the Shareholders or
the Directors with respect to a subject on which their concurrence is required
and which relates to the management or operations of the Company or PMCL, then a
deadlock (a "Deadlock") shall be deemed to arise 30 days after any Shareholder
shall give written notice to the Company of the occurrence of any such event.
(b) Upon the occurrence of a Deadlock, the Shareholders,
through their chief executive officers or designees, shall negotiate in good
faith for a period of not less than 30 days to seek a mutually agreeable
resolution of such Deadlock. In the event such matter cannot be so resolved
through good faith negotiations, the Shareholder shall mutually consult in good
faith for a period of 90 days (the "Consultation Period") concerning the
disposition of their respective interests in the Company.
(c) If a Deadlock occurs and continues after the expiration
of the Consultation Period, the Company shall notify PMCL of the existence of
the Deadlock and the Shareholders shall cause the Company to transfer the shares
of PMCL held by it to each of the Shareholders on a pro rata basis based on
their shareholding in the Company, with the result that each of the Shareholders
shall become direct shareholders of PMCL.
6.10. DIRECTORS' ACCESS. Each Director shall be entitled to
examine the books and accounts of the Company. The Company shall provide to each
Director, within 30 days after the end of each month, a monthly operating report
of the Company and each Subsidiary containing such information as may be
specified by the Board and such information relating to the business affairs and
financial position of the Company as such Director may require. Any Director
may provide such information to a Shareholder.
7. FINANCIAL REPORTS AND AUDITING.
7.1. RIGHT OF INSPECTION. The Company shall allow the
Shareholders and their authorized representatives the right during normal
business hours to inspect its books and accounting records and those of the
Subsidiaries, to make extracts and copies therefrom at their own expense and to
have full access to all of the Company's and each of the Subsidiaries' property
and assets. Notwithstanding the foregoing in this Section 7.1, the Company
shall not be obligated to provide any information to any Shareholder or
Shareholder's representatives or to any competitor of the Company pursuant to
this Section 7.1 that the Company considers to be a trade secret or similar
confidential information unless such Shareholder and such Shareholder's
representatives agree not to use such information and to keep such information
confidential. The foregoing rights of visitation and inspection shall be in
addition to any other similar rights the Shareholders may have under the laws of
Mauritius.
7.2. BOOKS AND RECORDS. The Company and the Subsidiaries shall
keep proper, complete and accurate books of account in US dollars in accordance
with international accounting standards and shall have their accounts audited
annually in accordance with such
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standards by a reputable firm of international accountants appointed by the
Shareholders. The audited financial statements shall be prepared in US dollars
and reconciled according to United States generally accepted accounting
principles.
7.3. REPORTS. The Company shall provide to each Shareholder (i)
within 60 days after the end of each Financial Year, the annual audited
consolidated financial statements of the Company for such Financial Year, (ii)
within 15 days after the end of each month, monthly unaudited consolidated
financial statements of the Company for such month, (iii) within 30 days after
the end of each quarter, quarterly unaudited consolidated financial statements
of the Company for such quarter which have been reconciled according to United
States generally accepted accounting principles, and (iv) such other reports as
the Board may determine. The Company shall furnish to the Shareholders and
their auditors such financial and other information relating to the business of
the Company and its Subsidiaries as any of them may reasonably require.
7.4. PMCL REPORTS.
(a) If any Shareholder wishes to obtain financial or other
information relating to the business of PMCL that is not otherwise being
provided by PMCL, upon its request, the Shareholders shall cause the Company to
make a request pursuant to Clause 7.7 of the PMCL Shareholders Agreement for
such financial or other information and to forward any information obtained by
the Company forthwith to each of the Shareholders.
(b) Upon the request of any Shareholder, the Shareholders
shall cause the Company to take all such actions or do all such things as may be
necessary or desirable to procure that the books and records, financial affairs
and internal audits of PMCL comply with the provisions of Clauses 7.1 and 7.2 of
the PMCL Shareholders Agreement.
8. FUNDING.
8.1. ADDITIONAL CAPITAL CONTRIBUTIONS; SHAREHOLDER LOANS.
(a) To the extent that the Company is required to make
capital contributions or shareholder loans to PMCL as provided in Clause 9.1 of
the PMCL Shareholders Agreement and Paragraph 3 of the PMCL Letter Agreement,
each Shareholder shall make its pro rata share, as set forth in Annex A attached
hereto (as the same may be amended from time to time to reflect issuances and
Transfers of Shares), of the required capital contributions or loans to the
Company to enable the Company to fulfill its obligations with respect to PMCL.
(b) Except as provided in Section 8.1(a), if the
Shareholders unanimously approve the making of capital contributions or
shareholder loans by the Company as referred to in Section 6.2(a)(xi), then each
Shareholder shall make its pro rata share of the approved capital contributions
or loans to the Company to enable the Company to fulfill its obligations with
respect to PMCL.
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(c) For the avoidance of doubt, all equity capital
contributions required to be made pursuant to this Agreement shall be made by
way of subscription for additional Shares by the Shareholders. The Board shall
determine whether such additional Shares will be Ordinary Shares, Redeemable
Preference Shares or a combination thereof. The aggregate subscription price
for such additional Shares shall be equal to the aggregate amount of the capital
contributions required to be made by the Company to PMCL. If it shall be
necessary to increase the authorized share capital of the Company to issue
additional Shares in connection with the making of any additional equity capital
contributions, then each Shareholder shall vote its Shares in favor of a
resolution to increase appropriately the share capital of the Company and to
allot such additional Shares in accordance with this Agreement, and shall cause
its Directors to adopt a resolution authorizing such increase and the allotment
of such additional Shares in accordance with this Agreement.
(d) If shareholder loans are required to be made
pursuant to this Agreement to enable the Company to provide a shareholder loan
to PMCL, then the terms and conditions of the loans made by the Shareholders to
the Company shall be the same as the terms and conditions on which the
shareholder loan of the Company to PMCL is being made.
8.2. FAILURE TO SUBSCRIBE FOR ADDITIONAL SHARES OR PROVIDE
SHAREHOLDER LOANS.
(a) If any Shareholder (the "Defaulting Shareholder")
fails to (i) subscribe and pay for its pro rata portion of any additional Shares
required to be subscribed by such Shareholder pursuant to Sections 8.1(a) and
(b) within 20 Business Days after receiving notice from the Company of the
Shares to be offered by the Company pursuant to Sections 8.1(a) and (b) and the
subscription price therefor or (ii) provide its pro rata portion of any
shareholder loans required to be made by such Shareholder pursuant to Section
8.1(a) within 20 Business Days after receiving notice from the Company of a call
for such loans, then the other Shareholders (the "Non-Defaulting Shareholders")
shall have the right (the "Section 8.2 Right") to purchase all, but not less
than all, of the Shares of the Defaulting Shareholder (the "Subject Shares") at
a purchase price equal to 50% of their fair market value as established in
accordance with Section 8.3(c).
(b) Any Non-Defaulting Shareholders who exercise their
Section 8.2 Right shall make up the share of the capital contributions or
shareholder loans to the Company that the Defaulting Shareholder failed to make,
and shall make the requisite capital contributions or, shareholder loans on the
original due date thereof, notwithstanding that the closing of the sale and
purchase of the Subject Shares may occur after such date as provided in Section
8.3. If there are more than one such Non-Defaulting Shareholders, they shall
make up the capital contributions or, shareholder loans that the Defaulting
Shareholder failed to make in proportion to the Shares of the Defaulting
Shareholder that they have each elected to purchase.
8.3. PROCEDURES.
(a) Upon the expiration of the 20-Business Day period
referred to in Section 8.2(a), the Company shall notify the Non-Defaulting
Shareholders in writing of
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their Section 8.2 Right. Within five Business Days after delivery of such
notice from the Company, the Non-Defaulting Shareholders shall decide whether
they wish to purchase the Subject Shares, and shall notify the Company and the
Defaulting Shareholder of their decision. If more than one Non-Defaulting
Shareholder wishes to purchase the Subject Shares, then they shall have the
right to purchase a pro rata portion of the Subject Shares based on the
proportion that the number of Shares owned by each such Non-Defaulting
Shareholder bears to the total number of Shares owned by all such Non-Defaulting
Shareholders that elect to purchase the Subject Shares. Failure by a
Non-Defaulting Shareholder to respond within such five-Business Day period shall
be regarded as a waiver of its right to purchase the Subject Shares.
If the Non-Defaulting Shareholders decline to exercise
their Section 8.2 Right or otherwise fail to elect to purchase all of the
Subject Shares within the five-Business Day period referred to in Section
8.3(a), then the right to exercise the Section 8.2 Right shall lapse and the
provisions of Section 8.4 shall apply.
(c) If the Non-Defaulting Shareholders elect to
exercise their Section 8.2 Right, then the Company shall, within two Business
Days after receipt of the Non-Defaulting Shareholders' notice of election,
notify the Defaulting Shareholder and the Non-Defaulting Shareholders. Within
10 Business Days of the date of the Company's notice, an appraiser (the
"Appraiser"), which shall be an internationally recognized investment banking
firm that has not had a substantial relationship with any of the Shareholders or
any of their Affiliates in the immediately preceding five years, shall be
selected in the following manner to determine the fair market value of the
Subject Shares. The Non-Defaulting Shareholders, on the one hand, and the
Defaulting Shareholder, on the other hand, shall each select an investment
banking firm and the investment banking firms so selected shall designate the
Appraiser; PROVIDED that if either the Non-Defaulting Shareholders or the
Defaulting Shareholder shall fail to select an investment banking firm within
such 10-Business Day period, then the appraisal shall be conducted by the
investment banking firm that is so selected. The Appraiser shall be instructed
to make its determination and to deliver its report within 20 Business Days of
its appointment. In addition, the Appraiser shall be instructed to take into
account the dilution of the Defaulting Shareholder's shareholding in the Company
as a result of its failure to make its share of the required capital
contributions or shareholder loans to the Company. The fees and expenses of the
Appraiser shall be borne by the Defaulting Shareholder. The Appraiser shall act
as an expert and not an arbitrator, and the determination of the Appraiser shall
be final and binding on all parties.
(d) The Company shall determine the date for the
closing of the sale and purchase of the Subject Shares (which date shall not be
more than 10 days after the date of receipt of the report of the Appraiser) and
shall notify all the Shareholders thereof. The closing shall take place at the
principal office of the Company on the date so specified.
8.4. DIVESTMENT. In the case of capital contributions or
shareholder loans that are required to be made by the Company to PMCL pursuant
to Clause 9.1 of the PMCL Shareholders Agreement or Paragraph 3 of the PMCL
Letter Agreement, if the Non-Defaulting Shareholders have not elected to
purchase all of the Subject Shares, the Company
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shall, on the due date of the making of the capital contributions or the
shareholder loans to PMCL or within the cure period stipulated in Clause 16.3(d)
of the PMCL Shareholders Agreement, make such part of its required capital
contributions or shareholder loans with the funds that have been provided by the
Non-Defaulting Shareholders. The parties agree that thereupon the Company shall
have the right to purchase the Shares held by the Defaulting Shareholder or to
otherwise cause the Defaulting Shareholder to divest its Shares in consideration
for the transfer by the Company to the Defaulting Shareholder of such number of
shares of PMCL that is attributable and corresponds to the shareholding
percentage in the Company of the Defaulting Shareholder, with the result that
the Defaulting Shareholder shall become a direct shareholder of PMCL. Each
Shareholder covenants that, if it is a Defaulting Shareholder, it shall execute
and deliver a deed of adherence, substantially in the form of Exhibit C to the
PMCL Shareholders Agreement. Immediately following the transfer of shares of
PMCL to the Defaulting Shareholder, the Defaulting Shareholder shall be deemed
to have been in default under Clause 16.3(d) of the PMCL Shareholders Agreement
by virtue of having failed to fund its share of the capital contributions or
shareholder loans that should have been made by it originally to the Company,
and the Company (as so constituted with only the Non-Defaulting Shareholders as
its shareholders) shall, together with the other shareholders of PMCL, have the
right to purchase the shares of PMCL held by the Defaulting Shareholder in
accordance with Clause 16.5 of the PMCL Shareholders Agreement. Notwithstanding
the foregoing, the Company may not purchase or divest the Shares held by the
Defaulting Shareholder without the unanimous approval of the Non-defaulting
Shareholders.
8.5. DILUTION OF BREACHING SHAREHOLDER. In the case of
capital contributions or shareholder loans that are required to be made by the
Company pursuant to Clause 9.2 or 9.3 of the PMCL Shareholders Agreement
following the unanimous approval of the Shareholders as required under
Section 6.2(a)(xi), if a Shareholder (the "Breaching Shareholder") fails to (i)
subscribe and pay for its pro rata portion of any additional Shares required to
be subscribed by such Shareholder pursuant to Sections 8.1(b) and (c) or (ii)
provide its pro rata portion of any shareholder loans required to be made by
such Shareholder pursuant to Section 8.1(b), then the Company shall, on the due
date of the making of the capital contributions or the shareholder loans to
PMCL, make such part of its required capital contributions or shareholder loans
with the funds that have been provided by the other Shareholders (the
"Non-Breaching Shareholders"). The parties agree, however, that any dilution of
the Company's shareholdings in PMCL resulting from the failure of the Company to
make its required capital contributions or shareholder loans in full to PMCL
shall require a corresponding dilution of the shareholding of the Breaching
Shareholder in the Company. Accordingly, in the case of the Breaching
Shareholder's failure to make its pro rata share of capital contributions, the
number of Shares to be issued to the Non-Breaching Shareholders for their
capital contributions and the subscription price therefor shall be determined
based upon the extent of such dilution and the aggregate amount of the capital
contributions made by the Non-Breaching Shareholders. In the case of the
Breaching Shareholder's failure to make its pro rata shareholder loan, such
dilution shall be effected through the issuance by the Company of additional
Shares to the Non-Breaching Shareholders at no cost. Each of the Shareholders
agrees that it shall vote its Shares in favor of a resolution to increase
appropriately the share capital of the Company (if required) and to allot such
additional Shares to the Non-Breaching Shareholders in accordance with this
Section 8.5,
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and shall cause its Directors to adopt a resolution authorizing such increase
(if required) and the allotment of such additional Shares in accordance with
this Section 8.5.
9. MEMORANDUM AND ARTICLES OF ASSOCIATION. The parties agree,
promptly after the date hereof, to take all necessary actions and execute all
documents and instruments necessary to amend the Charter Documents to conform to
the terms of this Agreement.
10. REPRESENTATIONS AND WARRANTIES. Each party hereto represents
with respect to itself, severally and not jointly, to the other parties hereto
that:
(a) such party has the full power and authority to
enter into, execute and deliver this Agreement and to perform the transactions
contemplated hereby and such party is duly organized and existing under the laws
of the jurisdiction of its organization and that the execution and delivery by
such party of this Agreement and the performance by such party of the
transactions contemplated hereby have been duly authorized by all necessary
corporate or other action of such party;
(b) assuming the due authorization, execution and
delivery hereof by the other parties, this Agreement constitutes the legal,
valid and binding obligation of such party, enforceable against such party in
accordance with its terms;
(c) the execution, delivery and performance of this
Agreement by such party and the consummation of the transactions contemplated
hereby will not (i) violate any provision of the Memorandum or Articles of
Association or By-laws (or comparable instruments) of such party; (ii) require
such party to obtain any consent, approval or action of, or make any filing with
or give any notice to, any governmental authority in such party's country of
organization or any other person pursuant to any instrument, contract or other
agreement to which such party is a party or by which such party is bound other
than such filings as may be required under applicable securities laws and such
notices and copies of documents as it may be required to provide its or its
Affiliates' lenders; (iii) conflict with or result in any material breach or
violation of any of the terms and conditions of, or constitute (or with notice
or lapse of time or both constitute) a default under, any instrument, contract
or other agreement to which such party is a party or by which such party is
bound; (iv) violate any order, judgment or decree against, or binding upon, such
party or upon its respective securities, properties or businesses; or (v)
violate any law or regulation of such party's country of organization or any
other country in which it maintains its principal office; and
(d) with respect to Clause 3(b)(iv) of the Motorola
Share Purchase Agreement, neither it nor any of its Affiliated Entities (as
defined in the Motorola Share Purchase Agreement), directors, employees or
agents have been advised of or have knowledge of facts or circumstances
involving the Condition of the Company (as defined in the Motorola Share
Purchase Agreement) that demonstrate an existing material misrepresentation by
Motorola pursuant to the Motorola Share Purchase Agreement that would give rise
to an ability of the Company to terminate the Motorola Share Purchase Agreement
or to a claim for indemnification pursuant to Clause 10(b)(i) of the Motorola
Share Purchase Agreement.
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11. FEES AND EXPENSES. Except as otherwise specifically provided in
this Agreement, each of the parties hereto shall bear its respective fees and
expenses incurred in connection with the preparation, execution and performance
of this Agreement and the transactions contemplated hereby and thereby,
including, without limitation, all fees and expenses of agents, representatives,
counsel and accountants.
12. CONFIDENTIALITY.
12.1. GENERAL OBLIGATION. Each party undertakes that it shall
not reveal, and shall cause its directors, officers and employees not to reveal,
to any third party any information acquired by it or them in connection with
this Agreement or confidential or proprietary information concerning the
organization, business, technology, finance, transactions or affairs of the
Company or the Subsidiaries or any other party hereto without the prior written
consent of the other parties.
12.2. EXCEPTIONS. The provisions of Section 12.1 shall not
apply to:
(a) information that is publicly available (except by
virtue of a breach of this Agreement);
(b) a disclosure to legal, financial or professional
advisors or bankers of any party;
(c) a disclosure, after giving prior notice to the
other parties to the extent practicable under the circumstances and subject to
any practicable arrangements to protect confidentiality, to the extent required
under the rules of any stock exchange or by applicable laws or governmental
regulations or judicial or regulatory process or in connection with any judicial
process regarding any legal action, suit or proceeding arising out of or
relating to this Agreement;
(d) a disclosure by the Company reasonably necessary
in the ordinary course of business or otherwise in connection with transactions
or proposed transactions of the Company; or
(e) a disclosure required by the lenders of any
Shareholder or of any Shareholder's Affiliates.
12.3. DISCLOSURE TO THIRD PARTIES. Upon any Shareholder
entering into negotiations with any Person with a view to selling any Shares to
such Person, information in respect of the Company or any Subsidiary that is
reasonably necessary to permit such Person to evaluate the business of the
Company or such Subsidiary may be provided to such Person, provided that such
Person has executed a binding confidentiality letter in a form approved by the
Board; PROVIDED that where such Person is involved in a business directly
competing with that of the Company, the Board may prohibit the disclosure of any
such confidential information as the Board may reasonably determine.
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13. PUBLICITY. Except for a publicity release or public announcement
(after giving prior notice to and consulting with the other parties to the
extent practicable under the circumstances), to the extent required under the
rules of any stock exchange or by applicable laws or governmental regulations or
judicial or regulatory process, and except for disclosures permitted by Article
12, no publicity release or public announcement concerning the Company any
Subsidiary or the relationship or involvement of the parties shall be made by
any party without advance approval thereof by the Board; PROVIDED that no
disclosure of a party's identity may be made without the prior approval of such
party, except as permitted by Article 12.
14. U.S. INVESTMENT COMPANY ACT OF 1940. Each of the parties hereto
agrees that the Company and the Subsidiaries shall conduct their business at all
times such that the Company or any present or future Subsidiary is not deemed to
be an "investment company" under the U.S. Investment Company Act of 1940.
15. MISCELLANEOUS.
15.1. LEGEND. Each certificate for any Shares now held or
hereafter acquired by any Shareholder shall, for as long as this Agreement is
effective, bear a legend as follows:
"International Wireless Communications Pakistan Limited (the "Company") is
a company organized under the laws of Mauritius, and the shares represented
by this certificate may not be sold, assigned, transferred, exchanged,
mortgaged, pledged or otherwise disposed of or encumbered without
compliance with the provisions of that certain Shareholders' Agreement,
dated as of August __, 1997 among the Company and the shareholders of the
Company named therein. A copy of such Shareholders' Agreement is on file
at the registered offices of the Company. The Company will not register
the transfer of such shares on the register of members of the Company
unless and until the transfer has been made in compliance with the terms of
such Shareholders' Agreement."
15.2. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally or
sent by registered mail or international courier service, in either case postage
prepaid, or delivered by facsimile or similar telecommunications equipment. Any
such notice shall be deemed given when so delivered personally or, if sent by
registered mail, five days after the date of deposit in the mails or, if sent by
international courier service, three days after the date of deposit with the
courier service or, if delivered by facsimile or similar telecommunications
equipment, at the time of receipt thereof, as follows:
(a) if to the Company, to:
International Wireless Communications
Pakistan Limited
P.O. Box 1130
3rd Floor
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12 Remy Ollier Street
Port Louis, Mauritius
Attention: _____________
Facsimile No.: _________
(b) if to IWC, to:
Pakistan Wireless Holdings Limited
400 South El Camino Real
San Mateo, California 94402
United States of America
Attention: Mr. Doug Sinclair
Ms. Aarti C. Gurnani
Facsimile No.: 1-415-548-1842
(c) if to SA Wireless, to:
South Asia Wireless Communications
(Mauritius) Limited
c/o Asian Infrastructure Fund Advisers
Limited
Suite 2302-03
Nine Queen's Road Central
Hong Kong
Attention: Mr. Antonio Yeung
Facsimile No.: 852-2845-0786
(d) if to Vanguard
Vanguard Pakistan, Inc.
2002 Pisgah Church Road, Ste. 300
Greensboro, NC 27405
Attention: General Counsel
Facsimile No: 1-910-545-2219
Any party may, by notice to the other parties, designate another
address or person for receipt of notices hereunder.
15.3. DISCREPANCIES. If there is any discrepancy between any
of the provisions of the Charter Documents or documents analogous to the Charter
Documents of any of the Subsidiaries and this Agreement, the provisions of this
Agreement shall prevail, and the parties shall thereupon procure that the
Charter Documents or relevant analogous documents, as the case may be, are
promptly amended, to the extent permitted by applicable law, in order to conform
with this Agreement.
24
<PAGE>
15.4. SEVERABILITY. In the event any provision hereof is held
void or unenforceable by any court, such provision shall be severable and shall
not affect the remaining provisions hereof.
15.5. ENTIRE AGREEMENT. This Agreement, together with the
other agreements referred to herein, reflects the entire agreement among the
parties and supersedes all prior agreements and communications, either oral or
in writing, among the parties hereto with respect to the subject matter hereof.
15.6. TERM OF AGREEMENT. This Agreement shall become effective
upon the execution hereof by all of the parties hereto and shall continue in
effect until the earlier to occur of (a) the date on which at least 30% of the
Shares in issue on a fully diluted basis are publicly traded on an
internationally recognized stock exchange and (b) any date agreed upon in
writing by all of the Shareholders.
15.7. AMENDMENT AND WAIVER. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the Company and Shareholders holding
collectively at least 90% of the issued and outstanding Shares or, in the case
of a waiver, by the party waiving compliance, provided that if this Agreement is
amended, supersed, canceled, renewed or extended, or a term hereof is waived, in
a manner that by its terms adversely affects one or more Shareholders but not
all of the Shareholders, the consent of such affected Shareholder(s) to such
action shall be required. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity.
15.8. CONSENT TO SPECIFIC PERFORMANCE. The parties hereto
declare that it is impossible to measure in money the damages that would be
suffered by a party by reason of the failure by any other party to perform any
of the obligations hereunder. Therefore, if any party shall institute any
action or proceeding to enforce the provisions hereof, any party against whom
such action or proceeding is brought hereby waives any claim or defense therein
that the other party has an adequate remedy at law.
15.9. ASSIGNMENT; BINDING ON TRANSFEREE. The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted transferees from and after
the effective date hereof.
15.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF ENGLAND AND WALES.
25
<PAGE>
15.11. ARBITRATION.
(a) Any dispute or claim arising out of or relating to
this Agreement, or the breach, termination or invalidity hereof, shall be
finally settled by arbitration under the Rules of Conciliation and Arbitration
of the International Chamber of Commerce (the "Rules") as are currently in force
and as may be amended by the rest of this Section 15.11. For the purpose of
such arbitration, there shall be one or more arbitrators appointed in accordance
with the Rules (such single arbitrator or board of arbitrators, as the case may
be, are referred to below as the "Arbitration Board"). The place of arbitration
shall be Hong Kong. All arbitration proceedings shall be conducted in the
English language. The arbitrators shall decide any such dispute or claim
strictly in accordance with the governing law specified in Section 15.10 of this
Agreement. Judgment upon any arbitral award rendered hereunder may be entered
in any court having jurisdiction, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be.
(b) Each party shall cooperate in good faith to expedite
(to the maximum extent practicable) the conduct of any arbitral proceedings
commenced under this Agreement.
(c) The costs and expenses of the arbitration,
including, without limitation, the fees of the Arbitration Board, shall be
borne equally by each party to the dispute or claim, and each party shall pay
its own fees, disbursement and other charges of its counsel.
(d) Any award made by the Arbitration Board shall be
final and binding on the parties hereto. The parties expressly agree to waive
the applicability of any laws and regulations that would otherwise give the
right to appeal the decisions of the Arbitration Board so that there shall be no
appeal to any court of law for the award of the Arbitration Board, and a party
shall not challenge or resist the enforcement action taken by another party in
whose favor the award of the Arbitration Board was given.
15.12. SHAREHOLDER OBLIGATIONS; FURTHER ASSURANCES. The parties
hereto shall comply with the provisions of this Agreement in relation to their
investment in the Company and in transacting business with the Company and shall
exercise their respective rights and powers in accordance with and so as to give
effect to this Agreement. Each of the parties shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby.
15.13. EXERCISE OF RIGHTS AND PERFORMANCE OF DUTIES BY IWC
GROUP. Any rights or obligation of the IWC Group under this Agreement may be
exercised or performed, as applicable, jointly by both members of the IWC Group
or individually by either member of the IWC Group and if exercised or performed
individually by either member of the IWC Group, the other Shareholders shall be
entitled to rely upon such exercise or performance as the action of the IWC
Group.
26
<PAGE>
15.14. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS PAKISTAN LIMITED
By:
---------------------------------------
Name:
Title:
PAKISTAN WIRELESS HOLDINGS
LIMITED
By:
---------------------------------------
Name:
Title:
SOUTH ASIA WIRELESS
COMMUNICATIONS (MAURITIUS)
LIMITED
By:
---------------------------------------
Name:
Title:
VANGUARD PAKISTAN, INC.
By:
---------------------------------------
Name:
Title:
27
<PAGE>
EXHIBIT A
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made the ___ day of ___________, 199
BETWEEN:
(1) International Wireless Communications Pakistan Limited, a company
incorporated in Mauritius (the "Company"); and
(2) [Name of New Shareholder] (the "New Shareholder").
WHEREAS:
(A) On the [ ] day of [ ] 1997, the Company and its
shareholders entered into a Shareholders' Agreement (the "Shareholders'
Agreement") to which a form of this Deed is attached as Exhibit A.
(B) The New Shareholder wishes to [be allotted/have transferred to him/her/it]
[ ] shares (the "Shares") in the share capital of the Company from [
] (the "Former Shareholder") and in accordance with the Shareholders'
Agreement has agreed to enter into this Deed.
(C) The Company enters this Deed on behalf of itself and as agent for all the
existing Shareholders of the Company.
NOW THIS DEED WITNESSES as follows:
1. INTERPRETATION.
In this Deed, except as the context may otherwise require, all words and
expressions defined in the Shareholders' Agreement shall have the same
meanings when used herein.
2. COVENANT.
The New Shareholder hereby covenants to the Company as trustee for all
other persons who are at present or who may hereafter become bound by the
Shareholders' Agreement, and to the Company itself to adhere to and be
bound by all the duties, burdens and obligations of a shareholder holding
the same class of share capital as the Shares imposed pursuant to the
provisions of the Shareholders' Agreement and all documents expressed in
writing to be supplemental or ancillary thereto as if the New Shareholder
had been an original party to the Shareholders' Agreement since the date
thereof.
3. ENFORCEABILITY.
Each existing shareholder and the Company shall be entitled to enforce the
Shareholders' Agreement against the New Shareholder, and the New
Shareholder shall be entitled to all
E-1
<PAGE>
rights and benefits of the Former Shareholder (other than those that are
non-assignable) under the Shareholders' Agreement in each case as if the
New Shareholder had been an original party to the Shareholders' Agreement
since the date thereof.
4. GOVERNING LAW.
THIS DEED OF ADHERENCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF ENGLAND AND WALES.
IN WITNESS WHEREOF, this Deed of Adherence has been executed as a deed
on the date first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS PAKISTAN LIMITED
By:
---------------------------------------
Name:
Title:
[NAME OF NEW SHAREHOLDER]
By:
---------------------------------------
Name:
Title:
E-2
<PAGE>
ANNEX A
PRO RATA SHARE OF CAPITAL CONTRIBUTIONS
AND SHAREHOLDER LOANS TO BE MADE TO PMCL
I. Capital Contributions and Shareholder Loans to be made by the Company as at
the Closing (as defined in the Motorola Share Purchase Agreement).
1. CAPITAL CONTRIBUTIONS.
US$[56,823,927] in the aggregate.
Shareholder Share of Capital Contributions
----------- ------------------------------
IWC US$
SA Wireless US$
Vanguard US$
2. SHAREHOLDER LOANS.
US$______________ in the aggregate.
Shareholder Share of Shareholder Loans
----------- --------------------------
IWC US$
SA Wireless US$
Vanguard US$
<PAGE>
IWC GROUP AGREEMENT
This AGREEMENT is entered into as of the 18th day of August, 1997 by
and among Pakistan Wireless Holdings Limited, a Mauritius company and wholly
owned subsidiary of International Wireless Communications, Inc. having its
principal offices at 400 South El Camino Real, San Mateo, California, 94402,
U.S.A. ("IWC"), and Vanguard Pakistan, Inc., a Delaware corporation ("Vanguard")
having its registered offices at Griffin Corporate Services, Inc., 900 Market
Street, 2nd Floor, Wilmington, Delaware 19801, U.S.A (this "Agreement").
W I T N E S S E T H :
WHEREAS, International Wireless Communications Pakistan Limited, a
Mauritius company with registered offices at P.O. Box 1130, 3rd Floor, 12 Remy
Ollier Street, Port Louis, Mauritius ("IWCPL"), IWC, Vanguard and South Asia
Wireless Communications (Mauritius) Limited, a Mauritius company having its
principal offices at Suite 2302-03, Nine Queen's Road Central, Hong Kong ("SA
Wireless;" together with IWC and Vanguard, the "Shareholders") are parties to
that certain Amended and Restated Shareholders' Agreement (the "Shareholders'
Agreement") dated as of August 13, 1997, that provides, among other things, for
certain matters relating to the transfer of shares of IWCPL (the "IWCPL Shares")
and the management and operation of IWCPL; and
WHEREAS, in order to induce the Shareholders to enter into the
Shareholders' Agreement, IWC and Vanguard have agreed to enter into this
Agreement to provide for certain matters relating to the exercise of rights and
performance of duties of IWC and Vanguard under the Shareholders' Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
promises set forth in this Agreement and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged;
THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS.
1.1 APPRAISED FAIR MARKET VALUE: The amount determined pursuant to
Section 3.3 hereof.
1.2 BANKRUPTCY EVENT:
(a) An order, judgment, decree or injunction is entered against
International Wireless Communications Holdings, Inc., a Delaware corporation and
the parent corporation of IWC ("IWCH"), requiring the dissolution or split up of
IWCH or preventing IWCH from conducting all or any material part of its
business, and such order, judgment, decree or injunction remains undischarged or
unstayed for more than sixty (60) consecutive days;
<PAGE>
(b) A proceeding is instituted in a court having jurisdiction in
the premises seeking a decree or order for relief in respect of IWCH in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
IWCH or for any substantial part of the property of IWCH, or for the winding-up
or liquidation of its affairs, and such proceeding remains undismissed or
unstayed and in effect for a period of sixty (60) consecutive days or such court
enters a decree or order granting the relief sought in such proceeding; or
(c) IWCH commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, consents
to the entry of an order for relief in an involuntary case under any such law,
or consents to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of IWCH or for any substantial part of the property of IWCH, or makes
a general assignment for the benefit of creditors, or fails generally to pay its
debts as they become due, or takes any corporate action in furtherance of any of
the foregoing.
1.3 IWC GROUP: Vanguard and IWC, together as a single group.
1.4 PRO RATA SHARE: For IWC and Vanguard means a fraction the
numerator of which is the number of IWCPL Shares owned by IWC or Vanguard, as
the case may be, and the denominator of which is the total number of IWCPL
Shares owned by IWC and Vanguard.
1.5 CAPITALIZED TERMS: Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Shareholders' Agreement.
2. EXERCISE OF RIGHTS AND DISCHARGE OF DUTIES OF IWC GROUP UNDER THE
SHAREHOLDERS' AGREEMENT.
2.1 RIGHT OF FIRST REFUSAL; RIGHT OF FIRST OFFER.
(a) IWC and Vanguard shall each have the right to purchase a Pro
Rata Share of the number of Securities that may be purchased by the IWC Group
upon exercise of the Right of First Refusal (including any Remaining Offered
Securities), provided that if IWC or Vanguard has not exercised its right to
purchase its Pro Rata Share of the Securities subject to the Right of First
Refusal in full within four (4) days before the expiration of the Notice Period
or two (2) days before the expiration of the Last Chance Period, as the case may
be, the unexercised portion of such right may be exercised by Vanguard or IWC,
as the case may be.
(b) IWC and Vanguard shall each have the right to purchase a Pro
Rata Share of the number of New Securities that may be purchased by the IWC
Group upon exercise of the Right of First Offer (including any New Securities
that IWC Group is entitled to purchase pursuant to Section 4(c) of the
Shareholders' Agreement), provided that if IWC or Vanguard has not exercised its
right to purchase its Pro Rata Share of the Securities subject to the Right of
First Offer in full within five (5) days before expiration of the twenty eight
(28) day periods specified
2
<PAGE>
in Sections 4(b) and (c) of the Shareholders' Agreement, the unexercised portion
of such right may be exercised by Vanguard or IWC, as the case may be.
2.2 IWC OPTION. The IWC Option may be exercised at any time during
the IWC Option Period by IWC, provided that
(a) if IWC does not plan to exercise the IWC Option, it shall
promptly notify Vanguard of its decision and Vanguard may exercise the IWC
Option in accordance with the Shareholders' Agreement; and
(b) if IWC does not exercise the IWC Option by December 15,
1998, Vanguard may elect to exercise the IWC Option by notifying IWC at least
five (5) days before the exercise date.
2.3 SECOND OPTION. Either IWC or Vanguard may exercise the Second
Option. IWC may purchase any or all of the Second Option Shares, provided that
if IWC does not notify Vanguard that it plans to purchase all of the Second
Option Shares at least two (2) Business Days before the purchase date, Vanguard
may purchase the Second Option Shares not purchased by IWC.
2.4 TRANSFER OF CONSORTIUM INTEREST TO SA WIRELESS. IWC and Vanguard
shall each transfer to SA Wireless a Pro Rata Share of any equity interest in a
consortium required to be transferred to SA Wireless pursuant to Section 6.8 of
the Shareholders' Agreement.
2.5 CAPITAL CONTRIBUTIONS. IWC and Vanguard shall each contribute or
make a Pro Rata Share of any capital contributions or shareholder loans to IWCPL
required pursuant to Sections 8.1(a) or (b) of the Shareholders' Agreement,
provided that if either IWC or Vanguard does not intend to make its Pro Rata
Share of such capital contributions or loans, it shall so notify the other party
within four (4) Business Days before the expiration of the twenty (20) Business
Day period referred to in Section 8.2(a) of the Shareholders' Agreement, then
Vanguard or IWC, respectively, may
(a) in the case of a capital contribution, contribute the
portion of the capital contribution not contributed by the other party and
purchase any Shares offered by IWCPL in exchange therefor; and
(b) in the case of a shareholder loan, make the portion of the
shareholder loan not made by the other party and purchase the note or other
evidence of indebtedness offered by IWCPL in exchange therefor.
2.6 OMNIBUS. Without limiting the foregoing, either party hereto may
take any appropriate or necessary action to prevent a breach of the
Shareholders' Agreement by the IWC Group or the other party.
3. BANKRUPTCY OPTION.
3
<PAGE>
3.1 BANKRUPTCY NOTICE. If at any time there occurs a Bankruptcy
Event, then IWC shall give Vanguard written notice of the Bankruptcy Event (the
"Bankruptcy Notice"), which Bankruptcy Notice shall include a summary of the
details of the Bankruptcy Event.
3.2 VANGUARD'S OPTION.
(a) Vanguard shall have an option for a period of thirty (30)
days from receipt of the Bankruptcy Notice to elect to purchase the IWCPL
Shares held by IWC (i) in the event that any Notes (as such term is defined
in the Loan Agreement dated August 18, 1997 between IWC and the Lenders
specified therein) remain outstanding, at a price equal to the greater of (A)
the outstanding principal amount of and unpaid interest on the Notes (the
"Note Price") and (B) the Appraised Fair Market Value, or (ii) in the event
that the Notes no longer remain outstanding, at a price equal to the
Appraised Fair Market Value. Vanguard may exercise such purchase option and,
thereby, purchase all the IWCPL Shares by notifying IWC in writing before
expiration of such thirty (30) day period as to whether it wishes to purchase
the IWCPL Shares for the Note Price or Appraised Fair Market Value, as the
case may be. If Vanguard gives IWC notice (the "Purchase Notice") that it
desires to purchase such shares, then payment for the IWCPL Shares shall be
by check or wire transfer, against delivery of the IWCPL Shares to be
purchased at a place agreed upon between the parties and at the time of the
scheduled closing therefor, which shall be no later than sixty (60) days
after Vanguard's receipt of the Bankruptcy Notice; or
(b) In the event Vanguard does not elect to exercise the
option granted in Section 3.2(a)(i) above, it shall have a right of first
offer to purchase all or any portion of the IWCPL Shares held by IWC (the
"Vanguard Right of First Offer") that IWC may from time to time propose to
sell, and the provisions of this Section 3.2(b) shall apply to such sales.
(i) In the event that IWC proposes to undertake a sale of
IWCPL Shares, IWC shall give written notice (the "IWC Notice") of its
intention to so sell such IWCPL Shares to Vanguard. The IWC Notice shall
include number of such IWCPL Shares that are proposed to be sold.
(ii) Vanguard shall have thirty (30) days after the
receipt of the IWC Notice to offer to purchase all (but not less than all) of
such IWCPL Shares by giving written notice to IWC and stating therein the
price and other general terms upon which Vanguard offers to purchase such
IWCPL Shares (the "Vanguard Notice").
(iii) If Vanguard waives or fails to exercise the
Vanguard Right of First Offer set forth in Sections 3.2(b)(i) and (ii) within
the above-mentioned time periods, then IWC shall have ninety (90) days
thereafter to sell all (but not less than all) of the IWCPL Shares specified
in the IWC Notice upon any terms and conditions. If Vanguard delivers a
Vanguard Notice with respect to all (but not less than all) of the IWCPL
Shares specified in the IWC Notice, then IWC shall have ninety (90) days
thereafter to sell all (but not less than all) of such IWCPL Shares at a
price and upon general terms no more favorable to the any prospective
acquirer (each a "Proposed Acquirer") than those specified in the Vanguard
Notice. In the event IWC does not sell the IWCPL Shares within either such
ninety (90)-day period, IWC shall not thereafter sell such IWCPL Shares
without first offering such IWCPL Shares to Vanguard in accordance with this
Section 3.2(b).
4
<PAGE>
(iv) The exercise or non-exercise of the Vanguard Right of
First Offer hereunder with respect to a sale of IWCPL Shares shall not affect
the Vanguard Right of First Offer with respect to subsequent sales of IWCPL
Shares.
(v) Any Proposed Acquirer to whom IWCPL Shares are sold
in accordance with this Section 3.2 shall become a party to and shall be
bound by the restrictions on transfer and the other restrictions and
obligations set forth in this Agreement (other than those set forth in this
Section 3, which shall not apply to any Proposed Acquirer) to the same extent
and with the same force and effect as if such person were an original
signatory hereto. Each Proposed Acquirer shall, as a condition to purchasing
such IWCPL Shares, execute a Deed of Adherence substantially in the form
attached as an exhibit to the Shareholders' Agreement upon or before the
consummation of the sale of such IWCPL Shares.
3.3 VALUATION OF IWCPL SHARES. Within ten (10) business days of
the date the Purchase Notice is received by IWC, an appraiser (the
"Appraiser"), which shall be an internationally recognized investment banking
firm that has not had a substantial relationship with any of the parties
hereto or any of their respective Affiliates in the immediately preceding
five (5) years, shall be selected in the following manner to determine the
fair market value of the IWCPL Shares. Vanguard, on the one hand, and IWC,
on the other hand, shall each select an investment banking firm and the
investment banking firms so selected shall designate the Appraiser; provided
that if either Vanguard or IWC shall fail to select an investment banking
firm within such ten (10) business day period, then the appraisal shall be
conducted by the investment banking firm that is so selected. The Appraiser
shall be instructed to make its determination and to deliver its report
within twenty (20) business days of its appointment. The fees and expenses
of the Appraiser shall be borne by Vanguard. The Appraiser shall act as an
expert and not an arbitrator, and the determination of the Appraiser shall be
final and binding on all parties.
4. RECIPROCAL RIGHTS OF CO-SALE.
(a) In the event that either Vanguard or IWC elects to
transfer or sell any portion of IWCPL Shares held by such entity, then the
party electing to sell or transfer such shares (the "Selling Holder") shall
send written notice (the "Transfer Notice") to the non-selling party (the
"Holder"). The Transfer Notice shall include (i) the number of IWCPL Shares
to be transferred ("Offered Shares"), (ii) the identity of the prospective
transferee(s) and (iii) the consideration and the material terms and
conditions upon which the proposed transfer is to be made. Within thirty
(30) days after receipt of the Transfer Notice, the Holder shall have the
right to participate in such sale of IWCPL Shares on the same terms and
conditions as specified in the Transfer Notice. Such Holder's notice to the
Selling Holder shall indicate the number of IWCPL Shares the Holder wishes to
sell under its right to participate.
(b) The Holder may sell all or any part of that number of IWCPL
Shares equal to the product obtained by multiplying (i) the aggregate number of
IWCPL Shares covered by the Transfer Notice by (ii) a fraction, the numerator of
which is the number of IWCPL Shares (including any such shares issuable upon
conversion or exercise or convertible or exercisable securities) owned by the
Holder on the date of the Transfer Notice and the
5
<PAGE>
denominator of which is the total number of IWCPL Shares owned by the Selling
Holder and the Holder on the date of the Transfer Notice.
(c) The Holder shall effect its participation in the sale by
promptly delivering to the Selling Holder for transfer to the prospective
purchaser one or more certificates, properly endorsed for transfer, which
represent:
(i) the type and number of IWCPL Shares which such Holder
elects to sell; or
(ii) that number of convertible securities which are at such
time convertible into the number of IWCPL Shares which such Holder elects to
sell; provided, however, that if the prospective third-party purchaser objects
to the delivery of such convertible securities in lieu of IWCPL Shares, such
Holder shall convert such convertible securities into IWCPL Shares and deliver
IWCPL Shares as provided in this Section 4.
(d) The stock certificate or certificates that the Holder
delivers to the Selling Holder pursuant to Section 4(c) shall be transferred to
the prospective purchaser in consummation of the sale of the IWCPL Shares
pursuant to the terms and conditions specified in the Transfer Notice, and the
Selling Holder shall concurrently therewith remit to the Holder that portion of
the sale proceeds to which the Holder is entitled by reason of its participation
in such sale. To the extent that any prospective purchaser or purchasers
prohibits such assignment or otherwise refuses to purchase shares or other
securities from a Holder exercising its rights of co-sale hereunder, the Selling
Holder shall not sell to such prospective purchaser or purchasers any IWCPL
Shares unless and until, simultaneously with such sale, the Selling Holder shall
purchase such shares or other securities from the Holder for the same
consideration and on the same terms and conditions as the proposed transfer
described in the Transfer Notice.
(e) To the extent that the Holder has not exercised its rights
to participate in the sale of the IWCPL Shares within the time periods specified
in this Section 4, the Selling Holder shall have a period of ninety (90) days
from the expiration of such rights in which to sell the IWCPL Shares specified
in the Transfer Notice upon terms and conditions (including the purchase price)
no more favorable than those specified in the Transfer Notice to the third-party
transferee(s) identified in the Transfer Notice. The third-party transferee(s)
shall acquire the IWCPL Shares free and clear of subsequent co-sale rights under
this Agreement. In the event Selling Holder does not consummate the sale or
disposition of the IWCPL Shares specified in the Transfer Notice within the
ninety (90) day period from the expiration of these rights, the Holder's co-sale
rights shall continue to be applicable to any subsequent disposition of the
IWCPL Shares by the Selling Holder until such right lapses in accordance with
the terms of this Agreement. Furthermore, the exercise or non-exercise of the
rights of the Holder under this Section 4 to participate in sales of IWCPL
Shares by the Selling Holder shall not adversely affect their rights to
subsequently participate in sales of IWCPL Shares by the Selling Holder.
(f) Notwithstanding the provisions of this Section 4, either
Vanguard or IWC may sell or otherwise assign, with or without consideration,
IWCPL Shares to an
6
<PAGE>
Affiliate of it, provided that each such transferee or assignee, prior to the
completion of the sale, transfer, or assignment shall have executed documents
assuming the obligations of the party transferring or assigning such IWCPL
Shares under this Agreement with respect to the transferred securities.
(g) In the event the Selling Holder should sell any IWCPL Shares
in contravention of the co-sale rights of the Holder under this Section 4 (a
"Prohibited Transfer"), the Holder, in addition to such other remedies as may be
available at law, in equity or hereunder, shall have the put option provided
below, and the Selling Holder shall be bound by the applicable provisions of
such option.
(h) In the event of a Prohibited Transfer, the Holder shall have
the right to sell to the Selling Holder the number of IWCPL Shares equal to the
number of shares such Holder would have been entitled to transfer to the
third-party transferee(s) under this Section 4 had the Prohibited Transfer been
effected pursuant to and in compliance with the terms hereof. Such sale shall
be made on the following terms and conditions:
(i) The price per share at which the shares are to be sold
to the Selling Holder shall be equal to the price per share paid by the
third-party transferee(s) to the Selling Holder in the Prohibited Transfer. The
Selling Holder shall also reimburse the Holder for any and all fees and expense,
including legal fees and expenses, incurred pursuant to the exercise or the
attempted exercise of the Holder's rights under this Section 4.
(ii) Within ninety (90) days after the later of the dates on
which the Holder (A) received notice of the Prohibited Transfer or (B) otherwise
become aware of the Prohibited Transfer, the Holder shall, if exercising the
option created hereby, deliver to the Selling Holder the certificate or
certificates representing shares to be sold, each certificate to be properly
endorsed for transfer.
(iii) The Selling Holder shall, upon receipt of the
certificate or certificates for the shares to be sold by the Holder, pursuant to
this Section 4, pay the aggregate purchase price therefor and the amount of
reimbursable fees and expenses, as specified in subparagraph 4(h)(i), in cash or
by other means acceptable to the Holder.
(iv) Notwithstanding the foregoing, any attempt by the
Selling Holder to transfer IWCPL Shares in violation of this Section 4 shall be
void.
(i) The co-sale rights of IWC and Vanguard under this Section 4
shall not apply to Transfers to Affiliates permitted by Section 3.3 of the
Shareholders' Agreement but shall be subject to Section 3.4 of the Shareholders'
Agreement.
5. ASSIGNMENTS AND TRANSFERS; NO THIRD PARTY BENEFICIARIES. This
Agreement and the rights and obligations of the parties hereunder shall inure to
the benefit of, and be binding upon, their respective successors, assigns and
legal representatives, but shall not otherwise be for the benefit of any third
party. The rights of the parties hereunder are only
7
<PAGE>
assignable (i) to an Affiliate of such Holder or (ii) to an assignee or
transferee who acquires all of the IWCPL Shares owned by either Vanguard or IWC,
as the case may be.
6. LEGEND. Each existing or replacement certificate for IWCPL
Shares now owned or hereafter acquired by Vanguard and IWC, or their respective
permitted assigns, shall bear the following legend upon its face:
"THE SALE, PLEDGE, HYPOTHECATION, ASSIGNMENT OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN AGREEMENT BY AND BETWEEN THE
SHAREHOLDER, THE COMPANY AND CERTAIN HOLDERS OF SHARES OF THE
COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN
REQUEST TO THE SECRETARY OF THE COMPANY."
7. EFFECT OF CHANGE IN IWCPL'S CAPITAL STRUCTURE. Appropriate
adjustments shall be made in the number and class of shares in the event of a
stock dividend, stock split, reverse stock split, combination, reclassification
or like change in the capital structure of IWCPL.
8. VOTING TRUST. Vanguard agrees to enter into the Voting Trust
Agreement attached hereto as EXHIBIT A upon the closing of the sale of IWCPL
Shares to Vanguard and IWC.
9. REIMBURSEMENT OF EXPENSES. Vanguard and IWC each hereby agree to
pay their respective pro-rata share of all out-of-pocket expenses incurred by
IWC (or an Affiliate thereof), Vanguard and the Asian Infrastructure Fund
("AIF") in connection with the purchase of ordinary shares of Pakistan Mobile
Communications (Pvt.) Limited ("PMCL") by IWCPL and the purchase of IWCPL Shares
by IWC, Vanguard and AIF, including legal fees and expenses, accounting fees,
consulting fees, finders fees, due diligence expenses and any similar expenses.
10. NOTICES. Any notice required or permitted by any provision of
this Agreement shall be given in writing and shall be delivered personally, by
confirmed facsimile transmission, by courier, or by registered or certified
mail, postage prepaid, addressed (i) in the case of any original party to this
Agreement at the address of such party as set forth in the signature pages
hereto or such other address for such party as shall be designated in writing
from time to time by such party; and, (ii) in the case of any permitted
transferee of a party to this Agreement or its transferee, to such transferee at
its address as designated in writing by such transferee to each of the parties
hereto from time to time. Notices that are mailed shall be deemed received five
(5) days after deposit in the mail. Notices sent by courier or overnight
delivery shall be deemed received two (2) days after they have been so sent.
Notices sent by facsimile shall be deemed received upon confirmation of
transmission.
11. FURTHER INSTRUMENTS AND ACTIONS. The parties agree to execute
such further instruments and to take such further action as may reasonably be
necessary to carry out the intent
8
<PAGE>
of this Agreement. Each party hereto agrees to cooperate affirmatively with the
other parties hereto, to the extent reasonably requested by such parties, to
enforce rights and obligations pursuant hereto.
12. TERM. This Agreement shall terminate upon the earlier of the
date that either IWC (or its successors, assigns or legal representatives) or
Vanguard (or its successors, assigns or legal representatives ) ceases to own
IWCPL Shares.
13. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter hereof,
supersedes all other agreements between or among any of the parties with respect
to the subject matter hereof and cannot be altered or otherwise amended except
pursuant to an instrument in writing signed by each of the parties to this
Agreement.
14. AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of Vanguard and IWC. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon the parties hereto and their respective successors and assigns.
15. SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
16. ATTORNEY'S FEES. In the event that any dispute among the parties
to this Agreement should result in litigation, the prevailing party in such
dispute shall be entitled to recover from the losing party all fees, costs and
expenses of enforcing any right of such prevailing party under or with respect
to this Agreement, including without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.
17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of England and Wales.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
VANGUARD PAKISTAN, INC.
By: /s/ Van E. Snowdon
-------------------------
Name: Van E. Snowdon
-----------------------
Title: Vice President
---------------------
Address:
-----------------------------
-----------------------------
PAKISTAN WIRELESS HOLDINGS LIMITED
By: /s/ Robin Maule
------------------------
Name: Robin Maule
---------------------
Title: Vice President
---------------------
Address:
----------------------------
----------------------------
Acknowledged by:
INTERNATIONAL WIRELESS
COMMUNICATIONS PAKISTAN LIMITED
By: /s/ Robin Maule
--------------------------------
Name: Robin Maule
-----------------------------
Title: Director
-----------------------------
Address:
--------------------------
--------------------------
<PAGE>
EXHIBIT A
Voting Trust Agreement
S-1
<PAGE>
VOTING TRUST AGREEMENT
VOTING TRUST AGREEMENT (the "Agreement"), dated as of August 13, 1997,
by and between Vanguard Pakistan, Inc., a Delaware corporation, having its
registered offices at Griffin Corporate Services, Inc., 900 Market Street,
2nd Floor, Wilmington, Delaware 19801 U.S.A. ("Vanguard") and the Vice
President of Pakistan Wireless Holdings Limited, having its principal offices
at 400 South El Camino Real, San Mateo, California 94402 U.S.A. ("IWC") as
Trustee (the "Trustee").
RECITALS:
WHEREAS, Vanguard is a holder of ordinary shares, nominal value US$1.00
each and redeemable preference shares, nominal value US$1.00 each
(collectively, the "IWCPL Shares"), of International Wireless Communications
Pakistan Limited, a Mauritius company having its registered offices at P.O.
Box 1130, 3rd Floor, 12 Remy Ollier Street, Port Louis, Mauritius (the
"Company");
WHEREAS, the Company, IWC, Vanguard and SA Wireless are parties to that
certain Amended and Restated Shareholders' Agreement dated as of August __,
1997 (the "Shareholders' Agreement"), providing for certain matters relating
to the transfer of the IWCPL Shares and the management and operations of the
Company.
WHEREAS, IWC and Vanguard are parties to that certain IWC Group
Agreement dated as of August __, 1997 (the "IWC Group Agreement"), providing
for certain matters relating to the exercise of rights and performance of
duties of IWC and Vanguard under the Shareholders' Agreement; and
WHEREAS, to induce certain parties to enter into the Shareholders'
Agreement, Vanguard desires to enter into this Agreement; and
WHEREAS, the Trustee is willing to act as voting trustee pursuant to the
terms of this Voting Trust Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and certain
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. VOTING TRUST CERTIFICATES.
(a) Upon execution of this Agreement, Vanguard shall deliver to
the Trustee all certificates held by Vanguard representing the Shares (as
defined herein), and the Trustee shall issue and deliver to Vanguard, a
voting trust certificate in substantially the form attached hereto as
SCHEDULE I (a "Voting Trust Certificate"), for the number of Shares owned by
Vanguard and transferred to the Trustee pursuant to the terms hereof. The
Trustee shall cause such Shares to be transferred to the Trustee on the
Company's books. Any Shares acquired by
<PAGE>
Vanguard after the date hereof shall be issued to the Trustee, who shall,
within five (5) Business Days, issue and deliver to Vanguard, a Voting Trust
Certificate for the number of additional Shares so acquired.
(b) All Voting Trust Certificates will be registered in a register
book which will be maintained by the Trustee for that purpose (the "Trust
Register"). The Trustee may treat the registered holder of each Voting Trust
Certificate as the absolute owner and holder of the Shares evidenced thereby
and of all the other rights and interests represented thereby. All transfers
of Shares will be recorded by the Trustee in the Trust Register.
(c) The Trustee shall hold the Shares in trust subject to the
terms of this Agreement. The Trustee shall distribute all dividends and other
distributions as may be declared on such Shares to the registered holder of
such Shares which shall not be distributed but shall remain subject to the
terms of this Agreement).
(d) If a Voting Trust Certificate is lost, stolen, mutilated or
destroyed the Trustee will issue a duplicate Voting Trust Certificate upon
receipt by the Trustee of evidence satisfactory to it of the loss, theft,
mutilation or destruction. The Trustee will also keep correct books of
account of all business transactions with respect to the Voting Trust, which
books, including the Trust Register, may be inspected by Vanguard, its agents
or personal representatives at any time during normal business hours.
2. TRUSTEE'S POWERS AND DUTIES. During the term of this Agreement, the
Trustee shall have the exclusive right to vote all Shares Beneficially Owned
(as defined herein) by Vanguard on all matters as to which Vanguard is
entitled to vote at a meeting of the shareholders of the Company, or
otherwise, or to which Vanguard is entitled to express consent or dissent to
corporate action in writing without a meeting. The Trustee shall give
Vanguard not less than five (5) Business Days prior written notice of such
vote or right to express consent or dissent. The Trustee shall exercise such
voting rights as follows:
(a) The Trustee shall vote at a regular or special meeting of
shareholders (or by written consent) the Shares:
(i) as directed in writing by the Board of Directors of IWC;
or
(ii) if not so directed in writing, the Trustee shall not
vote such shares and shares shall not be counted for the purpose of
determining whether a quorum is present or any percentage of shares of the
Company's capital stock is achieved.
The Trustee shall have no authority to sell, encumber or otherwise dispose of
any Shares. The Trustee shall have no voting or other rights with respect to
any shares of capital stock Beneficially Owned as of the date hereof by
Vanguard other than Shares.
3. EFFECTIVE TRANSFER. Any transferee of Shares must become a party to
this Agreement and any purported transfer of Shares to a person or entity
that has not become a party
<PAGE>
hereto shall be null and void. Any transferee of any Shares shall have all
the rights and shall be subject to all limitations of the transferor under
the Voting Trust Certificate and this Agreement.
4. NO WITHDRAWAL. Vanguard may not withdraw from this Agreement prior
to termination of this Agreement pursuant to Section 7 hereof.
5. REPLACEMENT OR REMOVAL OF TRUSTEE. In the event of the Trustee's
dissolution, resignation, removal or inability to act as trustee, IWC shall
elect a successor Trustee within 15 days after receiving written notice of
such dissolution, resignation, removal or inability to act as trustee. The
Trustee may be removed by Vanguard in the event of any material violation by
the Trustee of the terms of this Agreement and the Trustee shall become
disqualified from acting as trustee hereunder as soon as a successor shall
have been selected in the manner provided by this paragraph. Notwithstanding
any change in the Trustee, the certificates for Shares standing in the name
of the Trustee may be endorsed and transferred to any successor Trustee
without the further action of Vanguard or any predecessor Trustee with the
same effect as if endorsed and transferred by the Trustee who has ceased to
act.
6. TRUSTEE'S LIABILITY AND INDEMNITY. The Trustee shall not be liable
for any error of judgment or mistake of fact or law, or for any act or
omission undertaken in good faith in connection with the Trustee's powers and
duties under this Agreement, except for the Trustee's own willful misconduct
or gross negligence. The Trustee is authorized and empowered to construe this
Agreement and its reasonable construction made in good faith shall be
conclusive and binding upon Vanguard. The Trustee shall not be liable for
acting on any legal advice or on any notice, request or instruction or other
document believed by the Trustee to be genuine and to have been signed by the
proper party or parties.
7. TERM. This Agreement shall terminate and be of no further force or
effect upon the occurrence of any of the following events: (a) either IWC or
Vanguard is no longer the Beneficial Owner of any Shares or (b) the parties
hereto agree to terminate this Agreement.
As soon as practicable after the termination of this Agreement, the
Trustee shall deliver to Vanguard share certificates or securities
representing the number of Shares or other securities in respect of which
Voting Trust Certificates are then outstanding, upon the surrender of such
Voting Trust Certificates properly endorsed and upon payment by the persons
entitled to receive such share certificates or other securities of a sum
sufficient to cover any tax or governmental charge in respect of the transfer
or delivery of such certificates. If Vanguard cannot be located or fails or
refuses to surrender Voting Trust Certificates in exchange for Shares or
other securities as aforesaid, the Trustee shall deliver said Shares or other
securities to the Company or to any bank or trust company in California for
the benefit of the Person or Persons entitled thereto. Upon any such
delivery, the Trustee shall be fully acquitted and discharged with respect to
said Shares or other securities.
8. DEFINED TERMS. As used in this Agreement, the following terms have
the respective meanings set forth below:
<PAGE>
AFFILIATE: shall mean a Person (other than a subsidiary) which directly
or indirectly through one or more intermediaries controls, or is controlled
by, or is under common control with, a Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
BENEFICIAL OWNER: shall have the meaning set forth in Rule 13d-3(a) and
(b) of the Rules and Regulations to the Securities Exchange Act of 1934, as
amended; and Beneficially Owned shall have a correlative meaning.
COMPANY: shall have the meaning set forth in the Recitals; provided,
however that if Vanguard and IWC become shareholders in PMCL pursuant to the
terms of the Shareholders' Agreement, all references to "Company" in
paragraphs 1, 2 and 7 of this Agreement shall mean PMCL.
PERSON: shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political
subdivision thereof.
SHARES: shall include (1) all IWCPL Shares currently held or hereafter
obtained by Vanguard; (2) any other voting securities of the Company (a)
issued by the Company or (b) distributed with respect to any security then
subject to this Agreement; and (3) in the event that Vanguard and IWC become
shareholders of PMCL pursuant to the terms of the Shareholders' Agreement,
all shares in PMCL held or thereafter obtained by Vanguard.
Capitalized terms not otherwise defined herein shall have the meanings
given to them in the Shareholders' Agreement.
9. REMEDIES. The parties agree and acknowledge that money damages may
not be an adequate remedy for breach of the provisions of this Agreement and
that any party hereto shall be entitled, in its sole discretion, to apply to
any court of competent jurisdiction for specific performance, injunctive
relief or such other equitable remedy or remedies as the court may in its
discretion order to enforce or prevent any violations of the provisions of
this Agreement, in addition to its remedies at law. In respect of any such
equitable remedy so sought, the parties hereby waive the requirement of the
posting of any bond or the necessity to show irreparable injury on the part
of the party seeking such relief.
10. NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be sent prepaid registered or certified mail, return
receipt requested, addressed to the other party at the address shown below or
at such other address for which such party gives notice hereunder. Such
notice shall be deemed to have been given three (3) days after deposit in the
mail.
11. MODIFICATION, AMENDMENT, WAIVER. Any term hereof may be amended
and the observance of any term hereof may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the parties. Any amendment or waiver so effected shall be
binding upon the parties hereto. The failure of any
<PAGE>
party at any time to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
rights of the party thereafter to enforce the provisions of this Agreement in
accordance with its terms.
12. COMPLETE AGREEMENT. This Agreement and the Voting Trust
Certificates embody the complete agreement and understanding between and
among the parties hereto with respect to the subject matter hereof, and
supersede and preempt any prior understandings, agreements or representations
by or among the parties hereto, written or oral, which may have related to
the subject matter hereof.
13. SUCCESSORS AND ASSIGNS. This Agreement will bind and inure to the
benefit of and be enforceable by the parties and their respective permitted
transferees, successors and assigns.
14. LEGENDS. Each certificate evidencing Shares shall bear a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST AGREEMENT, DATED
AS OF AUGUST __, 1997, A COPY OF WHICH IS AVAILABLE FROM THE COMPANY AND
ANY SUCCESSOR THERETO.
15. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken
together will constitute one and the same Agreement.
16. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of England and Wales.
17. SEVERABILITY. If any one or more of the provisions of this
Agreement, as applied to any part or any circumstance, shall, for any reason,
be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein. If any one or more of the provisions of this Agreement shall, for any
reason, be held to be unenforceable as to duration, scope, activity or
subject, such provisions shall be construed by limiting and reducing it so as
to make such provision enforceable to the extent compatible with the then
existing applicable law.
18. TRUSTEE'S EXPENSES. The Trustee shall be reimbursed by IWC for all
reasonable out-of-pocket expenses incurred pursuant to this Agreement.
19. NATURE OF RELATIONSHIP. The Trust created by this Agreement is not
intended to be, shall not be deemed to be and shall not be treated as a
general partnership, limited partnership, joint venture, corporation joint
stock company or association. The relationship of
<PAGE>
Vanguard to the Trustee shall be solely that of beneficiary of the Trust
created by this Agreement, and its rights and obligations shall be limited to
those set forth in this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TRUSTEE:
/s/ AARTI C. GURNANI
------------------------------------
Aarti C. Gurnani, Trustee
Vice President, Pakistan Wireless Holdings Limited
Address: c/o International Wireless Communications, Inc.
400 S. El Camino Real, Suite 1275
San Mateo, CA 94402 U.S.A.
VANGUARD PAKISTAN, INC.
By: /s/ VAN E. SNOWDON
---------------------------------
Name: Van E. Snowdon
-------------------------------
Title: VP
------------------------------
Address: 2002 Pisgah Church Rd
------------------------------------
Greensboro, NC
------------------------------------
------------------------------------
Acknowledged by:
INTERNATIONAL WIRELESS COMMUNICATIONS
PAKISTAN LIMITED
By: /s/ ROB MAULE
---------------------------------
Name: R. Maule
-------------------------------
Title: Director
------------------------------
Address: APT 35A BLK3 PACIFIC VIEW
------------------------------------
38 TAI TAM RD HONG KONG
------------------------------------
------------------------------------
<PAGE>
PAKISTAN WIRELESS HOLDINGS LIMITED
By: R MAULE
---------------------------------
Name: R. Maule
-------------------------------
Title: V. President
------------------------------
Address: APT 35A BLK3 PACIFIC VIEW
------------------------------------
38 TAI TAM RD HONG KONG
------------------------------------
<PAGE>
SCHEDULE I
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON VOTING AND TRANSFER AS SET FORTH IN THE VOTING TRUST AGREEMENT,
DATED AS OF AUGUST __, 1997, A COPY OF WHICH IS AVAILABLE FROM THE
COMPANY AND ANY SUCCESSOR THERETO.
This certifies that Vanguard Pakistan, Inc. ("Vanguard") has deposited
or has caused to be deposited __________ ordinary shares, nominal value
US$1.00 each and _________ redeemable preferred shares, nominal value
US$1.00 each, of International Wireless Communications Pakistan Limited, a
Mauritius company (the "Company"), under a Voting Trust Agreement, dated as
of August __, 1997 (the "Voting Trust Agreement"), between the Vice President
of Pakistan Wireless Holdings Limited, a Mauritius company as Trustee (the
"Trustee") and Vanguard. The Trustee shall possess and be entitled to the
exclusive right to vote such shares upon the terms and subject to the
conditions stated in the Voting Trust Agreement.
This Voting Trust Certificate shall be transferable only on the records
of the Trustee upon surrender hereof by the registered holder in person or by
attorney duly authorized and, until so transferred, the Trustee may treat the
registered holder as the owner of this Voting Trust Certificate for all
purposes whatsoever, unaffected by any notice to the contrary. As a condition
precedent to the making of any transfer of this Voting Trust Certificate, the
Trustee may require the payment of a sum sufficient to cover the amount of
any taxes or other governmental charges incident thereto.
This Voting Trust Certificate is issued pursuant to, and the rights of
the holder hereof are subject to and limited by the terms and conditions of,
the Voting Trust Agreement. The holder of this Voting Trust Certificate, by
the acceptance hereof, assents to and agrees to be bound by all the terms and
conditions of the Voting Trust Agreement. Copies of the Voting Trust
Agreement are on file at the principal office of the Company and at the
office of the Trustee.
Certificates for the number of shares in respect of which this Voting
Trust Certificate was issued, or the net proceeds in cash or property of said
number of shares at the time of surrender hereof, all as provided in the
Voting Trust Agreement, shall be deliverable hereunder upon the termination
of the Voting Trust Agreement.
Dated: _______________,_____
__________________________________
Vice President of
Pakistan Wireless Holdings Limited,
as Trustee
<PAGE>
Draft (9): 26 August 1997
DATED AUGUST 1997
INTERNATIONAL WIRELESS COMMUNICATIONS PAKISTAN LIMITED
PAKISTAN WIRELESS HOLDINGS LIMITED
SOUTH ASIA WIRELESS COMMUNICATIONS (MAURITIUS) LIMITED
VANGUARD PAKISTAN, INC.
AND
ASIA PACIFIC CELLPHONE CO. INC.
---------------------------------
DEED OF ADHERENCE
TO
SHAREHOLDERS' AGREEMENT
---------------------------------
DENTON HALL
10/F HUTCHISON HOUSE
10 HARCOURT ROAD
CENTRAL
HONG KONG
REF: MDG/JSC/JL/85998.8/0085862.21
<PAGE>
CONTENTS
CLAUSE HEADING PAGE
1. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Subscription . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. Exercise of First Option . . . . . . . . . . . . . . . . . . . . . . . 5
8. Amendments to IWCPL Shareholders' Agreement. . . . . . . . . . . . . . 5
9. Enforcement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10. Representations, Warranties and Undertakings . . . . . . . . . . . . . 9
11. Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 11
13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
14. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
EXHIBIT A IWCPL Shareholders' Agreement
EXHIBIT B-1 PMCL Shareholders' Agreement
EXHIBIT B-2 Side Letters to the PMCL Shareholders' Agreement
EXHIBIT C-1 Memorandum and Articles of Association of the Company
EXHIBIT C-2 Resolutions of the Shareholders of the Company
EXHIBIT D Loan Agreement
EXHIBIT E Corporate Information relating to the Company
<PAGE>
EXHIBIT F Form of Letter from the Company to Motorola
EXHIBIT G Costs and Expenses Letter
<PAGE>
THIS DEED OF ADHERENCE is dated August 1997 and is made BETWEEN:
(1) INTERNATIONAL WIRELESS COMMUNICATIONS PAKISTAN LIMITED, a Mauritius company
with its registered offices at P.O. Box 1130, 3rd Floor, 12 Remy Ollier
Street, Port Louis, Mauritius (the "Company");
(2) PAKISTAN WIRELESS HOLDINGS LIMITED, a Mauritius company with its registered
offices at PO Box 1130, 3rd Floor, 12 Remy Ollier Street, Port Louis,
Mauritius ("IWC");
(3) SOUTH ASIA WIRELESS COMMUNICATIONS (MAURITIUS) LIMITED, a Mauritius company
with its address for correspondence at c/o Asian Infrastructure Fund
Advisers Limited, Suite 2302-03, Nine Queen's Road Central, Hong Kong ("SA
Wireless");
(4) VANGUARD PAKISTAN, INC, a Delaware corporation with its principal offices
at 2002 Pisgah Church Road, Suite 300, Greensboro, NC 27405, U.S.A.
("Vanguard"); and
(5) ASIA PACIFIC CELLPHONE CO. INC., a Mauritius company with its registered
offices at 6/F, Cerne House, Chaussee Port Louis, Mauritius ("Asia
Pacific").
WHEREAS:
(A) This Deed is supplemental to an Amended and Restated Shareholders'
Agreement in respect of the Company dated as of 13 August 1997 (the "IWCPL
Shareholders' Agreement") to which IWC, SA Wireless, Vanguard and the
Company are parties. An executed copy of the IWCPL Shareholders' Agreement
is annexed to this Deed as Exhibit A.
(B) Asia Pacific wishes to be allotted 1,269 Ordinary Shares and 14,986,890
Redeemable Preference Shares in the share capital of the Company and, in
accordance with Section 4(g) of the IWCPL Shareholders' Agreement, has
agreed to enter into this Deed.
NOW THIS DEED WITNESSETH that:
1. INTERPRETATION
In this Deed:
(a) except as the context may otherwise require, all words
and expressions defined in the IWCPL Shareholders' Agreement shall have the same
meanings when used herein;
<PAGE>
(b) "Completion" shall mean completion of the transactions
contemplated in this Deed and "Completion Date" shall mean the date of the First
Option Closing or such other date as may be agreed by the parties; and
(c) references to Clauses shall be to clauses of this Deed
and references to Sections and sub-sections shall be to sections and
sub-sections of the IWCPL Shareholders' Agreement.
2. CONDITIONS
2.1 Completion of this Deed is conditional upon:
(a) completion of the Motorola Share Purchase Agreement in
accordance with its terms and execution of all documents ancillary thereto
(including the PMCL Shareholders' Agreement substantially in the form of Exhibit
B-1 hereto) and no amendments having been made thereto since the date of
execution thereof without the prior written consent of Asia Pacific;
(b) completion of the Share Purchase Agreement between the
Company and Continental Communications Limited in accordance with its terms and
execution of all documents ancillary thereto and no amendments having been made
thereto since the date of execution thereof without the prior written consent of
Asia Pacific;
(c) execution of the side letter to the PMCL Shareholders'
Agreement substantially in the form of the draft attached hereto as Exhibit B-2
(together with the PMCL Letter Agreement referred to as the "Side Letters"); and
(d) Asia Pacific requiring the Company in writing to
exercise the First Option and Asia Pacific funding the purchase price of the
First Option Shares (as defined in the Motorola Share Purchase Agreement) and
the capital contribution of US$1,027,890 in connection therewith.
2.2 The parties may waive all or any of the conditions set out
in Clause 2.1 by written agreement.
2.3 The parties hereto shall use all reasonable endeavours to
ensure that the conditions set out in Clause 2.1 shall be fulfilled by the date
referred to in Clause 2.4.
2.4 If the conditions set out in Clause 2.1 shall not have been
fulfilled (or waived in accordance with Clause 2.2) by 5:00 pm London time on 5
September 1997, this Deed and everything herein contained shall, subject to the
liability of any party to the others in respect of any breaches of the terms
hereof, including the obligations under Clause 2.3, antecedent thereto, be null
and void and of no effect.
2.5 Completion shall occur simultaneously with the First Option
Closing. The obligation of Asia Pacific to subscribe for Shares under this Deed
shall be
<PAGE>
conditional on and interdependent with the First Option Closing. If (for any
reason other than default on the part of Asia Pacific) the First Option Closing
does not take place as contemplated under the Motorola Share Purchase Agreement
or the Asia Pacific Shares are not transferred to Asia Pacific in accordance
with the terms of this Deed, the Company shall return forthwith all monies paid
to it hereunder by Asia Pacific together with any interest accrued thereon.
3. WAIVER
Each of IWC, SA Wireless and Vanguard hereby waives its Right of First
Offer granted pursuant to Section 4 of the IWCPL Shareholders' Agreement and any
breach of the IWCPL Shareholders' Agreement caused by the execution and
performance of this Deed.
4. SUBSCRIPTION
4.1 On the terms and subject to the conditions set out in this
Deed, on Completion Asia Pacific shall subscribe for, and the Company shall
issue and allot to Asia Pacific and/or its nominee, 1,269 Ordinary Shares and
14,986,890 Redeemable Preference Shares (together the "Asia Pacific Shares")
free from all liens, charges and encumbrances together with all rights attaching
thereto as from the date hereof including the right to receive all dividends and
distributions declared, made or paid by the Company on or after the date hereof.
This Deed shall constitute Asia Pacific and/or its nominee's application for the
Asia Pacific Shares, subject to the Memorandum and Articles of Association of
the Company.
4.2 The subscription price payable by Asia Pacific to the
Company shall be US$12.69 for the Ordinary Shares, representing a price of
US$0.01 per Ordinary Share and US$14,986,890 for the Redeemable Preference
Shares, representing a price of US$1.00 per Redeemable Preference Share. No
later than 2 September 1997, Asia Pacific shall deliver payment to the Company
by way of telegraphic transfer of the sum of US$14,986,902.69, which shall be
applied at Completion to the payment of the subscription price of the Asia
Pacific Shares. If Asia Pacific shall fail to make such payment by 5 September
1997 and the Company shall have already irrevocably exercised the First Option,
then Asia Pacific shall, or failing Asia Pacific, Thorton Holdings Limited,
whose registered office is at Akara Building, 24 De Castro Street, Wickhams Cay
I, Road Town Tortola, British Virgin Islands, shall, indemnify the Company for
all reasonable costs, losses, liabilities, claims, actions, proceedings and
expenses properly incurred by the Company, that arise directly from the breach
by Asia Pacific of its obligations to make such payment.
4.3 Completion shall take place at the offices of Motorola in
London, England on or before the Completion Date when all (but not part only) of
the following business shall be transacted:
(a) IWC, SA Wireless and Vanguard shall procure the
directors of the Company to deliver to Asia Pacific (or its authorised
representative(s)) the following in respect of the Asia Pacific Shares
subscribed for by Asia Pacific pursuant to this Deed:
<PAGE>
(i) minutes of a board meeting of the board of
directors of the Company at which upon payment in full by Asia Pacific and/or
its nominee of the subscription price payable for the Asia Pacific Shares
pursuant to Clause 4.2, valid resolutions are passed to allot and issue the Asia
Pacific Shares to Asia Pacific and/or its nominee, to seal, issue and deliver to
Asia Pacific and/or its nominee share certificates duly executed on behalf of
the Company and to authorise and direct the company secretary to enter the
particulars of Asia Pacific and/or its nominee in the register of members of the
Company as the holder(s) of the Asia Pacific Shares;
(ii) share certificates in respect of the Asia
Pacific Shares, duly executed on behalf of the Company; and
(iii) copies of all of the agreements referred to
in Clause 2.1 and of all ancillary documents thereto and evidence reasonably
satisfactory to Asia Pacific that execution and completion of such agreements
has taken place in accordance with their respective terms.
(b) IWC, SA Wireless and Vanguard shall procure a meeting
of the board of directors of the Company to be held at which resolutions shall
be passed:
(i) to approve and give effect to all of the
matters referred to above;
(ii) to approve Asia Pacific and such of its
nominees as aforesaid for registration as the holder(s) of the Asia Pacific
Shares; and
(iii) to appoint Harry A. Cockrell as a new
director of the Company with effect from the close of business of the relevant
meeting.
(c) Asia Pacific shall provide evidence to the Company
that it has already delivered payment to the Company by way of telegraphic
transfer of the sum of US$14,986,902.69 in payment of the subscription price for
the Asia Pacific Shares.
4.4 No party shall be obliged to complete this Deed or perform
any obligations hereunder unless the other parties comply fully with the
requirements of this Clause 4.
5. COVENANT
Asia Pacific hereby covenants to the other parties hereto and to the
Company as trustee for all other persons who may hereafter become bound by the
IWCPL Shareholders' Agreement, to adhere to and be bound, with effect from
Completion, by all the duties, burdens and obligations of a shareholder holding
the same class of share capital as the Asia Pacific Shares imposed pursuant to
the provisions of the IWCPL Shareholders' Agreement and all documents expressed
in writing to be supplemental or ancillary thereto as if Asia Pacific had been
an original party to the IWCPL Shareholders' Agreement since the date thereof.
<PAGE>
6. ENFORCEABILITY
Each existing shareholder and the Company shall, with effect from
Completion, be entitled to enforce the IWCPL Shareholders' Agreement against
Asia Pacific, and Asia Pacific shall, with effect from Completion, be entitled
to all rights and benefits of the other Shareholders qua shareholders under the
IWCPL Shareholders' Agreement in each case as if Asia Pacific had been an
original party to the IWCPL Shareholders' Agreement since the date thereof.
7. EXERCISE OF FIRST OPTION
The parties agree that, notwithstanding Section 5.1 of the IWCPL
Shareholders' Agreement, the decision to exercise the First Option shall be made
by Asia Pacific. Asia Pacific hereby gives notice to the Company to exercise
the First Option and gives notice to the other Shareholders to cause the Company
to exercise the First Option in accordance with the provisions of Clauses 9(a)
to (d) of the Motorola Share Purchase Agreement and the other Shareholders shall
procure the Company to execute and deliver a notice of exercise to Motorola
substantially in the form set out in Exhibit F and to apply US$13,959,000 of the
subscription monies received from Asia Pacific in payment of the First Option
Purchase Price (as defined in the Motorola Share Purchase Agreement).
8. AMENDMENTS TO IWCPL SHAREHOLDERS' AGREEMENT
The IWCPL Shareholders' Agreement shall, with effect from Completion,
be amended as follows:
(a) RECITALS
(i) by inserting after the first paragraph of the
IWCPL Shareholders' Agreement, the following new recital:
"The Company, International Wireless Communications Limited and SA
Wireless are each parties to that certain Shareholders' Agreement, dated as of
17 July 1997 and in accordance with Section 15.7 of that agreement, each party
hereby agrees to amend and restate that agreement in its entirety as set forth
below."
(ii) by deleting the original second recital
paragraph and replacing it in its entirety by the following:
"The Company has issued and allotted to IWC, and IWC has subscribed
for, 23,622,000 Shares, comprised of 2,000 Ordinary Shares and 23,620,000
Redeemable Preference Shares, and the Company has issued and allotted to SA
Wireless, and SA Wireless has subscribed for, 23,622,000 Shares comprised of
2,000 Ordinary Shares and 23,620,000 Redeemable Preference Shares, and the
Company has issued and allotted to Vanguard, and Vanguard has subscribed for
7,086,600 Shares, comprised of 600 Ordinary Shares and 7,086,000 Redeemable
Preference Shares."
<PAGE>
(iii) by adding "subject to the terms and
conditions thereof" after the words "IWC will vote all Shares held by Vanguard"
on the last line of the third original recital paragraph.
(b) DEFINITIONS
by amending the definition of "Shareholder" in Section 1.1 by deleting
Clause (i) thereof and replacing it in its entirety by "each of IWC Group, SA
Wireless and Asia Pacific for so long as such Shareholder remains a shareholder
of the Company,".
(c) FIRST OPTION
by deleting the words "up to" on the sixth line of Section 2.2(a).
(d) IWC OPTION
by deleting Sections 5.2, 5.3 and 5.4 and replacing them in their
entirety by the following:
8.2 IWC OPTION
(a) Asia Pacific hereby irrevocably and unconditionally grants
an option to the IWC Group (the "IWC Option"), effective upon the exercise of
the First Option, exercisable on one occasion only at any time in the 12 month
period commencing from 1 January 1998 (the "IWC Option Period") to purchase from
Asia Pacific such number of Shares held by Asia Pacific as amount to 5.71% of
the issued share capital of the Company at that time (the "IWC Option Shares")
on the terms and subject to the conditions of this Section 5.2 and Section 5.4;
PROVIDED, HOWEVER, that notwithstanding the foregoing, IWC may exercise the IWC
Option on one occasion at any time prior to the commencement of the IWC Option
Period if it pays to Asia Pacific the IWC Option Share Price (as defined in
Section 5.4(a)) calculated as if the IWC Option had been exercised as of 1
January 1998.
(b) Subject to this Section 5.2 and Section 5.4, the IWC Group
may, at any time during the IWC Option Period, exercise the IWC Option by
serving on Asia Pacific written notice of such exercise. The notice of exercise
of the IWC Option once served shall be irrevocable and binding on the IWC Group
and may not be withdrawn without the prior written consent of Asia Pacific.
8.3 Asia Pacific Put Right
(a) Asia Pacific shall have the right (the "Asia Pacific Put
Right"), effective upon the exercise of the First Option, exercisable on one
occasion only at any time in the 12 month period commencing from 1 January 1998
(the "Asia Pacific Put Period") and so long as the IWC Option has not
theretofore been exercised, to sell the IWC Option Shares to IWC and IWC shall
be obligated to purchase the IWC Option Shares from Asia Pacific on the terms
and subject to the conditions of this Section 5.3 and Section 5.4.
<PAGE>
(b) Subject to this Section 5.3 and Section 5.4, Asia Pacific
may, at any time during the Asia Pacific Put Period and so long as the IWC
Option has not theretofore been exercised, exercise the Asia Pacific Put Right
by serving on IWC written notice of such exercise. The notice of exercise of
the Asia Pacific Put Right once served shall be irrevocable and binding on Asia
Pacific and may not be withdrawn without the prior written consent of IWC.
8.4 Closing of IWC Option or Asia Pacific Put Right
(a) The purchase price (the "IWC Option Share Price") payable by
the IWC Group for the IWC Option Shares, whether pursuant to the exercise of the
IWC Option under Section 5.2 or the exercise of the Asia Pacific Put Right under
Section 5.3, shall be the sum of the amounts that have been paid by the Company
in respect of the underlying shares of PMCL that are attributable and correspond
to the IWC Option Shares (the "Underlying Asia Pacific PMCL Shares") by way of
the original Purchase Price (as defined in the Motorola Share Purchase
Agreement) per share of the Underlying Asia Pacific PMCL Shares, any amounts
funded by the Company as additional capital contributions or shareholder loans
to PMCL in respect of the Underlying Asia Pacific PMCL Shares, the amounts of
any loans that the Company may have made to Saif Telecom (Pvt.) Limited ("SAIF")
to enable SAIF to respond to any shareholder loans to, or any capital call of,
PMCL which are attributable to the Underlying Asia Pacific PMCL Shares and the
pro rata share based on the percentage of the IWC Option Shares to the total
issued Shares of the fees, costs and expenses of third party advisors and
consultants engaged on behalf of the Company in connection with evaluating the
proposed acquisition of shares in PMCL and of any fees (if any) required to have
been paid in connection with the consummation of the acquisition by the Company
of shares in PMCL (such amounts, collectively, the "Actual Investment Cost"),
plus a return in United States dollars terms on the Actual Investment Cost
calculated at a rate equal to a 40% internal rate of return. The calculation of
the internal rate of return shall be made with respect to each separate amount
that constitutes the Actual Investment Cost commencing on the date each such
separate amount was paid by the Company in respect of the Underlying Asia
Pacific PMCL Shares. For the purposes of this Section 5.4(a), "internal rate of
return" means the discount rate which, when applied, constitutes the present
value, as of the date of closing of the sale and purchase of the IWC Option
Shares, of the Actual Investment Cost that is equal to the present value as of
the date of closing of the sale and purchase of the IWC Option Shares of all the
proceeds generated from the Actual Investment Cost.
(b) Following the exercise of the IWC Option in accordance with
Section 5.2 or the exercise of the Asia Pacific Put Right in accordance with
Section 5.3, the closing of the sale and purchase of the IWC Option Shares shall
take place at the principal offices of the Company or such other place as IWC
and Asia Pacific mutually agree on the seventh Business Day after the date of
the exercise of the IWC Option or the Asia Pacific Put Right, as the case may
be. At the closing, (i) Asia Pacific shall deliver share certificates to IWC
totalling the number of the IWC Option Shares, together with instruments of
transfer in respect thereof, and (ii) IWC shall pay the IWC Option Share Price
in cash by wire transfer of immediately available funds to the bank account
designated by Asia Pacific in writing."
<PAGE>
(c) SHAREHOLDER VOTES
by deleting the words "consent of all of the Shareholders owning
90%" in the second line of Section 6.2(a) and replacing them with "consent of
Shareholders owning collectively at least 90%".
(d) BOARD OF THE COMPANY
by deleting the words "three nominees of SA Wireless" where they
appear in Section 6.3.2 and substituting therefor the words "two nominees of
SA Wireless and (iii) one nominee of Asia Pacific".
(e) WRITTEN RESOLUTION
by amending Section 6.4.5 by adding the word "prior" before the word
"notice".
(f) PMCL BOARD
(i) by deleting "but if the number of directors
constituting the PMCL Board is increased to 10, then AIF shall have the right
to directly nominate three directors to the PMCL Board" in the fourth to six
lines of Section 6.5; and
(ii) by adding at the end of the first sentence of Section
6.5 the following as sub-clause (c): "and (c) so long as Asia Pacific owns
beneficially not less than 11% of the total issued Shares, Asia Pacific shall
have the right to cause the Company to nominate one director designated by
Asia Pacific from time to time to the PMCL Board and to cause the Company to
remove and / or replace such director from time to time, by written notice to
the Company, which notice the Company shall comply with and the Shareholders
agree to procure the Company to do the foregoing. For the avoidance of
doubt, in the event that the Shareholders become direct shareholders of PMCL
following a Deadlock (as defined in Section 6.9) the Shareholders shall have
the right to nominate the same number of directors directly to the PMCL Board
as under this Section 6.5".
(g) PMCL AFFAIRS
(i) by deleting the words "unanimous vote of the
Shareholders" in the third line of Section 6.6(a) and replacing them with
"vote of Shareholders owning collectively at least 90% of the Shares"; and
(ii) by deleting Section 6.6(b) and replacing it in its
entirety with:
A. Except for the matters referred to in Section
6.2, the Shareholders and the Board shall discuss matters concerning the
business of PMCL with a view to achieving a vote of at least 90% of the
Shares held by the IWC Group, SA Wireless and Asia Pacific in respect of
decisions of the shareholders of PMCL or of the PMCL Board. If such voting
threshold cannot be reached then (i) in the case of a PMCL shareholder
decision, the
<PAGE>
Company in its capacity as a shareholder of PMCL shall vote the shares held
by it in PMCL in such manner to reflect the differing positions of the IWC
Group, SA Wireless and Asia Pacific, and (ii) in the case of a PMCL Board
decision, each of the IWC Group, SA Wireless and Asia Pacific shall be free
to direct their nominees on the PMCL Board to vote as the IWC Group, SA
Wireless or Asia Pacific, as the case may be, may determine."
(h) MANAGEMENT OF PMCL
by adding "and Asia Pacific" after the words "SA Wireless" in the 9th
and 10th lines of Section 6.7.
(i) NON-COMPETITION
by adding the words "or Asia Pacific or an Affiliate thereof" after
the words "SA Wireless or an Affiliate thereof" on the third line of Section
6.8, the words "and to Asia Pacific or an Affiliate designated by it" after
the words "SA Wireless or an Affiliate designated by it" on the seventh line,
the words "and Asia Pacific" after "IWC Group and SA Wireless" on the ninth
line, the words "and to Asia Pacific or its Affiliate" after the words "SA
Wireless or its Affiliate" on the tenth line and the words "or to Asia
Pacific" after the words "SA Wireless" on the fourteenth line.
(j) NOTICES
by adding the following sub-section (d) to Section 15.2:
"if to Asia Pacific, to:
Asia Pacific
Suite 1101
Two Pacific Place
88 Queensway
Hong Kong
Attention: Harry A. Cockrell
Facsimile No: 852-2869-6201"
9. ENFORCEMENT
The Company hereby undertakes to take all reasonable steps required
by IWC, SA Wireless, Vanguard and/or Asia Pacific (at the request of any of
the foregoing) to enforce the provisions of the PMCL Shareholders' Agreement
and the Side Letters against the other parties thereto.
10. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
<PAGE>
(a) IWC and SA Wireless hereby severally warrant and represent
to Asia Pacific as at Completion:
(i) that the PMCL Shareholders' Agreement and the Side
Letters have been executed substantially in the form of the drafts attached
hereto as Exhibits B-1 and B-2, that such agreements and each of the other
agreements referred to in Clause 2.1 have been completed in accordance with
their terms and that no amendments have been made to these agreements or to
the IWCPL Shareholders' Agreement (save for this Deed and the Side Letters
set out in Exhibit B-2) since their respective dates of execution;
(ii) that the 1,269 Ordinary Shares and the 14,986,890
Redeemable Preference Shares to be issued and allotted to Asia Pacific shall,
at Completion, comprise 21.62% of the issued Ordinary Shares and the issued
Redeemable Preference Shares of the Company respectively and shall be issued
fully paid up and that the Ordinary Shares and the Redeemable Preference
Shares shall carry the same voting and other rights as the other existing
Ordinary Shares and Redeemable Preference Shares, respectively and that,
subject to completion of the First Option, the Company shall hold
beneficially not less than 58.69% of the issued share capital of PMCL;
(iii) that the Memorandum and Articles of Association of
the Company are in the form attached hereto as Exhibit C-1 and have been or
will be amended in accordance with the resolutions of the shareholders of the
Company dated 13 August 1997 and attached hereto as Exhibit C-2;
(iv) the Company has not carried on any business, incurred
any liabilities or entered into any agreements since its date of
incorporation other than as contemplated in the IWCPL Shareholders' Agreement
and the agreements referred to in Clause 2.1 and in sub-clause (v);
(v) the Company has entered into a loan agreement with
PMCL, a copy of which is attached hereto as Exhibit D pursuant to which the
Company has agreed to advance to PMCL the sum of US$7,157,487 on the terms
and conditions set out in such agreement and no amendments have been or will
be made to such agreement prior to Completion;
(vi) the Company has been duly incorporated under the laws
of Mauritius, is validly existing and is not engaged in any action or proceeding
before any court, tribunal, arbitrator or similar authority;
(vii) the execution and performance by it and by the
Company of the agreements referred to in Clause 2.1 to which it is a party
have been duly authorised and do not violate any laws of Mauritius and the
obligations expressed to be assumed by such party constitute legal, valid and
binding obligations of that party;
(viii) no option or lien or other form of security has been
granted or agreed to be granted in respect of any of the shares of PMCL held
by the Company
<PAGE>
other than pursuant to the IWCPL Shareholders' Agreement and the PMCL
Shareholders' Agreement; and
(ix) the information contained in Exhibit E is (not taking
into account Asia Pacific's subscription hereunder) accurate in all material
respects and is not misleading.
(b) Each of Asia Pacific, IWC, Vanguard and SA Wireless hereby
undertakes that, in the event of a transfer by the Company of any of its
shares in PMCL (pursuant to paragraph 6 of the PMCL Letter Agreement)
resulting from any default or action on its part, it shall promptly transfer
to the other Shareholders, pro rata to their shareholdings in the Company,
such number of its Shares as shall give each of them the same percentage
indirect holding in PMCL as they had immediately prior to any such transfer
by the Company.
11. INFORMATION
Each of IWC, SA Wireless, Vanguard and the Company hereby covenants,
with effect from the date hereof through to the Completion Date, to Asia
Pacific to keep Asia Pacific fully informed promptly in writing of the status
of each of the agreements referred to in Clause 2.1 (including, without
limitation, the expected dates of execution and/or completion of the same as
the case may be) and shall supply and give Asia Pacific access to all
information which may be relevant to Asia Pacific's decision to exercise the
First Option that is in its possession or control and not at the date hereof
subject to any obligations of confidentiality (but expressly excluding any
financial or other analyses or statistics that are prepared by it for
internal purposes) and such other information as Asia Pacific may reasonably
request including evidence reasonably satisfactory to Asia Pacific of the
fulfilment of the conditions set out in sub-clauses (a), (b) and (c) of
Clause 2.1.
12. COSTS AND EXPENSES
12.1 Each party shall bear its own costs and expenses incurred by it
in connection with the negotiation, preparation, execution and performance of
this Deed.
12.2 Subject to the conditions in Clause 2.1 being satisfied, Asia
Pacific agrees with effect from Completion that by this Deed it shall be
joined as a party to and become bound by the terms and conditions of the
letter attached hereto as Exhibit G as though it were an original party
thereto.
13. COUNTERPARTS
This Deed may be executed by the parties in separate counterparts,
each of which when so executed and delivered shall be an original but all of
which together shall constitute one and the same instrument.
<PAGE>
14. GOVERNING LAW
This Deed shall be governed by and construed in accordance with the
laws of England and Wales.
<PAGE>
IN WITNESS whereof this Deed has been executed as a deed on the date
first above written.
SIGNED by )
)
)
)
)
for and on behalf of )
INTERNATIONAL WIRELESS )
COMMUNICATIONS )
PAKISTAN LIMITED )
in the presence of: )
SIGNED by )
)
)
)
)
for and on behalf of )
PAKISTAN WIRELESS )
HOLDINGS LIMITED )
in the presence of: )
SIGNED by )
)
)
)
)
for and on behalf of )
SOUTH ASIA WIRELESS )
COMMUNICATIONS )
(MAURITIUS) LIMITED )
in the presence of: )
<PAGE>
SIGNED by )
)
)
)
)
for and on behalf of )
VANGUARD PAKISTAN, INC. )
in the presence of: )
SIGNED by )
)
)
)
)
for and on behalf of )
ASIA PACIFIC CELLPHONE CO. INC. )
in the presence of: )
<PAGE>
EXHIBIT A
IWCPL SHAREHOLDERS' AGREEMENT
<PAGE>
EXHIBIT B-1
PMCL SHAREHOLDERS' AGREEMENT
<PAGE>
EXHIBIT B-2
SIDE LETTERS TO THE PMCL SHAREHOLDERS' AGREEMENT
<PAGE>
EXHIBIT C-1
-----------
MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY
<PAGE>
EXHIBIT C-2
-----------
RESOLUTIONS OF THE SHAREHOLDERS OF THE COMPANY
<PAGE>
EXHIBIT D
---------
LOAN AGREEMENT
<PAGE>
EXHIBIT E
---------
CORPORATE INFORMATION RELATING TO THE COMPANY
1. Authorised share capital: US$77,000,000 comprised of
100,000,000 Ordinary Shares and
76,000,000 Redeemable Preference
Shares
2. Shareholders:
Name No. of Ordinary Shares No. of Redeemable Preference Shares
---- ---------------------- -----------------------------------
IWC 2,000 23,620,000
SA Wireless 2,000 23,620,000
Vanguard 600 7,086,000
3. Directors
Lee Kwee Tai
Li Tsang Chung
Robin M. Maule
Hugh B.L. McClung
John W. Troy
Antonio Y.P. Yeung
<PAGE>
EXHIBIT F
---------
FORM OF LETTER FROM THE COMPANY TO MOTOROLA
<PAGE>
EXHIBIT G
---------
COSTS AND EXPENSES LETTER
<PAGE>
(Seal)
Government of Pakistan
Pakistan Telecom Authority
Islamabad
9th August, 1997
RE VALIDATION OF LICENCE
The Pakistan Telecommunication Authority (hereinafter referred to as "the
Authority") in exercise of its powers conferred by section 21(7) of the Pakistan
Telecommunication (Re-organisation) Act 1996 (hereinafter referred to as "the
Act") hereby revalidate the licence granted to M/S Pakistan Mobile Communication
(Pvt.) Limited for the establishment and operation of cellular Mobile Telephone
System in Pakistan by the Government of Pakistan in July, 1992 subject to
following terms and conditions which either substitute or are in addition, as
deemed fit, to those which are already laid down in the said licence.
I) Wherever the words and figures "Telegraph Act 1885 as a ended in 1975"
are written in the said licence it shall be read as "the Act".
II) The exclusive right given in paragraph one (1) of the said licence is
withdrawn. No licence under the Act can be exclusive. Therefore,
para 1 of the licence will now read as:
"The Licence shall be valid initially for a period of 15 years
commencing 6th July, 1992 and may be renewed subject to
satisfactory performance, at the discretion of the Government of
Pakistan. Review period of the Licence for renewal thereof could
commence three years before expiry of this period".
III) Whereas any payment dues with reference to the said licence such as
initial fee, annual/renewal/royalty etc. are payable to PTC, the same
will now be payable to the Authority.
IV) The word "PTC" wherever occurring be read as PTCL (Pakistan
Telecommunication Company Limited).
V) The word "Chairman, PTC" occurring in para 22 and 16 in the said
licence be substituted by "the Authority".
VI) The terms and conditions of the said licence are subject to the Act
and rules, and regulation made thereunder by the Authority and
changes, modification including new enactments as may be considered
expedient and necessary from time to time.
2. The said licence with the above modifications shall be deemed to be an
authorized licence under the Act, for the remaining period of the licence issued
on 6th July, 1992 ending 5th July, 2007.
Barrister Ch. Inayat Ullah Khan
Director (Legal Affairs)
on behalf of
Pakistan Telecommunication Authority
M/S Pakistan Mobile Communications BARRISTER CH. INAYAT ULLAH KHAN
(P) Ltd., B.A.L.L.B (LEEDS), DIR INTER LAW, A INST A.M.
Kulsum Plaza, Blue Area, A.M DIRECTOR LEGAL AFFAIRS
Islamabad. PAKISTAN TELECOMMUNICATION AUTHORITY
- --------- GOVT OF PAKISTAN, ISLAMABAD
<PAGE>
August 1997
Motorola International Development Saif Telecom (Pvt.) Limited
Corporation 4th Floor
1303 E. Algonquin Road Kulsum Plaza
Schaumburg 42 Blue Area
Illinois, U S A Islamabad
Pakistan
PAKISTAN MOBILE COMMUNICATIONS (PVT.) LIMITED (THE "COMPANY")
Ladies and Gentlemen:
Reference is made to the Restated and Amended Shareholders Agreement, dated as
of August 1997 (the "Shareholders Agreement"), among International Wireless
Communications Pakistan Limited, a company organized under the laws of Mauritius
("IWCPL"), Saif Telecom (Pvt.) Limited, a company organized under the laws of
Pakistan ("SAIF"), and Motorola International Development Corporation, a company
organized under the laws of the State of Delaware, United States of America
("MIDC"). All capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Shareholders Agreement.
In consideration of the mutual promises and undertakings contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. AMENDMENTS
The Shareholders agree to amend the Shareholders Agreement as follows:
(a) "IWC" DEFINITION
by deleting the definition of "IWC" in Clause 1 and replacing it
in its entirety by the following:
""IWC" means Pakistan Wireless Holdings Limited, one of the
principal shareholders of IWCPL."
(b) TRANSFER
by amending Clause 12.6 by adding the following sentence:
"Upon a transfer by IWCPL of all its Shares to all of its
individual shareholders as contemplated by this Clause 12.6, the individual
shareholders shall together have the right to appoint Directors to the Board
pursuant to Clause 5.2 in place of IWCPL."
1.
<PAGE>
(c) CONFIDENTIALITY
by amending Clause 13.1(a) to add the words "and shareholders"
after the word "Associates".
(d) NON COMPETITION
by amending Clause 14 by adding the following sentence:
"The parties agree that, so long as Asia Pacific Cellphone Co.
Inc. ("Asia Pacific") remains a direct or indirect wholly-owned subsidiary of
Istethmar International Corporation, Asia Pacific shall have the same benefits
and obligations under this Clause 14 as are conferred on or assumed by AIF."
(e) TERMINATION
by amending Clause 16.3(b) by adding the following:
"Provided that in the event of any transfer of a controlling
interest in the ownership of the entity ultimately controlling IWCPL which
amounts to an Event of Default hereunder, the non-defaulting Shareholders shall
have the right to exercise the buy-back provisions under Clause 16.5 only with
respect to the percentage of Shares held by IWCPL which corresponds to the
percentage interest in IWCPL of the shareholder of IWCPL in respect of which the
transfer of a controlling interest has occurred causing the Event of Default
hereunder and, if the non-defaulting Shareholders exercise their buy-back rights
under Clause 16.5, IWCPL shall be obligated to sell such pro rata portion of the
Shares held by it to the non-defaulting Shareholders who have so exercised such
buy-back rights. For the purposes of this Clause 16.3(b): (i) where IWC or any
of its Associates controls IWCPL, the expression "transfer of a controlling
interest in the ownership of the entity ultimately controlling the Shareholder
which is a Party thereto" means a change of control of IWC or such Associate or
a change of control of the entity that controls IWC or such Associate where the
primary asset of such entity is the shares of IWC or its Associate, and (ii)
should the controlling interest in IWCPL pass from any of IWC, AIF, Vanguard,
Asia Pacific and/or any of their respective Associates or some combination
thereof to any of the foregoing entities or some other combination thereof, then
the terms of this Clause 16.3(b) shall apply, mutatis mutandis, to such of them
as shall have become the entity(ies) controlling IWCPL."
(f) ASSIGNMENT
by amending Clause 18.1 by adding ", Asia Pacific" after the
words "as IWCPL by AIF".
2. FIRST OPTION
Each of the parties hereto waives any breach or an Event of Default
under the Shareholders Agreement caused by the exercise of the First Option (as
defined in the Share Purchase Agreement dated 17 July 1997 between MIDC and
IWCPL).
2.
<PAGE>
3. GENERAL
1. This letter agreement shall be read together with the
Shareholders Agreement.
2. IWCPL shall have the right to assign the benefit of this letter
agreement to its individual shareholders.
3. This letter agreement shall be governed by and construed in
accordance with the laws of Pakistan.
4. This letter agreement may be executed in counterparts, each of
which shall be an original and all of which, when taken together, shall
constitute one and the same instrument.
If the foregoing accurately reflects our agreements relating to the
subject matter thereof, please indicate by signing this letter
agreement in the spaces indicated below.
Yours sincerely
INTERNATIONAL WIRELESS
COMMUNICATIONS PAKISTAN LIMITED
By
----------------------------------
Name:
Title:
AGREED TO AND ACCEPTED
AS OF THE DATE SET FORTH
ABOVE BY:
MOTOROLA INTERNATIONAL SAIF TELECOM (PVT.) LIMITED
DEVELOPMENT CORPORATION
By By
------------------------------------- -------------------------------
Name: Name:
Title: Title:
3.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN AGREEMENT
BETWEEN
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
AND
THE LENDERS WHO FROM TIME TO TIME
ARE PARTIES HERETO
AUGUST 18, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Principles . . . . . . . . . . . . . . . . . . . . 12
ARTICLE II THE LOANS AND RELATED MATTERS . . . . . . . . . . . . . . . . 12
2.01 Loans.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.02 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.03 Repayment of Principal. . . . . . . . . . . . . . . . . . . . 14
2.04 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.05 Prepayment of Loans . . . . . . . . . . . . . . . . . . . . . 15
2.06 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.07 Application of Payments . . . . . . . . . . . . . . . . . . . 17
2.08 Committed Lenders' Representations and Warranties.. . . . . . 17
ARTICLE III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 18
3.01 Organization and Qualification. . . . . . . . . . . . . . . . 18
3.02 Corporate Power . . . . . . . . . . . . . . . . . . . . . . . 18
3.03 Certain Other Representations.. . . . . . . . . . . . . . . . 19
3.04 Conflict. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.05 Authorization, Governmental Approvals . . . . . . . . . . . . 19
3.06 Validity and Binding Effect . . . . . . . . . . . . . . . . . 20
3.08 No Event of Default; Compliance with Agreements . . . . . . . 20
3.09 Solvency, etc.. . . . . . . . . . . . . . . . . . . . . . . . 20
3.10 Regulations G and X . . . . . . . . . . . . . . . . . . . . . 21
3.11 Investment Company; Public Utility Holding Company. . . . . . 21
3.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.13 Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.15 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . 21
3.16 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.17 Affiliated Transactions . . . . . . . . . . . . . . . . . . . 22
3.18 Title to Properties . . . . . . . . . . . . . . . . . . . . . 22
3.19 SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.20 Outstanding Indebtedness . . . . . . . . . . . . . . . . . . 23
3.21 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.22 Financial Statements . . . . . . . . . . . . . . . . . . . . 23
3.24 No Material Adverse Change. . . . . . . . . . . . . . . . . . 24
3.24 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . 24
4.01 Effectiveness of Commitments. . . . . . . . . . . . . . . . . 24
<PAGE>
4.02 At any Loan Closing . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.01 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . 27
5.02 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . 29
5.03 Reporting Requirements. . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VI DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . 34
6.02 Consequences of Event of Default. . . . . . . . . . . . . . . . 36
6.03 Rights of Setoff. . . . . . . . . . . . . . . . . . . . . . . . 37
6.04 Other Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VII SUCCESSORS AND ASSIGNS; PARTICIPATIONS. . . . . . . . . . . . . 37
7.01 Successors and Assigns in General . . . . . . . . . . . . . . . 37
7.02 Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.03 Further Assurance . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.01 Modifications, Amendments or Waivers. . . . . . . . . . . . . . 39
8.02 No Implied Waivers; Cumulative Remedies; Writing Required . . . 39
8.03 Reimbursement of Expenses; Taxes . . . . . . . . . . . . . . . 39
8.04 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.06 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.07 Governing Law; Waivers and Jurisdiction . . . . . . . . . . . . 41
8.08 Herein, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.09 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.10 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.12 Brokers Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 42
8.13 Indemnification.. . . . . . . . . . . . . . . . . . . . . . . . 42
8.14 Payment Set Aside . . . . . . . . . . . . . . . . . . . . . . . 44
8.15 Complete Agreement. . . . . . . . . . . . . . . . . . . . . . . 44
8.16 No Strict Construction . . . . . . . . . . . . . . . . . . . . 44
8.17 Register. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
<PAGE>
LIST OF EXHIBITS
Exhibit A -- Committed Lenders and Commitment Amounts
Exhibit B -- Opinion of Borrower's Counsel
Exhibit C -- Form of Exchange Agreement
Exhibit D -- Form of Intercreditor Agreement
Exhibit E -- Form of IWCH Charter
Exhibit F -- Forms of Senior Exchangeable Note:
Exhibit F-1 -- Tranche A Note
Exhibit F-2 -- Tranche B Note
Exhibit G -- Form of Initial Warrant
Exhibit H -- Form of Liquidity Warrant
<PAGE>
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of August 18, 1997, is made between
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC., a Delaware corporation
("BORROWER"), the Persons who are named on the attached EXHIBIT A (together with
all Persons who become additional Committed Lenders as provided in Section 7.01,
the "COMMITTED LENDERS") and the Persons who may hereafter become additional
Lenders.
The Borrower has requested that the Committed Lenders from time to
time make, and the Committed Lenders have agreed from time to time to make,
certain Loans, as described in greater detail in this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements set forth herein and intending to be legally bound
hereby, covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINITIONS. In addition to any other terms defined
elsewhere in this Agreement, the following terms will have the respective
meanings set forth below:
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such first
Person. For purposes of this definition, "control" will include the direct or
indirect ownership of, and/or right to vote or control the vote with respect
to, Equity Securities representing 20% or more of the aggregate voting power of
such first Person's voting Equity Securities (either based on the quantity of
such first Person's voting Equity Securities which are actually outstanding or
on a fully-diluted basis).
"AGGREGATE COMMITMENT AMOUNT" at any time, means $7,000,000, reduced
as provided in Section 2.01(d); PROVIDED that, at any time after the Commitment
Termination Date, the Aggregate Commitment Amount will be the aggregate unpaid
principal amount of the Notes at the time in question.
"APPLICABLE RATE" at any time means a per annum rate equal to the
following:
-----------
Rate
----
On and after the date of this Agreement and prior to 14%
February 18, 1998
On and after February 18, 1998 and prior to 15%
May 18, 1998
On and after May 18, 1998 and prior to 17%
August 18,
<PAGE>
------------
Rate
----
1998
On and after August 18, 1998 and prior to 19%
September 18, 1998
On and after September 18, 1998 and prior to 21%
October 18, 1998
On and after October 18, 1998 and prior to 23%
November 18, 1998
On and after November 18, 1998 25%
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, a public
holiday under the laws of the State of New York or the State of California or a
day on which banking institutions are authorized or obligated to close in New
York, New York or San Francisco, California.
"CAPITALIZED LEASE" means a lease under which the obligations of the
lessee would, in accordance with GAAP consistently applied, be included in
determining total liabilities as shown on the liability side of a balance sheet
of the lessee.
"CAPITALIZED LEASE OBLIGATIONS" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases, calculated in accordance with GAAP consistently applied and
Statement of Financial Accounting Standards No. 13.
A "CHANGE OF CONTROL" will occur if a "Change of Control" (as that
term is defined in the Indenture) occurs.
"CLOSING" means the making of any contemporaneous Loans under this
Agreement.
"COLLATERAL AGENT" means Bankers Trust Company, or any successor
thereto, in its capacity as the Collateral Agent as the case may be pursuant to
the Intercreditor Agreement or any Pledge Agreement.
"COMMISSION" means the United States Securities and Exchange
Commission, or any successor to the functions thereof.
"COMMITMENT" of any Committed Lender means such Committed Lender's
commitment to make Loans as provided in Section 2.01(a).
"COMMITMENT AMOUNT" for any Committed Lender means the Commitment
Amount specified for such Committed Lender on the attached EXHIBIT A, as in
effect from time to time, as such amount may be reduced pursuant to Section
2.01(d).
2
<PAGE>
"COMMITMENT TERMINATION DATE" means the first to occur of (a)
September 30, 1998, (b) any earlier date which is on or after any date specified
by Borrower by written notice to the Committed Lenders as the desired Commitment
Termination Date and upon which no Note is outstanding and no other amount is
payable to any Lender under any Loan Document, (c) the first date upon which a
Liquidity Event occurs, and (d) any date upon which the Commitments are
terminated pursuant to Section 6.02(a) or terminate pursuant to Section 6.02(b).
"COMMITTED LENDERS" has the meaning set forth in the preamble to this
Agreement.
"CONTROLLED GROUP" means the "controlled group of corporations," as
that term is defined in Section 1563(a) of the Internal Revenue Code, of which
Borrower is a part from time to time.
"CORE EQUITY DOCUMENTS" means the Exchange Agreement, the Warrants,
the IWCH Charter, the IWCH Sixth Amended and Restated Investor Rights Agreement
dated as of the date of this Agreement, and the Amended and Restated
Registration Rights Agreement dated as of the date of this Agreement among
Borrower and the "Stockholders" referred to therein.
"CORE FINANCING DOCUMENTS" means the Core Loan Documents and the Core
Equity Documents.
"CORE LOAN DOCUMENTS" means this Agreement, the Disclosure Letter, the
Exchange Agreement, the Pledge Agreements, the Intercreditor Agreement, the
Notes and the Warrants.
"DESIGNATED COMPANY" means (a) International Wireless Communications,
Inc., a Delaware corporation, PT Rajasa Hazanah Perkasa, an Indonesia company,
PT Mobile Selular Indonesia, an Indonesia company, PWH, International Wireless
Communications Pakistan Limited, a Mauritius company, Pakistan Mobile
Communications (Pvt) Limited, a Pakistan company, International Wireless
Communications Asia Holdings N.V., a Netherlands Antilles company, International
Wireless Communications Limited, a Mauritius company, IWC China Limited, a
Mauritius company, Star Digitel Limited, a Hong Kong company, Syarkat Telefon
Wireless (M) Sdn Bhd, a Malaysia company, International Wireless Communications
Latin America Holdings Ltd., a Bermuda company, Via Movel 1 Comunicacoes S.A., a
Brazil company, and Servicos de Radio Comunicacoes Ltda., a Brazil company, (b)
any of Borrower's Subsidiaries or any Investee which is not named in clause (a)
above if (i) as of the date any Loan is made, Borrower and its Subsidiaries have
made aggregate Investments of not less than $15,000,000 in such Subsidiary or
Investee, or (ii) such Subsidiary or Investee has a direct or indirect ownership
interest in any Subsidiary or Investee described in clause (b)(i) above, or (c)
any other of Borrower's Subsidiaries or any other Investee which Borrower has
designated a Designated Company by written notice to the Lenders to that effect.
"DISCLOSURE LETTER" means the letter addressed to the Committed
Lenders from Borrower and dated the date of this Agreement disclosing certain
matters relating to this Agreement.
3
<PAGE>
"DISTRIBUTION" means any dividend or other distribution or payment by
a Person (other than a natural person) with respect to its Equity Securities, or
any redemption, acquisition, purchase or other retirement of any Equity Security
of such Person, any of its Subsidiaries, or any Person of which such Person is a
Subsidiary or an Investee, in each case whether in cash, securities or other
property.
"EARNED WARRANT PERCENTAGE" has the meaning set forth in the Exchange
Agreement.
"ENVIRONMENTAL LAWS" means all present and future laws imposing
liability or standards of conduct with respect to environmental protection,
industrial hygiene, the protection of human health and safety from environmental
hazards, natural resources, pollution or waste management, or similar or related
matters.
"EQUITY AGREEMENTS" has the meaning set forth in Section 3.14.
"EQUITY DOCUMENTS" the Core Equity Documents, and all other documents,
agreements and instruments executed at any time in connection therewith.
"EQUITY SECURITY" of any Person means any capital stock, partnership
interest, membership interest or other ownership or equity interest or security
of or in such Person, any phantom equity, profit participation, appreciation or
similar right with respect to such Person, or any security or other right which
directly or indirectly is convertible into or exercisable or exchangeable for
any other Equity Security of such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations of any governmental agency or authority
promulgated thereunder.
"ERISA AFFILIATE" as applied to any Person means any trade or business
(whether or not incorporated) which is a member of a group of which that Person
is a member and which is under common control within the meaning of the
regulations promulgated under Section 414 of the Internal Revenue Code.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE AGREEMENT" means the Exchange Agreement dated as of the date
hereof in the form of the attached EXHIBIT C between Borrower and the initial
Committed Lenders, as such agreement is in effect from time to time.
"EXCLUDED SECURITIES" means the Notes, the PWH Notes and the Exercise
or Exchange Securities.
"EXERCISE OR EXCHANGE SECURITIES" means the Warrants, the Series G
Stock and the Series H Stock issued or issuable upon the exchange of the Notes
and the PWH Notes pursuant to the Exchange Agreement, the IWCH Common Stock
issued or issuable upon the
4
<PAGE>
conversion of such Series G Stock and Series H Stock (or upon the conversion
of Series G Stock or Series H Stock issued upon the conversion of other
Series G Stock or Series H Stock) and the IWCH Common Stock issued or
issuable upon the exercise of the Warrants.
"FINANCING DOCUMENTS" means the Loan Documents and the Equity
Documents.
"GAAP" means generally accepted accounting principles as promulgated
by the Financial Accounting Standards Board, as in effect from time to time
(subject to the provisions of Section 1.02).
"GUARANTEE" means any guarantee of the payment or performance of any
Indebtedness or other obligation or any other arrangement whereby credit is
extended to an obligor on the basis of any promise of another Person to pay
money, or any other arrangement having substantially similar economic effect,
including where the same is expressed in terms of an obligation to (i) pay the
Indebtedness or other monetary obligations of such obligor, (ii) purchase an
obligation owed by such obligor, or (iii) maintain the capital, working capital,
solvency or general financial condition of such obligor, whether or not any such
arrangement is listed on the balance sheet of such other Person or referred to
in a footnote thereto, but will not include endorsements of items for collection
in the ordinary course of business. Subject to the final sentence of the
definition of the term "Indebtedness," the amount of any Guarantee will be equal
to the amount of the obligation so guaranteed or otherwise supported or, if not
a fixed or determined amount, the maximum amount guaranteed or supported.
"HAZARDOUS MATERIALS" means all or any of the following:
(i) substances that are defined or listed in, or otherwise classified pursuant
to, any applicable Environmental Laws as "hazardous substances," "hazardous
materials," "hazardous wastes," "toxic substances" or any formulation intended
to define, list or classify substances by reason of deleterious properties such
as ignitability, corrosivity, reactivity, carcinogenicity, reproductive
toxicity, "TLCP" toxicity or "EP" toxicity; (ii) oil, petroleum or petroleum
derived substances, natural gas, natural gas liquids or synthetic gas and
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (iii) any flammable substances or explosives or any radioactive
materials; and (iv) asbestos in any friable form or electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million.
"INDEBTEDNESS" of any Person will include (i) all obligations for
borrowed money (including obligations incurred in exchange or replacement
thereof), (ii) all obligations evidenced by any note, bond, debenture or other
debt security, (iii) the balance deferred and unpaid of the purchase price for
any property or services (excluding unsecured trade payables incurred in the
ordinary course of business which are not more than 90 days past due or which
are in an aggregate amount for all such more-than-90-day-past-due trade payables
which does not exceed $500,000 or), (iv) all Capitalized Lease Obligations, (v)
all obligations arising under acceptance facilities, (vi) the undrawn face
amount of all outstanding letters of credit for the benefit of the Person in
question and (without duplication) all unreimbursed drafts drawn thereunder,
(vii) all obligations secured by a Lien on any property of the Person in
question, (viii) all obligations
5
<PAGE>
under interest rate or currency exchange or swap agreements, (ix) all
obligations under any Guarantee, and (x) all asserted withdrawal liabilities
under any Multiemployer Plan or other employee benefit or welfare plan, and if
to the extent the foregoing (other than items described in clause (vi) above)
would be required to be reflected on a balance sheet of the Person in question
prepared in accordance with GAAP. For purposes of this Agreement, the "amount"
at any time of any Indebtedness of a Person as to which the recourse of any
other Person is limited to one or more assets of such first Person will not
exceed the fair market value of such asset(s) at such time (determined without
regard to any Lien relating to such Indebtedness).
"INDENTURE" means the Indenture dated as of August 15, 1996 between
Borrower and Marine Midland Bank, as the initial Trustee, as in effect on the
date of this Agreement.
"INDENTURE NOTES" means the 14% Senior Secured Discount Notes due 2001
of Borrower issued pursuant to the Indenture.
"INITIAL CLOSING" has the meaning set forth in Section 4.01.
"INITIAL WARRANT" means a warrant (whether or not represented by a
certificate issued or reissued on a later date), in the form of the attached
EXHIBIT G, issued pursuant to this Agreement, and any warrant in such form
issued in whole or in part in replacement of or substitution for any other
Initial Warrant.
"INTERCREDITOR AGREEMENT" means the Intercreditor and Collateral
Agency Agreement dated as of the date hereof in the form of the attached EXHIBIT
D among Borrower, the Trustee, Bankers Trust Company, as the initial Collateral
Agent, and the initial Committed Lenders, as in effect from time to time.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVESTEE" means any Person (other than a Subsidiary of Borrower) in
which Borrower, any of its Subsidiaries or any other Investee has any direct or
indirect Investment (either itself or through one or more of its direct or
indirect Subsidiaries or Investees), including any Subsidiary of any other
Investee.
"INVESTMENT" means any amount paid for liabilities or assets of, or
loaned, advanced or contributed to, or acquisition for consideration of any
Equity Security or Indebtedness of, any other Person, or any other item that is
or would be classified as an investment on a balance sheet prepared in
accordance with GAAP. The term "Investment" will include the acquisition of a
company, business or product line.
"IWCH CHARTER" means the Amended and Restated Certificate of
Incorporation of Borrower, in the form of the attached EXHIBIT E.
"IWCH COMMON STOCK" mean IWCH Voting Common Stock or IWCH Non-Voting
Common Stock.
6
<PAGE>
"IWCH NON-VOTING COMMON STOCK" means Class 2 Common Stock, par value
$0.01 per share, of Borrower.
"IWCH VOTING COMMON STOCK" means Class 1 Common Stock, par value $0.01
per share, of Borrower.
"LAW" will be construed broadly to include any foreign, national,
federal, state, provincial, local or other law, rule, regulation, statute,
ordinance, judgment, decree, order, policy, guideline, directive, common law,
pronouncement, treaty, accord or similar item of any legislative, executive,
judicial or other governmental entity or authority.
"LENDER" means any holder of a Note.
"LIEN" means any security interest, pledge, bailment (in the nature of
a pledge or for purposes of security), mortgage, deed of trust, the grant of a
power to confess judgment, conditional sales and title retention agreement
(including any lease in the nature thereof), charge, encumbrance, restrictions
or other similar arrangement or interest in real or personal property.
"LIQUIDITY EVENT" means (i) any direct or indirect public or private
issuance or sale or series of related issuances or sales of Equity Securities of
Borrower which results in net cash proceeds to Borrower and its Subsidiaries
which are not less than the sum of (A) the aggregate amount of the unpaid
principal and accrued interest in respect of the Notes and the PWH Notes
immediately prior to such issuance or sale or series of related issuances or
sales and (B) the Permitted Cash Reserve Amount immediately prior to such
issuance or sale or series of issuances or sales, (ii) any Change of Control, or
(iii) any direct or indirect sale or other disposition of all or substantially
all of the consolidated assets of Borrower (whether by asset sale by Borrower or
its Subsidiaries, merger, consolidation or otherwise).
"LIQUIDITY WARRANT" means a warrant (whether or not represented by a
certificate issued or reissued on a later date), in the form of the attached
EXHIBIT H, issued pursuant to the terms of this Agreement, and any warrant in
such form issued in whole or in part in replacement of or substitution for any
other Liquidity Warrant.
"LOAN" has the meaning set forth in Section 2.01.
"LOAN DOCUMENTS" means the Core Loan Documents and all other
documents, agreements and instruments executed at any time in connection
therewith.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, properties, assets, liabilities, conditions (financial or otherwise)
or prospects of Borrower, taking into account Borrower's direct and indirect
ownership interests in its Subsidiaries and the Investees, (b) the ability of
any Person (other than any Lender) to perform any of its obligations under the
Loan Documents, or the ability of any Lender or the Collateral Agent to exercise
any right and remedy with respect to, or otherwise to realize upon, any of the
security for the Loans under the Loan Agreements or any other right or remedy
under any Loan Document, if the same would materially impair the value or
collectibility of the Notes (considered without regard to the
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right to exchange the Notes pursuant to the Exchange Agreement), or (c) the
ability of any Person (other than any holder of any Exercise or Exchange
Securities) to perform any of its obligations under the Equity Documents, or the
ability of any holder of Exercise or Exchange Securities to exercise any right
or remedy under any Equity Document, if the same would materially impair the
value of the Exercise or Exchange Securities.
"MATURITY DATE" means August 17, 2002.
"MULTIEMPLOYER PLAN" means any Plan which is a "multiemployer plan" as
defined in Section 3(37) of ERISA.
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities Exchange Act of 1934, as amended.
"NOTE" means a promissory note of Borrower issued pursuant to this
Agreement and in the form of the attached EXHIBIT F-1 or the attached EXHIBIT
F-2, including all amendments, modifications, extensions, replacements,
substitutions, renewals, refinancings or refundings thereof in whole or in part.
"ORGANIZATIONAL DOCUMENTS" has the meaning set forth in Section 3.01.
"PARTICIPANT" has the meaning set forth in Section 7.02.
"PARTICIPATING AGENT" has the meaning set forth in Section 7.02.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any other governmental entity or
agency succeeding to the functions of such corporation.
"PERMITTED CASH RESERVE AMOUNT" at any time means the amount (if any)
by which $2,500,000 exceeds the sum of (a) the amount of cash on hand of
Borrower, (b) the aggregate value of Cash Equivalents (as that term is defined
in the Indenture) owned by Borrower, (c) the aggregate amount of cash
contributed by Borrower to its Subsidiaries after the date of this Agreement and
prior to such time, and (d) the Unused Commitment Amount.
"PERMITTED INDEBTEDNESS" means (i) Capitalized Lease Obligations, to
the extent that the aggregate principal amount thereof does not exceed
$1,000,000 at any time, (ii) all obligations incurred in the ordinary course of
business under acceptance facilities, (iii) the undrawn face amount of letters
of credit obtained in the ordinary course of business and all unreimbursed
drafts thereunder, (iv) Indebtedness secured by Permitted Liens, and (v) all
obligations under interest rate or currency exchange or swap agreements entered
into in the ordinary course of business.
"PERMITTED LIENS" has the meaning set forth in the Indenture.
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"PERSON" means any individual, corporation, partnership, limited
liability company, trust or other entity, including any governmental entity or
agency.
"PLAN" means any plan, including single employer, multiple employer
and multiemployer plans, subject to Title IV of ERISA and established,
maintained or contributed by Borrower or any member of the Controlled Group at
any time during the two-year period ending on the Initial Closing or thereafter.
"PLEDGE AGREEMENT" means any Pledge Agreement (as that term is defined
in the Indenture).
"POTENTIAL EVENT OF DEFAULT" means any occurrence, condition, act or
omission which, with the passage of time or the giving of notice, or both, would
constitute an Event of Default.
"PWH" means Pakistan Wireless Holdings Limited, a Mauritius
corporation.
"PWH LOAN AGREEMENT" means the Loan Agreement dated as of the date
hereof between PWH and the initial Committed Lenders, as that Agreement is in
effect from time to time.
"PWH LOAN DOCUMENT" means any Loan Document (as that term is defined
in the PWH Loan Agreement).
"PWH NOTE" means any Note (as that term is defined in the PWH Loan
Agreement).
"QUARTERLY PAYMENT DATE" means the 17th day of each November,
February, May and August, beginning with November 17, 1997.
"REPORTABLE EVENT" means any of the events which are reportable under
Section 4043 of ERISA and the regulations thereunder, other than an occurrence
for which the 30-day notice contained in 29 C.F.R. Section 2615.3(a) is duly
waived.
"REPORTS" has the meaning set forth in Section 3.19.
"REQUISITE LENDERS" means Lenders which hold Notes which represent a
majority of the aggregate unpaid principal amount of the outstanding Notes.
"SERIES G STOCK" means Series G-1 Preferred Stock, and Series G-2
Preferred Stock, each par value $0.01 per share, of Borrower.
"SERIES H STOCK" means Series H-1 Preferred Stock, and Series H-2
Preferred Stock, each par value $0.01 per share, of Borrower.
"SHARE VALUE" with respect to any Liquidity Event means:
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(i) in the case of any issuance or sale or series of
related issuances or sales described in clause (i) of the definition of the term
"Liquidity Event," (A) if the Equity Securities issued or sold are IWCH Common
Stock or Equity Securities of Borrower which directly or indirectly are
convertible into or exercisable or exchangeable for IWCH Common Stock, then the
cash issue or sale price received in connection with such issuance or sale (or
the weighted-average cash issue or sale price, in the case of any such series of
related issuances or sales) on a per-share-of-IWCH Common Stock equivalent
basis, so long as the amount of the net cash proceeds of such issuance or sale
or series of related issuances or sales (disregarding any prior issuance or
sale) is not less than $5,000,000, and (B) the Appraised Value (as that term is
defined in the Exchange Agreement) immediately after such Liquidity Event, in
the case of any other Liquidity Event described in clause (i) of the definition
of the term "Liquidity Event,"
(ii) in the case of any Change of Control, the price per
share of IWCH Common Stock (taking into account cash consideration and the fair
market value of all consideration other than cash) reflected in such Change of
Control, and
(iii) in the case of a Liquidity Event described in clause
(iii) of the definition of the term "Liquidity Event," the amount that would be
received by the holder of one share of IWCH Common Stock upon the liquidation of
Borrower after such Liquidity Event after the satisfaction in full of all of
its liabilities and other obligations, if all Equity Securities of Borrower, any
of its Subsidiaries or any Investee which are then in the money (including the
Notes and the PWH Notes, to the extent that the direct and indirect exchange and
conversion rights associated therewith are then in the money and all Warrants)
which directly or indirectly are convertible into or exercisable or exchangeable
for IWCH Common Stock were so converted, exercised or exchanged in full prior to
such liquidation (taking into account the consideration which would be received
by the issuer of the Equity Securities in question in connection with any such
conversion, exercise or exchange).
For purposes of determining the amount described in clause (iii) above: (A) if
the principal amount of and accrued interest on the Notes and the PWH Notes are
paid in full in connection with the Liquidity Event in question, then the Earned
Warrant Percentage will be deemed to be the Earned Warrant Percentage at the
time of such payment in full, and (B) in any other event, the Earned Warrant
Percentage will be deemed to be the maximum percentage which the Earned Warrant
Percentage could thereafter become (i.e., the Earned Warrant Percentage at such
time plus the maximum amount of all increases in the Earned Warrant Percentage
which could occur pursuant to the Exchange Agreement based on the Commitment
Percentage (as that term is defined in the Exchange Agreement) attributable to
the unpaid principal amount of the Notes and the PWH Notes which are outstanding
after any repayment made in connection with such Liquidity Event).
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, trust, association or other business
entity of which (i) if a corporation, a majority of the total voting power of
shares of stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time
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owned or controlled, directly or indirectly, by that Person or one or more
direct or indirect Subsidiaries of that Person or a combination thereof, or
(ii) if a partnership, limited liability company, association or other business
entity, a majority of the partnership or other voting or economic ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more direct or indirect Subsidiaries of that Person or a
combination thereof, in each case including control by agreement. A Person or
Persons will be deemed to have a majority ownership interest in a partnership,
limited liability company, association or other business entity if such Person
or Persons is allocated a majority of partnership, limited liability company,
association or other business entity gains or losses or is or controls a
managing director, managing member, manager, trustee, general partner or similar
official or Person with respect to such partnership, limited liability company,
association or other business entity.
"TDI" means Toronto Dominion Investments, Inc.
"TOTAL NUMBER OF ISSUABLE WARRANT SHARES" has the meaning set forth in
the Exchange Agreement.
"TRANCHE A LENDERS" has the meaning set forth in Section 2.01(a).
"TRANCHE A LOANS" has the meaning set forth in Section 2.01(a).
"TRANCHE A NOTES" has the meaning set forth in Section 2.02.
"TRANCHE B LENDERS" has the meaning set forth in Section 2.01(a).
"TRANCHE B LOANS" has the meaning set forth in Section 2.01(a).
"TRANCHE B NOTES" has the meaning set forth in Section 2.02.
"TRUSTEE" means Marine Midland Bank or any successor thereto as the
Trustee under the Indenture.
"20% LENDER" means any Lender which, together with its Affiliates,
holds Notes representing not less than 20% of the aggregate unpaid principal
amount of the outstanding Notes or which represent an aggregate unpaid principal
amount of the Notes which is not less than the aggregate unpaid principal amount
of the Notes held by any other Person and such other Person's Affiliates.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"UNUSED COMMITMENT AMOUNT" at any time means the Aggregate Commitment
Amount (giving effect to any reduction notice which has been given pursuant to
Section 2.01(d), whether or not it has become effective) reduced by the amount
of all Loans theretofore made; PROVIDED that, at all times after the Commitment
Termination Date, the Unused Commitment Amount will be zero.
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"VANGUARD" means Vanguard Cellular Financial Corporation.
"WARRANT" means any Initial Warrant or Liquidity Warrant.
"WHOLLY-OWNED SUBSIDIARY" of any Person means any other Person of
which all of the Equity Securities are owned by such first Person, either
directly or indirectly through one or more Wholly-Owned Subsidiaries of such
first Person.
1.02 ACCOUNTING PRINCIPLES. The classification, character and
amount of all assets, liabilities, capital accounts and reserves and of all
items of income and expense to be determined, and any consolidation or other
accounting computation to be made, and the interpretation of any definition
containing any financial term, pursuant to this Agreement or any other Loan
Document will be determined and made in accordance with GAAP consistently
applied, unless such principles are inconsistent with the express requirements
of this Agreement; PROVIDED that if, because of a change in GAAP after the date
of this Agreement, Borrower would be required to alter a previously utilized
accounting principle, method or policy in order to remain in compliance with
GAAP, such determination will continue to be made in accordance with Borrower's
previous accounting principles, methods and policies unless Requisite Lenders
agree to allow Borrower to recompute any relevant amount to reflect any such
accounting change.
ARTICLE II
THE LOANS AND RELATED MATTERS
2.01 LOANS.
(a) MAKING OF LOANS. From time to time upon not less than
five Business Days' prior written notice (a "BORROWING REQUEST") to the
Committed Lenders requesting the same and specifying the requested borrowing
date and the account(s) to which the funds constituting such Loans are to be
disbursed, and subject to the terms and conditions of this Agreement and relying
upon the representations, warranties and covenants of Borrower set forth in this
Agreement and the other Financing Documents, at each Closing the Committed
Lenders will make loans (the "LOANS") to Borrower; PROVIDED that (i) Loans will
be made at any Closing by the Committed Lenders pro rata in accordance with
their respective Commitment Amounts, (ii) no Committed Lender will be required
to make Loans in an aggregate amount which exceeds such Committed Lender's
Commitment Amount (giving effect to any notice of any reduction of the Aggregate
Commitment Amount given pursuant to Section 2.01(d), whether or not such
reduction has become effective, and the resulting reductions of the Committed
Lenders' respective Commitment Amounts), and (iii) the aggregate amount of the
Loans to be made at any Closing will be an integral multiple of $500,000. The
Loans to be made at any Closing will be made simultaneously, in two Tranches,
with the Loans made by the Committed Lenders named under the heading "Tranche A
Lenders" on the attached EXHIBIT A (the "TRANCHE A LENDERS") being "TRANCHE A
LOANS" and the Loans made by the Committed Lenders named under the heading
"Tranche B Lenders" on the attached EXHIBIT A "TRANCHE B LENDERS" being
"TRANCHE B LOANS." Borrower may use the proceeds of the Loans for any lawful
purpose which is not
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prohibited by or inconsistent with any provision of any Financing Document. All
Loans will be made in United States dollars and will be disbursed by wire
transfer of immediately available funds in accordance with the instructions
provided by Borrower in the related Borrowing Request. If the Borrower requests
that Loans be made and does not actually borrow such Loans, or borrows such
Loans on a date other than the borrowing date specified in the Borrowing Request
therefor, then Borrower will be liable for, and will indemnify and hold harmless
each Committed Lender in respect of, all reasonable costs, losses, liabilities
and expenses incurred by such Committed Lender by reason of such failure to
borrow or such later borrowing.
(b) FUNDING FEE. In consideration of the making of any
Loan made by a Committed Lender hereunder, at the Closing in question Borrower
will pay to such Committed Lender a funding fee in the amount of 1% of the
amount of the Loan made by such Committed Lender at such Closing.
(c) WARRANTS.
(i) INITIAL WARRANTS. In further consideration of the
making of the Commitments and the making of certain Loans under the PWH Loan
Agreement, Borrower has issued to each Committed Lender an Initial Warrant which
is exercisable for the "Percentage" of the Total Number of Issuable Warrant
Shares specified for such Committed Lender on the attached EXHIBIT A.
(ii) LIQUIDITY WARRANTS. Upon the occurrence of any
Liquidity Event, Borrower will thereupon issue to the Committed Lenders
Liquidity Warrants which are initially exercisable (i.e., without giving effect
to any adjustment pursuant to the terms thereof after the date of such Liquidity
Event) for a number of shares of IWCH Common Stock which is equal to the
quotient of (A) 35% of the greater of (x) $2,000,000 and (y) the unpaid
principal amount of and unpaid accrued interest on the Notes immediately prior
to such Liquidity Event and without giving effect to any payment in respect of
the Notes made in connection with or in anticipation of such Liquidity Event,
divided by (B) the Share Value with respect to such Liquidity Event. Liquidity
Warrants issued pursuant to this clause (ii) to Tranche A Lenders will be
exercisable for shares of IWCH Voting Common Stock, and Liquidity Warrants
issued pursuant to this clause, (ii) to Tranche B Lenders will be exercisable
for shares of IWCH Non-Voting Common Stock. Warrants issued pursuant to this
clause, (ii) will be issued to the Committed Lenders pro rata, in accordance
with their respective Commitment Amounts.
(d) COMMITMENT REDUCTION. At any time and from time to
time prior to the Commitment Termination Date, by written notice to the
Committed Lenders, Borrower may permanently reduce the Aggregate Commitment
Amount by the amount specified in such notice, and such reduction will become
effective as of the date specified in such notice (or, if later, the Business
Day after such notice is given); PROVIDED that at no time may the Aggregate
Commitment Amount be reduced to an amount which is less than the aggregate
unpaid principal amount of the Notes. Any such reduction in the Aggregate
Commitment Amount will reduce the Committed Lenders' respective Commitment
Amounts, pro rata based on such Commitment
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Amounts. Upon any such reduction, the Lenders may attach to this Agreement an
amended and restated EXHIBIT A reflecting all such reductions which have become
effective.
2.02 NOTES. The obligation of Borrower to repay the Loans and
interest thereon will be evidenced by Notes dated the date of the Closing at
which such Loans are made, payable as specified in this Agreement to the order
of the payee thereof, and bearing interest and maturing as provided in this
Agreement. Notes in the form of the attached EXHIBIT F-1 ("TRANCHE A NOTES")
will be issued in respect of the Tranche A Loans, and Notes in the form of the
attached EXHIBIT F-2 ("TRANCHE B NOTES") will be issued in respect of the
Tranche B Loans. The rights of the holders of the Notes with respect to the
payment of the principal thereof and interest thereon will be PARI PASSU with
the rights of the holders of the Indenture Notes. Each Lender will, and is
hereby authorized by Borrower to, endorse on the schedule annexed to any Note an
appropriate notation evidencing the date and amount of each payment of principal
or interest by Borrower with respect thereto, and such notations will be
presumed correct until the contrary is established; PROVIDED that the failure to
make or any error in making any such notation will not limit or expand or
otherwise affect the obligations of Borrower under this Agreement, any Note or
any other Loan Document.
2.03 REPAYMENT OF PRINCIPAL. Borrower will repay in full the entire
unpaid principal amount of the Notes, and all unpaid accrued interest thereon,
on August 10, 2002.
2.04 INTEREST.
(a) INTEREST RATES; PAYMENTS. Interest will accrue from
time to time on the unpaid principal amount of each Note at the Applicable Rate,
based on a 365- or 366-day year (as the case may be) and the actual number of
days elapsed. All unpaid accrued interest on the Notes will be due and payable
in full on the Maturity Date and, to the extent not paid (whether or not due)
will be compounded on each Quarterly Payment Date. In addition, all accrued and
unpaid interest on the Notes will be paid upon the payment in full of the entire
outstanding principal amount of Notes and, if payment in full is not made when
due, thereafter on demand.
(b) ADDITIONAL INTEREST. After the occurrence of and
during the continuance of any Event of Default, the outstanding principal amount
of the Notes, and, to the extent permitted by applicable law, all accrued and
unpaid interest thereon and all other amounts, fees and obligations then due and
payable to any Lender under any Note, this Agreement and any other Loan
Document, will bear interest at a rate per annum which is 200 basis points in
excess of the Applicable Rate then in effect, and such interest will be payable
on demand.
(c) SAVING CLAUSE. Notwithstanding any other provision
contained in this Agreement, the Notes or any of the other Loan Documents to the
contrary, the aggregate interest rate per annum charged with respect to the
Loans (including all charges and fees which are required to be treated as
interest pursuant to applicable laws imposing a maximum rate of interest) will
not exceed the maximum rate per annum permitted by applicable law. If the
aggregate interest rate per annum payable with respect to the Loans (including
all charges and fees which are required to be treated as interest under
applicable laws imposing a maximum rate
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of interest) exceeds the maximum legal rate, then (i) Borrower will pay the
Lenders interest at the maximum permitted rate only, (ii) Borrower will continue
to make such interest payments at the maximum permitted rate until all such
interest payments and other charges and fees payable hereunder or under the
other Loan Documents (in the absence of such legal limitations) have been paid
in full, (iii) any interest in excess of the maximum permitted rate received by
any Lender will, at such Lender's option, be applied to a prepayment of
principal of the Loans or refunded to Borrower, and (iv) neither Borrower nor
any other Person will have any right of action against any Lender for any
damages or penalty arising out of the payment or collection of any such excess
interest.
2.05 PREPAYMENT OF LOANS.
(a) OPTIONAL PREPAYMENTS. Borrower will have the right, at its
option, to prepay the unpaid principal amount of the Notes and/or unpaid
interest accrued thereon in whole at any time or in part from time to time,
without premium or penalty; PROVIDED that Borrower will not prepay all or any
portion of the principal amount of any Note at any time when there remains any
unpaid principal or unpaid accrued interest in respect of any PWH Note, whether
or not such principal or interest in respect of any PWH Note is then due and
payable, or when any other amount is due and payable pursuant to any PWH Loan
Document.
(b) REQUIRED PREPAYMENTS.
(i) UPON LIQUIDITY EVENT. Not later than the Business
Day after the receipt thereof, Borrower will use all or a portion (as may be
necessary) of the cash proceeds (net of related transaction expenses) of any
Liquidity Event to prepay in full (or, if less, to the extent of the full amount
of such net proceeds) the unpaid principal amount of the Notes and unpaid
accrued interest thereon, without premium or penalty, immediately after
repayment in full of unpaid principal of and accrued interest on the PWH Notes
(if any) has been effected.
(ii) UPON OTHER EVENTS. At any time when there remains
no unpaid principal or unpaid accrued interest in respect of any PWH Note
(whether or not any principal or interest in respect of any PWH Note is then due
and payable) and no other amount is due and payable pursuant to any PWH Loan
Document:
(A) FROM EQUITY OR DEBT PROCEEDS. Not later than
the Business Day after receipt thereof (or on the first day when the preceding
condition has been satisfied, if later), Borrower will use all of the cash
proceeds (net of related transaction expenses) from any issuance or sale of any
Equity Securities of Borrower (other than Excluded Securities) or Indebtedness
of Borrower of the type described in clause (i) or clause (ii) of the definition
of the term "Indebtedness," reduced by the Permitted Cash Reserve Amount
immediately prior to such issuance or sale, to prepay the unpaid principal
amount of the Notes and unpaid accrued interest thereon (in whole or in part, as
the full application of such net proceeds, as so reduced, permits), without
premium or penalty.
(B) FROM ASSET SALES. As soon as is practicable
after receipt thereof (or on the first day when the condition described in the
portion of this
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Section 2.05(b)(ii) which precedes clause (A) above has been satisfied, if
later), to the extent not prohibited by the Indenture, Borrower will use (and
will cause its Subsidiaries to distribute or otherwise transfer to Borrower, so
that Borrower may use) all of the cash proceeds (net of related transaction
expenses and an estimate of any resulting taxes required to be paid) in respect
of any Asset Sale (as that term is defined in the Indenture), reduced by the
Permitted Cash Reserve Amount immediately prior to such issuance or sale, to
prepay the unpaid principal amount of the Notes and unpaid accrued interest
thereon (in whole or in part, as the full application of such net proceeds
permits), without premium or penalty.
2.06 PAYMENTS.
(a) NOTICE, PLACE AND MANNER OF PAYMENTS. All payments
(including prepayments) to be made to any Lender in respect of any Note or other
amount under any other Loan Document will be made in lawful money of the United
States of America, by wire transfer of immediately available funds for the
account of the payee thereof to an account(s) specified by such payee. Promptly
after request by Borrower, each Lender will provide Borrower with instructions
for any such wire transfer. If no such instructions are received, then Borrower
may make any such payment (in lawful money of the United States of America) by
cashier's or certified check delivered to the place for notice to such Lender in
accordance with Section 8.05. Any such payment will be deemed received when
such wire transfer is received or when such check is deemed received in
accordance with this Agreement. Any payment deemed received after 1:00 p.m.,
New York, New York, time on any day will be deemed to have been paid by Borrower
on the next succeeding Business Day. In the case of any payment to be made
pursuant to Section 2.05, Borrower will give notice (which may be withdrawn by
contrary notice given on or prior to the date specified for payment, in the case
of any payment to be made pursuant to Section 2.05(a), or any payment
anticipated to be required by Section 2.05(b) if the event in question does not
occur on the specified payment date) to each Lender of each such payment not
later than the thirtieth day preceding the date upon which such payment is to be
made. Such notice will specify the aggregate amount to be paid to all Lenders,
the payment date, and the application of such aggregate payment. Borrower will
be liable for, and will indemnify and hold harmless each Lender in respect of,
all reasonable costs, losses, liabilities and expenses incurred by such Lender
by reason of any failure by Borrower to make any payment when due or on any date
so specified by Borrower, whether or not any notice of such payment is
subsequently withdrawn. All payments under this Agreement or any other Loan
Document will be made without setoff, offset, deduction or counterclaim, free
and clear of all taxes, levies, imports, duties, fees and charges, and without
any withholding, restriction or conditions imposed by any governmental
authority. If Borrower is required by any law to deduct, setoff or withhold any
amount from or in respect of any payment to any Lender under this Agreement or
any other Loan Document, then the amount so payable to such Lender will be
increased as may be necessary so that, after making all required deductions,
setoffs and withholdings, such Lender will receive an amount equal to the sum it
would have received had no such deductions, setoffs or withholding been made.
Once repaid, no amount of any Loan may be reborrowed.
(b) PAYMENTS OF CERTAIN AMOUNTS PRIOR TO APPLICATION TO
NOTES. Prior to their application to the principal amount of any Note or
interest thereon pursuant to
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Section 2.07, all payments made by Borrower will be applied (i) first, to the
payment of all expenses, fees and other amounts (including attorneys' fees and
other legal expenses which may be payable) for which Borrower is obligated to
pay any Collateral Agent under and in accordance with this Agreement or any
other Loan Document, pro rata among the Collateral Agents according to the
respective amounts of such items which are payable to them, and (ii) second, to
the payment of all expenses, fees and other amounts (other than such principal
and interest) for which Borrower is obligated to pay the Lenders under and in
accordance with this Agreement or any other Loan Document, pro rata among the
Lenders according to the respective amounts of such items which are payable to
them.
2.07 APPLICATION OF PAYMENTS.
(a) AS AMONG THE NOTES. Subject to the requirements of
Section 2.06(b), all payments in respect of the Notes will be made pro rata
among the Lenders, based on the aggregate amount of the unpaid accrued interest
on the Notes held by each Lender and the unpaid principal amount of such Notes.
Each Lender agrees that, if such Lender receives a payment which is in excess of
the amount which such Lender is entitled to receive by virtue of the operation
of Section 2.06(b) and the preceding sentence, then such Lender will transfer a
portion of such payment to one or more other Lenders or other Persons in order
that full effect may be given to such Section and the preceding sentence.
(b) AS BETWEEN PRINCIPAL AND INTEREST. Each payment in
respect of any Note will be applied (i) first, to reduce the unpaid accrued
interest on such Note (whether or not such interest is then due and payable), on
a last-accrued, first-paid basis, and (ii) second, to reduce the unpaid
principal amount of such Note.
2.08 COMMITTED LENDERS' REPRESENTATIONS AND WARRANTIES. Each
Committed Lender makes the following representations and warranties (which
representations and warranties Borrower is relying upon in entering into this
Agreement), with respect to itself and not with respect to any other Committed
Lender:
(a) The Notes and the Warrants which such Committed Lender
may acquire (as to such Committed Lender, the "SECURITIES") will be acquired for
such Committed Lender's own account, not as nominee or agent, and not with a
view to the resale or distribution of any part thereof in violation of any
applicable federal or state securities laws, and such Committed Lender has no
present intention of selling, granting a participation in or otherwise
distributing any of the Securities. Such Committed Lender has no contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participations to any other Person with respect to any of the Securities.
(b) Such Committed Lender believes that it has received all
of the information which it considers necessary or appropriate for deciding
whether to acquire Notes and Warrants. Such Committed Lender has had an
opportunity to ask questions and receive answers from Borrower regarding the
terms and conditions of the offering of the Notes and the Warrants and the
business, properties, prospects and financial conditions of the Company. The
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foregoing representation will not limit or modify any representation or warranty
of Borrower or any other Person made in any Financing Document.
(c) Such Committed Lender is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Notes and the
Warrants and has such knowledge and experience in financial or business matters
that it is capable of evaluating the merits and risks of the investment in the
Notes and the Warrants. If such Committed Lender is not a natural person, then
such Committed Investor was not organized for the purpose of acquiring Notes and
Warrants.
(d) Such Committed Lender understands that the Notes and
Warrants are characterized as "restricted securities" under the federal
securities laws, inasmuch as they are being acquired from Borrower in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities my be resold under the 1993 Act only
under certain circumstances. In this connection, such Committed Lender
represents that it is familiar with Rule 144 promulgated under the 1933 Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the 1933 Act.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
As a material inducement to the Committed Lenders to make the
Commitments and the Loans and to each Lender to accept any Note, Borrower hereby
makes the following representations and warranties (which representations and
warranties will survive the execution and delivery of this Agreement and each
issuance of Notes) that, except as set forth on the Disclosure Letter (with a
cross-reference in the Disclosure Letter indicating the Section of this
Article III to which each disclosure thereon relates):
3.01 ORGANIZATION AND QUALIFICATION. Borrower and each Designated
Company is a corporation or other legal entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its purported
organization, possesses all material licenses, permits and authorizations
necessary to own its properties and to carry on its businesses as now being
conducted and as presently proposed to be conducted, and is duly qualified to do
business in each jurisdiction in which it is required to be so qualified, except
insofar as all failures to so qualify, in the aggregate, have not had, and are
not reasonably expected to have, a Material Adverse Effect. Borrower has
provided the initial Committed Lenders with correct and complete copies of the
articles or certificate of incorporation, bylaws and similar organizational or
constitutional documents (including any such items which may come into existence
after the date of this Agreement, and in each case as in effect from time to
time, the "ORGANIZATIONAL DOCUMENTS") of Borrower and each pledgor under any
Pledge Agreement.
3.02 CORPORATE POWER. Borrower and each pledgor under any Pledge
Agreement has the requisite corporate power and authority to execute, deliver
and perform this Agreement and each of the other Financing Documents to which it
is or may become a party.
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Borrower and each Designated Company has all requisite corporate or other power
and authority under the laws of its jurisdiction of incorporation to own and
operate its properties and to carry on its businesses as now conducted and as
presently proposed to be conducted.
3.03 CERTAIN OTHER REPRESENTATIONS. The representations and
warranties made by Borrower in the certificate(s) evidencing the Warrants are
true and correct and are incorporated herein and made by Borrower hereunder.
3.04 CONFLICT.
(a) GENERALLY. Neither the execution and delivery by
Borrower nor any pledgor under any Pledge Agreement of any Financing Document to
which it is or may become a party, nor the borrowings contemplated by the
provisions of this Agreement, nor the execution, issuance and delivery of the
Notes to evidence such borrowings and in payment of interest thereon, nor the
consummation of the transactions herein or therein contemplated to be
consummated by Borrower or any such pledgor, nor compliance by Borrower or any
such pledgor with the terms, conditions and provisions hereof or thereof, will
(i) conflict with or result in a breach or violation of any of the terms,
conditions or provisions of any Organizational Document of Borrower or any
Designated Company, any law (including any usury laws applicable to the Loans or
the Notes), or any agreement, instrument or document to which Borrower or any
Designated Company is a party or by which Borrower, any Designated Company or
any of their respective properties is bound, or constitute a default under or
right to terminate or modify any of the foregoing, or (ii) result in the
creation or imposition of any Lien (other than the Liens in favor of the
Collateral Agent for the benefit of the Lenders arising pursuant to the Loan
Documents and such other matters of the type described in clause (i) or clause
(ii) which in the aggregate have not had, and are not reasonably expected to
have, a Material Adverse Effect).
(b) CERTAIN MATTERS. Without limiting the foregoing: (i)
the Loans, this Agreement and the other Financing Documents constitute a
Permitted Bank Facility (as that term is defined in the Indenture), and (ii)
neither the Indenture, nor any other agreement, instrument or document to which
Borrower, and of its Subsidiaries or any Investee is a party or by which any of
them or any of their respective properties is bound, nor any law, prohibits the
application of the proceeds described in Section 2.05(b) in the manner described
in Section 2.05(b).
3.05 AUTHORIZATION, GOVERNMENTAL APPROVALS. The execution, delivery
and performance by Borrower and each pledgor under any Pledge Agreement of the
Financing Documents to which it is or may become a party, the borrowings
contemplated by the provisions of this Agreement, the execution, issuance and
delivery of the Notes to evidence such borrowings and in payment of interest
thereon, and the consummation by Borrower or any such pledgor of the
transactions herein and therein contemplated to be consummated by Borrower or
any such pledgor have been duly authorized by all necessary corporate action on
the part of Borrower or such pledgor, as the case may be. No authorization,
consent, approval, license or exemption of, and no registration, notice,
qualification, designation, declaration or filing with or to, any court,
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government or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, and no vote, authorization, consent or
approval of directors, shareholders or similar Persons with respect to Borrower
or any such pledgor, is necessary to or for the valid execution and delivery by
Borrower or any such pledgor of the Financing Documents to which it is or may
become a party, the borrowings contemplated by the provisions of this Agreement,
the valid execution, issuance and delivery by Borrower of the Notes to evidence
such borrowings and in payment of interest thereon, or the consummation by
Borrower or any such pledgor of the transactions herein and therein contemplated
to be consummated by Borrower or any such pledgor, other than such items the
absence of which, in the aggregate, have not had, and are not reasonably
expected to have, a Material Adverse Effect.
3.06 VALIDITY AND BINDING EFFECT. Each Financing Document to which
Borrower or any pledgor under any Pledge Agreement is a party has been, and each
Financing Document to which Borrower or any of its Subsidiaries may become a
party will (when it becomes a party) be, duly and validly executed and delivered
by Borrower or such pledgor or Subsidiary, as the case may be, and each such
Financing Document constitutes (or, as the case may be, will constitute) a
legal, valid and binding obligation of Borrower or such pledgor or Subsidiary,
as the case may be, and all such obligations of Borrower or any such pledgor or
Subsidiary are (or, as the case may be, will be) enforceable in accordance with
their respective terms.
3.07 OWNERSHIP OF BORROWER. The Disclosure Letter sets forth the
record and beneficial ownership of the outstanding Equity Securities of Borrower
and the authorized Equity Securities of Borrower. Other than as set forth in
the IWCH Charter, Borrower is not under any obligation (contingent or otherwise)
to redeem or otherwise acquire any Equity Securities of Borrower or any other
Person or to effect any other Distribution.
3.08 NO EVENT OF DEFAULT; COMPLIANCE WITH AGREEMENTS. No event, act
or omission has occurred, and no condition exists, which constitutes an Event of
Default or a Potential Event of Default. Neither Borrower nor any Designated
Company is in violation in any material respect of any provision of any of its
Organizational Documents or any term of any material agreement, instrument,
contract or commitment to which it is a party or by which it or any of its
assets is bound, except in such respects as, in the aggregate, have not had, and
are not reasonably expected to have, a Material Adverse Effect.
3.09 SOLVENCY, ETC. Borrower is solvent and has not and will not
become insolvent as a result of the consummation of the transactions
contemplated by the Financing Documents (including the borrowings under this
Agreement and the use of the proceeds of Loans). Borrower is, and after
giving effect to the transactions contemplated by the Financing Documents
(including the borrowings under this Agreement or the use of the proceeds of
Loans) will be, able to pay its debts as they become due, and Borrower's
property has, and after giving effect to such transactions will have, a fair
salable value (determined on a going concern basis) greater than the amounts
required to pay its debts (including a reasonable estimate of the amount of
all contingent liabilities). Borrower has, and after giving effect to the
transactions contemplated by the Financing Documents (including the
borrowings under this Agreement or
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the use of the proceeds of Loans) will have, adequate capital to conduct its
business. No transfer of property is being made and no obligation is being
incurred in connection with the transactions contemplated by the Financing
Documents (including the borrowings under this Agreement or the use of the
proceeds of Loans) with the intent to hinder, delay or defraud either present
or future creditors of Borrower or any other Person.
3.10 REGULATIONS G AND X. Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock (as
defined, from time to time, in Regulation G promulgated by the Board of
Governors of the Federal Reserve System), and no part of the proceeds of the
Loans will be used by Borrower, any of its Subsidiaries or any Investee, to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock in violation of Regulation G or
Regulation X promulgated by the Board of Governors of the Federal Reserve
System.
3.11 INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY. Neither
Borrower nor any of its Subsidiaries is an "investment company," or under the
control of an "investment company," within the meaning of the Investment Company
Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended. Borrower is not subject to any other law limiting its ability to
incur indebtedness for borrowed money.
3.12 INSURANCE. Neither Borrower nor any Subsidiary of Borrower is
in default with respect to its obligations under any insurance policy maintained
by it, each such policy is in full force and effect, other than such items the
absence of which, in the aggregate, has not had, and are not reasonably expected
to have, a Material Adverse Effect. The insurance coverage of Borrower and its
Subsidiaries is customary for corporations of similar size engaged in similar
lines of business.
3.13 BROKERAGE. Other than pursuant to Section 2.01(b), there are
no claims for brokerage commissions, finders' fees, closing fees or similar
compensation in connection with the transactions contemplated by this Agreement
or any other Financing Document (other than pursuant to this Agreement) based on
any arrangement or agreement binding upon Borrower or any of its Subsidiaries.
3.14 OTHER AGREEMENTS. Borrower is not a party to, and has no
knowledge of, any agreement or arrangement among or with respect to holders of
its Equity Securities other than the agreements described or identified by
category on the Disclosure Letter under the heading "Equity Agreements" (the
"EQUITY AGREEMENTS"). Borrower has delivered to the Committed Lenders, as
requested, correct and complete copies of the Equity Agreements, the Indenture
and the Pledge Agreements, each as currently in effect. Each Pledge Agreement
and each Equity Agreement is in full force and effect.
3.15 COMPLIANCE WITH LAWS. Borrower and each Designated Company has
complied and is in compliance with all laws applicable to it or its business or
property, except in
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such respects as in the aggregate have not had, and are not reasonably expected
to have, a Material Adverse Effect.
3.16 LITIGATION. There are no actions, suits or proceedings
pending or, to Borrower's knowledge, threatened against or affecting Borrower,
any of its Subsidiaries, any Investee or any of their respective businesses or
assets, before any court or governmental department, agency or instrumentality,
which (a) are reasonably expected to prevent the transactions contemplated by
this Agreement or (b) otherwise involve or pertain to Borrower, any of its
Subsidiaries or any Investee (other than, in the case of this clause (b) only,
those which, in the aggregate, have not had, and are not reasonably expected to
have, a Material Adverse Effect).
3.17 AFFILIATED TRANSACTIONS. Other than any Equity Agreement, no
officer, director or similar official of Borrower, no Affiliate of Borrower, no
Person who holds 5% or more of the IWCH Common Stock on a fully-diluted basis,
no individual related by blood or marriage to any Person described in this
Section 3.17, and no entity in which any Person described in this Section 3.17
directly or indirectly owns any beneficial interest of 10% or more, is a party
to any agreement, contract, commitment, transaction or arrangement with Borrower
or any Designated Company having terms which are less favorable to Borrower and
its Subsidiaries, taken as a whole, than those which could reasonably be
expected to be available from an unrelated Person.
3.18 TITLE TO PROPERTIES. Borrower and each Designated Company has
good and marketable title to all of its material properties, assets and other
rights which it purports to own or which are reflected in its books and records,
free and clear of all Liens, except for Permitted Liens, and all such assets are
in good working order and condition, ordinary wear and tear excepted, except in
such respects as, in the aggregate, have not had, and are not reasonably
expected to have, a Material Adverse Effect.
3.19 SEC FILINGS. Borrower has delivered to each Committed Lender,
as requested, correct and complete copies of Borrower's (a) annual report on
Form 10-K promulgated under the 1934 Act for the period ended December 31, 1996,
(b) quarterly reports on Form 10-Q promulgated under the 1934 Act for the
quarters ended March 31, 1997 and June 30, 1997, (c) all reports on any of Forms
10-K, 10-Q or 8-K promulgated under the 1934 Act (or any similar or successor
form) filed or required by the 1934 Act or the Indenture to be filed by Borrower
after the date of this Agreement, in each case as filed with the Commission or
the Trustee or provided pursuant to the Indenture. Borrower and each Designated
Company has filed all reports, registration statements and other documents
required to be filed by it with the Commission under the 1933 Act, the 1934 Act
or the rules and regulations of the Commission or the Indenture at any time, and
all such items complied as to form with the applicable requirements of the 1933
Act, the 1934 Act, such rules and regulations and/or the Indenture, as
applicable. As of their respective dates, the reports described in clauses (a)
through (c) above (the "REPORTS") (including in all cases any exhibits or
schedules thereto or documents incorporated therein by reference) did not
contain any untrue statement of material fact or omit to
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state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
3.20 OUTSTANDING INDEBTEDNESS. Neither Borrower nor any pledgor
under any Pledge Agreement has any Indebtedness other than (a) the Loans, (b)
the Indebtedness represented by the Indenture Notes, (c) Indebtedness owed to
Borrower or any of its Subsidiaries and (d) Indebtedness which is incurred after
the date of this Agreement and which is permitted by Section 5.02(a) to be
incurred.
3.21 ERISA. With respect to each Plan: (A) the Plan has been
administered in compliance with ERISA and the Internal Revenue Code in all
material respects; (B) no director or employee of Borrower, any of its
Subsidiaries or any Investee has been involved in any prohibited transactions
(as defined in ERISA) or breach of fiduciary responsibility that could result in
any material liability to the Plan, Borrower, any of its Subsidiaries or any
Investee; (C) no liability to the PBGC has been incurred by Borrower other than
premiums in the normal course; (D) there is no material risk of termination of
such Plan by the PBGC which would result in any material liability to the Plan,
Borrower, any of its Subsidiaries or any Investee; (E) neither Borrower, any of
its Subsidiaries nor any Investee has incurred any liability for any tax or
civil penalty imposed by Section 4975 of the Internal Revenue Code or Section
502 of ERISA; and (F) the Plan has not incurred any accumulated funding
deficiency (within the meaning of Section 412 of the Internal Revenue Code and
Section 302(a) of ERISA) whether or not waived.
3.22 FINANCIAL STATEMENTS. The following financial statements have
been provided to the initial Committed Lenders:
(a) audited consolidated and consolidating balance sheets
for the Borrower and its Subsidiaries for the fiscal years ended on each of
December 31, 1994, December 31, 1995 and December 31, 1996, and the related
consolidated and consolidating statements of income and cash flows; and
(b) unaudited consolidated and consolidating balance sheets
for Borrower and its Subsidiaries for the six-month period ended on June 30,
1997, and the related consolidated and consolidating statements of income and
cash flows.
Each of the foregoing financial statements (including in all cases the notes
thereto, if any) is accurate and complete in all material respects, is
consistent with the books and records of the Person in question (which, in turn,
are accurate and complete in all material respects), has been prepared in
accordance with GAAP, consistently applied, and presents fairly the financial
condition, results of operations and/or cash flows (as the case may be) of the
Person in question in accordance with GAAP applied on a consistent basis as of
the dates and for the periods set forth therein (subject to the omission of
footnotes and for normal, immaterial year end adjustments for those financial
statements provided, in the case of interim statements described above). The
fair market value of Borrower's assets, determined on a consolidated basis but
without regard to any Person which is not a Designated Company, is not less than
80% of the fair market value of Borrower's assets, determined on a consolidated
basis.
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3.23 NO MATERIAL ADVERSE CHANGE. Since June 30, 1997 nothing has
occurred (other than in the ordinary course of Borrower's business prior to the
date of this Agreement) or failed to occur, and no condition or fact exists,
with respect to Borrower, any Subsidiary of Borrower, any Investee or otherwise,
except as, in the aggregate, have not had, and are not reasonably expected to
have, a Material Adverse Effect.
3.24 DISCLOSURE. Neither any Financing Document nor any other
agreement, document or certificate when furnished to any Committed Lender by or
on behalf of Borrower or any of its Subsidiaries in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained herein and therein, at the time(s) made,
not misleading, other than as to matters which in the aggregate have not had,
and are not reasonably expected to have, a Material Adverse Effect.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 EFFECTIVENESS OF COMMITMENTS. The effectiveness on the date of
this Agreement of the respective individual Commitments of the Committed Lenders
to make Loans pursuant to this Agreement (such effectiveness being the "INITIAL
CLOSING") are subject to the satisfaction of the conditions set forth below:
(a) REPRESENTATIONS, WARRANTIES, COVENANTS. The
representations and warranties contained in this Agreement and in the other
Financing Documents (considered without regard to any materiality qualification
set forth therein) will be true and correct as of the time of the Initial
Closing as though then made, except in such respects as in the aggregate have
not had, and are not reasonably expected to have, a Material Adverse Effect as
compared with the state of affairs which would exist if all such representations
and warranties were true in all respects; and Borrower, each pledgor under any
Pledge Agreement and each other Person who is not a Lender will have performed
all obligations to be performed by it under the Financing Documents to which it
is a party (considered without regard to any materiality qualification set forth
therein) at or before the time of the Initial Closing, except in such respects
as in the aggregate have not had, and are not reasonably expected to have, a
Material Adverse Effect as compared with the state of affairs which would exist
if such obligations had been complied with in all respects.
(b) DELIVERIES. There will be delivered to such Committed
Lender:
(i) Opinions of Borrower's counsel as to the matters
set forth on the attached EXHIBIT B;
(ii) A duly executed original certificate evidencing
the Initial Warrant to be issued to such Committed Lender as described in
Section 2.01(c)(i);
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(iii) Correct and complete copies of this Agreement,
each other Financing Document executed and delivered or to be executed and
delivered prior to or in connection with the Initial Closing, and all
Organizational Documents of Borrower and each pledgor under any Pledge
Agreement;
(iv) Certified copies of all documents evidencing
corporate action taken by Borrower and its Subsidiaries which are parties
thereto with respect to the Financing Documents;
(v) A certificate executed on behalf of Borrower
certifying that the conditions set forth in Sections 4.01(a), (c) and (d) have
been fully satisfied at the time of the Initial Closing;
(vi) A certificate or certificates, signed by the
secretary or a similar official of Borrower certifying as to the names of the
respective officers or other officials of Borrower who are authorized to sign
this Agreement and the other Financing Documents on Borrower's behalf and as to
specimens of the true signatures of such officials, on which each Lender may
conclusively rely until a revised certificate is similarly so delivered; and
(vii) A certificate of Borrower signed on Borrower's
behalf by Borrower's chief financial officer regarding the matters set forth in
Section 3.09.
(c) OTHER AGREEMENTS. Each of Borrower, the Trustee and
the Collateral Agent will have executed and delivered the Intercreditor
Agreement, and each of the Intercreditor Agreement and each other Financing
Document will be in full force and effect.
(d) FEES AND EXPENSES. Borrower will have paid all fees
and expenses required to be paid pursuant to Section 2.01(b) or Section 8.03.
(e) COMMITMENT AND STRUCTURING FEES. Borrower will have
paid in full the commitment and structuring fees payable by it pursuant to the
letter agreement dated July 28, 1997 among Borrower, PWH, TDI, Vanguard and any
other Person which has become a party thereto.
(f) PROCEEDINGS. All legal proceedings in connection with
the transactions contemplated by this Agreement and the other Financing
Documents will be in form and substance satisfactory to such Committed Lender,
and such Committed Lender will have received all such counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and scope satisfactory to such Committed Lender's
counsel, as such Committed Lender may reasonably request.
4.02 AT ANY LOAN CLOSING. The respective individual obligations of
the Committed Lenders to make Loans at any Closing and the effectiveness thereof
are subject to the satisfaction of the conditions set forth below, any of which
may be waived with respect to any Committed Lender only in a writing to that
effect which is executed by such Committed Lender:
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(a) REPRESENTATIONS, WARRANTIES, COVENANTS. The
representations and warranties contained in this Agreement and in the other
Financing Documents (considered without regard to any materiality qualification
set forth therein) will be true and correct as of the time of such Closing as
though then made, except in such respects as in the aggregate have not had, and
are not reasonably expected to have, a Material Adverse Effect as compared with
the state of affairs which would exist if all such representations and
warranties were true in all respects; and Borrower, each pledgor under any
Pledge Agreement and each other Person who is not a Lender will have performed
all obligations to be performed by it under the Financing Documents to which it
is a party (considered without regard to any materiality qualification set forth
therein) at or before the time of such Closing, except in such respects as in
the aggregate have not had, and are not reasonably expected to have, a Material
Adverse Effect as compared with the state of affairs which would exist if such
obligations had been complied with in all respects.
(b) REQUEST. Such Committed Lender will have timely
received a related Borrowing Request.
(b) DEFAULT. There will be no Event of Default or
Potential Event of Default in existence either prior to or after giving effect
to the making of such Loans or the use of the proceeds thereof, and no Event of
Default will have occurred (whether or not it then exists).
(d) DELIVERIES. There will be delivered to such Committed
Lender:
(i) A duly completed and executed original Note (of
the proper Tranche) in the principal amount of the Loan to be made by such
Committed Lender at such Closing;
(ii) Correct and complete copies of each Financing
Document executed and delivered after the most-recent Closing and prior to or in
connection with such Closing;
(iii) A certificate executed on behalf of Borrower
certifying that the conditions set forth in Sections 4.02(a), (c) and (e) have
been fully satisfied at the time of the making of the Loans; and
(iv) A certificate of Borrower signed on Borrower's
behalf by Borrower's chief financial officer regarding the matters set forth in
Section 3.09.
(e) OTHER AGREEMENTS. Each of the Intercreditor Agreement
and each other Financing Document will be in full force and effect.
(f) FEES AND EXPENSES. Borrower will have paid all fees
and expenses required to be paid pursuant to Section 2.01(b) or Section 8.03.
(g) COMMITMENT. The Commitment Termination Date will not
have occurred.
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ARTICLE V
COVENANTS
5.01 AFFIRMATIVE COVENANTS. Borrower covenants that, until the
later of the Commitment Termination Date and the payment in full of the
principal amounts of the Notes and all accrued interest thereon and all fees,
other amounts and obligations outstanding or payable to any Lender (or
reasonably expected by any Lender to become payable) under this Agreement or any
other Loan Document, Borrower will, and will cause each Subsidiary to:
(a) CONDUCT OF BUSINESS, PRESERVATION OF CORPORATE
EXISTENCE, ETC. Conduct its business in the ordinary course, consistent with
its past practice (if any); preserve and maintain its corporate or other legal
existence, rights, franchises and privileges in the jurisdiction of its
incorporation; and qualify and remain qualified in each other jurisdiction
except insofar as all failures to do so in the aggregate do not have, and are
not reasonably expected to have, a Material Adverse Effect.
(b) PAYMENT OF TAXES. Pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, would
become a Lien upon any of its properties or in the aggregate have, or are
reasonably expected to have, a Material Adverse Effect; PROVIDED that no such
entity will be required to pay any such tax, assessment, charge, levy or claim
which is being contested in good faith and by proper proceedings, so long as
neither such contest nor the existence of such proceedings in the aggregate
have, or are reasonably expected to have, a Material Adverse Effect.
(c) MAINTENANCE OF INSURANCE. Maintain insurance on its
properties and businesses with reputable insurance companies in such amounts, of
such types and covering such casualties, risks and contingencies, as is
ordinarily carried by companies engaged in similar businesses and owning similar
properties in the same general locations, except insofar as all failures to do
so, in the aggregate, have not had, and are not reasonably expected to have, a
Material Adverse Effect
(d) MAINTENANCE OF PROPERTIES. Maintain and preserve its
properties in good working order and condition, ordinary wear and tear excepted,
except where the failure to do so, in the aggregate, has not had, and are not
reasonably expected to have, a Material Adverse Effect.
(e) RECORDS AND BOOKS OF ACCOUNT. Keep adequate records
and books of account, in which complete entries will be made in accordance with
GAAP, consistently applied, reflecting all of its financial transactions.
(f) VISITATION RIGHTS. At any reasonable time, permit any
20% Lender, or any agent or representative of any such Lender (at such 20%
Lender's expense if no Default or Event of Default then exists), to examine and
make copies of and abstracts from its records and books of account, to visit its
properties, and to discuss its affairs, finances and
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accounts with its officers, directors, similar officials and independent
accountants (any such Lender's delivery of an executed copy of this Agreement
evidencing Borrower's or the relevant Subsidiary's consent for such
discussions).
(g) COMPLIANCE WITH LAWS. Comply with the applicable
requirements of all laws, except as such noncompliance in the aggregate does not
have, and is not reasonably expected to have, a Material Adverse Effect.
(h) RELATED DOCUMENTS. Keep, observe and comply with all
of its covenants and obligations which are set forth in the other Financing
Documents.
(i) EFFORTS TO EFFECT CERTAIN TRANSACTIONS. At all times
after any engagement described in Section 7(c)(i) of the Exchange Agreement, use
commercially reasonable efforts to cause a registration statement with respect
to the related offering to become effective and to consummate the sale of such
IWCH Voting Common Stock in such an offering. At all times after any engagement
described in Section 7(c)(iii)(D) of the Exchange Agreement, use commercially
reasonable efforts to effect the offering or sale(s) in question, including
preparing and circulating (or causing the firm or broker so engaged to prepare
and circulate) a customary private offering memorandum with respect to such
offering or sale(s).
(j) CASH RESERVE. In the case of Borrower, cause the sum
of the aggregate amount of its cash on hand, the value of the Cash Equivalents
(as that term is defined in the Indenture) owned by it and the Unused Commitment
Amount at all times to equal or exceed $2,000,000.
(k) ENVIRONMENTAL COMPLIANCE. Promptly take any and all
necessary remedial actions in response to the presence, storage, use, disposal,
transportation, release or discharge of any Hazardous Materials on, under or
about any real property owned, leased or operated by Borrower, any of its
Subsidiaries or any Investee in order to comply with all Environmental Laws,
except in such respects as in the aggregate have not had, and are not reasonably
expected to have, a Material Adverse Effect. In the event Borrower or any
Designated Company undertakes any remedial action with respect to any Hazardous
Material on, under or about any real property owned, leased or operated by
Borrower or any Designated Company, diligently conduct and complete in all
material respects, or cause to be conducted and completed, such remedial action
in compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state, local and foreign
governmental authorities, except to the extent that Borrower's, any of its
Subsidiaries' or any Investees' liability for such presence, storage, use,
disposal, transportation, release or discharge of any Hazardous Material is
being contested in good faith and appropriate reserves therefore have been
established in accordance with GAAP consistently applied, on the financial
records of Borrower.
(l) DESIGNATED COMPANY VALUE. Take such actions (including
designated one or more additional Subsidiaries or Investees as a Designated
Company by written notice to the that effect to the Lenders) as may be necessary
so that at all times the fair market value of Borrower's assets, determined on a
consolidated basis but without regard to any Person
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which is not a Designated Company, is not less than 80% of the fair market value
of Borrower's assets, determined on a consolidated basis.
5.02 NEGATIVE COVENANTS. Borrower covenants that, until the later
of the Commitment Termination Date and the payment in full of the principal
amount of the Notes and all accrued interest thereon and all fees, other amounts
and obligations outstanding or payable to any Lender (or reasonably expected by
any Lender to become payable) under this Agreement or any other Loan Document,
it will not and will not cause or permit any of its Subsidiaries to:
(a) INDEBTEDNESS. In the case of Borrower or any of its
Subsidiaries which is a pledgor under any Pledge Agreement, create, incur,
assume, guarantee or be or remain liable for, contingently or otherwise, or
suffer to exist, any Indebtedness, except for the following:
(i) Indebtedness under this Agreement, the Notes,
the PWH Notes, the Indenture Notes and the Indenture;
(ii) Indebtedness representing intercompany loans and
advances solely among one or more of Borrower, its Subsidiaries and the
Investees;
(iii) Indebtedness all of the proceeds (net of related
transaction expenses) of which are used to repay principal or pay accrued
interest in respect of the Notes or the PWH Notes; and
(iv) Permitted Indebtedness.
(b) NEGATIVE PLEDGE; LIENS. In the case of Borrower or any
of its Subsidiaries which is a pledgor under any Pledge Agreement: (i) create,
assume, incur or suffer to be created, assumed, incurred or to exist any Lien
upon any of its respective properties or assets of any character whether now
owned or hereafter acquired, or upon the income or profits therefrom;
(ii) covenant in favor of any party (other than the Collateral Agent, for the
benefit of the Lenders) that it will not create, assume, incur or suffer to be
created, assumed, incurred or to exist any Lien upon its property or assets of
any character whether now owned or hereafter acquired, or upon the income or
profits therefrom; (iii) permit or acquiesce in the perfection of any security
interest held by any party (other than the Collateral Agent, for the benefit of
the Lenders) against any of the properties or assets of Borrower or any such
pledgor; (iv) transfer any of its respective properties or assets or the income
or profits therefrom for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors; (v) suffer to exist for a period of more than 30 days
after the same has been incurred any Indebtedness which if unpaid would by law
or upon bankruptcy or insolvency, or otherwise, be given priority over its
general creditors; or (vi) sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles or chattel paper (as such terms
are defined in the UCC), with or without recourse; PROVIDED that Borrower or any
such pledgor may create, assume or incur or suffer to be created or incurred or
to exist, and may cause or permit any such pledgor to create, assume or incur or
suffer to be created or incurred or to exist, any Permitted Lien.
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(c) MERGERS, ETC. In the case of Borrower, merge or
consolidate with, or sell, assign, lease, transfer or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to, any Person or
Persons (other than any merger pursuant to which Borrower is the surviving
Person and which does not result in a Change of Control).
(d) DIVIDENDS AND STOCK PURCHASES. Directly or indirectly,
or through any Subsidiary or Investee, declare, make or pay, or incur any
liability to declare, make or pay, any Distribution in respect of any Equity
Securities of Borrower, other than any repurchase, at cost, of Equity Securities
of Borrower held by a person who has ceased to be an employee or consultant of
Borrower which would be permitted by the Indenture (if the Indenture were in
effect at the time of such repurchase) and which is consummated at a time when
no Event of Default or Potential Event of Default exists.
(e) AMENDMENTS OF OTHER AGREEMENTS. Amend, supplement,
modify, terminate, or cause or permit to be amended, supplemented, modified or
terminated, any Core Financing Document or any of its Organizational Documents,
or cause or permit any of its Subsidiaries to effect any such amendment,
supplement, modification or termination, or fail to enforce any provision
thereof, in each case except as, in the aggregate, does not have, and is not
reasonably expected to have, a Material Adverse Effect.
(f) RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as
would be permitted by the Indenture (if the Indenture were in effect at the time
in question), create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction of any kind (other than as set forth in the PWH
Loan Documents) on the ability of any of its Subsidiaries to (i) pay any
Distribution in respect of any of such Subsidiary's capital stock or other
Equity Securities owned by Borrower or any of Borrower's Subsidiaries, (ii) pay
any Indebtedness owed to Borrower or any of Borrower's Subsidiaries, (iii) make
loans or advances to Borrower or any Subsidiaries or (iv) transfer any of its
property or assets to Borrower or any of Borrower's Subsidiaries.
(g) TRANSACTIONS WITH AFFILIATES. Except as would be
permitted by the Indenture (if the Indenture were in effect at the time in
question), enter into, amend, supplement or modify any agreement, contract or
transaction which, if it exists or existed on the date of this Agreement and
were not disclosed on the Disclosure Letter, would constitute a breach of the
representations and warranties set forth in Section 3.17.
(h) CHANGE OF BUSINESS. Conduct or enter into, or cause or
permit any Investee to conduct or enter into, any business other than any
Related Business (as that term is defined in the Indenture).
(i) INDENTURE COVENANTS. In the case of Borrower, fail to
comply with any covenant or obligation under the Indenture or any Indenture
Note.
5.03 REPORTING REQUIREMENTS. Borrower covenants that, until the
later of the Commitment Termination Date and the payment in full of the
principal amount of the Notes and
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all accrued interest thereon and all other amounts, fees and obligations
outstanding or payable to any Lender (or reasonably expected by any Lender to
become payable) under this Agreement or any other Loan Document, it will furnish
to each 20% Lender:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as
practicable and in any event within 45 days after the close of each quarterly
accounting period, unaudited consolidated statements of income and cash flows of
Borrower for such period and for the period from the beginning of its fiscal
year to the end of such quarterly period, and an unaudited consolidated balance
sheet of Borrower as of the close of such quarterly period, setting forth in
comparative form the corresponding figures for the corresponding period of the
preceding fiscal year, all in reasonable detail, certified by Borrower as having
been prepared in accordance with GAAP consistently applied (excluding footnote
disclosures and subject to normal year-end adjustments for recurring accruals).
(b) ANNUAL FINANCIAL STATEMENTS. As soon as practicable
and in any event within 90 days after the close of each fiscal year,
consolidated statements of income, cash flows and stockholders' equity of
Borrower for such fiscal year and a consolidated balance sheet of Borrower as of
the close of such fiscal year, setting forth in comparative form the
corresponding figures for the preceding fiscal year, all in reasonable detail
and certified by KPMG Peat Marwick or another firm of independent certified
public accountants of recognized national standing selected by Borrower and
approved by Requisite Lenders (which approval no Lender will unreasonably
withhold), whose certificate or opinion accompanying such financial statements
will not contain any qualification, exception or limitation which is not
satisfactory to Requisite Lenders.
(c) CERTIFICATE OF COMPLIANCE. Within 30 days after the
end of each monthly accounting period of Borrower, a certificate of Borrower
executed on Borrower's behalf by Borrower's chief financial officer stating that
he or she has caused the provisions of this Agreement to be reviewed and that
nothing has come to his or her attention to lead him or her to believe that any
Event of Default or Potential Event of Default has occurred or exists hereunder
or, if such is not the case, specifying the nature thereof and what action
Borrower has taken, is taking and proposes to take with respect thereto. Each
time financial statements are furnished pursuant to Section 5.03(b), there will
also be delivered to each Lender a statement as of the fiscal year end by the
independent certified public accountants referred to in Section 5.03(b) that
they have caused the provisions of this Agreement to be reviewed and that
nothing has come to their attention to lead them to believe that any Event of
Default or Potential Event of Default has occurred or exists hereunder or, if
such is not the case specifying the nature thereof.
(d) ANNUAL BUDGETS; NOTIFICATION OF DEVIATIONS. Prior to
(but not more than 90 days prior to) the end of each fiscal year, an annual
operating budget prepared on a monthly basis for Borrower and the Designated
Companies for the succeeding fiscal year (displaying anticipated statements of
income, cash flows and balance sheets) and an annual capital budget for Borrower
and its Subsidiaries for the succeeding fiscal year (displaying anticipated
expenditures for capital assets), and promptly upon preparation thereof, any
other
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significant budgets which Borrower or any Designated Company prepares (including
any material revisions of such annual or other budgets).
(e) NOTICES OF DEFAULT. As soon as possible, and in any
event within five Business Days, after Borrower discovers the occurrence of any
Event of Default or Potential Event of Default, a statement of Borrower executed
on Borrower's behalf by Borrower's chief financial officer or president setting
forth details of such Event of Default or Potential Event of Default and the
action with respect thereto taken, or proposed to be taken, by Borrower.
(f) NOTICES OF LITIGATION. Promptly after the commencement
thereof, written notice of all actions, suits and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, other than such matters which, in the
aggregate have not had, and are not reasonably expected to have, a Material
Adverse Effect.
(g) NOTICES OF ADVERSE JUDGMENTS. Promptly after the
institution thereof, written notice of all adverse judgments in excess of
$500,000, or which in the aggregate have had, or are reasonably expected to
have, a Material Adverse Effect, entered by any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, against Borrower or any of its Subsidiaries or any Investee, which
notice will include the dollar amount of any such adverse judgment as well as
any other expected adverse impact on Borrower and its Subsidiaries or the
Investee in question.
(h) MATERIAL ADVERSE CHANGES. Promptly after the
occurrence thereof, written notice of all events, conditions, acts, facts and
omissions (except general economic conditions) which in the aggregate have, or
are reasonably expected to have, a Material Adverse Effect.
(i) IPO AND ASSET SALE EFFORTS. At the request of any
Requisite Lenders, Borrower will provide such Lenders as Requisite Lenders may
specify a reasonably detailed description of the status of the matters described
in Section 5.01(i) and its and its Subsidiaries' efforts with respect thereto.
Borrower will give each 20% Lender written notice of any material adverse
development, or any abandonment of or material change in its or its Subsidiaries
efforts, with respect to any matter described in Section 5.01(i).
(j) ERISA NOTIFICATIONS.
(i) Promptly after receipt thereof by the plan
administrator, any notice from the Internal Revenue Service or the PBGC relating
to disqualification, termination or the intent to terminate any Plan;
(ii) promptly after receipt thereof by the plan
administrator, any notice from the Internal Revenue Service relating to the
disqualification of any Plan that is qualified under Section 401 of the Internal
Revenue Code;
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(iii) as soon as possible (in any event, within 30
days) after either Borrower or the plan administrator of any Plan knows or has
reason to know that any Reportable Event has occurred which in the aggregate
with all other such occurrences have had, or are reasonably expected to have, a
Material Adverse Effect, a written notice that such Reportable Event has
occurred;
(iv) promptly after filing with the Internal Revenue
Service, the Annual Return IRS Form 5500 (including all schedules thereto) with
respect to any Plan and any application for a waiver of the minimum funding
standards under the Internal Revenue Code; and
(v) together with each notice or copy of a notice or
filing specified in the immediately preceding clauses (i), (ii), (iii) and (iv),
a statement of Borrower's chief financial officer setting forth details as to
all events referred to therein and the action with respect thereto taken, or
proposed to be taken, by Borrower.
(k) COPIES OF REPORTS, FILINGS, ETC. Promptly after the
sending or filing thereof, copies of all proxy statements, financial statements
and reports which Borrower sends to its stockholders or holders of its
Indebtedness, and copies of all regular and periodic reports and all
registration statements Borrower files with the Commission or any governmental
authority which may be the successor therefor, or with any national securities
exchange.
(l) ENVIRONMENTAL NOTICES. Promptly (but in any event
within 15 days) after receipt or discovery of any of the following, written
notice thereof if all such occurrences, events or conditions in the aggregate
have had, or are reasonably expected to have, a Material Adverse Effect:
(i) written notice or claim to the effect that
Borrower or any of its Subsidiaries or any Investee is or may be liable to any
Person as a result of the release or threatened release of any Hazardous
Material;
(ii) written notice that any real or personal
property of Borrower or any of its Subsidiaries or any Investee is subject to
any environmental Lien;
(iii) written notice of violation of, or discovery of
a condition which has resulted or would reasonably be expected to result in a
violation of, any requirement of law involving environmental, health or safety
matters; or
(iv) written notice of the commencement of any
judicial or administrative proceeding or investigation alleging a violation of
any requirement of law involving environmental, health or safety matters or
subjecting Borrower or any of its Subsidiaries or any Investee to environmental
liabilities or costs.
Upon written request by any 20% Lender, Borrower shall submit to Lender a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issues identified in any notice or report
required pursuant to this Section 5.03(m) and any other environmental, health or
safety compliance obligation, remedial obligation or liability.
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(m) INFORMATION CONCERNING DESIGNATED COMPANIES. As and
when received, all reports and other information received by Borrower or any of
its Subsidiaries with respect to any Designated Company.
(n) OTHER INFORMATION. Such other information with respect
to the business, properties, condition or operations, of Borrower, any of its
Subsidiaries or any Investee as any 20% Lender may from time to time reasonably
request.
ARTICLE VI
DEFAULT
6.01 EVENTS OF DEFAULT. An "EVENT OF DEFAULT" means the occurrence
of any event (or the date, in the case of Section 6.01(o)) described in this
Section 6.01:
(a) Borrower defaults in the payment of (i) any principal
amount with respect to any of the Notes when due, whether at maturity, by
acceleration or otherwise, (ii) any interest with respect to any of the Notes
when due or (iii) any other amount required to be paid to any Lender or the
Collateral Agent under this Agreement or any other Loan Document when due
(unless the same is being contested in good faith), and, in the case of any
occurrence described in clause (iii) above, the default in payment continues
uncured for a period of five or more days;
(b) Borrower or any Designated Company (other than Syarikat
Telefon Wireless (M) Sdn Bhd, or PWH, in each case so long as such Person is not
a Restricted Subsidiary, as that term is defined in the Indenture) defaults in
(i) the payment of any principal of or any interest, premium or other amount due
and payable with respect to any Indebtedness with an aggregate principal amount
in excess of $500,000 beyond any period of grace provided with respect thereto
or (ii) the performance or observance of any other covenant, agreement, term or
condition contained in any agreement or instrument with respect to any such
Indebtedness, if in either case the effect of such default is to cause (whether
automatically or by acceleration), or permit the holder of such Indebtedness to
cause, after the expiration of any applicable cure period, such obligation to
become due prior to its stated maturity;
(c) The representations and warranties made by Borrower or
any of its Subsidiaries in this Agreement or in any other Core Financing
Document, including or in any schedule, certificate or financial statement
furnished to any Lender or the Collateral Agent pursuant to the provisions
thereof, considered without regard to any materiality qualification set forth
therein, were as of the time made or furnished false or misleading in such
respects as in the aggregate have had, or are reasonably expected to have, a
Material Adverse Effect as compared with the state of affairs which would exist
if all such representations and warranties were in all respects true and not
misleading;
(d) Any Core Loan Document or any material provision
thereof ceases to be in full force and effect or is declared to be null and void
by a court of competent jurisdiction, or any material portion of the collateral
described in any Core Loan Document is attached, seized, subjected to a writ,
warrant, assessment or Lien (other than a Permitted Lien) or
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levied upon or comes within the control of any other creditor of any Person
other than any Collateral Agent;
(e) Borrower defaults in the performance of or compliance
with any provision of Section 5.02;
(f) Borrower or any of its Subsidiaries defaults in the
performance of or compliance with any other covenant, condition or provision of
this Agreement or any other Core Financing Document and such default continues
for a period of 60 days after the occurrence thereof, except where all such
defaults, in the aggregate, have not had, and are not reasonably expected to
have, a Material Adverse Effect;
(g) (A) There is entered against Borrower a final judgment
which, together with all other undischarged final judgments against Borrower,
exceeds $500,000, if, 30 days after the entry thereof, such judgment has not
been fully discharged or execution thereof stayed pending appeal, or if, 30 days
after the expiration of any such stay, such judgment has not been fully
discharged, or (B) there is entered against Borrower, any of its Subsidiaries or
any Investee a final judgment which, together with all other undischarged final
judgments against Borrower, any of its Subsidiaries or any Investee, has had or
are reasonably expected to have a Material Adverse Effect, if, 30 days after the
entry thereof, such judgment has not been fully discharged or execution thereof
stayed pending appeal, or if, 30 days after the expiration of any such stay,
such judgment has not been fully discharged;
(h) Any order, judgment, decree or injunction is entered
against Borrower or any Designated Company requiring the dissolution or split up
of Borrower or any Designated Company or preventing Borrower or any Designated
Company from conducting all or any material part of its business, and such
order, judgment, decree or injunction remains undischarged or unstayed for more
than 30 days;
(i) A proceeding is instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
Borrower or any Designated Company in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or for
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Borrower or any Designated Company or for
any substantial part of the property of any of them, or for the winding-up or
liquidation of its affairs, and such proceeding remains undismissed or unstayed
and in effect for a period of 60 consecutive days or such court enters a decree
or order granting the relief sought in such proceeding;
(j) Borrower or any Designated Company commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, consents to the entry of an order for relief in an
involuntary case under any such law, or consents to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of Borrower or any Designated Company or for any
substantial part of the property of any of them, or makes a general assignment
for the benefit of creditors, or fails generally to pay its debts as they become
due, or takes any corporate action in furtherance of any of the foregoing;
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(k) Any Core Equity Document or any provision thereof
ceases to be in full force and effect as to Borrower or Borrower or any Person
acting by or on behalf of Borrower denies or disaffirms Borrower's obligations
under any Core Equity Document or Borrower defaults in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any Core Equity Document, in all such cases except where
the same, in the aggregate, have not had, and are not reasonably expected to
have, a Material Adverse Effect of a type described in clause (c) of the
definition of that term;
(l) Any pledgor under any Pledge Agreement or any Person
acting by or on behalf of any such pledgor denies or disaffirms such pledgor's
obligations under any Pledge Agreement, or any such pledgor defaults in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any Pledge Agreement.
(m) Any Plan maintained by Borrower or any of its ERISA
Affiliates is terminated within the meaning of Title IV of ERISA or a trustee is
appointed by an appropriate United States district court to administer any Plan,
or the PBGC (or any successor thereto) institutes proceedings to terminate any
Plan or to appoint a trustee to administer any Plan, or Borrower or any of its
ERISA Affiliates withdraws, either wholly or partially, from any Multiemployer
Plan, if as of the date thereof Borrower's liability and any such ERISA
Affiliate's liability (after giving effect to the tax consequences thereof) to
the Plan participants, the PBGC or the trustees of any Multiemployer Plan (or
any successors thereto) for benefits under the Plan exceeds the then current
fair market value of assets accumulated in such Plan by more than $25,000 in the
aggregate (or in the case of a termination involving Borrower or any of their
ERISA Affiliates as a "substantial employer" (as defined in Section 4001(a)(2)
of ERISA), the withdrawing employer's proportionate share of such shall exceed
such amount) or, in the case of any withdrawal from a Multiemployer Plan, the
amount of withdrawal liability exceeds $25,000 in the aggregate or any Plan that
is qualified under Section 401 of the Internal Revenue Code becomes disqualified
if the aggregate potential loss of tax benefits to Borrower and its Subsidiaries
and their employees is reasonably determined by Requisite Lenders to be in
excess of $25,000;
(n) a Change of Control occurs; or
(o) January 31, 1998, unless on or prior to such date
either (i) Borrower has consummated the sale of IWCH Voting Common Stock
pursuant to the public offering of the type contemplated by Section 7(c)(ii)(B)
of the Exchange Agreement, or (ii) Borrower has abandoned its efforts to effect
such a public offering and Borrower has entered into an engagement agreement
described in Section 7(c)(iii)(D) of the Exchange Agreement.
6.02 CONSEQUENCES OF EVENT OF DEFAULT.
(a) NON-BANKRUPTCY DEFAULTS. If an Event of Default (other
than any Event of Default described in Section 6.01(i) or 6.01(j)) occurs and is
continuing, then Requisite Lenders may at their option terminate the Commitments
and/or declare the unpaid principal balance of the Notes, all interest accrued
thereon and all other liabilities and obligations of
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Borrower and its Subsidiaries under this Agreement and under the other Loan
Documents to be forthwith due and payable, and the same will thereupon become
and be immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived by Borrower (on its
own behalf and on behalf of its Subsidiaries).
(b) BANKRUPTCY. If an Event of Default specified in any of
Sections 6.01(i) and 6.01(j) occurs, then the Commitments will automatically
terminate and any unpaid principal balance of the Notes, all interest accrued
thereon and all other liabilities and obligations of Borrower and its
Subsidiaries under this Agreement and under the other Loan Documents will be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by Borrower (on its own
behalf and on behalf of its Subsidiaries).
6.03 RIGHTS OF SETOFF. To the extent permitted by law:
(a) in case an Event of Default occurs and is continuing,
any Lender will have the right, in addition to all other rights and remedies
available to it, without notice to Borrower, to setoff against and to
appropriate and apply to the unpaid balance of the Notes, all accrued interest
thereon and all other obligations of Borrower under this Agreement and under the
Notes and the other Loan Documents, any debt owing to, and any other funds held
in any manner for the account of Borrower by, such Lender, including all funds
in all deposit accounts (general or special) now or hereafter maintained by
Borrower for its own account with such Lender, and such Lender is hereby granted
a security interest in and lien on all such debts (including all such deposit
accounts) for such purpose;
(b) the right described in clause (a) above will exist
whether or not any Lender or the Collateral Agent has made any demand under this
Agreement or any other Loan Document and whether or not the Notes and such other
obligations are matured or unmatured; and
(c) Borrower hereby confirms each Lender's right of
banker's lien and setoff, as further specified in this Section 6.03, and nothing
in this Agreement or any other Loan Document will be deemed to be a waiver or
prohibition of any Lender's right of banker's lien and setoff.
6.04 OTHER RIGHTS. The rights and remedies of any Lender upon the
occurrence of an Event of Default set forth in Sections 6.02 and 6.03 are
cumulative and in addition to and not in derogation of any other rights each
Lender may have under applicable law, the Financing Documents or other
agreements.
ARTICLE VII
SUCCESSORS AND ASSIGNS; PARTICIPATIONS
7.01 SUCCESSORS AND ASSIGNS IN GENERAL. This Agreement will be
binding upon and, subject to Section 7.02, inure to the benefit of the parties
hereto and their respective
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successors and assigns, except that Borrower may not assign or transfer its
rights under this Agreement or any interest under this Agreement or delegate its
liabilities, obligations or duties, without the prior written consent of
Requisite Lenders. Any Person which is not already a party to this Agreement
and which becomes the holder of any Note will, by virtue of becoming such a
holder, become a party to this Agreement as an additional Lender. The assigning
Lender will give Borrower prompt written notice of any assignment of or
participation in the Loans or any Note. Any Committed Lender may delegate its
Commitment in whole or in part to any other Person, in which event such
Committed Lender will provide to Borrower and each other Committed Lender
written notice of such delegation and a restatement of the attached EXHIBIT A
showing the name and address for notice of such other Person, the Commitment
Amount for such Person and the revised Commitment Amount (which will be zero, in
the case of a delegation in full) for the delegating Committed Lender, whereupon
such Person (if not already a Committed Lender), by virtue of such delegation,
will become a party to this Agreement as an additional Committed Lender;
PROVIDED that, without Borrower's prior consent, no such delegation will relieve
the delegating Committed Lender of the delegated Commitment to the extent it is
not performed by the delegate.
7.02 CONDITIONS. Each Lender may assign or delegate all or any
portion of its interest in and rights and obligations under this Agreement and
the other Financing Documents to any other Person (who will thereupon become a
Lender and/or a Committed Lender as provided in Section 7.01), or grant a
participating or beneficial interest in this Agreement and the other Financing
Documents to any other Person (a "PARTICIPANT"), subject to the following
conditions:
(a) SECURITIES LAWS. Such assignment, delegation or
participation is not made under such circumstances as may constitute a violation
of the 1933 Act or regulations thereunder, or any other applicable securities
laws.
(b) PARTICIPATING AGENT. In the case of any such
participating or beneficial interest, the granting Lender enters into an agency
relationship with all Participants of such Lender, pursuant to which such
Lender, as agent (in such capacity, the "PARTICIPATING AGENT"), will administer
its interest with respect to the Loans and the Notes on behalf of itself as a
Lender and all of its Participants. All payments to be made by Borrower for the
benefit of such Lender under this Agreement and the other Financing Documents
will be made to such Lender, as the Participating Agent, and all communications
by Borrower to such Lender or any of its Participants will be addressed to or in
the care of the Participating Agent. If the granting Lender is a Committed
Lender, then no such participating or beneficial interest will reduce such
Lender's Commitment or obligation to make Loans or create, as between Borrower
and any Participant, a right to require, or an obligation of, such Participant
to make any Loan or portion thereof.
7.03 FURTHER ASSURANCE. Borrower will, from time to time at the
request of any Lender, execute and deliver to such Lender or to such party or
parties as such Lender may designate any and all further instruments (including
substitute or replacement Notes) as may in
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the opinion of such Lender be reasonably necessary or advisable to give full
force and effect to any transfer contemplated by this Article VII.
ARTICLE VIII
MISCELLANEOUS
8.01 MODIFICATIONS, AMENDMENTS OR WAIVERS. The provisions of this
Agreement, the Notes and the other Core Financing Documents may be modified,
amended or waived, but only by a written instrument signed by Borrower and
Requisite Lenders (and, in the case of the Intercreditor Agreement, any Pledge
Agreement or any agreement, instrument or document delivered thereunder, the
Collateral Agent and, if required by the terms thereof, the Trustee), except
Sections 6.01(a) and 6.02(a), and all provisions of this Agreement relating to
the rate at which interest accrues on the Loans and the Notes or the times at
which such interest becomes payable or the rate at which the Loans or the Notes
are to be repaid, may be amended only with the prior written consent of Borrower
and all Lenders and Committed Lenders.
8.02 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED. No
delay or failure of any Lender or the Collateral Agent in exercising any right,
power or remedy under this Agreement or any other Financing Document will affect
or operate as a waiver thereof, nor will any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such a right, power or
remedy preclude any further exercise thereof, or of any other right, power or
remedy. The rights and remedies of each Lender and the Collateral Agent under
this Agreement and each other Financing Document are cumulative and not
exclusive of any rights or remedies which it would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of any Lender
of any breach or default or any such waiver of any provision or condition of
this Agreement or any other Financing Document must be in writing and will be
effective only to the extent in such writing specifically set forth.
8.03 REIMBURSEMENT OF EXPENSES; TAXES. Borrower will upon demand
pay or reimburse TDI and Vanguard for all reasonable out-of-pocket expenses,
including fees and expenses of counsel for TDI or Vanguard, from time to time
(i) arising in connection with the preparation and execution of this Agreement
and the other Financing Documents (which amount will be limited to $35,000 in
the case of Vanguard, in respect of this Agreement, the other Financing
Documents and the PWH Loan Documents), (ii) relating to any amendments, waivers
or consents pursuant to the provisions hereof or thereof, (iii) arising in
connection with any partial or total repayment of the Loans or Notes, or
(iv) arising in connection with the enforcement of the provisions of this
Agreement or any other Financing Document. Borrower will pay and save each
Lender harmless from all liability for any stamp or other similar taxes which
may be payable in connection with this Agreement and the other Financing
Documents or the performance of any transactions contemplated hereby or thereby
(but excluding any franchise tax, income tax, gross receipts tax or other
similar tax).
8.04 HOLIDAYS. Whenever any payment or action to be made or taken
under this Agreement or any other Loan Document is stated to be due or required
to be taken on a day which is not a Business Day, such payment or action will be
made or taken on the next following
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Business Day, and such extension of time will be included in computing interest
or fees, if any, in connection with such payment or action.
8.05 NOTICES. All notices and other communications given to or made
upon any party hereto in connection with this Agreement or any other Loan
Document will, except as otherwise expressly provided herein or therein, be in
writing and mailed, telecopied or delivered by hand or by reputable overnight
courier service to the respective parties, as follows:
Borrower: c/o International Wireless Communications, Inc.
400 S. El Camino Real
Suite 1275
San Mateo, CA 94402
Attention: Douglas S. Sinclair
Aarti C. Gurnani
Telecopy: (650) 548-1842
with a copy (which will not constitute notice) to:
Brooks Stough, Esq.
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigan, LLP
155 Constitution Drive
Menlo Park, CA 94025
Telecopy: (650) 321-2800
To any Committed Lender or Lender:
To the address (if any) for such Committed Lender or Lender set
forth on the attached Exhibit A, with any copy described on
such EXHIBIT A
or in accordance with any subsequent written direction from the recipient party
to the sending party made in accordance with this Section 8.05. All such
notices and other communications will, except as otherwise expressly provided in
this Agreement or any other Loan Document, be effective upon (a) delivery if
delivered by hand; (b) on the Business Day after deposited with a reputable
overnight courier service, delivery charges prepaid; (c) on the third Business
Day after deposited in the mail, postage prepaid; or (d) in the case of
telecopy, when received.
8.06 SURVIVAL. All representations, warranties, covenants and
agreements of Borrower or any of its Subsidiaries contained in this Agreement or
any other Financing Document or made in writing in connection herewith or
therewith will survive the execution and delivery of this Agreement, the making
of the Loans hereunder and the issuance of the Notes. The provisions of this
Article VIII will survive repayment of the Loans and the other amounts payable
to the Lenders and under this Agreement and the other Financing Documents and
the termination of this Agreement and the other Financing Documents.
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8.07 GOVERNING LAW; WAIVERS AND JURISDICTION.
(a) GOVERNING LAW. This Agreement, the Notes and the other
Loan Documents will in all respects be governed by, and construed and enforced
in accordance with, the laws of the State of New York, without giving effect to
any choice of law or conflict of law rules or provisions (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York, except that the
filing, perfection, effect of perfection and enforcement of security interests
and liens under the Pledge Agreements in other jurisdictions will be governed by
the laws of the applicable jurisdictions in accordance with the UCC as in effect
in the State of New York.
(b) WAIVERS. To the extent permitted by law, each party
hereto hereby waives personal service of any and all process upon it in
connection with this Agreement or any other Financing Document and agrees that
all such service of process may be made as provided in Section 8.05, and service
so made will be deemed to be completed as provided in Section 8.05. In
addition, Borrower and each Lender and Committed Lender each hereby waives trial
by jury, any objections based on FORUM NON CONVENIENS and any objections to
venue of any action arising out of, connected with, related to or incidental to
the transactions contemplated by or the relationships established in connection
with this Agreement, the Notes and the other Financing Documents.
(c) EXCLUSIVE JURISDICTION. Except as provided in Section
8.07(d), all disputes among or between any Lender or Committed Lender and
Borrower arising out of, connected with, related to or incidental to the
transactions contemplated by or the relationship established between them in
connection with this Agreement, the Notes or the other Financing Documents, and
whether arising in contract, tort, equity or otherwise, will be resolved only by
state or federal courts located in New York County, New York, and Borrower and
each Lender and Committed Lender hereby consents and submits to the jurisdiction
of any state or federal court located within such county and state. The
Lenders, the Committed Lenders and Borrower acknowledge, however, that any
appeals from those courts may be required to be heard by a court located outside
of New York County, New York. Borrower and each Lender and Committed Lender
waives in all disputes any objection that it may have to the location of the
court considering the dispute. Nothing in this Section 8.07 will affect the
right of any Lender or Committed Lender or Borrower to serve legal process in
any other manner permitted by law or affect the right of any Lender or Committed
Lender to bring any action or proceeding against Borrower or its property in the
courts of any other jurisdiction.
(d) OTHER JURISDICTIONS. Borrower and each Lender agrees
that any Lender or Committed Lender or Borrower will have the right to proceed
against Borrower or any Lender or Committed Lender in a court in any location to
enable any Lender or Committed Lender or Borrower to enforce a judgment or other
court order obtained in any proceeding brought in accordance with Section
8.07(c) and entered in favor of such Lender or Committed Lender or Borrower.
Borrower and each Lender or Committed Lender waives any objection that it may
have to the location of the court in which any Lender or Committed Lender or
Borrower has commenced a proceeding described in this Section 8.07(d).
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8.08 HEREIN, ETC. Words such as "herein," "hereunder," "hereof" and
the like will be deemed to refer to this Agreement as a whole and not to any
particular document or Article, Section or other portion of a document.
Section, clause, Exhibit and Schedule references contained in this Agreement are
references to Sections, clauses, Exhibits and Schedules in or attached to this
Agreement, unless otherwise specified. Each defined term used in this Agreement
has a comparable meaning when used in its plural or singular form. Each
gender-specific term used in this Agreement has a comparable meaning whether
used in a masculine, feminine or gender-neutral form. As used in this
Agreement, the terms "knowledge" or "aware" will include the actual knowledge
and awareness of the Person in question, and the knowledge and awareness that
such Person would have obtained after making reasonable inquiry and exercising
reasonable diligence with respect to the matter in question. Whenever the term
"including" is used in this Agreement (whether or not that term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) in connection with a listing of items within a particular
classification, that listing will be interpreted to be illustrative only and
will not be interpreted as a limitation on, or an exclusive listing of, the
items within that classification. Each reference in this Agreement to any law
will be deemed to include such law as it hereafter may be amended, supplemented
or modified from time to time and any successor thereto.
8.09 SEVERABILITY. Whenever possible, each provision of this
Agreement and each other Financing Document will be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement or any other Financing Document is held to be prohibited by or invalid
under applicable law in any jurisdiction, such provision will be ineffective
only to the extent of such prohibition or invalidity, without invalidating any
other provision of this Agreement or any other Financing Document.
8.10 HEADINGS. Section and subsection headings in this Agreement
and each other Financing Document are included for convenience of reference
only and will not constitute a part of this Agreement or any other Financing
Document for any other purpose.
8.11 COUNTERPARTS. This Agreement and each other Financing Document
may be executed in multiple counterparts and by any party hereto or thereto on
separate counterparts, each of which, when so executed and delivered, will be an
original, but all such counterparts will together constitute one and the same
instrument.
8.12 BROKERS FEES. Borrower will indemnify each Lender and
Committed Lender and hold it harmless for any liability, loss or expense
(including reasonable attorneys' fees) arising from any claim for brokerage
commissions, finders' fees or similar compensation in connection with any
agreement or arrangement binding upon Borrower, any of its Subsidiaries or any
of their Affiliates.
8.13 INDEMNIFICATION.
(a) GENERALLY. In consideration of each Lender's and each
Committed Lender's execution and delivery of this Agreement and such Committed
Lender's making of the Commitments and the Loans hereunder and each other
Lender's acquisition of a Note, and in
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addition to all other obligations of Borrower under this Agreement and the other
Loan Documents, Borrower will defend, protect, indemnify and hold harmless each
Committed Lender and each Lender and its Participants and the Collateral Agent,
and all of their respective officers, directors, employees and agents (including
those retained in connection with the transactions contemplated by this
Agreement and the other Loan Documents) (collectively, the "INDEMNITEES") from
and against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements, but excluding claims and losses arising from such
Indemnitee's breach hereof or thereof or such Indemnitee's gross negligence or
willful misconduct (the "INDEMNIFIED LIABILITIES"), incurred by the Indemnitees
or any of them as a result of, or arising out of, or relating to (i) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the Loans, (ii) the execution, delivery,
performance or enforcement of this Agreement, the Notes or the other Loan
Documents and any instrument, document or agreement executed pursuant hereto by
any of the Indemnitees or (iii) such Lender's or Committed Lender's status as a
lender to Borrower or the Collateral Agent's status as an agent of the Lenders.
To the extent that the foregoing undertaking by Borrower may be unenforceable
for any reason, Borrower will make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
(b) ENVIRONMENTAL LIABILITIES. Without limiting the
generality of the indemnity set out in Section 8.13(a), Borrower hereby further
agrees to defend, protect, indemnify and hold harmless each Indemnitee from and
against any and all actions, causes of action, suits, losses, liabilities,
damages, injuries, penalties, fees, costs, expenses and claims of any and every
kind whatsoever paid, incurred or suffered by, or asserted against, any
Indemnitee for, with respect to, or as a direct or indirect result of, the past,
present or future environmental condition of any property owned, operated or
used by Borrower, any of its Subsidiaries or any Investee, their respective
predecessors or successors or of any offsite treatment, storage or disposal
location associated therewith, including the presence on or under, or the
escape, seepage, leakage, spillage, discharge, emission, release, or threatened
release into, onto or from, any such property or location of any Hazardous
Material (including any losses, liabilities, damages, injuries, penalties, fees,
costs, expenses or claims asserted or arising under the Comprehensive
Environmental Response, Compensation and Liability Act, any so-called
"Superfund" or "Superlien" law, or any other Environmental Law or other,
regardless of whether caused by, or within the control of, Borrower or any
Subsidiary of Borrower but excluding any such actions, causes of action, suits,
losses, liabilities, damages, injuries, penalties, fees, costs, expenses and
claims arising as a direct result of the willful misconduct or gross negligence
of such Indemnitee.
(c) CONTRIBUTION. To the extent that the undertaking to
indemnify, pay and hold harmless by Borrower under this Section 8.13 may be
unenforceable because it violates any law or public policy, Borrower will
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law or public policy to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnities or any of them.
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8.14 PAYMENT SET ASIDE. To the extent that Borrower makes a payment
or payments to any Lender or Committed Lender or the Collateral Agent hereunder
or under the Notes or any other Loan Document or any Lender or Committed Lender
or Collateral Agent enforces its security interests or rights or exercises its
right or setoff hereunder or thereunder, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to Borrower, a trustee, receiver or any other Person under any law (including
any bankruptcy law, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied and all Liens created under the Loan
Documents will be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
8.15 COMPLETE AGREEMENT. Except as otherwise expressly set forth
herein, this Agreement, the Notes and the other Financing Documents embody the
complete agreement and understanding of the parties hereto and thereto and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, whether written or oral, which may have related to the
subject matter hereof in any way, and such agreements may not be contradicted or
varied by evidence of prior, contemporaneous or subsequent oral discussions or
understandings of the parties. The parties hereto acknowledge and agree there
are no oral understandings or agreements between them with respect to the
subject matter hereof or thereof. Borrower and the Lenders acknowledge that the
Exchange Agreement will be effective and binding upon each of them,
notwithstanding the fact that it may not be executed and delivered by each
Initial Lender.
8.16 NO STRICT CONSTRUCTION. The language used in this Agreement
and the other Loan Documents will be deemed to be the language chosen by the
parties to express their mutual intent. In the event an ambiguity or question
of intent or interpretation arises, this Agreement and the other Loan Documents
will be construed as if drafted jointly by the parties, and no presumption or
burden of proof will arise favoring or disfavoring any Person by virtue of the
authorship of any of the provisions of this Agreement or any other Loan
Document.
8.17 REGISTER. Borrower will maintain a register in which it will
record the initial ownership of the Notes and changes in the ownership of Notes
of which it receives notice. For purposes of this Agreement (to the extent
Borrower so maintains such register), the holder of any Note indicated at any
time in such register will be the holder of such Note.
* * * * *
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Loan Agreement as of the day and year first
above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By: /s/ Douglas S. Sinclair
---------------------------------
Its: Executive Vice President
---------------------------------
TORONTO DOMINION INVESTMENTS, INC.
By: /s/ Martha L. Gariepy
---------------------------------
Its:
---------------------------------
VANGUARD CELLULAR FINANCIAL
CORPORATION
By: /s/ Haynes Griffin
---------------------------------
Its:
--------------------------------
[OTHER LENDERS]
<PAGE>
EXHIBIT A
COMMITMENT
COMMITTED LENDER'S NAME AND ADDRESS AMOUNT PERCENTAGE(1)
- ----------------------------------- ------ ----------
TRANCHE A LENDERS
Vanguard Cellular Financial Corporation
2002 Pisgah Church Road
Suite 300
Greensboro, NC 27455
Attention: Haynes Griffin
Telecopy: (910) 545-2233
with a copy (which will not constitute notice) to: [$_____] ____
- -------------------------------------------------
Joe Blum
Latham & Watkins
One Angel Court
London EC2R 7HJ
England
Telecopy: 011 44 171 374 4460
TRANCHE B LENDERS
Toronto Dominion Investments, Inc.
909 Fanin Street
Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Fax No. (713) 652-2647
with copies (which will not constitute notice) to:
- -------------------------------------------------
Toronto Dominion Investments, Inc.
31 West 52nd Street
20th Floor
New York, NY 10019
Attention: Brian A. Rich
Telecopy: (212) 974-8429
------------
------------
Total $7,000,000
- -------------------------
(1) [Will equal the Lender's percentage of the total commitment.]
<PAGE>
EXCHANGE AGREEMENT
This Exchange Agreement is made as of August 18, 1997 among
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC., a Delaware corporation
("IWCH"), the Persons named on the attached EXHIBIT A (the "INITIAL HOLDERS"),
and the other Noteholders and Warrantholders who may hereafter become parties
hereto.
On and/or after the date of this Agreement, IWCH will issue certain
promissory notes pursuant to a Loan Agreement dated as of the date of this
Agreement among IWCH and the Initial Holders (as in effect from time to time,
the "IWCH LOAN AGREEMENT").
On and/or after the date of this Agreement, Pakistan Wireless Holdings
Limited, a Mauritius private company and an indirect wholly-owned subsidiary of
IWCH ("PWH"), will issue certain promissory notes pursuant to a Loan Agreement
dated as of the date of this Agreement among PWH and the Initial Holders (as in
effect from time to time, the "PWH LOAN AGREEMENT").
As a material inducement to the Initial Holders to agree to make, and
to make, loans to IWCH and PWH pursuant to the IWCH Loan Agreement and the PWH
Loan Agreement (collectively, the "LOAN AGREEMENTS"), and to induce the
Noteholders to acquire and hold the Notes referred to in this Agreement and to
induce the Warrantholders to acquire and hold the Warrants referred to in this
Agreement, IWCH has entered into this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements set forth herein and intending to be legally bound
hereby, covenant and agree as follows:
1. DEFINITIONS. In addition to any other terms elsewhere defined in
this Agreement, the following terms have the respective meanings set forth
below:
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such first
Person. For purposes of this definition, "control" will include the direct or
indirect ownership of, and/or right to vote or control the vote with respect to,
Equity Securities representing 20% or more of the aggregate voting power of such
first Person's voting Equity Securities (either based on the quantity of such
first Person's voting Equity Securities which are actually outstanding or on a
fully-diluted basis).
"APPRAISED VALUE" has the meaning set forth in Section 5(a).
"APPRAISER" has the meaning set forth in Section 5(b).
"BUSINESS DAY" has the meaning set forth in the IWCH Loan Agreement.
<PAGE>
"COMMITMENT PERCENTAGE" at any time means a fraction, the numerator of
which is the Aggregate Commitment Amount (as that term is defined in the IWCH
Loan Agreement) at such time and the denominator of which is $7,000,000.
"COMMON STOCK" means Voting Common Stock and Non-Voting Common Stock.
"DISTRIBUTION" means any dividend or other distribution or payment by
a Person (other than a natural person) with respect to its Equity Securities, or
any redemption, acquisition, purchase or other retirement of any Equity Security
of such Person, any of its Subsidiaries, or any Person of which such Person is a
Subsidiary or an Investee, in each case whether in cash, securities or other
property.
"EARNED WARRANT PERCENTAGE" has the meaning set forth in Section 7(b).
"EQUITY SECURITY" of any Person means any capital stock, partnership
interest, membership interest or other ownership or equity interest or security
of or in such Person, any phantom equity, profit participation, appreciation or
similar right with respect to such Person, or any security or other right which
directly or indirectly is convertible into or exercisable or exchangeable for
any other Equity Security of such Person.
"EXCHANGE NOTICE" means any notice of a desired exchange of Notes
given by Supermajority IWCH Noteholders or Majority PWH Noteholders pursuant to
Section 2(a) or Section 3(a), as the case may be.
"EXCHANGE STOCK" means (i) Voting Series G Stock, in the case of any
exchange of any IWCH Tranche A Note pursuant to Section 2 or Section 2A, (ii)
Non-Voting Series G Stock, in the case of any exchange of any IWCH Tranche B
Note pursuant to Section 2 or Section 2A, (iii) Voting Series H Stock, in the
case of any exchange of any PWH Tranche A Note pursuant to this Agreement, and
(iv) Non-Voting Series H Stock, in the case of any exchange of any PWH Tranche B
Note pursuant to this Agreement.
"FIRST OFFER NOTICE" has the meaning set forth in Section 6(d).
"HOLDER" means any Noteholder or Warrantholder.
"INITIAL HOLDERS" has the meaning set forth in the preamble to this
Agreement.
"INITIAL WARRANTS" has the meaning set forth in the IWCH Loan
Agreement.
"INVESTEE" means any Person (other than a Subsidiary of IWCH) in which
IWCH, any of its Subsidiaries or any other Investee has any direct or indirect
Investment (either itself or through one or more of its direct or indirect
Subsidiaries or Investees), including any Subsidiary of any other Investee.
"INVESTMENT" means any amount paid for liabilities or assets of, or
loaned, advanced or contributed to, or acquisition for consideration of any
Equity Security or
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Indebtedness of, any other Person, or any other item that is or would be
GDSVFH\56899.1classified as an investment on a balance sheet prepared in
accordance with generally accepted accounting principles. The term "Investment"
will include the acquisition of a company, business or product line.
"IWCH" has the meaning set forth in the preamble to this Agreement.
"IWCH CHARTER" means the Amended and Restated Certificate of
Incorporation of IWCH, as in effect on the date of this Agreement (in the form
attached as an exhibit to the IWCH Loan Agreement).
"IWCH LOAN AGREEMENT" has the meaning set forth in the preamble to
this Agreement.
"IWCH NOTE EXCHANGE PRICE" has the meaning set forth in Sections 2(c).
"IWCH NOTEHOLDER" means any holder of any IWCH Note.
"IWCH NOTES" means the Notes, as that term is defined in the IWCH Loan
Agreement.
"IWCH TRANCHE A NOTE" means any Tranche A Note, as that term is
defined in the IWCH Loan Agreement.
"IWCH TRANCHE B NOTE" means any Tranche B Note, as that term is
defined in the IWCH Loan Agreement.
"LAW" will be construed broadly to include any foreign, national,
federal, state, provincial, local or other law, rule, regulation, statute,
ordinance, judgment, decree, order, policy, guideline, directive, common law,
pronouncement, treaty, accord or similar item of any legislative, executive,
judicial or other governmental entity or authority.
"LIQUIDITY EVENT" has the meaning set forth in the IWCH Loan
Agreement.
"LIQUIDITY REPAYMENT EVENT" means any repayment in full of the
principal amount of and accrued interest on the Notes in connection with a
Liquidity Event described in clause (i) or clause (iii) of the definition of the
term "Liquidity Event" set forth in the IWCH Loan Agreement.
"LIQUIDITY WARRANTS" has the meaning set forth in the IWCH Loan
Agreement.
"LOAN AGREEMENTS" has the meaning set forth in the preamble to this
Agreement.
"MAJORITY IWCH NOTEHOLDERS" means holders of IWCH Notes which
represent a majority of the unpaid principal amount of the outstanding IWCH
Notes.
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<PAGE>
"MAJORITY NOTEHOLDERS" means Majority IWCH Noteholders or Majority PWH
Noteholders, as the context requires.
"MAJORITY PWH NOTEHOLDERS" means holders of PWH Notes which represent
a majority of the unpaid principal amount of the outstanding PWH Notes.
"NON-VOTING COMMON STOCK" means Class 2 Common Stock, par value $0.01
per share, of IWCH.
"NON-VOTING SERIES G STOCK" means Series G-2 Preferred Stock, par
value $0.01 per share, of IWCH.
"NON-VOTING SERIES H STOCK" means Series H-2 Preferred Stock, par
value $0.01 per share, of IWCH.
"NOTE" means any IWCH Note or PWH Note. Any Note which has been
exchanged pursuant to Section 2, 2A or 3 will no longer be deemed to be
outstanding for purposes of the IWCH Loan Agreement, any other "Loan Document"
referred to in the IWCH Loan Agreement, the PWH Loan Agreement or any other
"Loan Document" referred to in the PWH Loan Agreement.
"NOTEHOLDER" means any holder of any Note.
"ORGANIC CHANGE" means any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of
IWCH's assets or other transaction, in each case which is effected in such a
manner that the holders of IWCH Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for IWCH Common Stock.
"PERSON" means any individual, corporation, partnership, limited
liability company, trust or other entity, including any governmental entity or
agency.
"PLACEMENT AGENT" has the meaning set forth in Section 6(a).
"POST-EXCHANGE SALE" has the meaning set forth in Section 6(b).
"PURCHASE NOTICE" has the meaning set forth in Section 6(d).
"PWH" has the meaning set forth in the preamble to this Agreement.
"PWH LOAN AGREEMENT" has the meaning set forth in the preamble to
this Agreement.
"PWH NOTE EXCHANGE PRICE" has the meaning set forth in Section 6(b).
"PWH NOTEHOLDER" means any holder of any PWH Note.
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"PWH NOTES" means the Notes, as that term is defined in the PWH Loan
Agreement.
"PWH TRANCHE A NOTE" means any Tranche A Note, as that term is defined
in the PWH Loan Agreement.
"PWH TRANCHE B NOTE" means any Tranche B Note, as that term is defined
in the PWH Loan Agreement.
"REQUIRED NET SALE PRICE" has the meaning set forth in Section 6(b).
"SERIES F STOCK" means the Series F-1 Preferred Stock and the Series
F-2 Preferred Stock, each having a par value of $0.01 per share, of IWCH.
"SERIES G STOCK" means Voting Series G Stock and Non-Voting Series G
Stock.
"SERIES H STOCK" means Voting Series H Stock and Non-Voting Series H
Stock.
"SERIES H PURCHASER" has the meaning set forth in Section 6(b).
"SHARE VALUE" has the meaning set forth in the IWCH Loan Agreement.
"SUBSIDIARY" has the meaning set forth in the IWCH Loan Agreement.
"SUPERMAJORITY IWCH NOTEHOLDERS" means holders of IWCH Notes which
represent not less than 70% of the unpaid principal amount of the outstanding
IWCH Notes.
"SUPERMAJORITY PWH NOTEHOLDERS" means holders of PWH Notes which
represent not less than 70% of the unpaid principal amount of the outstanding
PWH Notes.
"TOTAL NUMBER OF ISSUABLE WARRANT SHARES" has the meaning set forth in
Section 7(a).
"TRANCHE A NOTE" means any IWCH Tranche A Note or PWH Tranche A Note.
"TRANCHE B NOTE" means any IWCH Tranche B Note or PWH Tranche B Note.
"20% NOTEHOLDER" means any Person who, together with its Affiliates,
holds Notes which represent not less than 20% of the aggregate unpaid principal
amount of the outstanding Notes or which represent an aggregate unpaid principal
amount of the Notes which is not less than the aggregate unpaid principal amount
of the Notes held by any other Person and such other Person's Affiliates.
"VOTING COMMON STOCK" means Class 1 Common Stock, par value $0.01 per
share, of IWCH.
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"VOTING SERIES G STOCK" means Series G-1 Preferred Stock, par value
$0.01 per share, of IWCH.
"VOTING SERIES H STOCK" means Series H-1 Preferred Stock, par value
$0.01 per share, of IWCH.
"WARRANTHOLDER" means any holder of any Warrant.
"WARRANTS" has the meaning set forth in the IWCH Loan Agreement.
2. EXCHANGE OF ALL IWCH NOTES FOR SERIES G STOCK.
(a) GENERAL. At any time, upon the request of Supermajority
IWCH Noteholders by written notice to IWCH (which notice will specify the date,
or the event or occurrence, upon which the desired exchange will be deemed to be
effective), IWCH, on one occasion, will issue to each IWCH Noteholder shares of
Series G Stock in exchange for each IWCH Note held by such Noteholder, in
accordance with this Section 2 and Section 4. Promptly after it receives any
such request, IWCH will give notice of such request to each IWCH Noteholder,
informing each such Noteholder that the exchange pursuant to this Section 2 is
to be effected and instructing each such Noteholder as to the surrender of the
IWCH Notes in accordance with Section 4 in order to effect such exchange.
(b) SERIES OF SHARES ISSUABLE. In exchange for any IWCH Tranche
A Note pursuant to this Section 2, IWCH will issue shares of Voting Series G
Stock, and in exchange for any IWCH Tranche B Note pursuant to this Section 2,
IWCH will issue shares of Non-Voting Series G Stock.
(c) QUANTITY OF SHARES ISSUABLE. In exchange for any IWCH Note
pursuant to this Section 2, IWCH will issue a number of shares of Series G Stock
which is equal to (i) the amount of the unpaid principal amount of such IWCH
Note, plus the amount of unpaid accrued interest thereon, as of the effective
time of such exchange, divided by (ii) the lesser of:
A. the Conversion Price (as that term is defined in, and
adjusted from time to time in accordance with the terms of, the IWCH Charter)
applicable to Series F Stock as of the effective time of such exchange, and
B. (x) 65% of the Share Value applicable to the Liquidity
Event in question, if any Liquidity Event has occurred as of the effective time
of such exchange, or (y) 65% of the Appraised Value as of the effective time of
such exchange, if no Liquidity Event has occurred as of the effective time of
such exchange
(such lesser amount being the "IWCH NOTE EXCHANGE PRICE").
(d) LIQUIDATION VALUE AND EXCHANGE PRICE. The "Original Series
G Issue Price" (as that term is defined in the IWCH Charter) will be an amount
which is equal to the IWCH Note Exchange Price.
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(e) NO OTHER ISSUANCES. IWCH will not issue Series G Stock
other than (i) as provided in subsection V.B.4(a1) of the IWCH Charter, (ii)
upon an exchange effected pursuant to this Section 2, or (iii) upon a stock
split, stock dividend or other subdivision of Series G Stock effected after the
effective time of any exchange pursuant to this Section 2.
2A. EXCHANGE OF LESS THAN ALL IWCH NOTES FOR SERIES G STOCK.
(a) GENERAL. At any time within the twenty (20) days after
notice of such prepayment is given pursuant to Section 2.06(a) of the IWCH Loan
Agreement, but only if Supermajority IWCH Noteholders have not given and do not
give IWCH an Exchange Notice pursuant to Section 2(a), any IWCH Noteholder may
request by written notice to IWCH that such IWCH Noteholder's IWCH Notes be
exchanged for shares of Series G Stock effective immediately prior to any
Liquidity Prepayment Event, in accordance with this Section 2A and Section 4.
Any such exchange will be effective only if such Liquidity Prepayment Event
actually occurs. Promptly after it receives any such request, IWCH will
instruct each such Noteholder as to the surrender of the IWCH Notes in
accordance with Section 4 in order to effect such exchange.
(b) SERIES OF SHARES ISSUABLE. In exchange for any IWCH Tranche
A Note pursuant to this Section 2A, IWCH will issue shares of Voting Series G
Stock, and in exchange for any IWCH Tranche B Note pursuant to this Section 2A,
IWCH will issue shares of Non-Voting Series G Stock.
(c) QUANTITY OF SHARES ISSUABLE. In exchange for any IWCH Note
pursuant to this Section 2A, IWCH will issue a number of shares of Series G
Stock which is equal to (i) the amount of the unpaid principal amount of such
IWCH Note, plus the amount of unpaid accrued interest thereon, as of the
effective time of such exchange, divided by (ii) the lesser of (A) the
Conversion Price (as that term is defined in, and adjusted from time to time in
accordance with the terms of, the IWCH Charter) applicable to Series F Stock as
of the effective time of such exchange, and (B) 65% of the Share Value
applicable to the Liquidity Event in question.
3. EXCHANGE OF PWH NOTES.
(a) GENERAL. At any time upon the request of Supermajority PWH
Noteholders by written notice to IWCH (which notice will specify the date, or
the event or occurrence, upon which the desired exchange will be deemed to be
effective):
i. at any time when any Event of Default (as that term is
defined in the PWH Loan Agreement) has occurred and is continuing (whether or
not such Event of Default is continuing at the time the related exchange is
effective), or
ii. at any other time, so long as the effective date for
the desired exchange is after February 17, 1999,
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IWCH, on one occasion, will issue to each PWH Noteholder shares of Series H
Stock in exchange for each PWH Note held by such Noteholder, in accordance with
this Section 3 and Section 4. Promptly after it receives any such request, IWCH
will give notice of such request to each PWH Noteholder, informing each such
Noteholder that the exchange pursuant to this Section 3 is to be effected and
instructing each such Noteholder as to the surrender of the PWH Notes in
accordance with Section 4 in order to effect such exchange.
(b) SERIES OF SHARES ISSUABLE. In exchange for any PWH Tranche
A Note pursuant to this Section 3, IWCH will issue shares of Voting Series H
Stock, and in exchange for any PWH Tranche B Note pursuant to this Section 3,
IWCH will issue shares of Non-Voting Series H Stock.
(c) QUANTITY OF SHARES ISSUABLE. In exchange for any PWH Note
pursuant to this Section 3, IWCH will issue a number of shares of Series H Stock
which is equal to the amount of the unpaid principal amount of such PWH Note,
plus the amount of unpaid accrued interest thereon, as of the effective time of
such exchange, divided by the PWH Note Exchange Price (as determined pursuant to
Section 6) at such time.
(d) LIQUIDATION VALUE. The "Original Series H Issue Price" (as
that term is defined in the IWCH Charter) will be an amount which is equal to
the PWH Note Exchange Price.
(e) NO OTHER ISSUANCES. IWCH will not issue Series H Stock
other than (i) as provided in subsection V.B.4(a1) of the IWCH Charter, (ii)
upon an exchange effected pursuant to this Section 3, (iii) upon a stock split,
stock dividend or other subdivision of Series H Stock effected after the
effective time of any exchange pursuant to this Section 3, or (iv) upon an
exchange described in Section 6(d)(iv).
(f) SALE OF SHARES AFTER EXCHANGE. Immediately after the
issuance of shares of Series H Stock to any PWH Noteholder upon an exchange
pursuant to this Section 3, such PWH Noteholder will sell such shares for cash,
at a price per share equal to the PWH Note Exchange Price, to one or more Series
H Purchasers in the Post-Exchange Sale as described in Section 6; provided that,
if such PWH Noteholder is a Series H Purchaser, then such PWH Noteholder will
retain the number of shares of Series H Stock which such PWH Noteholder would
otherwise purchase in the Post-Exchange Sale (or, if fewer, all of the shares of
Series H stock issued to such PWH Noteholder upon such exchange) in lieu of
selling and purchasing such quantity of shares of Series H Stock at the closing
described in Section 6(f).
4. EXCHANGE PROCEDURES.
(a) SURRENDER; EFFECTIVE TIME. Each exchange of any Note
pursuant to this Agreement will be deemed to have been effected at the effective
time for such exchange (which will be immediately prior to the closing of the
Post-Exchange Sale, in the case of any exchange of the PWH Notes), whether or
not the Note to be exchanged has been surrendered at the office of IWCH as
provided in Section 4(c). At such time as such exchange has been effected, the
rights of the holder of such Note as such holder will cease, such Note will be
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deemed cancelled and the Person or Persons in whose name or names any
certificate or certificates for shares of Exchange Stock are to be issued upon
such exchange will be deemed to have become the holder or holders of record of
the shares of Exchange Stock represented thereby.
(b) DELAYED EFFECTIVENESS. Notwithstanding any other provision
hereof, if an exchange of any IWCH Notes pursuant to Section 2 is to be made in
connection with a Liquidity Event or any other event specified by Supermajority
IWCH Noteholders, then the exchange of such Notes may, at the election of
Supermajority IWCH Noteholders, be conditioned upon the consummation of such
Liquidity Event or other event, in which case such exchange will not be deemed
to be effective unless of such Liquidity Event or other event occurs.
(c) DELIVERIES. At, prior to or after the effective time for
any exchange of any Note, the Noteholder which holds such Note will deliver such
Note to IWCH at the place specified for notices pursuant to this Agreement.
Immediately prior to the closing of the Post-Exchange Sale (in the case of the
exchange of the PWH Notes), or as soon as possible (but in any event within five
days) after the later of the effective time for such exchange and such delivery
of such Note (in the case of the exchange of the IWCH Notes), IWCH will deliver
to the exchanging Noteholder a certificate or certificates representing the
number of shares of Exchange Stock issuable by reason of such exchange, in such
name or names and such denomination or denominations as the exchanging
Noteholder has specified.
(d) NO CHARGE. The issuance of certificates for shares of
Exchange Stock upon the exchange of any Note will be made without charge to the
exchanging Noteholder or any other Person for any issuance tax in respect
thereof or other cost incurred by IWCH in connection with such exchange or the
related issuance of shares of Exchange Stock. Upon exchange of any Note, IWCH
will take all such actions as are necessary in order to insure that the Exchange
Stock issuable with respect to such exchange is validly issued, fully paid and
nonassessable and free from all taxes, liens and other charges.
(e) TRANSFER BOOKS; FILINGS. IWCH will not close its books
against the transfer of Exchange Stock issued or issuable upon exchange of
any Note in any manner which interferes with the timely exchange of any Note.
IWCH will assist and cooperate with any Noteholder which is required to make
any governmental filing or obtain any governmental approval prior to or in
connection with any exchange of any Note, or the Post-Exchange Sale (in the
case of the exchange of the PWH Notes), including making any filing required
to be made by IWCH, and IWCH will take all such actions as may be necessary
to assure that all such shares of Exchange Stock may be so issued (and sold
in the Post-Exchange Sale as described in Section 6, in the case of the
exchange of the PWH Notes) without violation of any applicable law or any
requirement of any domestic securities exchange upon which shares of Exchange
Stock may be listed (except for official notice of issuance which will be
immediately delivered by IWCH upon each such issuance). Without limiting the
foregoing, IWCH will use commercially reasonable efforts to take such actions
as may be required so that the issuance of Exchange Stock upon the exchange
of any Note, and the Post-Exchange Sale (in the case of the exchange of the
PWH
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Notes), are exempt from registration or qualification under all applicable
federal and state securities laws.
(f) RESERVATION OF SHARES. IWCH will at all times reserve and
keep available out of its authorized but unissued shares of Voting Series G
Stock, Non-Voting Series G Stock, Voting Series H Stock and Non-Voting Series H
Stock solely for the purpose of issuance upon the exchange of the Notes, such
number of such Series of Exchange Stock as from time to time would be issuable
upon the exchange of all outstanding Notes.
(g) FURTHER EXCHANGE OR CONVERSION. If the shares of Exchange
Stock issuable by reason of the exchange of any Note are convertible into or
exchangeable for any other stock or securities of IWCH, then IWCH will, at the
exchanging holder's option, at the effective time of the exchange of such Note
and upon the making of any notice, statement or payment required to effect such
conversion or exchange of such Exchange Stock, deliver to such Noteholder or as
otherwise specified by such Noteholder a certificate or certificates
representing the stock or securities into which the shares of Exchange Stock
issuable by reason of such exchange are so convertible or exchangeable,
registered in such name or names and in such denomination or denominations as
such Noteholder has specified.
(h) NOTICE OF CERTAIN EVENTS. IWCH will give written notice to
all Noteholders at least 20 days prior to the date on which IWCH closes its
books or takes a record (i) with respect to any Distribution upon Common Stock
or any series of Exchange Stock, (ii) with respect to any pro rata subscription
offer to holders of Common Stock or any series of Exchange Stock or (iii) for
determining rights to vote with respect to any Liquidity Event, Organic Change,
dissolution or liquidation. IWCH will also give written notice to the
Noteholders at least 20 days prior to the date on which any Liquidity Event or
Organic Change takes place, and will give each Noteholder prompt written notice
of the occurrence of any event described in any of clause (i) or clause (ii) of
Section 3(a).
(i) NOTEHOLDERS' REPRESENTATIONS AND WARRANTIES. Upon receipt
of any Exchange Stock, the exchanging Noteholder will be deemed to have made the
following representations and warranties (which representations and warranties
IWCH will be relying upon in entering into this Agreement), with respect to
itself and not with respect to any other Noteholder:
A. Except in the case of any Exchange Stock acquired upon
the exchange of any PWH Note, the Exchange Stock which such Noteholder is
acquiring is being acquired for such Noteholder's own account, not as nominee or
agent, and not with a view to the resale or distribution of any part thereof in
violation of any applicable federal or state securities laws, and such
Noteholder has no present intention of selling, granting a participation in or
otherwise distributing any such Exchange Stock, and such Noteholder has no
contract, undertaking, agreement or arrangement with any Person to sell,
transfer or grant participations to any other Person with respect to any such
Exchange Stock.
B. Such Noteholder believes that it has received all of
the information which it considers necessary or appropriate for deciding whether
to acquire such
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Exchange Stock. Such Committed Investor has had an opportunity to ask questions
and receive answers from IWCH regarding the terms and conditions of the offering
of the Exchange Stock and the business, properties, prospects and financial
conditions of the Company. The foregoing representation will not limit or
modify any representation or warranty of IWCH or any other Person made in any
Financing Document (as that term is defined in either Loan Agreement).
C. Such Noteholder is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Exchange Stock has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Notes. If
such Noteholder is not a natural person, then such Committed Investor was not
organized for the purpose of acquiring Exchange Stock.
D. Such Noteholder understands that the Exchange Stock is
characterized as "restricted securities" under the federal securities laws,
inasmuch as they are being acquired from IWCH in a transaction not involving a
public offering and that under such laws and applicable regulations such
securities my be resold under the 1993 Act only under certain circumstances. In
this connection, such Noteholder represents that it is familiar with Rule 144
promulgated under the 1933 Act, as presently in effect, and understands the
resale limitations imposed thereby and by the 1933 Act.
5. DETERMINATION OF APPRAISED VALUE.
(a) DEFINITION. The "APPRAISED VALUE" at any time means:
i. the amount that would be received by the holder of one
share of IWCH Common Stock upon the liquidation of IWCH after the satisfaction
in full of all of its liabilities and other obligations, if all Series G Stock
issuable in connection with the exchange of the IWCH Notes pursuant to Section
2, and all other Equity Securities of IWCH, any of its Subsidiaries or any
Investee which are then in the money (including the PWH Notes, to the extent
that the direct and indirect exchange and conversion rights associated therewith
are then in the money, whether or not the PWH Notes are then exchangeable, and
all Warrants) which directly or indirectly are convertible into or exercisable
or exchangeable for IWCH Common Stock were so converted, exercised or exchanged
in full prior to such liquidation (taking into account the consideration which
would be received by IWCH in connection with any such conversion, exercise or
exchange), if
ii. such liquidation immediately followed a sale at the
effective time of the exchange in question of the consolidated assets of IWCH in
an all-cash transaction between an informed and willing buyer and an informed
and willing seller, neither being under any compulsion to buy or sell, at arms
length and arranged in an orderly manner over a reasonable period of time under
then prevailing market conditions.
For purposes of determining the amount described above, the Earned Warrant
Percentage will be deemed to be the maximum percentage which the Earned Warrant
Percentage could thereafter become (i.e., the Earned Warrant Percentage at such
time plus the maximum amount of all
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increases in the Earned Warrant Percentage which could occur pursuant to Section
7 based on the Commitment Percentage attributable to the unpaid principal amount
of the Notes if any which will be outstanding after the exchange of the IWCH
Notes).
(b) PROCEDURES. Unless the Appraised Value is otherwise agreed
upon by IWCH and Majority IWCH Noteholders, and except to the extent that IWCH
and Majority IWCH Noteholders agree to alter the following procedures:
i. the Appraised Value at any time will be determined by a
nationally-recognized investment banking firm (the "APPRAISER") which is
experienced in the valuation of business concerns such as IWCH and its
Subsidiaries and the Investees and which is designated by IWCH and which is
approved by Majority IWCH Noteholders (which approval no IWCH Noteholder will
unreasonably withhold), PROVIDED that, if IWCH does not designate such a firm
within 10 Business Days after the relevant Exchange Notice is given, then
Majority IWCH Noteholders will have the right to designate such a firm to act as
the Appraiser, so long as such firm is approved by IWCH (which approval IWCH
will not unreasonably withhold with respect to any such firm of which no 20%
Noteholder is an Affiliate);
ii. if such a firm is not so designated and approved to act
as the Appraiser within 20 Business Days after any Exchange Notice is given
pursuant to Section 2(a) (unless a Liquidity Event has occurred or Majority IWCH
Noteholders have specified in such Exchange Notice that the exchange is to be
effective at or after the time of any Liquidity Event, in either which case the
Appraised Value need not be determined in connection with the requested
exchange), then the Appraiser will be selected by lot from among the top-tier
New York-based investment banking firms of which no 20% Noteholder is an
Affiliate;
iii. IWCH and each Noteholder will supply to the Appraiser
all relevant information in its possession or available to it which the
Appraiser may request and will use reasonable efforts to cause the Appraiser to
determine the Appraised Value as promptly as is practicable after it is
selected;
iv. the Appraised Value determined by the Appraiser will be
set forth in a written report of the Appraiser delivered to IWCH (which will, in
turn, promptly deliver copy of such report to each IWCH Noteholder), and the
determination of the Appraised Value by the Appraiser will be binding on IWCH
and the IWCH Noteholders; and
v. the fees and expenses of the Appraiser will be borne by
IWCH.
6. DETERMINATION OF PWH NOTE EXCHANGE PRICE. Except as may
otherwise be agreed by IWCH and Majority PWH Noteholders, the PWH Note Exchange
Price will be determined, and immediately after the issuance thereof the Series
H Stock issued upon the exchange of the PWH Notes will be sold, as described in
this Section 6.
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(a) ENGAGEMENT OF PLACEMENT AGENT. Promptly (but in any event
within 15 Business Days) after it receives an Exchange Notice pursuant to
Section 3(a), IWCH will engage a nationally-recognized investment banking firm
(the "PLACEMENT AGENT") which is experienced in arranging for the private
placement of securities such as the Series H Stock and which is designated by
IWCH and is approved by Majority PWH Noteholders (which approval no PWH
Noteholder will unreasonably withhold) to arrange for the Post-Exchange Sale
described in this Section 6. If IWCH or Majority PWH Noteholders determine in
good faith that any Placement Agent engaged pursuant to this Section 6(a) is not
using reasonable efforts to arrange for the Post-Exchange Sale or will not be
capable of arranging such sale, then IWCH will terminate the engagement of such
Placement Agent and promptly will engage another investment banking firm which
is of the type, and which is designated and approved, as described in the
preceding sentence, and such other firm will be a "Placement Agent" under this
Section 6.
(b) EXCHANGE AND SALE TERMS GENERALLY. The "POST-EXCHANGE SALE"
will be a sale for cash of the shares to be issued upon the exchange of the PWH
Notes to one or more Persons (the "SERIES H PURCHASERS") at such a price and
upon such other terms and conditions as will yield aggregate net cash proceeds
to the sellers of such shares (net of all related commissions, fees and
expenses) which are equal to the aggregate amount of the unpaid principal of and
accrued interest on the PWH Notes at the effective time of such exchange (the
"REQUIRED NET SALE PRICE"). The Post-Exchange Sale will be effected for the
account of the PWH Noteholders who receive such shares upon such exchange, on
the same day and immediately after the effective time of the exchange, and will
otherwise be made in accordance with the provisions of this Section 6.
Immediately prior to the Post-Exchange Sale, IWCH will effect the exchange of
the PWH Notes pursuant to Section 3 by issuing to each PWH Noteholder a number
of shares of Voting Series H Stock or Non-Voting Series H Stock, as the case may
be, which, when multiplied by the net cash price per share of Series H Stock to
be received by the selling holders in the Post-Exchange Sale (the "PWH NOTE
EXCHANGE PRICE"), will equal the aggregate unpaid principal amount of and
accrued interest on the PWH Note(s) held by such PWH Noteholder.
(c) EFFORTS TO EFFECT SALE.
i. After the engagement of the Placement Agent, IWCH will
use reasonable efforts to cause the Placement Agent to arrange for the
Post-Exchange Sale. IWCH will use reasonable efforts to cooperate with and
assist the Placement Agent in arranging for the Post-Exchange Sale, and
otherwise to cause the Post-Exchange Sale to occur. Subject to clause (iii)
below, IWCH will have the right on behalf of the PWH Noteholders to accept
offers to purchase the Series H Stock which are made by prospective Series H
Purchasers and which are approved by Majority PWH Noteholders (which approval no
PWH Noteholder will unreasonably withhold).
ii. IWCH will, and will use reasonable efforts to cause the
Placement Agent to, (A) give the PWH Noteholders notice of any offer or
indication of interest from any prospective Series H Purchaser and of the
acceptance of any such offer, and (B) from time to time as any 20% Holder (as
that term is defined in the PWH Loan Agreement) may
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reasonably request, answer inquiries from such 20% Holder as to the actions
which have been taken to arrange for the Post-Exchange Sale, the progress and
status of negotiations toward that end and other matters relating to the
Post-Exchange Sale.
iii. If during the 120 days after the Placement Agent is
engaged an offer which is approved by Majority PWH Noteholders (which approval
no PWH Noteholder will unreasonably withhold) is received from one or more
prospective Series H Purchasers to purchase the Series H Stock to be issued upon
the exchange of the PWH Notes for an aggregate net cash purchase price which
will be not less than the Required Net Sale Price, then IWCH will cause, and
will instruct the Placement Agent to cause, the exchange of the PWH Notes and
the sale of the Series H Stock to be issued upon such exchange to be consummated
in accordance with the terms of such offer (or another offer having terms and
conditions more favorable to IWCH and approved by Majority PWH Noteholders,
which approval no PWH Noteholder will unreasonably withhold) and this Section 6,
if more than one such offer is received; PROVIDED that (i) IWCH's obligations
pursuant to this Section 6 will continue until a Post-Exchange Sale is effected,
whether or not pursuant to an offer received during such 120-day period and
whether or not any such offer is received during such 120-day period, and (ii)
after such 120-day period, Majority PWH Noteholders will also have the right to
accept in good faith on behalf of the PWH Noteholders any offer to purchase such
Series H Stock for an aggregate net cash purchase price equal to the Required
Net Sale Price and IWCH will use reasonable efforts to cause any such sale to
occur.
(d) FIRST OFFER RIGHT.
i. Promptly after the Placement Agent is engaged, IWCH
will send to the PWH Noteholders written notice of such engagement. Whether or
not IWCH delivers such notice, at any time after an Exchange Notice is given and
prior to the 30th day after such PWH Noteholder receives the notice from IWCH
described in the preceding sentence, any PWH Noteholder may offer to purchase
all or a portion of the shares of Series H Stock to be issued upon the exchange
of the PWH Notes by delivering to IWCH written notice (a "FIRST OFFER NOTICE").
Each First Offer Notice will state the price (or the maximum price) per share of
Series H Stock which such PWH Noteholder would pay for such Series H Stock and
the aggregate purchase price or the percentage of such shares (or the maximum
aggregate purchase price or maximum percentage of such shares) which such PWH
Noteholder would be willing to pay or purchase.
ii. If IWCH receives any First Offer Notice from any PWH
Noteholder, then no Post-Exchange Sale as to which the PWH Note Exchange Price
is equal to or less than the price (or the maximum price) per share set forth in
such First Offer Notice will be consummated (and no offer to consummate such a
Post-Exchange Sale will be accepted) unless IWCH gives such PWH Noteholder
written notice of the terms and conditions of such Post-Exchange Sale not fewer
than ten Business Days prior to such consummation or acceptance and such PWH
Noteholder is permitted to purchase in such Post-Exchange Sale, at the same
price and upon the same other terms and conditions as all other Series H
Purchasers, such quantity of such shares of the Series H Stock as such PWH
Noteholder desires to purchase (up to the
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quantity or maximum quantity of such shares, by price or percentage, specified
in such First Offer Notice). Any PWH Noteholder described in the preceding
sentence may elect to purchase shares of Series H Stock by giving IWCH written
notice (a "PURCHASE NOTICE") during the ten Business Days after it receives the
notice from IWCH described in the preceding sentence, and any PWH Noteholder who
so elects will be a Series H Purchaser. Each Purchase Notice will set forth the
quantity of shares that such PWH Noteholder desires to purchase.
iii. If more than one PWH Noteholder has the right to
purchase shares of Series H Stock by reason of clause (ii) above and the PWH
Noteholders who deliver Purchase Notices elect in the aggregate to purchase
more than the number of shares of Series H Stock to be issued upon the
conversion of the PWH Notes, then the shares to be purchased will be allocated
among them pro rata, according to the respective quantities of such shares which
they indicated in their Purchase Notices.
iv. If any former PWH Noteholder which exchanged Tranche B
PWH Notes in the exchange of the PWH Notes purchases Voting Series H Stock in
the Post-Exchange Sale, then at such purchaser's request, immediately after the
Post-Exchange Sale, IWCH will exchange such Voting Series H Stock for
validly-issued, fully-paid and nonassessable shares of Non-Voting Series H
Stock, on a share-for-share basis.
(e) OTHER TERMS OF SALE. All expenses associated with the
Post-Exchange Sale will be paid by IWCH, so that the net proceeds received by
each selling former PWH Noteholder will equal the aggregate unpaid principal
amount of and accrued interest on the PWH Note(s) held by such former PWH
Noteholder immediately prior to such exchange. No selling former PWH Noteholder
will be required to make any representation or warranty, provide any
indemnification or incur or agree to any other liability or obligation to any
Person in connection with the Post-Exchange Sale; PROVIDED that each selling
Person may be required to make representations and warranties as to its own
power and authority to sell the shares in question and its ownership of such
shares, and may be required to indemnify the Series H Purchasers in respect of
any breach of any such representation or warranty. IWCH will make such
customary representations, warranties, covenants and agreements in favor of the
Series H Purchasers as may be required in order to induce Persons to agree to be
Series H Purchasers and to consummate the Post-Exchange Sale.
(f) CLOSING. The closing of the exchange of the PWH Notes for
shares of Series H Stock and the Post-Exchange Sale will occur at the principal
offices of IWCH as soon as is practicable after one or more offers to consummate
the Post-Exchange Sale have been accepted. At such closing, IWCH will deliver
to the Series H Purchasers (on behalf of the selling former PWH Noteholders)
certificates representing the shares of Series H Stock to be purchased by them,
and the Series H Purchasers will deliver to the selling former PWH Noteholders
the purchase price for the shares of Series H Stock held by them by wire
transfer of immediately available funds to the respective accounts designated by
them.
7. MATTERS RELATING TO WARRANTS. The "TOTAL NUMBER OF ISSUABLE
WARRANT SHARES" referred to in any Initial Warrant will be determined as
provided in this Section 7.
15
<PAGE>
(a) DEFINITION. At any time, the "TOTAL
NUMBER OF ISSUABLE WARRANT SHARES" will equal "x", where
x = EW% (OS + x)
and EW% = the Earned Warrant Percentage at such time determined as provided
in Section 7(b), and
OS = the number of shares of IWCH Common Stock outstanding on a
fully-diluted basis on the date of this Agreement, without regard
to the exchange of the Notes pursuant to this Agreement or the
exercise of the Warrants (which number IWCH represents and
warrants is 24,449,440), as such number may be proportionately
adjusted to reflect any stock dividend, stock split, reverse
stock split or other subdivision or combination of the IWCH
Common Stock effected prior to such time but after the date of
this Agreement.
(b) INITIAL EARNED WARRANT PERCENTAGE. On the date of this
Agreement, the "EARNED WARRANT PERCENTAGE" is 1.00%. After the date of this
Agreement, the Earned Warrant Percentage may be increased from time to time, as
provided in Section 7(c).
(c) INCREASES IN EARNED WARRANT PERCENTAGE. From time to time,
the Earned Warrant Percentage may increase as follows (it being understood that
the increases described below are stated in absolute terms, not in terms of the
percentage increase from the Earned Warrant Percentage previously in effect):(1)
i. ENGAGEMENT OF MANAGING UNDERWRITER. On August 22,
1997, the Earned Warrant Percentage will increase by 1.00% multiplied by the
Commitment Percentage on such date, unless on or prior to such date IWCH has
designated in writing to each 20% Holder one or more nationally-recognized
investment banking firms to act as the managing underwriter(s) for an initial
public offering of IWCH Voting Common Stock of the type described in clause (ii)
below. If the Earned Warrant Percentage increases pursuant to this clause (i),
then the Earned Warrant Percentage will not increase pursuant to clause (ii)
below and will not increase pursuant to clause (iii) below.
ii. REGISTRATION STATEMENT FILING. On October 31, 1997,
the Earned Warrant Percentage will increase by 1.00% multiplied by the
Commitment Percentage on such date, unless either
A. the Earned Warrant Percentage increased pursuant to
clause (i) above, or
- ------------------------
(1) I.E., if the increase described in clause (i) above were the first to occur
and the Commitment Percentage on August 31, 1997 were 100%, then the Earned
Warrant Percentage will increase from 1.00% to 2.00%, not by 1.00% of 1.00%.
16
<PAGE>
B. on or prior to such date IWCH has filed a
registration statement or amended registration statement on Form S-1 under the
1933 Act with respect to a public offering of IWCH Voting Common Stock with an
aggregate anticipated offering price to the public of not less than $50,000,000.
If the Earned Warrant Percentage increases pursuant to this clause (ii), then
the Earned Warrant Percentage will not increase pursuant to clause (iii) below.
iii. COMPLETION OF PUBLIC OFFERING OR PURSUANT OF PRIVATE
SALE. On December 31, 1997, the Earned Warrant Percentage will increase by
1.00% multiplied by the Commitment Percentage on such date, unless either
A. the Earned Warrant Percentage increased pursuant
to clause (i) above,
B. the Earned Warrant Percentage increased pursuant
to clause (ii) above,
C. on or prior to such date, IWCH has consummated the
sale of IWCH Voting Common Stock pursuant to a public offering of the type
contemplated by clause (ii)(B) above, or
D. on or prior to such date, IWCH entered into a
written agreement (which is in effect on such date) engaging a
nationally-recognized investment banking firm or broker to arrange for (x) a
private placement of Equity Securities of IWCH which, when consummated, would
constitute a Liquidity Event of a type described in clause (a) of the definition
of the term "Liquidity Event" or (y) a sale for cash of assets of Borrower, its
Subsidiaries and/or the Investees having a value (as reasonably determined by
such firm or broker) which is anticipated to yield cash proceeds to IWCH (net of
related transaction expenses and resulting taxes) of not less than $50,000,000.
iv. IWCH COMMITMENT OR NOTES OUTSTANDING. On each date
set forth below, unless the Commitment Termination Date (as that term is defined
in the IWCH Loan Agreement) has theretofore occurred and no IWCH Note is
outstanding, then the Earned Warrant Percentage will increase by the
corresponding percentage set forth below, multiplied by the Commitment
Percentage on such date:
DATE PERCENTAGE
----------------- ----------
November 17, 1997 0.18%
February 17, 1998 0.18%
May 17, 1998 0.18%
August 17, 1998 0.30%
November 17, 1998 0.48%
February 17, 1999 0.60%
17
<PAGE>
v. PWH NOTES OUTSTANDING. On each date set forth below,
if any PWH Note is outstanding, then the Earned Warrant Percentage will increase
by the corresponding percentage set forth below, multiplied by a fraction, the
numerator of which is the aggregate unpaid principal amount of the PWH Notes on
such date and the denominator of which is $22,000,000:
DATE PERCENTAGE
----------------- ----------
November 17, 1997 0.57%
February 17, 1998 0.57%
May 17, 1998 0.57%
August 17, 1998 0.95%
November 17, 1998 1.52%
February 17, 1999 1.90%
8. SUCCESSORS AND ASSIGNS IN GENERAL. This Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that IWCH may not assign or transfer its rights
under this Agreement or any interest under this Agreement or delegate its
liabilities, obligations or duties, without the prior written consent of
Majority IWCH Noteholders and Majority PWH Noteholders. Any Person which is not
already a party to this Agreement and which becomes the holder of any Note or
Warrant will, by virtue of becoming such a holder, become a party to this
Agreement and as an additional Noteholder or Warrantholder, as the case may be.
9. MODIFICATIONS, AMENDMENTS OR WAIVERS. The provisions of this
Agreement may be modified, amended or waived, but only by a written instrument
signed by IWCH, Majority IWCH Noteholders and Majority PWH Noteholders.
10. NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED. No
delay or failure of any Holder in exercising any right, power or remedy under
this Agreement will affect or operate as a waiver thereof, nor will any single
or partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power or remedy preclude any further exercise thereof, or
of any other right, power or remedy. The rights and remedies of each Holder
under this Agreement are cumulative and not exclusive of any rights or remedies
which it would otherwise have. Any waiver, permit, consent or approval of any
kind or character on the part of any Holder of any breach or default or any such
waiver of any provision or condition of this Agreement must be in writing and
will be effective only to the extent in such writing specifically set forth and
executed by Majority IWCH Noteholders and Majority PWH Noteholders.
11. HOLIDAYS. Whenever any payment or action to be made or taken
under this Agreement is stated to be due or required to be taken on a day which
is not a Business Day, such payment or action will be made or taken on the next
following Business Day, and such extension of time will be included in computing
interest or fees, if any, in connection with such payment or action.
18
<PAGE>
12. NOTICES. All notices and other communications given to or made
upon any party hereto in connection with this Agreement will, except as
otherwise expressly provided herein, be in writing and mailed, telecopied or
delivered by hand or by reputable overnight courier service to the respective
parties, as follows:
IWCH: 400 S. El Camino Real
Suite 1275
San Mateo, CA 94402
Attention: Douglas S. Sinclair
Aarti D. Gurnani
Telecopy: (650) 548-1842
with a copy (which will not constitute notice) to:
Brooks Stough, Esq.
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigan, LLP
155 Constitution Drive
Menlo Park, CA 94025
Telecopy: (650) 343-7502
To any Holder: To the address (if any) for such Holder set forth on the
attached EXHIBIT A, with any copy described on such EXHIBIT
A
or in accordance with any subsequent written direction from the recipient party
to the sending party made in accordance with this Section 12. All such notices
and other communications will, except as otherwise expressly provided in this
Agreement, be effective upon (a) delivery if delivered by hand; (b) on the
Business Day after deposited with a reputable overnight courier service,
delivery charges prepaid; (c) on the third Business Day after deposited in the
mail, postage prepaid; or (d) in the case of telecopy, when received.
13. SURVIVAL. All representations, warranties, covenants and
agreements of IWCH contained in this Agreement or made in writing in connection
herewith or therewith will survive the execution and delivery of this Agreement,
the making of the "Loans" referred to in the Loan Agreements and the issuance of
the Notes.
14. GOVERNING LAW; WAIVERS AND JURISDICTION.
(a) GOVERNING LAW. This Agreement will in all respects be
governed by, and construed and enforced in accordance with, the laws of the
State of New York, without giving effect to any choice of law or conflict of law
rules or provisions (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York, except that corporate matters with respect to IWCH and its
capital stock and stockholder will be governed by the applicable provisions of
the Delaware General Corporation Law, as amended.
19
<PAGE>
(b) WAIVERS. To the extent permitted by law, each party hereto
hereby waives personal service of any and all process upon it in connection with
this Agreement and agrees that all such service of process may be made as
provided in Section 12, and service so made will be deemed to be completed as
provided in Section 12. In addition, each party hereto hereby waives trial by
jury, any objections based on FORUM NON CONVENIENS and any objections to venue
of any action arising out of, connected with, related to or incidental to the
transactions contemplated by or the relationships established in connection with
this Agreement.
(c) EXCLUSIVE JURISDICTION. Except as provided in Section
14(d), all disputes among or between any of the parties hereto arising out of,
connected with, related to or incidental to the transactions contemplated by or
the relationship established between them in connection with this Agreement, and
whether arising in contract, tort, equity or otherwise, will be resolved only by
state or federal courts located in New York County, New York, and each party
hereto hereby consents and submits to the jurisdiction of any state or federal
court located within such county and state. The parties hereto acknowledge,
however, that any appeals from those courts may be required to be heard by a
court located outside of New York County, New York. Each party hereto waives in
all disputes any objection that it may have to the location of the court
considering the dispute. Nothing in this Section 14 will affect the right of
any party hereto to serve legal process in any other manner permitted by law or
affect the right of any Holder to bring any action or proceeding against IWCH or
its property in the courts of any other jurisdiction.
(d) OTHER JURISDICTIONS. Each party hereto agrees that any
party hereto will have the right to proceed against it in a court in any
location to enable such proceeding Person to enforce a judgment or other court
order obtained in any proceeding brought in accordance with Section 14(c) and
entered in favor of such proceeding Person. Each party hereto waives any
objection that it may have to the location of the court in which any other party
has commenced a proceeding described in this Section 14(d).
15. HEREIN, ETC. Words such as "herein," "hereunder," "hereof" and
the like will be deemed to refer to this Agreement as a whole and not to any
particular Section or other portion of this Agreement. Section, clause and
Exhibit references contained in this Agreement are references to Sections,
clauses and Exhibits in or attached to this Agreement, unless otherwise
specified. Each defined term used in this Agreement has a comparable meaning
when used in its plural or singular form. Each gender-specific term used in
this Agreement has a comparable meaning whether used in a masculine, feminine or
gender-neutral form. As used in this Agreement, the terms "knowledge" or
"aware" will include the actual knowledge and awareness of the Person in
question, and the knowledge and awareness that such Person would have obtained
after making reasonable inquiry and exercising reasonable diligence with respect
to the matter in question. Whenever the term "including" is used in this
Agreement (whether or not that term is followed by the phrase "but not limited
to" or "without limitation" or words of similar effect) in connection with a
listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or an exclusive listing of, the items within that classification. Each
reference in this Agreement to any
20
<PAGE>
law will be deemed to include such law as it hereafter may be amended,
supplemented or modified from time to time and any successor thereto.
16. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law in any jurisdiction, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating any other provision of this Agreement or any other Loan Document
(as that term is variously defined in the Loan Agreements).
17. HEADINGS. Section and subsection headings in this Agreement are
included for convenience of reference only and will not constitute a part of
this Agreement for any other purpose.
18. COUNTERPARTS. This Agreement may be executed in multiple
counterparts and by any party hereto or thereto on separate counterparts, each
of which, when so executed and delivered, will be an original, but all such
counterparts will together constitute one and the same instrument. This
Agreement will be effective when it is executed and delivered by IWCH, whether
or not it has been executed and delivered by all Initial Holders. Each Holder
which is not a signatory to this Agreement will be an express, third-party
beneficiary of this Agreement having all of the rights, and being bound by all
of the agreements, of a Holder which is a signatory to this Agreement.
19. COMPLETE AGREEMENT. Except as otherwise expressly set forth
herein, this Agreement, the Notes and the other Loan Documents (as that term is
variously defined in the Loan Agreements) embody the complete agreement and
understanding of the parties hereto and thereto and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
whether written or oral, which may have related to the subject matter hereof in
any way, and such agreements may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral discussions or understandings of the
parties. The parties hereto acknowledge and agree there are no oral
understandings or agreements between them with respect to the subject matter
hereof or thereof.
20. NO STRICT CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties,
and no presumption or burden of proof will arise favoring or disfavoring any
Person by virtue of the authorship of any of the provisions of this Agreement.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Exchange Agreement as of the day and year
first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By: /s/ Douglas S. Sinclair
----------------------------------------
Its: Executive Vice President
---------------------------------------
TORONTO DOMINION INVESTMENTS, INC.
By: /s/ Martha L. Gariepy
---------------------------------------
Its:
--------------------------------------
VANGUARD CELLULAR FINANCIAL
CORPORATION
By: /s/ Haynes Griffin
----------------------------------------
Its:
---------------------------------------
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Exchange Agreement as of the day and year
first above written.
---------------------------------------
[Type or print out name.]
By:
---------------------------------------
Name:
Title:
Address for Notices:
<PAGE>
EXHIBIT A
HOLDERS' NAMES AND ADDRESSES
Vanguard Cellular Financial Corporation
2002 Pisgah Church Road, Suite 300
Greensboro, NC 27455
Attention: Haynes Griffin
Telecopy: (910) 545-2233
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Joe Blum
Latham & Watkins
One Angel Court
London EC2R 7HJ
England
Telecopy: 011 44 171 374 4460
Toronto Dominion Investments, Inc.
909 Fannin Street
Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Fax No.: (713) 652-2647
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Toronto Dominion Investments, Inc.
31 West 52nd Street, 20th Floor
New York, NY 10019
Attention: Brian A. Rich
Telecopy: (212) 974-8429
AND
John Kuehn
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022
Teleopy: (212) 446-4900
A-1
<PAGE>
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE PAGE 1
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.", FILED
IN THIS OFFICE ON THE TENTH DAY OF SEPTEMBER, A.D. 1997, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT
COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
[SEAL OF THE STATE OF DELAWARE] -----------------------------------
EDWARD J. FREEL, SECRETARY OF STATE
AUTHENTICATION: 8644011
DATE: 09-10-97
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/10/1997
971301549 - 2641736
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
a Delaware Corporation
International Wireless Communications Holdings, Inc. (the
"Corporation"), a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware (the "General Corporation
Law"), does hereby certify that:
FIRST: The name of the Corporation is International Wireless
Communications Holdings, Inc. and the Corporation was originally incorporated on
July 8, 1996.
SECOND: The following resolutions amending and restating the
Corporation's Certificate of Incorporation were duly approved at a meeting of
the Board of Directors of the Corporation on August 7, 1997 and were duly
adopted by the stockholders of the Corporation in accordance with the provisions
of Section 242 of the General Corporation Law by written consent of the
stockholders given in accordance with Section 228 of the General Corporation
Law:
NOW, THEREFORE, BE IT RESOLVED, that the Certificate of
Incorporation of the Corporation be, and it hereby is, amended and
restated in its entirety as follows:
ARTICLE I
The name of this corporation is International Wireless Communications
Holdings, Inc. (the "Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 15 E. North Street, Dover, Kent County, Delaware. The name of its
registered agent at such address is Incorporating Services, Ltd.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law.
ARTICLE IV
The number of directors which shall constitute the whole Board of
Directors of the Corporation shall be as specified in the by-laws of the
Corporation.
<PAGE>
ARTICLE V
A. CLASSES OF STOCK. The Corporation is authorized to issue three
classes of stock to be designated, respectively, "Class 1 Common Stock,"
"Class 2 Common Stock" (together with Class 1 Common Stock, "Common Stock") and
"Preferred Stock." The total number of shares which the Corporation is
authorized to issue is One Hundred Six Million (106,000,000).
Sixty Million (60,000,000) shares shall be Class 1 Common Stock, with a
par value of $0.01 per share, Six Million (6,000,000) shares shall
be Class 2 Common Stock, with a par value of $0.01 per share, and
Forty Million (40,000,000) shares shall be Preferred Stock, with a par
value of $0.01 per share.
B. RIGHTS, PREFERENCES AND RESTRICTIONS OF PREFERRED STOCK. The
Preferred Stock authorized by this Amended and Restated Certificate of
Incorporation may be issued from time to time in one or more series. There is
hereby designated a Series A Preferred Stock (the "Series A Preferred Stock"), a
Series B Preferred Stock (the "Series B Preferred Stock"), a Series C Preferred
Stock (the "Series C Preferred Stock"), a Series D Preferred Stock (the
"Series D Preferred Stock), a Series E Preferred Stock (the "Series E Preferred
Stock"), a Series F-1 Preferred Stock (the "Series F-1 Preferred Stock"), a
Series F-2 Preferred Stock (the "Series F-2 Preferred Stock;" and the Series F-1
Preferred Stock are collectively referred to as the "Series F Preferred Stock"),
a Series G-1 Preferred Stock (the "Series G-1 Preferred Stock"), a Series G-2
Preferred Stock (the "Series G-2 Preferred Stock;" and the Series G-1 Preferred
Stock are collectively referred to as the "Series G Preferred Stock"), a Series
H-1 Preferred Stock (the "Series H-1 Preferred Stock"), and a Series H-2
Preferred Stock (the "Series H-2 Preferred Stock; and the Series H-1 Preferred
Stock are collectively referred to as the "Series H Preferred Stock") (the
Series A, Series B, Series C, Series D, Series E, Series F, Series G and Series
H Preferred Stock are collectively referred to as the "Existing Preferred
Stock"). The rights, preferences, privileges, and restrictions granted to and
imposed on the Series A Preferred Stock, which series shall consist of One
Million Two Hundred Thousand (1,200,000) shares, the Series B Preferred Stock,
which series shall consist of One Million Two Hundred Twenty-Nine Thousand Two
Hundred Forty (1,229,240) shares, the Series C Preferred Stock, which series
shall consist of Two Million Four Hundred Sixty (2,460,000) shares, the Series D
Preferred Stock, which series shall consist of Five Million Eight Hundred
Thousand (5,800,000) shares, the Series E Preferred Stock, which series shall
consist of Three Million Nine Hundred Seventy-Two Thousand Two Hundred Forty
(3,972,240) shares, the Series F-1 Preferred Stock, which series shall consist
of Seven Million (7,000,000) shares, the Series F-2 Preferred Stock, which
series shall consist of One Million Eighty Thousand (1,080,000) shares, the
Series G-1 Preferred Stock, which series shall consist of One Million Nine
Hundred Twenty-Eight Thousand (1,928,000) shares, the Series G-2 Preferred
Stock, which series shall consist of One Million Two Hundred Ninety-Two Thousand
(1,292,000) shares, the Series H-1 Preferred Stock, which series shall consist
of Five Million Seventy-Two Thousand (5,072,000) shares, and the Series H-2
Preferred Stock, which series shall consist of Three Million Three Hundred
Ninety-Eight Thousand (3,398,000), are as set forth below in this Article V(B);
provided, that anything contained herein to the contrary notwithstanding, the
economic rights, preferences and privileges of (i) the Series F-1 and Series F-2
Preferred Stock shall be identical, (ii) the Series G-1 and Series G-2 Preferred
Stock shall be identical and (iii) the Series H-1 and Series H-2 Preferred Stock
shall be
2
<PAGE>
identical. The Board of Directors is hereby authorized to fix or alter the
rights, preferences, privileges and restrictions granted to or imposed upon
additional series of Preferred Stock, and the number of shares constituting any
such series and the designation thereof, or of any of them. Subject to
compliance with applicable protective voting rights which have been or may be
granted to the Preferred Stock or series thereof in Certificates of Designation
or the Corporation's Amended and Restated Certificate of Incorporation
("Protective Provisions"), but notwithstanding any other rights of the Preferred
Stock or any series thereof, the rights, privileges, preferences and
restrictions of any such additional series may be subordinated to, PARI PASSU
with (including, without limitation, with respect to liquidation and acquisition
preferences, redemption and/or approval of matters by vote or written consent),
or senior to any of those of any present or future class or series of Preferred
or Common Stock. Subject to compliance with applicable Protective Provisions,
the Board of Directors is also authorized to increase or decrease the number of
shares of any series of Preferred Stock (other than the Existing Preferred
Stock), prior or subsequent to the issue of that series, but not below the
number of shares of such series then outstanding. In case the number of shares
of any series shall be so decreased, the shares constituting such decrease shall
resume the status which they had prior to the adoption of the resolution
originally fixing the number of shares of such series.
1. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, either voluntary or involuntary, the holders of Series B,
Series C, Series D, Series E, Series F, Series G and Series H Preferred Stock
shall be entitled to receive, prior and in preference to any distribution of any
assets of the Corporation to the holders of the Series A Preferred Stock and
Common Stock by reason of their ownership thereof, the following amounts (with
respect to each such series of Preferred Stock, the "Preferred Preferential
Amount") in the following order of priority:
(i) First, the holders of Series G Preferred Stock
shall be entitled to receive an amount per share equal to the sum of (i) the
IWCH Note Exchange Price (as defined below), as appropriately adjusted for any
stock dividends, combinations, splits or the like with respect to such shares
after the initial issuance thereof (the "Original Series G Issue Price"), and
(ii) an amount equal to declared but unpaid dividends on such share, subject to
reduction in accordance with subsection V.B.1(a)(vi);
(ii) Then the holders of Series H Preferred Stock
shall be entitled to receive an amount per share equal to the sum of (i) the PWH
Note Exchange Price (as defined below), as appropriately adjusted for any stock
dividends, combinations, splits or the like with respect to such shares after
the initial issuance thereof (the "Original Series H Issue Price"), and (ii) an
amount equal to declared but unpaid dividends on such share, subject to
reduction in accordance with subsection V.B.1(a)(vi);
(iii) Then, the holders of Series F Preferred Stock
shall be entitled to receive an amount per share equal to the sum of (i) the
product of (A) .50 multiplied by (B) $9.375, as appropriately adjusted for any
stock dividends, combinations, splits
3
<PAGE>
or the like with respect to such shares (the "Original Series F Issue Price"),
and (ii) an amount equal to declared but unpaid dividends on such share, subject
to reduction in accordance with subsection V.B.1(a)(vi);
(iv) Then, the holders of Series B, Series C,
Series D and Series E Preferred Stock (the "Junior Preferred Stock") shall be
entitled to receive an amount per share calculated as follows:
(A) the holders of Series B Preferred Stock
shall be entitled to receive an amount per share equal to the sum of (i) the
product of (A) .55 multiplied by (B) $0.9193, as appropriately adjusted for any
stock dividends, combinations, splits or the like with respect to such shares
(the "Original Series B Issue Price"), and (ii) an amount equal to declared but
unpaid dividends on such share, subject to reduction in accordance with
subsection V.B.1(a)(vi);
(B) the holders of Series C Preferred Stock
shall be entitled to receive an amount per share equal to the sum of (i) the
product of (A) .55 multiplied by (B) $2.223, as appropriately adjusted for any
stock dividends, combinations, splits, or the like with respect to such shares
(the "Original Series C Issue Price"), and (ii) an amount equal to declared but
unpaid dividends on such share, subject to reduction in accordance with
subsection V.B.1(a)(vi);
(C) the holders of Series D Preferred Stock
shall be entitled to receive an amount per share equal to the sum of (i) the
product of (A) .55 multiplied by (B) $6.55, as appropriately adjusted for any
stock dividends, combinations, splits or the like with respect to such shares
(the "Original Series D Issue Price"), and (ii) an amount equal to declared but
unpaid dividends on such share, subject to reduction in accordance with
subsection V.B.1(a)(vi); and
(D) the holders of Series E Preferred Stock
shall be entitled to receive an amount per share equal to the sum of (i) the
product of (A) .55 multiplied by (B) $6.2938, as appropriately adjusted for any
stock dividends, combinations, splits or the like with respect to such shares
(the "Original Series E Issue Price"), and (ii) an amount equal to declared but
unpaid dividends on such share, subject to reduction in accordance with
subsection V.B.1(a) (vi);
(v) Then, the holders of the Junior Preferred Stock
and the Series F Preferred Stock shall be entitled to receive an amount per
share calculated as follows:
(A) the holders of Series B Preferred Stock
shall be entitled to receive an amount per share equal to the product of (1) .50
multiplied by (2) the Original Series B Issue Price, subject to reduction in
accordance with subsection V.B.1(a)(vi);
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(B) the holders of Series C Preferred Stock
shall be entitled to receive an amount per share equal to the product of (1) .50
multiplied by (2) the Original Series C Issue Price, subject to reduction in
accordance with subsection V.B.1(a)(vi);
(C) the holders of Series D Preferred Stock
shall be entitled to receive an amount per share equal to the product of (1) .50
multiplied by (2) the Original Series E Issue Price, subject to reduction in
accordance with subsection V.B.1(a)(vi);
(D) the holders of Series E Preferred Stock
shall be entitled to receive an amount per share equal to the product of (1) .50
multiplied by (2) the Original Series E Issue Price, subject to reduction in
accordance with subsection V.B.1(a)(vi); and
(E) the holders of Series F Preferred Stock
shall be entitled to receive an amount per share equal to the product of (1) .50
multiplied by (2) the Original Series F Issue Price, subject to reduction in
accordance with subsection V.B.1(a)(vi).
(vi) Notwithstanding the foregoing,
(A) If the assets and funds of the
Corporation are insufficient to permit the payment in full to the holders of
Series G Preferred Stock and Series H Preferred Stock in accordance with
clauses (i) and (ii) above, then, the entire assets and funds of the Corporation
legally available for distribution shall be distributed ratably among the
holders of outstanding shares of Series G Preferred Stock and Series H
Preferred Stock in proportion to their respective aggregate Preferred
Preferential Amounts (as defined above);
(B) if the assets and funds of the
Corporation are insufficient to permit the payment in full to the holders of
Series F Preferred Stock in accordance with clause (iii) above, then, the entire
assets and funds of the Corporation legally available for distribution, after
completion of the distributions required by clauses (i) and (ii) above, shall be
distributed ratably among the holders of the shares of Series F Preferred Stock
in proportion to the number of shares of Series F Preferred Stock then
outstanding;
(C) if the assets and funds of the
Corporation are insufficient to permit the payment in full to the holders of the
Junior Preferred Stock in accordance with clause (iv) above, then, the entire
assets and funds of the Corporation legally available for distribution, after
completion of the distribution required by clauses (i), (ii) and (iii) above,
shall be distributed ratably among the holders of each series of Junior
Preferred Stock in proportion to the total amounts to be paid to the holders of
such series of Preferred Stock, and ratably among the holders of shares of each
such series in proportion to the number of shares of such series of Preferred
Stock then outstanding; and
(D) if the assets and funds of the
Corporation are insufficient to permit the payment in full to the holders of the
Junior Preferred Stock and the Series F Preferred Stock in accordance with
clause (v) above, then, the entire assets and funds of the Corporation legally
available for distribution, after completion of the distribution required by
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clauses (i), (ii), (iii) and (iv) above, shall be distributed ratably among the
holders of each such series of Preferred Stock in proportion to the total
amounts to be paid to the holders of such series of Preferred Stock, and ratably
among the holders of shares of each such series in proportion to the number of
shares of such series of Preferred Stock then outstanding.
(b) Upon the completion of the distribution required by
subsection (a) above, if assets remain in the Corporation, the holders of the
Series A Preferred Stock of the Corporation shall be entitled to receive, prior
and in preference to any distribution of any of the assets of the Corporation to
the holders of Common Stock by reason of their ownership thereof, an amount per
share equal to the sum of (i) $0.85, as appropriately adjusted for any stock
dividends, combinations, splits or the like with respect to such shares (the
"Original Series A Issue Price") and (ii) an amount equal to declared but unpaid
dividends on such shares (together, the "Series A Preferential Amount"), subject
to reduction in accordance with the next sentence and section V.B.2. If upon
the occurrence of such event, the assets and funds to be distributed among the
holders of the Series A Preferred Stock shall be insufficient to permit the
payment to such holders of the full Series A Preferential Amount, then, the
entire assets and funds of the Corporation legally available for distribution
shall be distributed ratably among the holders of Series A Preferred Stock in
proportion to the number of shares of such series owned by each such holder.
(c) Upon the completion of the distribution required by
subsections (a) and (b) above and any other distribution that may be required
with respect to series of Preferred Stock that may from time to time come into
existence, if assets remain in the Corporation, the holders of the Common Stock
of the Corporation shall be entitled to receive an amount per share equal to the
sum of (i) $0.50 per share of Common Stock, as appropriately adjusted for any
stock dividends, combinations, splits or the like with respect to such shares
(the "Original Common Issue Price"), and (ii) all declared and unpaid dividends
on such shares (the "Common Preferential Amount"), subject to reduction in
accordance with the next sentence and section V.B.2. If upon the occurrence of
such event, the assets and funds to be distributed among the holders of the
Common Stock shall be insufficient to permit the payment to such holders of the
full Common Preferential Amount, then, subject to the rights of series of
Preferred Stock that may from time to time come into existence, the entire
assets and funds of the Corporation legally available for distribution shall be
distributed ratably among the holders of Common Stock in proportion to the
number of shares of Common Stock owned by each such holder.
(d) After the distributions described in subsections (a),
(b) and (c) above have been paid, the remaining assets of the Corporation
available for distribution to stockholders shall be distributed among the
holders of Existing Preferred Stock and Common Stock pro rata based on the
number of shares of Common Stock held by each, such that each holder of shares
of Existing Preferred Stock shall be entitled to the same amount of
distributions as would have been paid thereon had such shares been converted
into Common Stock as of the record date fixed for determining the holders of
Common Stock entitled to receive such distribution.
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Notwithstanding the foregoing, upon the consummation of a
Corporate Transaction (as defined below) in which the consideration thereunder,
net of all direct expenses of the Corporate Transaction, equals or exceeds
$18.75 per share (as adjusted appropriately for stock dividends, combinations,
splits or the like with respect to such shares) on a fully diluted basis, then
in lieu of the distributions set forth in subsections (a) through (d) above, all
proceeds of such Corporate Transaction shall be distributed to the stockholders
of the Corporation pro rata based upon the number of shares of Common Stock
owned by each stockholder (assuming the conversion into Common Stock of all
securities convertible into Common Stock).
(e) (i) For purposes of this Section 1, a liquidation,
dissolution or winding up of the Corporation shall be deemed to be occasioned
by, and to include, (A) the acquisition of the Corporation by another entity by
means of any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation but, excluding any
merger effected exclusively for the purpose of changing the domicile of the
Corporation); or (B) a sale of all or substantially all of the assets of the
Corporation; UNLESS the Corporation's stockholders of record as constituted
immediately prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as consideration for the
Corporation's acquisition or sale or otherwise) hold at least 50% of the voting
power of the surviving or acquiring entity. Any such transaction contemplated
by this subsection (e)(i) shall be hereinafter referred to as a "Corporate
Transaction."
(ii) In any of such events, if the consideration
received by the Corporation is other than cash, for purposes of determining the
value of any assets of the Corporation which are to be distributed to the
stockholders of the Corporation in any liquidation, winding up or dissolution,
its value will be deemed its fair market value, as determined below:
(A) Securities not subject to investment letter
or other similar restrictions on free marketability covered by (B) below:
(1) If traded on a securities exchange or
through the Nasdaq National Market, the value shall be deemed to be the average
of the closing prices of the securities on such exchange or market over the
thirty (30)-day period ending three (3) days prior to the closing;
(2) If actively traded over-the-counter
other than the Nasdaq National Market, the value shall be deemed to be the
average of the closing bid or sale prices (whichever is applicable) over the
thirty (30)-day period ending three (3) days prior to the closing; and
(3) If there is no active public market, the
value shall be the fair market value thereof, as mutually determined by the
Corporation and the holders of a majority of the voting power of all then
outstanding shares of Preferred Stock, with holders of a majority of the shares
of Series F Preferred Stock voting in favor thereof.
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(B) The method of valuation of securities subject
to investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a stockholder's status as an affiliate
or former affiliate) shall be to make an appropriate discount from the market
value determined as above in subsection (A)(1), (2) or (3) to reflect the
approximate fair market value thereof, as mutually determined by the Corporation
and the holders of a majority of the voting power of all then outstanding shares
of such Preferred Stock, with holders of a majority of the shares of Series F
Preferred Stock voting in favor thereof.
(C) The value of assets other than securities
will be their fair market value as mutually determined by the Corporation and
the holders of a majority of the voting power of all then outstanding shares of
Preferred Stock, with holders of a majority of the shares of Series F Preferred
Stock voting in favor thereof.
(D) If the Corporation and holders of Preferred
Stock are unable to mutually determine the value of any securities or other
assets as provided above, then the fair market value of such securities or other
assets shall be determined as follows:
(1) The Corporation and a representative
(the "Representative") of the holders of a majority of the voting power of all
then outstanding shares of Preferred Stock shall negotiate in good faith to
determine the fair market value of such securities or assets. Such
Representative shall be selected by holders of a majority of the voting power of
all then outstanding shares of Preferred Stock (other than the Series F
Preferred Stock) and the holders of a majority of the shares of Series F
Preferred Stock. If the Corporation and the Representative so agree, the fair
market value shall be the amount so agreed upon.
(2) If no such agreement is reached within
thirty (30) days after negotiations commence, the Corporation, on the one hand,
and the Representative, on the other hand, shall within fifteen (15) business
days thereafter each select an investment banker to value such securities or
assets. The Corporation shall give representatives of each investment banker
full access to all information that they may reasonably request concerning the
Corporation. Within thirty (30) days of their selection, each investment banker
must propose a fair market value for such securities or assets.
(3) If the fair market value proposed by the
investment banker selected by the Representative is lower or higher by not more
than 10% of the fair market value proposed by the Corporation's investment
banker, then the fair market value shall be the average of such proposed fair
market values. If, however, the fair market value proposed by the investment
banker selected by the Representative is more than 10% higher than the fair
market value proposed by the Corporation's investment banker, then the parties
again shall consult as to a fair market value. If they are unable to agree on a
fair market value within fifteen (15) days after the receipt of the investment
bankers' reports, they shall cause their investment bankers to jointly select a
third investment banker who shall have access to all information it may
reasonably request concerning the Corporation.
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(4) The third investment banker shall have
within thirty (30) days after its selection to choose the fair market value
which best reflects its professional opinion of the fair market value of such
securities or assets, which value shall be either the fair market value proposed
by the Corporation's investment banker or the fair market value proposed by the
investment banker selected by the Representative and which choice shall be final
and be deemed to be the fair market value. The party whose investment banker's
proposed fair market value was not chosen shall be responsible for all of the
costs and expenses incurred by, and the fees of, the third investment banker.
For such purpose, the holders of the Preferred Stock shall be deemed to
constitute a single party and shall bear the costs, if any, imposed by the
immediately preceding sentence severally in proportion to the number of shares
of Preferred Stock held. Otherwise, the Corporation shall be responsible for
all reasonable costs and expenses incurred by the holders and Corporation for
each of the investment bankers retained in connection with the Corporation's
purchase of the holders' shares of Preferred Stock.
(5) The investment bankers appointed for
purposes of determining the fair market value of such securities or assets may
apply such factors and discounts as are customarily utilized.
(iii) The Corporation shall give each holder of record
of Existing Preferred Stock written notice of such impending transaction not
later than twenty (20) days prior to the stockholders' meeting called to approve
such transaction, or twenty (20) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction and the provisions of
this Section 1, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than twenty (20) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of Existing
Preferred Stock (excluding the Series F-2 Preferred Stock) that are entitled to
such notice rights or similar notice rights and that represent at least a
majority of the voting power of all then outstanding shares of Existing
Preferred Stock (excluding the Series F-2 Preferred Stock) and a majority of the
voting power of the Series F Preferred Stock (excluding the Series F-2 Preferred
Stock) then outstanding.
(f) The following terms shall have the following meanings:
(i) "Series G Exchange Date" means the date on which
the Corporation issues Series G Preferred Stock pursuant to Section 2 of the
Exchange Agreement.
(ii) "Series H Exchange Date" means the date on which
the Corporation issues Series H Preferred Stock pursuant to Section 3 of the
Exchange Agreement.
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(iii) "Exchange Agreement" means that term as defined
in the IWCH Loan Agreement.
(iv) "IWCH Loan Agreement" means the Loan Agreement
dated on or about August 18, 1997 to be entered into between the Corporation and
the lenders named therein.
(v) "IWCH Note Exchange Price" has the meaning set
forth in the Exchange Agreement.
(vi)"IWCH Notes" mean the Notes (as defined in the IWCH
Loan Agreement).
(vii) "PWH Loan Agreement" means the Loan Agreement
dated on or about August 18, 1997 among Pakistan Wireless Holdings Limited and
the lenders named therein.
(viii) "PWH Note Exchange Price" has the meaning set
forth in the Exchange Agreement.
(ix) "PWH Notes" mean the Notes (as defined in the
PWH Loan Agreement).
2. DISTRIBUTIONS. When, as and if declared by the
Corporation's Board of Directors, and subject to the Protective Provisions of
the holders of Preferred Stock, for all distributions of funds and assets of the
Corporation, holders of Existing Preferred Stock shall be entitled to receive
distributions at the same time and on the same basis as holders of Common Stock
when, as and if declared by the Corporation's Board of Directors (each holder of
shares of Existing Preferred Stock to be entitled to the same amount of
distributions as would have been declared or paid thereon had such shares been
converted into Common Stock as of the record date fixed for determining the
holders of Common Stock entitled to receive such distribution). If any such
dividends are declared which are payable in shares of Common Stock, then
dividends shall be declared which are payable at the same rate on both classes
of Common Stock and the dividends payable in shares of Class 1 Common Stock
shall be payable to holders of Class 1 Common Stock and the dividends payable in
shares of Class 2 Common Stock shall be payable to holders of Class 2 Common
Stock. If any such dividends consist of other voting securities of the
Corporation, then the Corporation shall make available to each holder of
Series F-2, Series G-2 and Series H-2 Preferred Stock, at such holder's request,
dividends consisting of securities of the Corporation having voting rights
comparable to the Series F-2, Series G-2 or Series H-2 Preferred Stock, as the
case may be, and which are otherwise identical to such other voting securities
and which are convertible into or exchangeable for such other voting securities
on the same terms as Series F-2, Series G-2 or Series H-2 Preferred Stock, as
the case may be, are convertible into Class 2 Common.
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3. REDEMPTION.
(a) (i) On or after the later of (i) such date (the
"Note Payment Date") as all of the Corporation's Senior Secured Discount Notes
due 2001 or senior debt securities of the Corporation containing substantially
identical terms issued in exchange therefor (collectively, the "Senior Notes"),
the IWCH Notes and the PWH Notes shall have been repaid in full (whether by
repurchase, redemption, payment at maturity, exchange pursuant to the Exchange
Agreement or otherwise) or (ii) December 31, 1998, but within forty-five (45)
days (the "Redemption Date") after the receipt by the Corporation of a written
request from the holders of not less than a majority of the then outstanding
shares of Series B, Series C, Series D, Series E, Series F, Series G and
Series H Preferred Stock (voting on an as converted basis) that shares of
Series B, Series C, Series D, Series E, Series F, Series G and Series H
Preferred Stock be redeemed (a "Redemption Request"), the Corporation shall in
accordance with this Section 3, to the extent it may lawfully do so, redeem all
of the shares of Series B, Series C, Series D, Series E, Series F, Series G and
Series H Preferred Stock by paying in cash therefor a sum per share (with
respect to each series of Preferred Stock, the "Redemption Price") equal to the
greater of (1) the then fair market value of the Series B Preferred Stock on an
as-converted basis for each share of Series B Preferred Stock, the then fair
market value of the Series C Preferred Stock on an as-converted basis for each
share of Series C Preferred Stock, the then fair market value of the Series D
Preferred Stock on an as-converted basis for each share of Series D Preferred
Stock, the then fair market value of the Series E Preferred Stock on an
as-converted basis for each share of Series E Preferred Stock, the then fair
market value of the Series F Preferred Stock on an as-converted basis for each
share of Series F Preferred Stock, the then fair market value of the Series G
Preferred Stock on an as-converted basis for each share of Series G Preferred
Stock and the then fair market value of the Series H Preferred Stock on an
as-converted basis for each share of Series H Preferred Stock, as the case may
be, as determined in accordance with subsection V.B.1.(e)(ii) hereof (except
that, to the extent the holders of Preferred Stock are entitled to vote on any
matters relating to such valuation, only holders of Preferred Stock which is
being redeemed shall be entitled to so vote, and the "closing" as used therein
shall instead refer to the redemption provided for by this subsection 3(a)), or
(2) the full Preferred Preferential Amount payable in respect of each such
series of Preferred Stock in accordance with subsection V.B.1(a). All payments
by the Corporation in respect of any redemption shall be made to the holders of
the Series F, Series G and Series H Preferred Stock and Junior Preferred Stock
in the same priorities or order of distribution and in the same proportions as
distributions of funds and assets are to be made to such holders in the case of
a liquidation, dissolution or winding-up of the Corporation. In the event of a
liquidation, dissolution or winding-up of the Corporation prior to the payment
in full of the Redemption Price for any shares to be redeemed hereunder, the
partial payment hereunder shall be credited toward the payment of the Preferred
Preferential Amount to be paid to the holders of each series of Preferred Stock.
(ii) On or after the later of (i) the Note Payment
Date or (ii) December 31, 2000, but within forty-five (45) days (a "Series F
Redemption Date") after the receipt by the Corporation of a written request from
the holders of not less than a majority of the then outstanding shares of
Series F Preferred Stock that shares of Series F Preferred Stock be redeemed (a
"Series F Redemption Request"), the Corporation shall in accordance with this
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Section 3, to the extent it may lawfully do so, redeem all of the shares of
Series F Preferred Stock by paying in cash therefor at the Redemption Price of
the Series F Preferred Stock.
(iii) Upon the occurrence of a Change of Control (as
defined in the Securities Purchase Agreement dated as of December 6, 1995 among
the Corporation and the investors named therein (the "Securities Purchase
Agreement")) that is not approved by all of the Series F Directors (as defined
in subsection V.B.6(b)), then the holders of a majority of the shares of
Series F Preferred Stock then outstanding shall have the right, by written
demand to the Corporation (a "Series F Redemption Request"), to require the
Corporation, on or after the Note Payment Date, to redeem immediately, to the
extent it may lawfully do so, all of the shares of Series F Preferred Stock then
outstanding, at a price per share equal to the Redemption Price of the Series F
Preferred Stock on the date of redemption (a "Series F Redemption Date").
(iv) On or after the later of (i) the Note Payment
Date, (ii) the Series G Exchange Date (in the case of Series G Preferred Stock)
or the Series H Exchange Date (in the case of Series H Preferred Stock),
(iii) December 31, 1998 and (iv) the first date upon which holders of Series F
Preferred Stock shall be entitled to make a redemption request pursuant to
subsection V.B.3(a)(ii) or (iii) above, but within 45 days (a "Series G/H
Redemption Date") after the receipt by the Corporation of a written request from
the holders of not less than the majority of the then outstanding shares of
Series G or Series H Preferred Stock that shares of Series G or Series H
Preferred Stock, respectively, be redeemed (a "Series G/H Redemption Request"),
the Corporation shall in accordance with this Section 3, to the extent it may
lawfully do so, redeem all of the shares of the Series G Preferred Stock or the
Series H Preferred Stock by paying in cash therefore at the Redemption Price of
the Series G Preferred Stock and the Series H Preferred Stock, respectively.
(v) In the case of any Redemption Request made by
holders of a majority of the Series F, Series G or Series H Preferred Stock
pursuant to subsection V.B.3(a)(ii), (iii) or (iv), the holders of a majority of
the shares of each such other Series (e.g., the holders of the Series G and
Series H, if the Redemption Request is given by the holders of a majority of the
Series F) will be deemed to have made a Redemption Request pursuant to
subsection V.B.3(ii), (iii) or (iv), as appropriate, unless holders of a
majority of the shares of such other Series decline such redemption by giving
the Corporation written notice to that effect within 10 days after delivery of
the related Redemption Notice. If redemptions pursuant to subsections
V.B.3(a)(ii), (iii) and (iv) above occur on the same date, the liquidation
preference provisions provided in Section V.B.1 above shall apply.
(b) Within ten (10) days after receipt of a Redemption
Request, a Series F Redemption Request or a Series G/H Redemption Request,
written notice shall be mailed, first class postage prepaid, to each holder of
record (at the close of business on the business day next preceding the day on
which notice is given) of Series B, Series C, Series D, Series E, Series F,
Series G and Series H Preferred Stock, pursuant to subsection V.B3(a)(i)(i), or
solely to each holder of Series F, Series G or Series H Preferred Stock pursuant
to subsection V.B(3)(a)(ii), (iii), or (iv), at the address last shown on the
records of the Corporation for such
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holder, notifying such holder of the redemption to be effected, specifying the
Redemption Date, Series F Redemption Date or Series G/H Redemption Date, as the
case may be, the Redemption Price, the place at which payment may be obtained
and calling upon such holder to surrender to the Corporation, in the manner and
at the place designated, his, her or its certificate or certificates
representing the shares (the "Redemption Notice"). Except as provided in
subsection (3)(c) below, on or after the Redemption Date, Series F Redemption
Date or Series G/H Redemption Date, as the case may be, each holder of Series B,
Series C, Series D, Series E, Series F, Series G and Series H Preferred Stock,
pursuant to subsection V.B3(a)(i), solely to each holder of Series F, Series G
and Series H Preferred Stock pursuant to subsection V.B3(a)(ii) or (iii),
subsection V.B3(a)(iv), or subsection V.B3(a)(iv), as the case may be, shall
surrender to the Corporation the certificate or certificates representing such
shares, in the manner and at the place designated in the Redemption Notice, and
thereupon the respective Redemption Price of such shares shall be payable to the
order of the person whose name appears on such certificate or certificates as
the owner thereof and each surrendered certificate shall be cancelled.
(c) From and after the Redemption Date, unless there shall
have been a default in payment of the Redemption Price, all rights of a holder
of shares of Series B, Series C, Series D, Series E, Series F, Series G and
Series H Preferred Stock as a holder of such Preferred Stock (except the right
to receive the Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever. From and after a Series F
Redemption Date, unless there shall have been a default in payment of the
Redemption Price, all rights of a holder of shares of Series F Preferred Stock
as a holder of such Preferred Stock (except the right to receive the Redemption
Price without interest upon surrender of their certificate or certificates)
shall cease with respect to such shares, and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding for
any purpose whatsoever. From and after the Series G/H Redemption Date, unless
there shall have been a default in payment of the Redemption Price, all rights
of a holder of shares of Series G or Series H Preferred Stock, as the case may
be, as a holder of such Preferred Stock (except the right to receive the
Redemption Price without interest upon surrender of their certificate or
certificates) shall cease with respect to such shares, and such shares shall not
thereafter be transferred in the books of the Corporation or be deemed to be
outstanding for any purpose whatsoever. If the funds of the Corporation legally
available for redemption of shares of Series B, Series C, Series D, Series E,
Series F, Series G and Series H Preferred Stock on any Redemption Date, or of
shares of the Series F, Series G or Series H Preferred Stock to be redeemed on
any Series F Redemption Date or Series G/H Redemption Date, as the case may be,
are insufficient to redeem the total number of shares of Series B, Series C,
Series D, Series E, Series F, Series G and Series H Preferred Stock to be
redeemed on such date, as the case may be, those funds which are legally
available will be used to redeem shares of Series B, Series C, Series D, Series
E, Series F, Series G and Series H Preferred Stock to be redeemed in the order
and in the priorities set forth in subsection V.B.3(a) above. The shares of
Preferred Stock not redeemed shall remain outstanding and entitled to all the
rights and preferences provided herein. At any time thereafter when additional
funds of the Corporation are legally available for the redemption of such shares
of Preferred Stock, such funds will immediately be used to redeem the balance of
the shares which the Corporation has
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become obliged to redeem on any Redemption Date, Series F Redemption Date or
Series G/H Redemption Date, but which it has not redeemed.
(d) On or prior to the Redemption Date, a Series F
Redemption Date or a Series G/H Redemption Date, as the case may be, the
Corporation shall deposit the respective Redemption Price of all shares of
Preferred Stock designated for redemption in the Redemption Notice, and not yet
redeemed or converted, with a bank or trust corporation having aggregate capital
and surplus in excess of $100,000,000 as a trust fund for the benefit of the
respective holders of the shares designated for redemption and not yet redeemed,
with irrevocable instructions and authority to the bank or trust corporation to
pay the Redemption Price for such shares to their respective holders on or after
the Redemption Date, a Series F Redemption Date or a Series G/H Redemption Date,
as the case may be, upon receipt of notification from the Corporation that such
holder has surrendered his, her or its share certificate to the Corporation
pursuant to subsection V.B.3(b) above. As of the date of such deposit (even if
prior to the Redemption Date or a Series F Redemption Date), the deposit shall
constitute full payment of the shares to their holders, and from and after the
date of the deposit the shares so called for redemption shall be redeemed and
shall be deemed to be no longer outstanding, and the holders thereof shall cease
to be stockholders with respect to such shares and shall have no rights with
respect thereto except the rights to receive from the bank or trust corporation
payment of the Redemption Price of the shares, without interest, upon surrender
of their certificates therefor, and the right to convert such shares as provided
in Section V.B.4 below. Such instructions shall also provide that any moneys
deposited by the Corporation pursuant to this subsection 3(d) for the redemption
of shares thereafter converted into shares of the Common Stock pursuant to
Section V.B.4 below prior to the Redemption Date, a Series F Redemption Date or
a Series G/H Redemption Date, as the case may be, shall be returned to the
Corporation forthwith upon such conversion. The balance of any moneys deposited
by the Corporation pursuant to this subsection 3(d) remaining unclaimed at the
expiration of two (2) years following the Redemption Date shall thereafter be
returned to this corporation upon its request expressed in a resolution of its
Board of Directors.
4. CONVERSION. The holders of Existing Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
(a1) RIGHT TO CONVERT. Each share of Series A Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Class 1 Common Stock as is determined by dividing the
Original Series A Issue Price by the Conversion Price applicable to such share,
determined as hereafter provided, in effect on the date the certificate is
surrendered for conversion. Each share of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of
Class 1 Common Stock as is determined by dividing the Original Series B Issue
Price by the Conversion Price applicable to such share, determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
Each share of Series C Preferred Stock shall be convertible, at the option of
the
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holder thereof, at any time after the date of issuance of such share, at the
office of the Corporation or any transfer agent for such stock, into such number
of fully paid and nonassessable shares of Class 1 Common Stock as is determined
by dividing the Original Series C Issue Price by the Conversion Price applicable
to such share, determined as hereafter provided, in effect on the date the
certificate is surrendered for conversion. Each share of Series D Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Class 1 Common Stock as is determined by dividing the
Original Series D Issue Price by the Conversion Price applicable to such share,
determined as hereafter provided, in effect on the date the certificate is
surrendered for conversion. Each share of Series E Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of
Class 1 Common Stock as is determined by dividing the Original Series E Issue
Price by the Conversion Price applicable to such share, determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
Each share of Series F-1 Preferred Stock shall be convertible, at the option of
the holder thereof, at any time after the date of issuance of such share, at the
office of the Corporation or any transfer agent for such stock, into such number
of fully paid and nonassessable shares of Class 1 Common Stock as is determined
by dividing the Original Series F Issue Price by the Conversion Price applicable
to such share, determined as hereafter provided, in effect on the date the
certificate is surrendered for conversion. Each share of Series F-2 Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of Corporation or any
transfer agent for such stock, into such number of fully paid and nonassessable
shares of Class 2 Common Stock (or, subject to subsection V.B.4(a2) below,
Class 1 Common Stock) as is determined by dividing the Original Series F Issue
Price by the Conversion Price applicable to such share, determined as hereafter
provided, in effect on the date this certificate is surrendered for conversion.
Each share of Series G-1 Preferred Stock shall be convertible, at the option of
the holder thereof, at any time after the date of issuance of such share, at the
office of the Corporation or any transfer agent for such stock, into such number
of fully paid and nonassessable shares of Class 1 Common Stock as is determined
by dividing the Original Series G Issue Price by the Conversion Price applicable
to such share, determined as hereafter provided, in effect on the date the
certificate is surrendered for conversion. Each share of Series G-2 Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Class 2 Common Stock (or, subject to
subsection V.B.4(a2) below, Class 1 Common Stock) as is determined by dividing
the Original Series G Issue Price by the Conversion Price applicable to such
share, determined as hereafter provided, in effect on the date the certificate
is surrendered for conversion. Each share of Series H-1 Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for such stock, into such number of fully paid and nonassessable shares of
Class 1 Common Stock as is determined by dividing the Original Series H Issue
Price by the Conversion Price applicable to such share, determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
Each share of Series H-2 Preferred Stock shall be convertible, at the option of
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the holder thereof, at any time after the date of issuance of such share, at the
office of the Corporation or any transfer agent for such stock, into such number
of fully paid and nonassessable shares of Class 2 Common Stock (or, subject to
subsection V.B.4(a2) below, Class 1 Common Stock) as is determined by dividing
the Original Series H Issue Price by the Conversion Price applicable to such
share, determined as hereafter provided, in effect on the date the certificate
is surrendered for conversion. The initial Conversion Price per share for
shares of Series A Preferred Stock shall be the Original Series A Issue Price;
the initial Conversion Price per share for shares of Series B Preferred Stock
shall be the Original Series B Issue Price; the initial Conversion Price per
share for shares of Series C Preferred Stock shall be the Original Series C
Issue Price; the initial Conversion Price per share for shares of Series D
Preferred Stock shall be the Original Series D Issue Price; the initial
Conversion Price per share for shares of Series E Preferred Stock shall be the
Original Series E Issue Price; the initial Conversion Price per share for shares
of Series F Preferred Stock shall be the Original Series F Issue Price; the
initial Conversion Price per share for shares of Series G Preferred Stock shall
be the Original Series G Issue Price; and the initial Conversion Price per share
for shares of Series H Preferred Stock shall be the Original Series H Issue
Price; provided, however, that the Conversion Price for each series of Existing
Preferred Stock shall be subject to applicable adjustment as set forth in
subsection V.B.4(d) below.
In addition, each share of Series F-2 Preferred Stock shall, subject
to subsection V.B.4(a2) below, be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the office of
the Corporation or any transfer agent for such stock, into one (1) fully paid
and nonassessable share of Series F-1 Preferred Stock, each share of Series G-2
Preferred Stock shall, subject to subsection V.B.4(a2) below, be convertible, at
the option of the holder thereof, at any time after the date of issuance of such
share, at the office of the Corporation or any transfer agent for such stock,
into one (1) fully paid and nonassessable share of Series G-1 Preferred Stock,
and each share of Series H-2 Preferred Stock shall, subject to subsection
V.B.4(a2) below, be convertible, at the option of the holder thereof, at any
time after the date of issuance of such share, at the office of the Corporation
or any transfer agent for such stock, into one (1) fully paid and nonassessable
share of Series H-1 Preferred Stock.
(a2) ADDITIONAL RESTRICTION ON CONVERSION OF SERIES F-2, G-2
AND H-2 PREFERRED STOCK.
(i) Upon the occurrence (or the expected occurrences
described in subsection V.B.4(a2)(iii) below) of any Conversion Event (as
defined below), each holder of Series F-2, G-2 and H-2 Preferred Stock shall be
entitled to convert any or all of the shares of such holder's Series F-2, G-2 or
H-2 Preferred Stock being (or expected to be) distributed, disposed of or sold
in connection with such Conversion Event into (a) the same number of shares of
Class 1 Common Stock as the number of shares of Class 2 Common Stock into which
such shares of Series F-2, G-2 or H-2 Preferred Stock, respectively, would
otherwise have been convertible pursuant to subsection V.B.4(a1) above or
(b) the same number of shares of Series F-1, Series G-1 or Series H-1 Preferred
Stock, respectively, as the number of shares of Series F-2, G-2 or H-2 Preferred
Stock, respectively, being so converted pursuant to subsection V.B.4(a1) above.
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(ii) A "Conversion Event" shall mean (a) any sale of
securities in any public offering or public sale of securities of the
Corporation (including a public offering registered under the Securities Act of
1933, as amended, and a public sale pursuant to Rule 144 of the Securities and
Exchange Commission or any similar rule then in force), (b) any sale of
securities of the Corporation (including by virtue of a merger, consolidation or
similar transaction involving the Corporation) to a person or group of persons
(within the meaning of the Securities Exchange Act of 1934, as amended (the
"1934 Act")) if, after such sale, such person or group of persons in the
aggregate would own or control securities which possess in the aggregate the
ordinary voting power to elect a majority of the Corporation's directors
(provided that such sale has been approved by the Corporation's Board of
Directors or a committee thereof), (c) any sale of securities of the Corporation
(including by virtue of a merger, consolidation or similar transaction involving
the Corporation) to a person or group of persons (within the meaning of the
Securities Exchange Act of 1934, as amended) if, after such sale, such person or
group of persons in the aggregate would own or control securities of the
Corporation (excluding any Class 2 Common being converted and disposed of in
connection with such Conversion Event) which possess in the aggregate the
ordinary voting power to elect a majority of the Corporation's directors, or
(d) any sale of securities of the Corporation to a person or group of persons
(within the meaning of the 1934 Act) if, after such sale, such person or group
of persons in the aggregate would not own, control or have the right to acquire
more than two percent (2%) of the outstanding securities of any class of voting
securities of the Corporation. "Person" shall include any natural person and
any corporation, partnership, joint venture, trust, unincorporated organization
and any other entity or organization.
(iii) Each holder of Series F-2, G-2 and H-2 Preferred
Stock shall be entitled to convert such shares of Preferred Stock in connection
with any Conversion Event if such holder reasonably believes that such
Conversion Event will be consummated. A written request for conversion from any
holder of Series F-2, G-2 or H-2 Preferred Stock to the Corporation stating such
holder's reasonable belief that a Conversion Event will occur shall be
conclusive and shall obligate the Corporation to effect such conversion in a
timely manner so as to enable each such holder to participate in such Conversion
Event. The Corporation will not cancel the shares of Series F-2, G-2 or H-2
Preferred Stock so converted before the tenth day following such Conversion
Event and will reserve such shares until such tenth day for reissuance in
compliance with the next sentence. If any shares of Series F-2, G-2 or H-2
Preferred Stock are converted into shares of Class 1 Common, Series F-1
Preferred Stock, Series G-1 Preferred Stock or Series H-1 Preferred Stock, as
the case may be, in connection with a Conversion Event and such shares of
capital stock are not actually distributed, disposed of or sold pursuant to such
Conversion Event, such shares of capital stock shall be promptly converted back
into the same number of shares of Series F-2, G-2 and H-2 Preferred Stock, as
the case may be.
(b) AUTOMATIC CONVERSION. Each share of Existing Preferred
Stock (other than Series F-2, G-2 and H-2 Preferred Stock) shall automatically
be converted into shares of Class 1 Common Stock, and each share of Series F-2,
G-2 and H-2 Preferred Stock shall automatically be converted into shares of
Class 2 Common Stock, at the then effective Conversion Price immediately upon,
except as provided in subsection V.B.4(c) below,
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the Corporation's sale of its Common Stock in a firm commitment underwritten
public offering pursuant to a registration statement under the Securities Act of
1933, as amended (a "Public Offering"), the public offering per share price of
which is not less than two times the then applicable Conversion Price for the
Series D Preferred Stock and the aggregate offering price is not less than
$8,000,000; PROVIDED, HOWEVER, that upon such Public Offering (i) the shares of
Series F Preferred Stock shall not automatically be converted into Common Stock
unless the following shall occur (a "Threshold Public Offering"): (A) the
Public Offering is consummated on or prior to December 31, 1998, (B) the Public
Offering per share price is at least two times the Original Series F Issue Price
and (C) the aggregate offering price is not less than $25,000,000 and (ii) the
shares of Series G Preferred Stock and Series H Preferred Stock shall not be
automatically converted into Common Stock unless all other shares of Preferred
Stock are converted into Common Stock at the consummation of such Public
Offering.
(c) MECHANICS OF CONVERSION. Before any holder of Existing
Preferred Stock shall be entitled to convert the same into shares of Common
Stock pursuant to subsection (a1) or subsection (a2) (collectively
"subsection (a)" above), or in the event that any Existing Preferred Stock is
automatically converted pursuant to subsection (b) above, the holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for the Preferred Stock. If the
conversion is pursuant to subsection (a) above, the holder electing to convert
any Existing Preferred Stock shall give written notice to the Corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Preferred Stock,
or to the nominee or nominees of such holder, a certificate or certificates for
the number of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date. If the conversion is in connection with an underwritten offering
of securities registered pursuant to the Securities Act of 1933, as amended, the
conversion may, at the option of any holder tendering Existing Preferred Stock
(including Series F-2, Series G-2 or Series H-2 Preferred Stock) for conversion,
be conditioned upon the closing with the underwriter(s) of the sale of
securities pursuant to such offering, in which event the person(s) entitled to
receive the Common Stock upon conversion of the Existing Preferred Stock shall
not be deemed to have converted such series of Preferred Stock until immediately
prior to the closing of such sale of securities.
(d) CONVERSION PRICE ADJUSTMENTS OF PREFERRED STOCK FOR
CERTAIN DILUTIVE ISSUANCES, SPLITS AND COMBINATIONS. The Conversion Price of
the Existing Preferred Stock shall be subject to adjustment from time to time as
follows:
(i) (A) If the Corporation shall issue, after
the time this Amended and Restated Certificate of Incorporation becomes
effective ("Effective Time"), any Additional Stock (as defined below) without
consideration or for a consideration per share
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less than the applicable Conversion Price for such series of Preferred Stock in
effect immediately prior to the issuance of such Additional Stock, the
applicable Conversion Price:
(i) for the Series B, Series C, Series D,
Series E and Series F Preferred Stock in effect immediately prior to each such
issuance shall forthwith (except as otherwise provided in this clause (i)) be
adjusted to a price determined by multiplying such Conversion Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
which would be outstanding immediately prior to such issuance assuming the
conversion of all outstanding shares of Preferred Stock into Common Stock (not
including shares excluded from the definition of Additional Stock by subsection
V.B.4(d)(ii)) plus the number of shares of Common Stock that the aggregate
consideration received by the Corporation for such issuance would purchase at
such Conversion Price; and the denominator of which shall be the number of
shares of Common Stock which would be outstanding immediately prior to such
issuance assuming the conversion of all outstanding shares of Preferred Stock
into Common Stock (not including shares excluded from the definition of
Additional Stock by subsection V.B.4(d)(ii)) plus the number of shares of such
Additional Stock;
(i) for the Series G Preferred Stock in effect
immediately prior to such issuance shall forthwith (except as otherwise provided
in this clause (ii)) be adjusted to a price equal to the average consideration
per share received by the Corporation for such issuance of Additional Stock;
provided, however, that no adjustment shall be made for any issuance of
Additional Stock before the Series G Exchange Date.
(ii) for the Series H Preferred Stock in effect
immediately prior to such issuance shall forthwith (except as otherwise provided
in this clause (iii)) be adjusted to a price equal to the average consideration
per share received by the Corporation for such issuance of Additional Stock;
provided, however, that no adjustment shall be made for any issuance of
Additional Stock before the Series H Exchange Date.
(B) No adjustment of the Conversion Price for the
Series B, Series C, Series D, Series E, Series F, Series G or Series H Preferred
Stock shall be made in an amount less than one cent per share, provided that any
adjustments which are not required to be made by reason of this sentence shall
be carried forward and shall be taken into account in any subsequent adjustment.
Except to the limited extent provided for in subsections (E)(3) and (E)(4)
below, no adjustment of such Conversion Price pursuant to this subsection
V.B.4(d)(i) shall have the effect of increasing the Conversion Price above the
Conversion Price in effect immediately prior to such adjustment.
(C) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid therefor
before deducting any reasonable discounts, commissions or other expenses
allowed, paid or incurred by the Corporation for any underwriting or otherwise
in connection with the issuance and sale thereof.
(D) In the case of the issuance of the Common Stock
for a consideration in whole or in part other than cash, the consideration
other than cash
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shall be deemed to be the fair value thereof as determined in good faith by
the Corporation's Board of Directors irrespective of any accounting treatment.
(E) In the case of the issuance (whether before, on
or after the Effective Time) of options to purchase or rights to subscribe for
Common Stock, securities by their terms convertible into or exchangeable for
Common Stock or options to purchase or rights to subscribe for such convertible
or exchangeable securities, the following provisions shall apply for all
purposes of this subsection 4(d)(i) and subsection 4(d)(ii):
(1) The aggregate maximum number of shares
of Common Stock deliverable upon exercise (assuming the satisfaction of any
conditions to exercisability, including without limitation, the passage of time,
but without taking into account potential antidilution adjustments) of such
options to purchase or rights to subscribe for Common Stock shall be deemed to
have been issued at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner provided in
subsections V.B.4(d)(i)(C) and (d)(i)(D)), if any, received by the Corporation
upon the issuance of such options or rights plus the minimum exercise price
provided in such options or rights (without taking into account potential
antidilution adjustments) for the Common Stock covered thereby.
(2) The aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in exchange (assuming the
satisfaction of any conditions to convertibility or exchangeability, including,
without limitation, the passage of time, but without taking into account
potential antidilution adjustments) for any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to subscribe
for such convertible or exchangeable securities and subsequent conversion or
exchange thereof shall be deemed to have been issued at the time such securities
were issued or such options or rights were issued and for a consideration equal
to the consideration, if any, received by the Corporation for any such
securities and related options or rights (excluding any cash received on account
of accrued interest or accrued dividends), plus the minimum additional
consideration, if any, to be received by the Corporation (without taking into
account potential antidilution adjustments) upon the conversion or exchange of
such securities or the exercise of any related options or rights (the
consideration in each case to be determined in the manner provided in
subsections V.B.4(d)(i)(C) and (d)(i)(D)).
(3) In the event of any change in the number
of shares of Common Stock deliverable or in the consideration payable to the
Corporation upon exercise of such options or rights or upon conversion of or in
exchange for such convertible or exchangeable securities, including, but not
limited to, a change resulting from the antidilution provisions thereof, the
Conversion Price of the Series B, Series C, Series D, Series E, Series F,
Series G or Series H Preferred Stock, to the extent in any way affected by or
computed using such options, rights or securities, shall be recomputed to
reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the exercise
of any such options or rights or the conversion or exchange of such securities.
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(4) Upon the expiration of any such options
or rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or exchangeable
securities, the Conversion Price of the Series B, Series C, Series D, Series E,
Series F, Series G or Series H Preferred Stock, to the extent in any way
affected by or computed using such options, rights or securities or options or
rights related to such securities, shall be recomputed to reflect the issuance
of only the number of shares of Common Stock (and convertible or exchangeable
securities which remain in effect) actually issued upon the exercise of such
options or rights, upon the conversion or exchange of such securities or upon
the exercise of the options or rights related to such securities.
(5) The number of shares of Common Stock
deemed issued and the consideration deemed paid therefor pursuant to subsections
V.B.4(d)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any change,
termination or expiration of the type described in either
subsection V.B.4(d)(i)(E)(3) or (4).
(ii) "Additional Stock" shall mean any shares of
Common Stock issued (or deemed to have been issued pursuant to subsection
V.B.4(d)(i)(E)) by the Corporation after the Effective Time other than
(A) shares of Common Stock issued pursuant
to a transaction described in subsection V.B.4(d)(iii), (e) or (f) hereof;
(B) shares of Common Stock issuable or
issued to employees, consultants, directors or vendors (if in transactions with
primarily non-financing purposes) of the Corporation directly or pursuant to a
stock option plan or restricted stock plan approved by the stockholders and
Board of Directors of the Corporation at any time when the total number of
shares of Common Stock so issuable or issued (and not repurchased at cost by the
Corporation in connection with the termination of employment) does not exceed
3,000,000 (as appropriately adjusted for any stock dividends, combinations,
splits or the like with respect to shares of Common Stock) plus such additional
number of shares of Common Stock as shall be approved by holders of at least
sixty-six and two-thirds percent (66-2/3%) of the then outstanding shares of
Series B, Series C, Series D, Series E, Series F and Series G Preferred Stock;
(C) shares of Common Stock or Existing
Preferred Stock issuable as a result of the conversion of any shares of Existing
Preferred Stock;
(D) shares of Common Stock issued or deemed
issued to a corporation, partnership or other entity with which the Corporation
has a partnership, joint venture or other business relationship, provided that
such issuances are for other than primarily equity financing purposes; provided
that holders of at least eighty percent (80%) of the Series F Preferred Stock
then outstanding shall have consented thereto in writing;
(E) shares of Common Stock issued or deemed
issued in connection with the acquisition by the Corporation of the stock or
assets of another corporation, partnership or other entity; provided that
holders of at least eighty percent (80%) of the Series F Preferred Stock then
outstanding shall have consented thereto in writing;
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(F) shares of Common Stock issued or deemed
issued in connection with any equipment lease financing or the incurrence by the
Corporation of any indebtedness for money borrowed; provided that holders of at
least eighty percent (80%) of the Series F Preferred Stock then outstanding
shall have consented thereto in writing;
(G) shares of Common Stock issued or deemed
issued by the Corporation in connection with the merger of a wholly owned
subsidiary of the Corporation with and into International Wireless
Communications, Inc. (including shares of Common Stock (aa) issued or issuable
upon the exercise of options assumed in such merger (bb) issued or issuable upon
the conversion of Preferred Stock and (cc) issued and issuable upon the exercise
of warrants assumed in such merger);
(H) shares of Common Stock issued or deemed
issued pursuant to warrants issued by the Corporation in connection with the
Senior Notes and pursuant to the IWCH Loan Agreement and the PWH Loan Agreement;
or
(I) shares of Common Stock issued or
issuable for the purchase from Continental Communications Limited of shares of
Pakistan Mobile Communications Limited.
(iii) In the event the Corporation should at any time
or from time to time after the Effective Time fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price of the Existing Preferred Stock shall be appropriately
decreased so that the number of shares of Common Stock issuable on conversion of
each share of such series shall be increased in proportion to such increase of
the aggregate of shares of Common Stock outstanding and those issuable with
respect to such Common Stock Equivalents with the number of shares issuable with
respect to Common Stock Equivalents determined from time to time in the manner
provided for deemed issuances in subsection V.B.4(d)(i)(E).
(iv) If the number of shares of Common Stock
outstanding at any time after the Effective Time is decreased by a combination
of the outstanding shares of Common Stock, then, following the record date of
such combination, the Conversion Price for the Existing Preferred Stock shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion of each share of such series shall be decreased in proportion to such
decrease in outstanding shares.
(e) OTHER DISTRIBUTIONS. In the event the Corporation
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by
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the Corporation or other persons, assets (excluding cash dividends) or options
or rights not referred to in subsection V.B.4(d)(iii), then, in each such case
for the purpose of this subsection 4(e), the holders of the Existing Preferred
Stock shall be entitled to a share of any such distribution as such distribution
shall be made in accordance with and subject to the provisions of Section V.B.2.
As provided therein, all distributions shall be made to the holders of the
Preferred Stock and the Common Stock in the same priorities and order of
distribution and in the same proportions as distributions of funds and assets
are to be made in the case of a liquidation, dissolution or winding-up of the
Corporation. All amounts so distributed to the holders of any series of
Preferred Stock or Common Stock, as the case may be, in accordance therewith
shall be credited toward the payment of the Preferred Preferential Amount, the
Series A Preferential Amount or Common Preferential Amount, as the case may be,
to be paid to the holders of each series of Preferred Stock or Common Stock, as
the case may be.
(f) RECAPITALIZATIONS. If at any time or from time to time
there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger, sale of assets or other transaction provided for
elsewhere in this Section 4 or in Section 2) provision shall be made so that the
holders of the Existing Preferred Stock shall thereafter be entitled to receive
upon conversion of the Preferred Stock the number of shares of stock or other
securities or property of the Corporation or otherwise, to which a holder of
Common Stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 4 with respect to the rights of
the holders of the Existing Preferred Stock after the recapitalization to the
end that the provisions of this Section 4 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Existing Preferred Stock) shall be applicable after that event
as nearly equivalent as may be practicable.
(g) NO IMPAIRMENT. The Corporation will not, by amendment
of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Existing Preferred Stock against
impairment.
(h) NO FRACTIONAL SHARES AND CERTIFICATE AS TO ADJUSTMENTS.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Existing Preferred Stock, and the
number of shares of Common Stock to be issued shall be rounded to the nearest
whole share. Whether or not fractional shares are issuable upon such conversion
shall be determined on the basis of the total number of shares of Preferred
Stock the holder is at the time converting into Common Stock and the number of
shares of Common Stock issuable upon such aggregate conversion.
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(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price of Existing Preferred Stock pursuant to
this Section 4, the Corporation, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Preferred Stock of a series of which the applicable
Conversion Price has been adjusted a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Existing Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth such adjustment and
readjustment, the Conversion Price for such series of Preferred Stock at the
time in effect, and the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the conversion of a
share of each series of Preferred Stock.
(i) NOTICES OF RECORD DATE. In the event of any taking by
the Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, the Corporation
shall mail to each holder of Existing Preferred Stock, at least 20 days prior to
the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Existing Preferred Stock, such number of its
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Existing Preferred Stock; and if at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion of all then outstanding shares of the
Existing Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Existing Preferred Stock, the Corporation will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes, including, without limitation,
engaging in best efforts to obtain the requisite stockholder approval of any
necessary amendment to these articles.
(k) NOTICES. Any notice required by the provisions of this
Section 4 to be given to the holders of shares of Preferred Stock shall be
deemed given if deposited in the United States mail, by registered or certified
mail, postage prepaid, and addressed to each holder of record at his address
appearing on the books of the Corporation.
5. VOTING RIGHTS.
(a) Except as otherwise provided herein, the holder of each
share of Existing Preferred Stock (other than the Series F-2 , G-2 and H-2
Preferred Stock) shall
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have the right to one vote for each share of Common Stock into which such
series of Preferred Stock could then be converted, and with respect to such
vote, such holder shall have full voting rights and powers equal to the voting
rights and powers of the holders of Common Stock, and shall be entitled,
notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the bylaws of the Corporation, and shall be entitled to vote,
together with holders of Common Stock, with respect to any question upon which
holders of Common Stock have the right to vote. Fractional votes shall not,
however, be permitted and any fractional voting rights available on an
as-converted basis (after aggregating all shares into which shares of Existing
Preferred Stock held by each holder could be converted) shall be rounded to the
nearest whole number (with one-half being rounded upward). Notwithstanding the
foregoing, the approval of the holders of a majority of the outstanding
Series F-2, G-2 or H-2 Preferred Stock, as the case may be, shall be required
for any merger or consolidation of the Corporation with or into another entity
or entities, any sale of all or substantially all of the Corporation's assets or
any recapitalization or reorganization, if as a result of any of the foregoing
the shares of such Series would receive or be exchanged for consideration
different on a per share basis than the consideration received with respect to
or in exchange for shares of Series F-1, G-1 or H-1 Preferred Stock, as the case
may be, or would otherwise be treated differently from shares of Series F-1,
Series G-1 or Series H-1 Preferred Stock, respectively, in connection with such
transaction, except that shares of Series F-2, G-2 and H-2 Preferred Stock may
(and, at the request of the holders of a majority of the shares of such Series,
shall), without such a separate class vote, receive or be exchanged for
securities having voting rights comparable to the Series F-2, Series G-2 or
Series H-2 Preferred Stock, as the case may be, and which are otherwise
identical on a per share basis in amount and form to the voting securities
received with respect to or exchanged for Series F-1, G-1 and H-1 Preferred
Stock, as the case may be, so long as (i) such non-voting securities are
convertible into such voting securities on the same terms as Series F-2, G-2 and
H-2 Preferred Stock, as the case may be, is convertible into Class 2 Common
Stock and (ii) all other consideration is equal on a per share basis.
(b) The holders of the Series E Preferred Stock, voting
separately as a class, shall be entitled to elect three (3) directors at each
annual meeting of stockholders of the Corporation at which any director is
elected or at the time of any written consent to action in lieu of any such
meeting. For so long as 20% of the shares of Series F Preferred Stock issued on
the Closing Date (as defined in the Securities Purchase Agreement), pursuant to
the Securities Purchase Agreement remain outstanding, the holders of the
Series F-1 Preferred Stock, voting separately as a class, shall be entitled to
elect at least three (3) directors (the "Series F Directors") at each annual
meeting of stockholders of the Corporation at which any director is elected or
at the time of any written consent to action in lieu of any such meeting;
PROVIDED, that (i) for so long as Electra Investment Trust P.L.C. and Electra
Associates, Inc. (collectively, "Electra") owns at least 213,360 shares of
Series F Preferred Stock (as such number may be adjusted appropriately for stock
splits, stock dividends, combinations and other recapitalizations), Electra
shall have the right to elect one (1) of the directors (the "Electra Director")
to be elected by the holders of the Series F-1 Preferred Stock; (ii) for so long
as Central Investment Holdings, Inc. ("CIH") owns at least 213,360 shares of
Series F Preferred Stock (as such number may be adjusted appropriately for stock
splits, stock dividends, combinations and other recapitalizations), CIH shall
have the right to elect one (1) of the
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directors to be elected by the holder of the Series F-1 Preferred Stock; and
(iii) for so long as Toronto Dominion owns at least 213,360 shares of Series F
Preferred Stock (as such number may be adjusted appropriately for stock splits,
stock dividends, combinations and other recapitalizations), Toronto Dominion
shall have the right to elect one (1) of the directors to elected by the holders
of the Series F Preferred Stock; PROVIDED, HOWEVER, that Toronto Dominion shall
not be entitled to so elect such director if exercising this right would be in
violation of the Bank Holding Company Act. At least one of the Series F
Directors, which shall be the Electra Director, if any, shall have the right to
be a member of the Audit and Compensation Committees of the Board, if any, or of
any committee of the Board performing comparable functions. The holders of
Series G-1 and H-1 Preferred Stock, voting together as a single class, on an
as-converted basis, shall be entitled to elect one (1) director at each annual
meeting of stockholders of the Corporation at which any director is elected or
at any time by written consent to action in lieu of such meeting; provided that
such right to elect a director may not be exercised if holders of more than ten
percent (10%) of the combined shares of Series G and H Preferred Stock then
outstanding, on an as-converted basis, shall have any other rights to elect a
director of the Corporation by virtue of holding any other class or series of
the Corporation's capital stock.
In addition to the above rights of the holders of the Series F-1
Preferred Stock to elect the Series F Directors of the Corporation and, in
addition to any other rights the holders of the Series F Preferred Stock may
have hereunder, under the Securities Purchase Agreement, or in law or equity, to
the extent provided in Section 7.1 of the Securities Purchase Agreement,
immediately upon written notice to the Corporation from the holders of a
majority of the shares of Series F-1 Preferred Stock then outstanding, the
number of directors constituting the Board of Directors of the Corporation shall
automatically and without further action be increased by one, and upon the
exercise of such right by the holders of the Series F-1 Preferred Stock, the
holders of the shares of Series F-1 Preferred Stock then outstanding shall have
the right to elect, by voting as a class, one additional director to the Board
of Directors of the Corporation; provided, however, that the right of the
holders of Series F-1 Preferred Stock to increase the number of directors
constituting such Board of Directors and to elect such additional director may
only be exercised once. No director(s) so elected by the holders of the Series
E or Series F-1 Preferred Stock, Electra, CIH or Toronto Dominion, as the case
may be, may be removed without the prior consent, given in person or by proxy,
either in writing or at a special meeting called for that purpose, of the
holders of such series of Preferred Stock, voting separately as a class,
Electra, CIH or Toronto Dominion, as the case may be. In case of the death,
resignation or other removal of the director elected by the holders of the
Series E or Series F-1 Preferred Stock or Electra, as the case may be, such
holders may elect, voting separately as a class, by written notification
delivered to the Board of Directors of the Corporation, a successor to hold
office for the unexpired term of such removed director. Except as provided in
this subsection V.B.6(b), the holders of Series E Preferred Stock may not vote
for the election of directors.
(c) The directors not elected to the Corporation's Board of
Directors pursuant to subsection V.B.6(b) hereof shall be elected by the holders
of the Class 1 Common Stock and Preferred Stock (other than the Series E, F-2,
G-2 and H-2 Preferred Stock and, for so long as the holders of Series F-1
Preferred Stock shall be entitled to elect the Series F
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Directors pursuant to subsection V.B.6(b) hereof, Series F-1 Preferred Stock),
voting separately as a class.
(d) Until the earlier of (i) a Threshold Public Offering
and (ii) the date on which less than 20% of the shares of Series F Preferred
Stock issued on the Closing Date pursuant to the Securities Purchase Agreement
remain outstanding, the majority of the Corporation's Board of Directors may not
be comprised of (y) representatives collectively designated by Vanguard Cellular
Operating Corp. or any of its Affiliates pursuant to subsection V.B.5(b) hereof,
and/or (z) officers of the Corporation (or any individual performing a similar
function).
(e) The Corporation shall give to each holder of
Series F-2, Series G-2 or Series H-2 Preferred Stock, or Class 2 Common Stock,
notice of any stockholders' meetings for which notice is sent in accordance with
the bylaws of the Corporation to other stockholders of the Corporation, and
shall permit such holders to attend such meetings.
6. PROTECTIVE PROVISIONS.
(a) Subject to the provisions of subsection V.B.6(g) below,
so long as any shares of Series B, Series C, Series D, Series E, Series F-1,
Series G-1 or Series H-1 Preferred Stock are outstanding, the Corporation shall
not without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of at least fifty percent (50%) in the aggregate
of the then outstanding shares of Series B, Series C, Series D, Series E, Series
F-1, Series G-1 and Series H-1 Preferred Stock (voting on an as converted
basis):
(i) authorize or create any new class or series of
stock or any instrument convertible into such stock or authorize an increase in
the authorized number of shares of any existing class or series of stock that
has a preference over, or is on a parity with, the Series B, Series C, Series D,
Series E, Series F, Series G or Series H Preferred Stock with respect to voting,
dividends, or upon liquidation;
(ii) authorize, issue, redeem or acquire any shares
of capital stock of the Corporation, otherwise than pursuant to employee benefit
plans or other compensatory arrangements approved by the Corporation's Board of
Directors; provided, however, that the aggregate number of shares of such
capital stock so approved shall not exceed [2,400,000] shares of Common Stock
(as appropriately adjusted for any stock dividends, combinations, splits or the
like with respect to such shares);
(iii) approve a Corporate Transaction, as defined in
subsection V.B.1(e)(i);
(iv) approve any amendment of this Amended and
Restated Certificate of Incorporation, as the same may be amended from time to
time or of the by-laws of the Corporation;
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<PAGE>
(v) permit the Corporation to organize or acquire an
interest in any business unrelated to the international wireless communications
business or the personal communications services (PCS) business;
(vi) declare or pay any dividends in cash, stock or
other property;
(vii) reinvest more than $3 million in proceeds from
the sale or liquidation of any single investment by the Company; or
(viii)liquidate or dissolve the Corporation.
(b) So long as any shares of Series B, Series C, Series D,
Series E, Series F-1, Series G-1 or Series H-1 Preferred Stock are outstanding,
the Corporation shall not without first obtaining the approval (by vote or
written consent, as provided by law) of the holders of at least two-thirds
(66 2/3%) in the aggregate of the then outstanding shares of Series B, Series C,
Series D, Series E, Series F-1, Series G-1 and Series H-1 Preferred Stock voting
on an as converted basis):
(i) increase or decrease the number of authorized
directors of the Corporation; or
(ii) remove with or without cause any officer or
director of the Corporation, excluding directors elected by the holders of
shares of a series of Preferred Stock pursuant to subsection V.B.6(b) hereof
(who may only be removed by such holders).
(c) So long as any shares of Series F-1 Preferred Stock are
outstanding, the Corporation shall not, without first obtaining the approval (by
vote or written consent) of the holders of at least seventy-five percent (75%)
of the then outstanding shares of Series F-1 Preferred Stock, (i) take any
action which would violate any of the provisions of Section 6.9, 6.11(B), 6.13
or 6.15 of the Securities Purchase Agreement, or (ii) take any other actions
which require the consent of the holders of any other series of Preferred Stock
(whether now existing or created in the future) voting as a class, or with
respect to which a director or other designee of that series of Preferred Stock
must approve such action.
(d) So long as any shares of the Series F-1 Preferred Stock
are outstanding, the Corporation shall not, and shall not permit any of its
Subsidiaries to, take any action (or fail to take any action, as the case may
be) that would violate any of the provisions of Sections 6.1 or 6.14 of the
Securities Purchase Agreement without first obtaining the approval (by vote or
written consent) of (i) the holders of at least eighty percent (80%) of the then
outstanding shares of Series F-1 Preferred Stock or (ii) at least (A) a majority
of the members of the Board of Directors of the Corporation and (B) all of the
Series F Directors. So long as any shares of Series F-1 Preferred Stock are
outstanding, the Corporation shall not, and shall not permit any of its
Subsidiaries to, take any action (or fail to take any action, as the case may
be) that would violate any of the provisions of Section 5.3, 5.4, 5.6, 6.4, 6.8
or 6.16 of the Securities Purchase Agreement without first obtaining the
approval (by vote or written consent) of (i) the
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holders of at least seventy-five percent (75%) of the then outstanding shares of
Series F-1 Preferred Stock or (ii) at least (A) a majority of the members of the
Board of Directors of the Corporation and (B) one Series F Director, if there
shall be two Series F Directors on the Board of Directors of the Corporation, or
a majority of the Board of Directors of the Corporation, if there shall be more
than two Series F Directors on the Board of Directors of the Corporation. So
long as any shares of Series F-1 Preferred Stock are outstanding, the
Corporation shall not, and shall not permit any of its Subsidiaries to, take any
action that would violate any of the provisions of Section 6.5, 6.6, 6.7, 6.10
or 6.11(A) of the Securities Purchase Agreement without first obtaining the
approval (by vote or written consent) of (i) the holders of at least
seventy-five (75%) of the then outstanding shares of Series F-1 Preferred Stock
or (ii) at least (A) seventy-five percent (75%) of the members of the Board of
Directors of the Corporation and (B) at least one Series F Director, if there
shall be two Series F Directors on the Board of Directors of the Corporation, or
a majority of the Series F Directors, if there shall be more than two Series F
Directors on the Board of Directors of the Corporation. Notwithstanding the
foregoing, if any the foregoing actions may not be approved by the requisite
number of Series F Directors solely because the number of Series F Directors
present at such meeting is insufficient to approve such action, then such
meeting of the Board of Directors shall be adjourned and held on a date, not
less than 10 days nor more than 20 days following such adjournment, on which
such requisite number of Series F Directors are present at such meeting (whether
in person or by telephone); PROVIDED, that if there is no date during such
period on which the requisite number of Series F Directors may be present, such
action may be taken at any meeting held not less than 20 days nor more than 30
days following such originally adjourned meeting if approved by (i) at least a
majority or seventy-five (75%), as the case may be, of the members of the Board
of Directors of the Corporation and (ii) all of the Series F Directors present,
if any, at such meeting.
(e) So long as any shares of a series of Existing Preferred
Stock (an "Existing Series") are outstanding, the Corporation shall not, without
first obtaining the approval (by vote or written consent, as provided by law) of
the holders of at least a majority of the shares of such Existing Series then
outstanding, amend the Corporation's Amended and Restated Certificate of
Incorporation to alter or change the rights, preferences or privileges of the
shares of such Existing Series, if such Existing Series would be adversely
affected by such amendment in a manner different from other then outstanding
Existing Series (it being understood that, without limiting the foregoing,
different Existing Series shall not be affected differently because of
differences in the amounts of their respective issue prices, liquidation
preferences and redemption prices or because of changes in the public offering
price per share at which Preferred Stock automatically converts to Common Stock
pursuant to subsection V.B.4(b) above).
(f) So long as any shares of Series E Preferred Stock are
outstanding, the Corporation shall not without, first obtaining the approval (by
vote or written consent, as provided by law) of the holders of at least
two-thirds (2/3) of the shares of Series E Preferred Stock then outstanding,
amend subsection V.B.5(b) hereof to adversely affect the right of holders of
Series E Preferred Stock to elect a director of the Corporation pursuant
thereto. So long as any shares of Series F-1, Series G-1 or Series H-1
Preferred Stock are outstanding, the Corporation shall not without first
obtaining the approval (by vote or written consent, as
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<PAGE>
provided by law) of the holders of at least two-thirds (2/3) of the shares of
Series F-1, Series G-1 and Series H-1 Preferred Stock then outstanding, amend
subsection V.B.5(b) hereof to adversely affect the right of holders of Series
F-1, Series G-1 and Series H-1 Preferred Stock, respectively, to elect directors
of the Corporation pursuant thereto.
(g) So long as any shares of Series G or Series H Preferred
Stock are outstanding, the Corporation shall not without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of at
least fifty percent (50%) in the aggregate of the then outstanding shares of
Series G and Series H Preferred Stock (voting on an as-converted basis):
(i) authorize or create any new class or series of
stock or any instrument convertible into such stock or authorize an increase in
the authorized number of shares of any existing class or series of stock that
has a preference over, or is on a parity with, the Series G or Series H
Preferred Stock with respect to voting, dividends, or upon redemption or
liquidation.
(h) The Corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of the holders of at
least a majority of the shares of the Class 2 Common Stock, Series F-2, Series
G-2 and Series H-2 Preferred Stock then outstanding, voting together as a single
class on an as converted basis, amend the Corporation's Amended and Restated
Certificate of Incorporation to alter or change the rights, preferences or
privileges of the shares of the Class 2 Common Stock, if the Class 2 Common
would be adversely affected by such amendment in a manner different from the
Class 1 Common Stock (it being understood that, without limiting the foregoing,
different Classes of Common Stock shall not be affected differently because of
differences in the amounts of their respective issue prices).
7. STATUS OF REDEEMED AND CONVERTED STOCK. Subject to
subsection V.B.4(a2) above, in the event any shares of Preferred Stock shall be
redeemed or converted pursuant to Sections 3 or 4, respectively hereof, the
shares so redeemed or converted shall be cancelled and shall not be issuable by
the Corporation. The Amended and Restated Certificate of Incorporation of the
Corporation shall be appropriately amended to effect the corresponding reduction
in the Corporation's authorized capital stock.
C. COMMON STOCK.
1. DIVIDEND RIGHTS. Subject to the prior rights of holders of
all classes of stock at the time outstanding having prior rights as to
dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of the Corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.
2. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation shall be
distributed as provided in Section 1 of Division (B) of Article V hereof.
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3. REDEMPTION. The Common Stock is not redeemable.
4. CONVERSION OF CLASS 2 COMMON STOCK.
(a) Upon the occurrence (or the expected occurrence as
described in subsection V.C.4(b) below) of any Conversion Event, each holder of
Class 2 Common Stock shall be entitled to convert, into the same number of
shares of Class 1 Common Stock, any or all of the shares of such holder's
Class 2 Common Stock being (or expected to be) distributed, disposed of or sold
in connection with such Conversion Event.
(b) Each holder of Class 2 Common Stock shall be entitled
to convert such shares of Class 2 Common Stock in connection with any Conversion
Event if such holder reasonably believes that such Conversion Event will be
consummated. A written request for conversion from any holder of Class 2 Common
Stock to the Corporation stating such holder's reasonable belief that a
Conversion Event will occur shall be conclusive and shall obligate the
Corporation to affect such conversion in a timely manner so as to enable each
such holder to participate in such Conversion Event. The Corporation will not
cancel the shares of Class 2 Common Stock so converted before the tenth day
following such Conversion Event and will reserve such shares until such tenth
day for reissuance in compliance with the next sentence. If any shares of
Class 2 Common Stock are converted into shares of Class 1 Common Stock in
connection with a Conversion Event and such shares of Class 1 Common Stock are
not actually distributed, disposed of or sold pursuant to such Conversion Event,
such shares of Class 1 Common Stock shall be promptly converted back into the
same number of shares of Class 2 Common Stock.
5. VOTING RIGHTS. The holder of each share of Class 1 Common
Stock shall have the right to one vote, and shall be entitled to notice of any
stockholders' meeting in accordance with the bylaws of the Corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law. Notwithstanding the foregoing, the approval of the holders of
a majority of the outstanding Class 2 Common Stock, voting together as a single
class, shall be required for any merger or consolidation of the Corporation with
or into another entity or entities, any sale of all or substantially all of the
Corporation's assets or any recapitalization or reorganization, if as a result
of any of the foregoing the shares of Class 2 Common Stock would receive or be
exchanged for consideration different on a per share basis than the
consideration received with respect to or in exchange for shares of Class 1
Common Stock, or would otherwise be treated differently from shares of Class 1
Common Stock in connection with such transaction, except that shares of Class 2
Common Stock may (and, at the request of a majority of the shares of such
Series, shall) receive or be exchanged for securities having voting rights
comparable to the Class 2 Common Stock, so long as (i) such non-voting
securities are convertible into such voting securities on the same terms as
Class 2 Common Stock is convertible into Class 1 Common Stock, and (ii) all
other consideration is equal on a per share basis.
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ARTICLE VI
Except as otherwise provided in this Amended and Restated
Certificate of Incorporation, in furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.
ARTICLE VII
Elections of directors need not be by written ballot unless the
Bylaws of the Corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws may provide. The books of the Corporation may be
kept (subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE IX
A director of the Corporation shall, to the full extent permitted
by the Delaware General Corporation Law as it now exists or as it may hereafter
be amended, not be liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Neither any amendment nor
repeal of this Article IX, nor the adoption of any provision of this Amended and
Restated Certificate of Incorporation inconsistent with this Article IX, shall
eliminate or reduce the effect of this Article IX, in respect of any matter
occurring, or any cause of action, suit or claim that, but for this Article IX,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision. If the Delaware General Corporation Law is amended to
authorize, with the approval of the Corporation's stockholders, further
reductions in the liability of the Corporation's directors, then a director of
the Corporation shall not be liable for any such breach to the fullest extent
permitted by the Delaware General Corporation Law as so amended.
ARTICLE X
The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
ARTICLE XI
At the Effective Time, each share of the Class 2 Common Stock
then issued and outstanding shall be changed into one (1) fully paid and
nonassessable share of Class 1 Common Stock of the Corporation. The Corporation
shall, upon the request of each holder of record of a
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<PAGE>
certificate representing shares of Class 2 Common Stock of the Corporation
issued and outstanding immediately prior to the Effective Time, issue and
deliver to such holder a new certificate or certificates representing the number
of shares of Class 1 Common Stock represented by such certificate immediately
prior to the Effective Time.
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IN WITNESS WHEREOF, said International Wireless Communications
Holdings, Inc. has caused this certificate to be signed by its Executive Vice
President, Douglas S. Sinclair and its Secretary, Aarti C. Gurnani, this 10th
day of September, 1997.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By: /s/ Douglas S. Sinclair
-------------------------------------------
Douglas S. Sinclair, Executive Vice President
Attest:
/s/ Aarti C. Gurnani
- ------------------------------
Aarti C. Gurnani, Secretary
<PAGE>
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
This Intercreditor and Collateral Agency Agreement (this "Agreement"),
dated as of August 18, 1997, is by and among Marine Midland Bank, as trustee
(the "Trustee"), under the Indenture, dated as of August 15, 1996 (the
"Indenture"), between International Wireless Communications Holdings, Inc., a
Delaware corporation (the "Company"), and the Trustee, and those lenders listed
on Exhibit A (the "Lenders") to the Loan Agreement between the Company and the
Lenders dated as of August 18, 1997 (the "Loan Agreement" or "Bank Facility"),
and Bankers Trust Company, as Collateral Agent (as defined below). All terms
used herein which are defined in Section 1 hereof or in the text of any other
Section hereof shall have the meanings given therein. Capitalized terms used
but not defined herein shall have the meanings assigned thereto in the
Indenture.
1. DEFINITIONS.
For the purposes of this Agreement, the following terms shall have the
meanings specified with respect thereto below. Any plural term that is used
herein in the singular shall be taken to mean each entity or item of the defined
class and any singular term that is used herein in the plural shall be taken to
mean all of the entities or items of the defined class, collectively.
"Avoided Payments" shall mean any payment of any Secured Indebtedness
made to any Secured Party hereunder that is subsequently invalidated, declared
fraudulent or preferential, set aside or required to be paid to a trustee,
receiver, or any other party under any bankruptcy act, state or federal law,
common law or equitable cause.
"Collateral" shall mean all property and assets, and interests in
property and assets, upon or in which the Company has granted a lien or security
interest to the Collateral Agent or any Secured Party to secure any Secured
Indebtedness.
"Collateral Agent" shall mean Bankers Trust Company, in its capacity
as agent for the Secured Parties pursuant to this Agreement, or any successor or
replacement agent which may be appointed pursuant to this Agreement.
"Collateral Agent Expenses" shall mean all reasonable costs and
expenses incurred by the Collateral Agent under this Agreement and the Pledge
Agreements when acting with a good faith belief that its actions are not
contrary to the provisions of this Agreement, including in connection with the
realization upon or protection of the Collateral or enforcing or defending any
lien upon or security interest in the Collateral or any other action taken under
or in connection with this Agreement or the Pledge Agreements, reasonable
expenses incurred for legal counsel in connection with the foregoing, and any
other costs, expenses or liabilities incurred by the Collateral Agent for which
the Collateral Agent is entitled to be reimbursed or indemnified pursuant to
this Agreement or any Collateral Document.
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"Collateral Agent Obligations" shall mean, without duplication, all
obligations of the Company to pay, reimburse or indemnify the Collateral Agent
for any Collateral Agent Expenses.
"Collateral Documents" shall mean the Pledge Agreements, any other
agreement, document or instrument in effect on the date hereof or executed after
the date hereof under which the Company has granted a lien upon or security
interest in any property or assets to secure all or any part of the Secured
Indebtedness and all financing statements, certificates, documents and
instruments relating thereto or executed or provided in connection therewith,
each as amended, restated, supplemented or otherwise modified from time to time.
"Enforcement" shall mean (a) for any Secured Party or any holder of
Securities to make demand for payment of or accelerate the time for payment
prior to the scheduled payment date of any Secured Indebtedness, (b) for any
Secured Party or any holder of Securities to commence the judicial enforcement
of any rights or remedies under or with respect to any Financing Agreement or
any Secured Indebtedness, or to set-off or appropriate any balances held by it
for the account of the Company or any other property at any time held or owing
by it to or for the credit or for the account of the Company, (c) for the
Collateral Agent to commence the judicial enforcement of any rights or remedies
under any Collateral Document (other than an action solely for the purpose of
establishing or defending the lien or security interest intended to be created
by any Collateral Document upon or in any Collateral as against or from claims
of third parties on or in such Collateral), to set-off or appropriate any
balances held by it for the account of the Company or any other property at any
time held or owing by it to or for the credit or for the account of the Company
or to otherwise take any action to realize upon the Collateral, or (d) the
commencement by, against or with respect to the Company of any proceeding under
any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law or for the
appointment of a receiver for the Company or its assets.
"Event of Default" shall mean an "Event of Default", as defined in any
Financing Agreement.
"Financing Agreements" shall mean the Indenture and the Loan Agreement
(including the agreements and other exhibits attached thereto).
"Lender(s)" shall mean the lenders under the Bank Facility.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, and a
government or any department or agency thereof
"Refinanced Person" shall have the meaning given in Section 16(b).
"Refinancing Person" shall have the meaning given in Section 16(b).
"Repurchase Offer" shall have the meaning specified in the Indenture.
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"Required Secured Parties" at any time shall mean the holders of more
than 50% of this aggregate outstanding principal amount of the Securities and
the indebtedness outstanding under the Bank Facility.
"Requisite Lenders" shall have the meaning specified in the Loan
Agreement; PROVIDED, HOWEVER, that upon and after the day that is 91 days after
the payment in full of all obligations of the Company to the Lenders under the
Loan Agreement, all requirements herein for the approval or consent of the
Requisite Lenders shall refer to the approval or consent of the Trustee.
"Requisite Securityholders" at any time shall mean holders of
Securities (or, without duplication, the Trustee acting at the direction of
holders of Securities) representing, in the aggregate, more than 50% of the
aggregate outstanding principal amount of all Securities; PROVIDED, HOWEVER,
that upon and after the day that is 91 days after the payment in full of all
obligations of the Company under the Indenture and the Securities to the Trustee
and the holders of the Securities, all requirements herein for the approval or
consent of the Requisite Securityholders shall refer to the approval or consent
of the Requisite Lenders.
"Secured Indebtedness" shall mean the Collateral Agent Obligations and
the indebtedness, liabilities and obligations of the Company under the Indenture
and the Securities to the Trustee and the holders from time to time of the
Securities and under a Financing Agreement relating to a Bank Facility to the
Lenders thereunder, and any agent for such Lenders, now or hereafter owed to any
Secured Party evidenced by or arising under, by virtue of or pursuant to the
Financing Agreements, the Securities, or the Collateral Documents, whether such
indebtedness, liabilities and obligations are direct or indirect, now exist or
hereafter arise, and all renewals and extensions thereof; PROVIDED, HOWEVER,
that maximum amount of indebtedness, liabilities and obligations of the Company
to all Lenders under any Financing Agreements relating to the Bank Facility
shall not exceed $20 million (or such other amount permitted to be incurred by
the Company under the Indenture).
"Secured Parties" shall mean the Lender and the Trustee, for itself
and on behalf of the holders of the Securities.
"Trustee" shall mean Marine Midland Bank in its capacity as trustee
under the Indenture, or any successor or replacement trustee that may be
appointed pursuant to the Indenture.
2. APPOINTMENT OF BANKERS TRUST COMPANY AS COLLATERAL AGENT FOR THE
SECURED PARTIES.
(a) APPOINTMENT OF COLLATERAL AGENT. Subject in all respects to
the terms and provisions of this Agreement, the Secured Parties hereby appoint
Bankers Trust Company to act as agent for the benefit of the Secured Parties
with respect to the liens upon and the security interests in the Collateral and
the rights and remedies granted under and pursuant to the Collateral Documents,
and Bankers Trust Company hereby accepts such appointment and agrees to act as
such agent. To the extent necessary or desirable to enable the Collateral Agent
to
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enforce or otherwise foreclose and realize upon any of the liens or security
interests in the Collateral in any legal proceeding which the Collateral Agent
either commences or joins as a party in accordance with the terms hereof, each
of the Secured Parties agrees to join as a party in such proceeding and take
such action therein to enforce and obtain a judgment for the payment of the
Secured Indebtedness held by it or as to which it is the trustee, subject, in
the case of the Trustee, to its right to prior indemnity, and other provisions
granting it rights not to take action, under the Indenture.
(b) DUTIES OF COLLATERAL AGENT. Subject to the Collateral Agent
having been directed to take such action in accordance with the terms of this
Agreement, each Secured Party hereby irrevocably authorizes the Collateral Agent
to take such action on its behalf under the provisions of the Collateral
Documents and any other instruments, documents and agreements referred to
therein and to exercise such powers thereunder as are specifically delegated to
the Collateral Agent by the terms thereof and such other powers as are
reasonably incidental thereto. Subject to the provisions of Section 10 hereof,
the Collateral Agent is hereby irrevocably authorized to take all actions on
behalf of the Secured Parties to enforce the rights and remedies of the
Collateral Agent and the Secured Parties provided for in the Collateral
Documents or by applicable law with respect to the liens upon and security
interests in the Collateral granted to secure the Secured Indebtedness;
PROVIDED, HOWEVER, that, notwithstanding any provision to the contrary herein or
in any of the Collateral Documents, (i) the Collateral Agent shall act at all
times solely at and in accordance with the written direction of the Required
Secured Parties, (ii) the Collateral Agent shall not, without the written
consent of the Requisite Lenders and the Requisite Securityholders, release or
terminate by affirmative action or consent any lien upon or security interest in
any Collateral granted under any Collateral Documents except (x) upon
dispositions of Collateral by the Company as permitted in accordance with the
terms of the Financing Agreements or the Collateral Documents prior to the
occurrence of an Event of Default (and, for this purpose, the Collateral Agent
(1) shall not be deemed to have knowledge of an Event of Default unless the
Collateral Agent has received notice thereof, and (2) may rely, as to whether a
disposition of Collateral is permitted by the Financing Agreements or the
Collateral Documents, upon a certificate signed by the Requisite Lenders (as
defined in the Loan Agreement), as to the Bank Facility, and the Trustee, as to
the Indenture, and any such certificate shall be full warranty by the applicable
Secured Party to the Collateral Agent as to the truth of the matters certified
to for any action taken by the Collateral Agent in reasonable reliance thereon),
and (y) upon disposition of such Collateral after an Event of Default pursuant
to direction given under clause (i) hereof, and (iii) the Collateral Agent shall
not accept any Secured Indebtedness in whole or partial consideration for the
disposition of any Collateral. The Collateral Agent agrees to make such demands
and give such notices under the Collateral Documents as may be requested by, and
to take such action to enforce the Collateral Documents and to foreclose upon,
collect and dispose of the Collateral or any portion thereof as may be directed
by, the Required Secured Parties; PROVIDED, HOWEVER, that the Collateral Agent
shall not be required to take any action (A) that is contrary to law or the
terms of the Collateral Documents, or this Agreement, or (B) if the Collateral
Agent determines, in good faith, that the potential Collateral Agent Expenses
resulting from such action are likely to exceed the amounts available for
distribution to the Collateral Agent pursuant to Section 5(a)(i) hereof, and so
notifies the Secured Parties giving the Collateral Agent the direction to take
such action, unless
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the Collateral Agent is provided adequate security and indemnity against the
Collateral Agent Expenses which may be incurred by it in taking such action and
complying with any such request or direction, including such reasonable advances
as may be requested by the Collateral Agent.
(c) REQUESTING INSTRUCTIONS. The Collateral Agent may at any
time request directions from the Secured Parties as to any course of action or
other matter relating to the performance of its duties under this Agreement or
the Collateral Documents and the Secured Parties shall respond to such request
in a reasonably prompt manner. The Collateral Agent shall have the right at any
time to seek instructions concerning its obligations hereunder from any court of
competent jurisdiction.
(d) EMERGENCY ACTIONS. If the Collateral Agent has asked the
Secured Parties for instructions following the receipt of any notice of an Event
of Default and if the Required Secured Parties have not responded to such
request within 30 days, the Collateral Agent may, but shall not be obligated to,
take such actions with regard to such Event of Default which the Collateral
Agent, in good faith, believes to be reasonably required to protect the
Collateral from damage or destruction; PROVIDED, HOWEVER, that once instructions
have been received from the Required Secured Parties, the actions of the
Collateral Agent shall be governed thereby and the Collateral Agent shall not
take any further action which would be contrary thereto.
(e) DOCUMENT AMENDMENTS. No amendment, supplement,
modification, restatement, or waiver of any provision of any Collateral Document
or any consent to any departure by the Company therefrom which could reasonably
be expected to adversely affect any of the Secured Parties' rights or interests
thereunder or with respect to any of the Collateral, or any of the Collateral
Agent's rights, immunities or indemnities hereunder or thereunder or which could
reasonably be expected to impose any additional responsibilities upon any
Secured Party or the Collateral Agent shall be effective against such Person
without the written consent of such Person (in the case of any Secured Party,
given in accordance with the applicable Financing Agreements and Collateral
Documents).
(f) ADMINISTRATIVE ACTIONS. The Collateral Agent may, but shall
not be obligated to, take such actions hereunder and under the Collateral
Documents not inconsistent with the instructions of the Required Secured Parties
or the terms of the Collateral Documents, and this Agreement, as the Collateral
Agent deems necessary or appropriate to perfect or continue the perfection of
the liens on the Collateral for the benefit of the Secured Parties.
(g) COLLATERAL AGENT ACTING THROUGH OTHERS. The Collateral
Agent may perform any of its duties under this Agreement and the Collateral
Documents by or through attorneys (which attorneys may be the same attorneys who
represent any Secured Party), agents or other persons reasonably deemed
appropriate by the Collateral Agent. In addition, the Collateral Agent may act
in good faith reliance upon the opinion or advice of attorneys, accountants and
other experts selected by the Collateral Agent, and any action so taken in such
good faith reliance shall be authorized and protected. In all cases the
Collateral Agent may pay customary and reasonable compensation to all such
attorneys, agents or other persons as may be
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employed in connection with the performance of its duties under this Agreement
and the Collateral Documents.
(h) RESIGNATION AND REMOVAL OF COLLATERAL AGENT.
(i) The Collateral Agent (A) may resign at any time upon
notice to the Secured Parties, (B) may be removed at any time upon the written
request of the Required Secured Parties sent to the Collateral Agent and the
other Secured Parties and (C) shall resign at any time when it may not legally
act as agent for the Secured Parties hereunder.
(ii) If the Collateral Agent shall resign or be removed,
the Trustee shall have the right to select and appoint a replacement Collateral
Agent that meets the requirements of clause (v) below by notice to the
Collateral Agent and the other Secured Parties.
(iii) Upon any replacement of the Collateral Agent, the
Collateral Agent shall assign all of the liens upon and security interests in
all Collateral under the Collateral Documents, and all right, title and interest
of the Collateral Agent under all the Collateral Documents, to the replacement
Collateral Agent, without recourse to the Collateral Agent or any Secured Party,
and transfer and pay over to the replacement Collateral Agent all moneys and
other properties held by the Collateral Agent hereunder, all at the expense of
the Company.
(iv) No resignation or removal of the Collateral Agent
shall become effective until a replacement Collateral Agent shall have been
selected as provided herein and shall have assumed in writing the obligations of
the Collateral Agent hereunder and under the Collateral Documents. In the event
that a replacement Collateral Agent shall not have been selected and appointed
as provided in clause (h)(ii) and have assumed such obligations within 30 days
after notice of the resignation or removal of the Collateral Agent, then the
Collateral Agent may select and appoint for and on behalf of the Secured Parties
a replacement Collateral Agent so long as such replacement Collateral Agent
meets the requirements of clause (h)(v) or in its sole discretion may apply to
any court of competent jurisdiction to select and appoint a successor Collateral
Agent to act until such time, if any, as a successor Collateral Agent shall have
been selected and appointed by the Trustee as provided in clause (h)(ii). Any
successor Collateral Agent appointed by the Collateral Agent or such court as
provided above shall immediately and without further act be superseded by any
successor Collateral Agent appointed by the Trustee as provided in
clause (h)(ii).
(v) Any replacement Collateral Agent shall be a bank
trust company, or insurance company having capital, surplus and undivided
profits of at least $100 million, the replacement of the Collateral Agent by
such replacement Collateral Agent shall not violate any provision of any
applicable law or create a relationship which would be in violation thereof,
and, if such replacement Collateral Agent shall have been selected by the
Trustee pursuant to clause (ii) above or by the Collateral Agent pursuant to
clause (h)(iv), the fees charged by such replacement Collateral Agent shall not
be commercially unreasonable.
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(i) INDEMNIFICATION OF COLLATERAL AGENT. The Company, by its
consent hereto, hereby agrees to indemnify and hold the Collateral Agent, its
officers, directors, employees and agents (including, but not limited to, any
attorneys acting at the direction or on behalf of the Collateral Agent) harmless
against any and all costs, claims, damages, penalties, liabilities, losses and
expenses (including, but not limited to, court costs and attorneys' fees) which
may be incurred by or asserted against the Collateral Agent or any such
officers, directors, employees and agents by reason of its status as agent
hereunder or which pertain, whether directly or indirectly, to this Agreement or
the Collateral Documents, or to any action or failure to act of the Collateral
Agent as agent hereunder, except to the extent any such action or failure to act
by the Collateral Agent constitutes gross negligence or willful misconduct. The
obligations of the Company under this Section 2(i) shall survive the payment in
full of the Secured Indebtedness and the termination of this Agreement.
(j) LIABILITY OF COLLATERAL AGENT. In the absence of gross
negligence or willful misconduct, the Collateral Agent will not be liable to any
Secured Party for any action or failure to act or any error of judgment,
negligence, mistake or oversight on its part or on the part of any of its
officers, directors, employees or agents.
(k) NO RELIANCE ON COLLATERAL AGENT. Neither the Collateral
Agent nor any of its officers, directors, employees or agents (including, but
not limited to, any attorneys acting at the direction or on behalf of the
Collateral Agent) shall be deemed to have made any representations or
warranties, express or implied, with respect to, nor shall the Collateral Agent
or any such officer, director, employee or agent be liable to any Secured Party
or responsible for (i) any warranties or recitals made by the Company in the
Collateral Documents or any other agreement, certificate, instrument or document
executed by the Company in connection therewith, (ii) the due or proper
execution or authorization of this Agreement or any Collateral Document by any
party other than the Collateral Agent, or the effectiveness, enforceability,
validity, genuineness or collectibility as against the Company of any Collateral
Document or any other agreement, certificate, instrument or document executed by
the Company in connection therewith, (iii) the present or future solvency or
financial worth of the Company, or (iv) the value, condition, existence or
ownership of any of the Collateral or the existence or perfection of any lien
upon or security interest in the Collateral (whether now or hereafter held or
granted) or the sufficiency of any action, filing, notice or other procedure
taken or to be taken to perfect, attach or vest any lien or security interest in
the Collateral. The Collateral Agent shall not be required, either initially or
on a continuing basis, to (A) make any inquiry, investigation, evaluation or
appraisal respecting, or enforce performance by the Company of, any of the
covenants, agreements or obligations of the Company under any Collateral
Document, or (B) undertake any other actions (other than actions expressly
required to be taken by it under this Agreement). Nothing in any of the
Collateral Documents, expressed or implied, is intended to or shall be so
construed as to impose upon the Collateral Agent any obligations, duties or
responsibilities except as set forth in this Agreement and therein. The
Collateral Agent shall be protected in acting upon any notice, request, consent,
certificate, order, affidavit, letter, telegram, telecopy or other paper or
document given to it by any Person reasonably and in good faith believed by it
to be genuine and correct and to have been signed or sent by such Person. The
Collateral Agent shall have no duty to inquire as to the performance or
observance of any other
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terms, covenants or conditions of any Financing Agreement. The Collateral Agent
will not be required to inspect the properties or books and records of the
Company for any purpose, including to determine compliance by the Company with
its covenants respecting the perfection of security interests.
3. LIEN PRIORITIES. The parties hereto expressly agree that,
notwithstanding the relative priority or the time of grant, creation, attachment
or perfection under applicable law of any security interests and liens, if any,
of any Secured Party upon or in any of the Collateral to secure any Secured
Indebtedness, whether such security interests and liens are now existing or
hereafter acquired or arising and whether such security interests and liens are
in or upon now existing or hereafter arising Collateral, such security interests
and liens shall be security interests of and liens in favor of the Collateral
Agent to secure the Secured Indebtedness in the priorities set forth in
Section 5 hereof.
4. CERTAIN NOTICES. The Collateral Agent and each Secured Party
agree to use their best efforts to give to the others (a) copies of any notice
of the occurrence or existence of an Event of Default sent to the Company,
simultaneously with the sending of such notice to the Company, (b) notice of the
occurrence or existence of an Event of Default of which such party has
knowledge, promptly after obtaining knowledge thereof, and (c) notice of an
Enforcement by such party, prior to commencing such Enforcement, but the failure
to give any of the foregoing notices shall not affect the validity of such
notice of an Event of Default given to the Company or create a cause of action
against or cause of forfeiture of any rights of the party failing to give such
notice or create any claim or right on behalf of any third party. The
Collateral Agent agrees to deliver to each Secured Party a copy of each notice
or other communication received by it under any Collateral Document as soon as
reasonably practicable after receipt thereof.
5. DISTRIBUTION OF PROCEEDS OF COLLATERAL AFTER ENFORCEMENT.
(a) On and after the occurrence of an Enforcement, all proceeds
of Collateral held or received by the Collateral Agent or any Secured Party
(including, without limitation, (i) any amounts received or held by any Secured
Party as a consequence of the exercise of any set-off or other appropriation of
any account or any other property of the Company and (ii) any adequate
protection payments received by any Secured Party on account of any Collateral
in any bankruptcy proceeding) shall (in the case of such proceeds received by
any Secured Party) promptly be delivered to the Collateral Agent and distributed
by the Collateral Agent as follows:
(i) First, to the Collateral Agent in the amount of any
unpaid Collateral Agent Obligations;
(ii) Next, to any Secured Parties from which an Avoided
Payment has been recovered but has not been reimbursed pursuant to this clause
(ii) in the amount of any such Avoided Payments which have not been so
reimbursed, pro rata in proportion to the respective amounts thereof;
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(iii) Next, to the extent proceeds remain, to the Lenders
and the Trustee (for itself and on behalf of the holders of the Securities) in
the amount of the aggregate Accreted Value of the Securities and the principal
amount of, and any unpaid interest on loans outstanding under the Bank Facility,
and (without duplication) any unpaid premiums or payments due upon a Repurchase
Offer due with respect to or constituting a part of, the Secured Indebtedness,
pro rata in proportion to the respective amounts thereof; and
(iv) Next, to the extent proceeds remain, to the Lenders
and the Trustee in the amount of any other unpaid Secured Indebtedness, pro rata
in proportion to the respective amounts thereof.
After the Secured Indebtedness has been finally paid in full in cash,
the balance of proceeds of the Collateral, if any, shall be paid to the Company
or as otherwise required by law.
(b) For the purposes hereof, the interest or amortized original
issue discount accrued on or constituting a part of the Secured Indebtedness
shall include interest on the Secured Indebtedness at the rate specified in the
applicable Financing Agreements from the date of filing of any proceeding under
any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar laws irrespective of
whether or not all or any portion of any such amounts are an allowed claim
enforceable against the debtor in a case under any such law.
6. AMENDMENTS TO AGREEMENTS; ACTIONS RELATED TO COLLATERAL; OTHER
LIENS AND SECURITY INTERESTS.
(a) Each Lender agrees that, without the consent in writing of
the Trustee, it will not (i) retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to all or any part of
the Secured Indebtedness, or (ii) from and after the institution of any
bankruptcy or insolvency proceeding involving the Company, as respects the
Collateral enter into any agreement with the Company with respect to
post-petition usage of cash collateral, post-petition financing arrangements or
adequate protection.
(b) The Trustee agrees that, without the consent in writing of
the Requisite Lenders, it will not (i) retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to all or any part of
the Secured Indebtedness, or (ii) from or after the institution of any
bankruptcy or insolvency proceeding, as respects the Collateral enter into any
agreement with the Company with respect to post-petition usage of cash
collateral, post-petition financing arrangements or adequate protection.
(c) Each Secured Party agrees that it will have recourse to the
Collateral only through the Collateral Agent, that it shall have no independent
recourse thereto and that it shall refrain from exercising any rights or
remedies under the Collateral Documents which have or may have arisen or which
may arise as a result of an Event of Default or an acceleration of the
maturities of the Secured Indebtedness, except that, upon the direction of the
Required Secured Parties, any Secured Party may (but shall not be required to)
appropriate any amount of any balances held by it for the account of the Company
or any other property held or
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owing by it to or for the credit or for the account of the Company provided that
the amount appropriated is delivered to the Collateral Agent for application
pursuant to Section 5 hereof. Without such direction, no Secured Party shall
set-off or appropriate any such amount.
(d) Nothing contained in this Agreement shall (i) prevent any
Secured Party from imposing a default rate of interest in accordance with the
applicable Financing Agreement, or prevent a Secured Party from raising any
defenses or counterclaims in any action in which it has been made a party
defendant or has been joined as a third party, except that the Collateral Agent
may direct and control any defense directly relating to the Collateral or any
one or more of the Collateral Documents as directed by the Required Secured
Parties, which shall be governed by the provisions of this Agreement, or
(ii) affect or impair the right any Secured Party may have under the terms and
conditions governing the Secured Indebtedness to accelerate and demand repayment
of such Secured Indebtedness. Subject only to the express limitations set forth
in this Agreement, each Secured Party retains the right to exercise freely its
rights and remedies as a creditor of the Company in accordance with applicable
law and agreements with the Secured Parties, including, without limitation, the
right to file a lawsuit and obtain a judgment therein against the Company and to
enforce such judgment against any assets of the Company.
(e) Subject to the provisions set forth in this Agreement and
the Financing Agreements, each Secured Party and its affiliates may (without
having to account therefor to any Secured Party) own, sell, acquire and hold
equity and debt securities of the Company, or any affiliate thereof, and lend
money to and generally engage in any kind of business with the Company, and
subject to the provisions of this Agreement, the Secured Parties and their
affiliates may accept dividends, interest, principal payments, fees and other
consideration from the Company for services in connection with this Agreement or
otherwise without having to account of the same to the other Secured Parties.
7. ACCOUNTING; ADJUSTMENTS.
(a) Each of the Collateral Agent and each Secured Party agrees
to render an accounting to any of the others of the amounts of the outstanding
Secured Indebtedness, receipts of payments from the Company or from the
Collateral and of other items relevant to the provisions of this Agreement upon
the reasonable request from one of the other Secured Parties as soon as
reasonably practicable after such request, giving effect to the application of
payments and the proceeds of Collateral as hereinbefore provided in this
Agreement.
(b) Each party hereto agrees that to the extent any payment of
Secured Indebtedness made to it hereunder is in excess of the amount due to be
paid to it hereunder, then it shall pay to the other parties hereto such amounts
so that, after giving affect thereto, the amount received by such party is not
in excess of the amount to be paid to it hereunder. Notwithstanding the
foregoing, the Trustee shall not be liable to return any such excess amount paid
to it if such excess amount has been distributed by it if the holders of the
Securities prior to the time the Trustee received notice of the payment of such
excess amount; provided, however,
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that, in such event, no further distributions shall be made to the Trustee
pursuant to Section 5 hereof until distributions shall thereafter have been made
to the other Lenders pursuant to Section 5 in an aggregate amount equal to such
excess amount.
8. NOTICES. Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have been validly served, given or delivered
five (5) days after deposit in the United States mails, with proper postage
prepaid, one business day after delivery to a courier for next day delivery,
upon delivery by courier or upon transmission by telex, telecopy or similar
electronic medium (provided that a copy of any such notice sent by such
transmission is also sent by one of the other means provided hereunder within
one day after the date sent by such transmission) to the addresses set forth
below the signatures hereto, with a copy to any person or persons set forth
below such signature shown as to receive a copy, or to such other address as any
party designates to the others in the manner herein prescribed; PROVIDED that
notices or other communications to the Collateral Agent and the Trustee shall be
effective body upon receipt. Any party giving notice to any other party
hereunder shall also give copies of such notice to all other parties.
9. CONTESTING LIENS OR SECURITY INTERESTS; NO PARTITIONING OR
MARSHALLING OF COLLATERAL; CONTESTING SECURED INDEBTEDNESS.
(a) No Secured Party shall contest the validity, perfection,
priority or enforceability of, or seek to avoid, have declared fraudulent or
have put aside any lien or security interest granted to the Collateral Agent in
compliance with the Indenture and the Pledge Agreement and each party hereby
agrees to cooperate in the defense of any action contesting the validity,
perfection, priority or enforceability of such liens or security interests.
Each party shall also use its best efforts to notify the other parties of any
change in the location of the business operations of the Company of any change
in law which would make it necessary or advisable to file additional financing
statements in another location against the Company with respect to the liens and
security interests intended to be created by the Collateral Documents, but the
failure to do so shall not create a cause of action against the party failing to
give such notice or create any claim or right on behalf of any other party
hereto or any third party.
(b) Notwithstanding anything to the contrary in this Agreement
or in any Collateral Document, no Secured Party shall have the right to have any
of the Collateral partitioned, or to file a complaint or institute any
proceeding at law or in equity to have any of the Collateral or any such
security interest or other property partitioned, and each Secured Party hereby
waives any such right. Each Secured Party hereby waives any and all rights to
have the Collateral, or any part thereof, marshaled upon any foreclosure of any
of the liens or security interests securing the Secured Indebtedness.
(c) No Secured Party shall contest the validity or
enforceability of or seek to avoid, have declared fraudulent or have set aside
any Secured Indebtedness incurred in compliance with the Indenture. In the
event any such Secured Indebtedness is invalidated, avoided, declared fraudulent
or set aside for the benefit of the Company, the Secured Parties
11
<PAGE>
agree that such Secured Indebtedness shall nevertheless be considered to be
outstanding for all purposes of this Agreement.
10. NO ADDITIONAL RIGHTS FOR THE COMPANY HEREUNDER. The Company, by
its consent hereto, acknowledges that it shall have no rights under this
Agreement. If the Collateral Agent or any Secured Party shall violate the terms
of this Agreement, the Company agrees, by its consent hereto, that it shall not
use such violation as a defense to any enforcement by any such party of any
obligations of the Company nor assert such violation as a counterclaim or basis
for set-off or recoupment against any such party.
11. BANKRUPTCY PROCEEDINGS. Except as provided in Section 6 hereof,
nothing contained herein shall limit or restrict the independent right of any
Secured Party to initiate an action or actions in any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar proceeding in its individual capacity and
to appear or be heard on any matter before the bankruptcy or other applicable
court in any such proceeding, including, without limitation, with respect to any
question concerning the post-petition usage of Collateral and post-petition
financing arrangements. The Collateral Agent, acting in such capacity, is not
entitled to initiate such actions on behalf of any Secured Party or to appear
and be heard on any matter before the bankruptcy or other applicable court in
any such proceeding as the representative of any Secured Party. The Collateral
Agent is not authorized in any such proceeding to enter into any agreement for,
or give any authorization or consent with respect to, the post-petition usage of
Collateral, unless such agreement, authorization or consent has been approved in
writing by the Requisite Securityholders and the Requisite Lenders. This
Agreement shall survive the commencement of any such bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar proceeding.
12. INDEPENDENT CREDIT INVESTIGATION. Neither the Collateral Agent
nor any Secured Party, nor any of their respective directors, officers, agents
or employees, shall be responsible to any of the others for the solvency or
financial condition of the Company or the ability of the Company to repay any of
the Secured Indebtedness, or for the value, sufficiency, existence or ownership
of any of the Collateral, the perfection or vesting of any lien or security
interest, or the statements of the Company, oral or written, or for the
validity, sufficiency or enforceability of any of the Secured Indebtedness, any
Financing Agreement, any Collateral Document, any document, instrument or
agreement executed or delivered in connection with or pursuant to any of the
foregoing, or the liens or security interests granted by the Company in
connection therewith. Each Secured Party has entered into its respective
financial agreements with the Company based upon its own independent
investigation, and makes no warranty or representation to the other, nor does it
rely upon any representation by any of the others, with respect to the matters
identified or referred to in this Section 12.
13. SUPERVISION OF OBLIGATIONS. Except to the extent otherwise
expressly provided herein, each Secured Party shall be entitled to manage and
supervise the obligations of the Company to it in accordance with applicable law
and such Secured Party's practices in effect from time to time without regard to
the existence of any other Secured Party.
12
<PAGE>
14. TURNOVER OF COLLATERAL. If any Secured Party (other than the
Collateral Agent) acquires custody, control or possession of any Collateral or
any proceeds thereof other than pursuant to the terms of this Agreement, such
Secured Party shall promptly cause such Collateral or the proceeds thereof to be
delivered to or put in the custody, possession or control of the Collateral
Agent for disposition and distribution in accordance with the provisions of
Section 5 of this Agreement. Until such time as such Secured Party shall have
complied with the provisions of the immediately preceding sentence, such Secured
Party shall be deemed to hold such Collateral and the proceeds thereof in trust
for the parties entitled thereto under this Agreement.
15. AMENDMENT. An amendment, supplement, modification, restatement
or waiver hereof shall be effective if, and only if, consented to in writing by
the Requisite Securityholders (or the Trustee on their behalf) and the Requisite
Lenders (or any agent on their behalf); PROVIDED, HOWEVER, that no such
amendment, supplement, modification, restatement, waiver or consent which could
reasonably be expected to adversely affect any of the Collateral Agent's rights,
immunities or indemnities hereunder or which could reasonably be expected to
impose any additional responsibilities upon the Collateral Agent shall be
effective without the written consent of the Collateral Agent; and PROVIDED,
FURTHER, that no such amendment, supplement, modification restatement, waiver or
consent shall be effective (i) against the Trustee or any holder of Securities
unless it has been consented to in compliance with all of the terms and
provisions of the Indenture or (ii) against any Lender unless it has been
consented to in compliance with all of the terms and provisions of the
applicable Financing Agreements.
16. SUCCESSORS AND ASSIGNS; REFINANCINGS.
(a) This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of each of the parties hereof,
including subsequent holders of the Secured Indebtedness, provided that (i) no
Lender shall assign or transfer any interest in any Secured Indebtedness under a
Bank Facility unless such transfer or assignment is made subject to this
Agreement and the applicable transferee or assignee becomes a signatory to this
Agreement and assumes the obligations of the transferor or assignor hereunder
with respect to the Secured Indebtedness so assigned from and after the time of
such transfer or assignment, and (ii) the appointment of any replacement
Collateral Agent shall be subject to the provisions of Section 2(h) hereof.
(b) In the event of any refinancing of the respective extensions
of credit provided by any Bank Facility or the Securities, then the Person or
Persons providing such refinancing or a trustee or agent therefor (the
"Refinancing Person") may succeed to the rights hereunder of the Person or
Persons whose credit extension is being refinanced (the "Refinanced Person")
with respect to the Secured Indebtedness being refinanced, and the indebtedness
being provided by such refinancing may become Secured Indebtedness entitled to
the benefits of the liens and security interests in the Collateral pursuant to
the Collateral Documents, subject to the provisions hereof, provided that (i)
the Refinancing Person becomes a signatory to this Agreement and assumes the
obligations of the Refinanced Person with respect to the Secured Indebtedness
being refinanced by executing and delivering to the Secured Parties a
counterpart of
13
<PAGE>
this Agreement, (ii) the principal amount of the credit available at any time
under such refinancing shall not exceed the principal amount of the outstanding
Secured Indebtedness being refinanced at the time of such refinancing plus the
amount of any prepayment premium and expenses reasonably incurred by the Company
in connection with such refinancing (PROVIDED, HOWEVER, that nothing contained
in this paragraph (b) shall limit the right of the Company to incur indebtedness
pursuant to a Permitted Bank Facility in accordance with the Indenture).
17. LIMITATION RELATIVE TO OTHER AGREEMENTS. Nothing contained in
this Agreement is intended to impair, as between any Secured Party and the
Company, the rights of such Secured Party and the obligations of the Company
under the Financing Agreements between the Company and such Secured Party.
18. COUNTERPARTS. This Agreement may be executed in several
counterparts and by each party on a separate counterpart, each of which, when so
executed and delivered, shall be an original, but all of which together shall
constitute but one and the same instrument. In proving this Agreement, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.
19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW.
20. INDENTURE TRUSTEE. Each of the other parties to this Agreement
acknowledges that the Trustee is entering into this Agreement in its capacity as
Trustee under the Indenture and not in its individual capacity.
21. TERMINATION. This Agreement shall terminate automatically on the
91st day following the payment in full of the Secured Indebtedness; PROVIDED,
HOWEVER, that SECTION 2(i) of this Agreement shall survive, and remain operative
and in full force and effect, regardless of the termination of this Agreement.
22. REPRESENTATIONS AND WARRANTIES. Each of the Collateral Agent,
the Trustee, the Lenders and the Company represents and warrants to the other
parties hereto that (a) the execution, delivery and performance of this
Agreement (i) has been duly authorized by all requisite corporate, partnership
or other action on its part and (ii) will not contravene any provision of its
charter or bylaws or any order of any court or other governmental authority
applicable to it, and (b) this Agreement has been duly executed and delivered by
it and constitutes its legal, valid and binding obligation.
14
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written above.
MARINE MIDLAND BANK,
as Trustee
By: /s/ Charles E. Bauer
------------------------------------
Name: Charles E. Bauer
Title: Vice President
Address for notices:
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005-1180
Attn: Corporate Trust Administration
BANKERS TRUST COMPANY,
as Collateral Agent
By: /s/ Kevin Weeks
------------------------------------
Name: Kevin Weeks
Title: Assistant Vice President
Address for notices:
Bankers Trust Company
Four Albany Street, 4th Floor
New York, NY 10006
SIGNATURE PAGE TO INTERCREDITOR AGREEMENT
<PAGE>
VANGUARD CELLULAR FINANCIAL
CORPORATION
By: /s/ Richard C. Rowlenson
------------------------------------
Name: Richard C. Rowlenson
Title: Vice President
Address for notices:
Vanguard Cellular Financial Corporation
2002 Pisgah Church Road, Suite 300
Greensboro, NC 27455
TORONTO DOMINION INVESTMENTS, INC.
By: /s/ Martha L. Gariepy
------------------------------------
Name: Martha L. Gariepy
Title: Vice President
Address for notices:
Toronto Dominion Investments, Inc.
909 Fannin, Suite 1700
Houston, TX 77010
SIGNATURE PAGE TO INTERCREDITOR AGREEMENT
<PAGE>
---------------------------------------
[Type or Print Name of Lender]
By:
------------------------------------
Name:
Title:
Address for notices:
Acknowledged and consented to:
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By: /s/ Douglas S. Sinclair
- ----------------------------------------
Name: Douglas S. Sinclair
Title: Executive Vice President
INTERNATIONAL WIRELESS
COMMUNICATIONS, INC.
By: /s/ Douglas S. Sinclair
- ----------------------------------------
Name: Douglas S. Sinclair
Title: Executive Vice President
SIGNATURE PAGE TO INTERCREDITOR AGREEMENT
<PAGE>
THE SECURITY REPRESENTED BY THIS INSTRUMENT WAS ORIGINALLY ISSUED ON AUGUST 18,
1997, AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THE TRANSFER OF SUCH SECURITY IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE LOAN
AGREEMENT DATED AS OF AUGUST 18, 1997, AS IN EFFECT FROM TIME TO TIME, BETWEEN
THE ISSUER HEREOF ("BORROWER") AND CERTAIN LENDERS, AND BORROWER RESERVES THE
RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITY UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON WRITTEN REQUEST, A COPY OF SUCH
CONDITIONS WILL BE FURNISHED BY BORROWER TO THE HOLDER HEREOF WITHOUT CHARGE.
THIS TRANCHE A SENIOR EXCHANGEABLE NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE
DISCOUNT AND, AS REQUIRED BY TREASURY REGULATION SECTION 1.1275-3(B)(1),
INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE AND THE YIELD TO MATURITY MAY BE OBTAINED FROM BORROWER.
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
TRANCHE A SENIOR EXCHANGEABLE NOTE
August 181997 $___________
International Wireless Communications Holdings, Inc., a Delaware
corporation ("BORROWER"), for value received, hereby promises to pay to the
order of [PAYEE] the principal amount of
[________________________________________] (US$___________) on August 17,
2002,* together with interest thereon calculated from the date hereof in
accordance with the provisions of the Loan Agreement referred to below.
This Note was issued pursuant to the Loan Agreement, dated as of
August 18, 1997 (as in effect from time to time, the "LOAN AGREEMENT"), among
Borrower and the Lenders who from time to time are parties thereto and is one of
the "Tranche A Notes" referred to in the Loan Agreement. The Loan Agreement
contains terms governing the rights of the holder of this Note, and all
provisions of the Loan Agreement are hereby incorporated in this Note in full by
this reference. Except as otherwise defined in this Note, each capitalized term
used in this Note has the meaning set forth in the Loan Agreement.
Subject to the transfer conditions referred to in the legend endorsed
on this Note, this Note and all rights hereunder are transferable, in whole or
in part, without charge to the
- ---------------------------
* [The Maturity Date]
<PAGE>
holder, upon surrender of this Note, properly endorsed for transfer, at the
office of Borrower specified for delivery of notices pursuant to the Loan
Agreement.
This Note is exchangeable, upon the surrender of this Note by the
holder at the office of Borrower specified for delivery of notices pursuant to
the Loan Agreement, for one or more new Notes of like tenor representing in the
aggregate the rights under this Note, and each of such new Notes will represent
such portion of such rights as is designated by the holder at the time of such
surrender.
Upon receipt of evidence reasonably satisfactory to Borrower (it being
agreed that an affidavit of the holder will be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any certificate evidencing
this Note, and in the case of any such loss, theft or destruction, upon receipt
of indemnity reasonably satisfactory to Borrower (it being agreed that such
holder's its own unsecured agreement will be satisfactory), or, in the case of
any such mutilation upon surrender of such certificate, Borrower will (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost, stolen,
destroyed or mutilated certificate.
It is the intention of Borrower and the holder of this Note to conform
strictly to all applicable usury laws now or hereafter in force, and any
interest payable under this Note will be subject to reduction to the amount not
in excess of the maximum legal amount allowed under the applicable usury laws as
now or hereafter construed by the courts having jurisdiction over such matters.
If such interest does exceed the maximum legal rate, it will be deemed a
mistake.
Borrower and the Initial Lenders participated jointly in the
negotiation and drafting of this Note. In the event an ambiguity or question of
intent or interpretation arises, this Note will be construed as if drafted
jointly by Borrower and the holder hereof, and no presumption or burden of proof
will arise favoring or disfavoring any Person by virtue of the authorship of any
of the provisions of this Note.
The holder of this Note named as the payee hereof is the owner of this
obligation with respect to principal and interest. Furthermore, transfer of
this obligation can be effected by such named person only by surrender of this
obligation to Borrower and by either reissuance by Borrower of this Note to a
new holder or by the issuance of a new obligation to the new holder. It is
intended that interest paid on the obligation qualify for the exemption from
U.S. withholding tax as a portfolio debt instrument under Section 871(h) or
881(c) of the Internal Revenue Code.
2
<PAGE>
IN WITNESS WHEREOF, Borrower has executed and delivered this Note on
the date specified above.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By
------------------------------------
Its
------------------------------------
3
<PAGE>
PAYMENT DATE PRINCIPAL PAID INTEREST PAID PRINCIPAL BALANCE
- ------------ -------------- ------------- -----------------
4
<PAGE>
FORM OF INITIAL WARRANT
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT, PURSUANT TO RULE 144 UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT.
No. IWC-__ Void after August 17, 2007.
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
WARRANT TO PURCHASE COMMON STOCK
This Warrant is issued to __________________ (the "Holder") by
International Wireless Communications Holdings, Inc., a Delaware corporation
(the "Company"), pursuant to the Loan Agreement dated as of August 18, 1997
among the Company and the persons named on Exhibit A thereto (the "Loan
Agreement"), and certain matters relating to this Warrant are governed by the
Exchange Agreement referred to in the Loan Agreement (the "Exchange Agreement").
This Warrant is one of the "Initial Warrants" referred to in the Exchange
Agreement. Each capitalized term which is used and not otherwise defined in
this Warrant has the meaning which the Exchange Agreement assigns to that term.
1. PURCHASE OF SHARES. Subject to the terms and conditions
hereinafter set forth, the Holder is entitled, upon surrender of this Warrant
at the principal office of the Company (or at such other place as the Company
shall notify the Holder hereof in writing), to purchase a number of shares of
the Company's [Class 1/Class 2] Common Stock, par value $0.01 per share (the
"Equity Securities"), at a per share purchase price of No Dollars and One
Cent ($0.01) per share, which is equal to (a) ____%* of the Total Number of
Issuable Warrant Shares at such time, REDUCED BY (b) the number of Warrant
Shares as to which this Warrant has theretofore been exercised or canceled
(as adjusted pursuant to Section 7, the "PREVIOUSLY ISSUED WARRANT SHARES").
The shares of Equity Securities issuable at any time as described in clauses
(a) and (b) above are referred to as the "WARRANT SHARES". The purchase
price of the Warrant Shares as provided in this Section 1 (the "Exercise
Price") shall be subject to adjustment pursuant to Section 7 hereof.
- ---------------------
* For any Committed Lender, the Percentage set forth for such Committed
Lender on Exhibit A to the Exchange Agreement.
<PAGE>
2. EXERCISE PERIOD. This Warrant is exercisable only until and
including the close of business on August 17, 2007.
3. METHOD OF EXERCISE. While this Warrant remains outstanding and
exercisable in accordance with Section 2 above, the Holder may exercise, from
time to time, the purchase rights evidenced hereby. Such exercise shall be
effected by:
(a) the surrender of this Warrant, together with a duly executed
copy of the form of subscription attached hereto, to the Secretary of the
Company at its principal offices; and
(b) the payment to the Company of an amount equal to the
aggregate Exercise Price for the number of Warrant Shares being purchased.
4. NET ISSUE EXERCISE.
(a) In lieu of exercising this Warrant as to any number of
Warrant Shares, Holder may elect to receive shares equal to the value of this
Warrant with respect to such Warrant Shares (whereupon the purchase rights under
this Warrant as to such Warrant Shares will be cancelled) by surrender of this
Warrant at the principal office of the Company together with notice of such
election in which event the Company shall issue to Holder a number of shares of
Equity Securities computed using the following formula:
X = (Y)(A-B)
-------
A
Where X - The number of shares of Equity Securities to be issued to
Holder.
Y - The number of shares of Warrant Shares as to which such
cancellation is to be effected.
A - The fair market value of one share of the Equity Securities
to be issued upon such cancellation.
B - Exercise Price (as adjusted to the date of such
calculations).
(b) For purposes of this Section, the Board of Directors of the
Company shall determine the fair market value in its good
faith.
5. RETURN OF WARRANT AND CERTIFICATES FOR WARRANT SHARES. Upon the
exercise or cancellation of the purchase rights evidenced by this Warrant, one
or more certificates for the number of Warrant Shares to be issued shall be
issued as soon as practicable thereafter, and in any event within thirty
(30) days of the delivery of the subscription notice. Together with such share
certificate(s), the Company will return to the Holder (or to such other Person
as the Holder may designate, so long as the Holder has complied with the
applicable provisions of Section 10 as to the transfer of this Warrant to such
other Person) this Warrant, after recording on the attached
Exercise/Cancellation Schedule the date of such exercise or cancellation and the
number of Warrant Shares as to which this Warrant is being exercised or
canceled.
2
<PAGE>
6. RESERVATION OF WARRANT SHARES. The Company covenants that it
will at all times keep available such number of authorized shares of its Equity
Securities issuable upon exercise of this Warrant, free from all preemptive
rights with respect thereto, which will be sufficient to permit the exercise or
cancellation of the purchase rights under this Warrant for the full number of
Warrant Shares specified herein. The Company further covenants that such
Warrant Shares, when issued pursuant to the exercise of this Warrant, will be
duly and validly issued, fully paid and nonassessable and free from all taxes,
liens, and charges with respect to the issuance thereof.
7. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF PREVIOUSLY ISSUED
WARRANT SHARES. The number of Previously-Issued Warrant Shares, the kind of
securities purchasable upon exercise or cancellation of rights under this
Warrant and the Exercise Price shall be subject to adjustment from time to time
as follows:
(a) SUBDIVISIONS, COMBINATIONS AND OTHER ISSUANCES. If the
Company shall at any time prior to the expiration of this Warrant subdivide its
Equity Securities by split-up or otherwise, or combine its capital stock, or
issue additional securities as a dividend with respect to any shares of its
Equity Securities, the number of Previously Issued Warrant Shares shall
forthwith be proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a combination. Inversely
proportional adjustments shall also be made to the Exercise Price payable per
share, but the aggregate purchase price payable for the total number of Warrant
Shares purchasable under this Warrant (as adjusted) shall remain the same. Any
adjustment under this Section 7(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of
the record date of such dividend, or in the event that no record date is fixed,
upon the making of such dividend.
(b) RECLASSIFICATION, REORGANIZATION, AND CONSOLIDATION. In
case of any reclassification, capital reorganization, or change in the capital
stock of the Company (other than as a result of a subdivision, combination, or
stock dividend provided for in Section 7(a) above), then, as a condition of such
reclassification, reorganization, or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the Holder, so that the Holder shall have the right at any
time prior to the expiration of this Warrant to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization, or change by a holder of the same number of
shares of capital stock as were purchasable by the Holder immediately prior to
such reclassification, reorganization, or change. In any such case appropriate
provisions shall be made with respect to the rights and interest of the Holder
so that the provisions hereof shall thereafter be applicable with respect to any
shares of stock or other securities and property deliverable upon exercise
hereof, and appropriate adjustments shall be made to the Exercise Price per
share payable hereunder, provided the aggregate purchase price shall remain the
same.
(c) NOTICE OF ADJUSTMENT. When any adjustment is required to be
made in the Previously Issued Warrant Shares, in the number or kind of shares
purchasable upon exercise of this Warrant, or in the Exercise Price, the Company
shall promptly notify the Holder of such event and the adjusted number of
Previously Issued Warrant Shares, the adjusted
3
<PAGE>
Exercise Price and the type of securities or property thereafter purchasable
upon exercise of or cancellation of rights under this Warrant.
8. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise or cancellation
of rights under this Warrant, but in lieu of such fractional shares the Company
shall make a cash payment therefor on the basis of the fair market value (as
determined in good faith by the Company's Board of Directors) of one Warrant
Share of the type in question.
9. NO STOCKHOLDER RIGHTS. Prior to exercise of this Warrant, the
Holder shall not be entitled to any rights of a stockholder with respect to the
Warrant Shares, including (without limitation) the right to vote such Warrant
Shares, receive dividends or other distributions thereon, exercise preemptive
rights or be notified of stockholder meetings, and such Holder shall not be
entitled to any notice or other communication concerning the business or affairs
of the Company. Notwithstanding the foregoing, the Company will give written
notice to the Holders hereof at least 20 days prior to the date on which the
Company closes its books or takes a record (i) with respect to any Distribution
upon the Equity Securities, (ii) with respect to any pro rata subscription offer
to holders of the Equity Securities or (iii) for determining rights to vote with
respect to any Liquidity Event, Organic Change, dissolution or liquidation. The
Company will also give written notice to the Holders hereof at least 20 days
prior to the date on which any Liquidity Event or Organic Change takes place.
10. SUCCESSORS AND ASSIGNS. The terms and provisions of this Warrant
shall inure to the benefit of, and be binding upon, the Company and the Holders
hereof and their respective successors and assigns.
A Holder may transfer in whole or in part the purchase rights
evidenced hereby to any third party to whom such rights may be transferred
without registration or qualification under federal or state securities laws,
provided: (a) the transferee or assignee receives a Warrant to purchase five
percent (5%) of the Warrant Shares; (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of the
name and address of such transferee or assignee; (c) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions of this
Warrant; and (d) the transferor shall have delivered to the Company, if
reasonably requested by counsel to the Company, an opinion of counsel
substantially to the effect that the transfer or assignment can be effected
without registration or qualification under applicable federal or state
securities laws (or, at the Holders' option, a certification by the Holder to
that effect in which the Holder agrees to indemnify and hold harmless the
Company in respect of any violation of such securities laws in connection with
such transfer). Upon surrender of this Warrant to the Secretary of the Company
at its principal offices after any such transfer, the Company will issue one or
more new Warrants of like tenor (in the name(s) of the Holder and/or the
transferee(s), as appropriate) representing in the aggregate the purchase rights
represented by this Warrant.
11. AMENDMENTS AND WAIVERS. Any term of this Warrant may be amended
and the observance of any term of this Warrant may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders Initial Warrants representing a
majority of the securities as to which all outstanding
4
<PAGE>
Initial Warrants are then exercisable. Any waiver or amendment effected in
accordance with this section shall be binding upon each holder of any Warrant
Shares thereafter purchased under this Warrant, each future holder of all such
Warrant Shares, and the Company.
12. EFFECT OF AMENDMENT OR WAIVER. The Holder acknowledges that by
the operation of paragraph 11 hereof, the holders of Initial Warrants
representing a majority of the securities as to which all outstanding Initial
Warrants are then exercisable will have the right and power to diminish or
eliminate all rights of such Holder under this Warrant or under the Exchange
Agreement.
5
<PAGE>
13. GOVERNING LAW. This Warrant shall be governed by the laws of the
State of Delaware as applied to agreements among Delaware residents made and to
be performed entirely within the State of Delaware.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By:
----------------------------------
Douglas S. Sinclair
Executive Vice President
6
<PAGE>
SUBSCRIPTION
International Wireless Communications Holdings, Inc.
Attention: Corporate Secretary
1. The undersigned hereby elects to purchase, pursuant to
the provisions of the Warrant to Purchase _______________ shares of
_________________ stock of International Wireless Communications Holdings,
Inc. and held by the undersigned, ____________ shares of ________ stock of
International Wireless Communications Holdings, Inc. Payment of the exercise
price per share required under such Warrant accompanies this Subscription.
1. The undersigned hereby elects to receive shares
equal to the value of this Warrant as to _________ Warrant Shares in the
manner specified in Section 4 of the Warrant.
[Strike paragraph above that does not apply.]
Date:
-----------------------
Signature:
-----------------------
Address:
-----------------------
-----------------------
Name in which shares should be registered:
- -----------------------------------
<PAGE>
EXERCISE/CANCELLATION SCHEDULE
Date Number of Warrant Shares as to which
Warrant Exercised or Canceled
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LOAN AGREEMENT
BETWEEN
PAKISTAN WIRELESS HOLDINGS LIMITED
AND
THE LENDERS WHO FROM TIME TO TIME
ARE PARTIES HERETO
AUGUST 18, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Principles. . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE II THE LOANS AND RELATED MATTERS. . . . . . . . . . . . . . . . . .10
2.01 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2.02 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2.03 Repayment of Principal . . . . . . . . . . . . . . . . . . . . . . .10
2.04 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
2.05 Prepayment of Loans. . . . . . . . . . . . . . . . . . . . . . . . .11
2.06 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
2.07 Application of Payments. . . . . . . . . . . . . . . . . . . . . . .13
2.08 Initial Lenders' Representations and Warranties. . . . . . . . . . .13
ARTILE III REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . .14
3.01 Organization and Qualification . . . . . . . . . . . . . . . . . . .14
3.02 Corporate Power. . . . . . . . . . . . . . . . . . . . . . . . . . .15
3.03 Subsidiaries and Investments . . . . . . . . . . . . . . . . . . . .15
3.04 Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
3.05 Authorization, Governmental Approvals. . . . . . . . . . . . . . . .16
3.06 Validity and Binding Effect. . . . . . . . . . . . . . . . . . . . .16
3.07 Ownership of Borrower. . . . . . . . . . . . . . . . . . . . . . . .16
3.08 No Event of Default; Compliance with Agreements. . . . . . . . . . .17
3.09 Solvency, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
3.10 Regulations G and X. . . . . . . . . . . . . . . . . . . . . . . . .17
3.11 Investment Company; Public Utility Holding Company . . . . . . . . .17
3.12 [Reserved.]. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
3.13 Brokerage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
3.14 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.15 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . .18
3.16 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
3.17 Affiliated Transactions. . . . . . . . . . . . . . . . . . . . . . .18
3.18 Title to Properties. . . . . . . . . . . . . . . . . . . . . . . . .19
3.19 Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
3.20 Outstanding Indebtedness . . . . . . . . . . . . . . . . . . . . . .19
3.21 Operations, Agreements, Liabilities. . . . . . . . . . . . . . . . .19
3.22 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .19
3.23 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . .19
3.24 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
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ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . .20
4.01 Representations, Warranties, Covenants . . . . . . . . . . . . . . .20
4.02 Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
4.03 Contributions to Borrower. . . . . . . . . . . . . . . . . . . . . .21
4.04 Collateral Items . . . . . . . . . . . . . . . . . . . . . . . . . .21
4.05 Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . .21
4.06 Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . .21
4.07 Closing under IWCH Loan Agreement. . . . . . . . . . . . . . . . . .21
4.08 Vanguard Purchase. . . . . . . . . . . . . . . . . . . . . . . . . .22
4.09 SAWC Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
4.10 License Matters. . . . . . . . . . . . . . . . . . . . . . . . . . .22
4.11 Newco Shareholders Agreement . . . . . . . . . . . . . . . . . . . .22
4.12 Commitment and Structuring Fees. . . . . . . . . . . . . . . . . . .22
4.13 Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
5.01 Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . .22
5.02 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . .24
5.03 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . .28
ARTICLE VI DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
6.01 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . .29
6.02 Consequences of Event of Default . . . . . . . . . . . . . . . . . .31
6.03 Rights of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . .32
6.04 Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
ARTICLE VII SUCCESSORS AND ASSIGNS; PARTICIPATIONS. . . . . . . . . . . . .32
7.01 Successors and Assigns in General. . . . . . . . . . . . . . . . . .32
7.02 Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
7.03 Further Assurance. . . . . . . . . . . . . . . . . . . . . . . . . .33
ARTICLE VIII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .33
8.01 Modifications, Amendments or Waivers . . . . . . . . . . . . . . . .33
8.02 No Implied Waivers; Cumulative Remedies; Writing Required. . . . . .33
8.03 Reimbursement of Expenses; Taxes . . . . . . . . . . . . . . . . . .33
8.04 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
8.05 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
8.06 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
8.07 Governing Law; Waivers and Jurisdiction. . . . . . . . . . . . . . .35
8.08 Herein, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.09 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
8.12 Brokers Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.13 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . .37
8.14 Payment Set Aside. . . . . . . . . . . . . . . . . . . . . . . . . .37
8.15 Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . .38
8.16 No Strict Construction . . . . . . . . . . . . . . . . . . . . . . .38
8.17 Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
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LIST OF EXHIBITS
Exhibit A - Initial Lenders and Loan Amounts
Exhibit B - Opinions of Borrower's Counsel
Exhibit C - Form of Exchange Agreement
Exhibit D - Forms of Exchangeable Senior Secured Note:
Exhibit D-1 - Tranche A Note
Exhibit D-2 - Tranche B Note
Exhibit E - Form of Pledge Agreement
Exhibit F - Form of Security Agreement
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PAKISTAN WIRELESS HOLDINGS LIMITED
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of August 18, 1997, is made between
PAKISTAN WIRELESS HOLDINGS LIMITED, a private company established under the laws
of Mauritius ("BORROWER"), the Persons who are named on the attached EXHIBIT A
(the "INITIAL LENDERS") and the Persons who may hereafter become additional
Lenders.
The Borrower has requested that the Initial Lenders make, and the
Initial Lenders have agreed to make, certain Loans, as described in greater
detail in this Agreement.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements set forth herein and intending to be legally bound
hereby, covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINITIONS. In addition to any other terms defined
elsewhere in this Agreement, the following terms will have the respective
meanings set forth below:
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such first
Person. For purposes of this definition, "control" will include the direct or
indirect ownership of and/or right to vote or control the vote with respect to,
Equity Securities representing 20% or more of the aggregate voting power of such
first Person's voting Equity Securities (either based on the quantity of such
first Person's voting Equity Securities which are actually outstanding or on a
fully-diluted basis).
"AGENT" means Toronto Dominion Investments, Inc., or any successor
thereto, in its capacity as the collateral agent as the case may be pursuant to
the Security Agreement or the Pledge Agreement.
"APPLICABLE RATE" at any time means a per annum rate equal to the
following:
----------
Rate
----
On and after the date of this Agreement and
prior to February 18, 1998 14%
On and after February 18, 1998 and prior to
May 18, 1998 15%
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----------
Rate
----
On and after May 18, 1998 and prior to
August 18, 1998 17%
On and after August 18, 1998 and prior to
September 18, 1998 19%
On and after September 18, 1998 and prior
to October 18, 1998 21%
On and after October 18, 1998 and prior to
November 18, 1998 23%
On and after November 18, 1998 25%
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BORROWER CONTRIBUTION" means the contribution by Borrower to Newco of
493,510 shares of IWCH Voting Common Stock and $17,461,000 in cash, pursuant to
the Newco Shareholders Agreement.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, a public
holiday under the laws of the State of New York or the State of California or a
day on which banking institutions are authorized or obligated to close in New
York, New York or San Francisco, California.
"CAPITALIZED LEASE" means a lease under which the obligations of the
lessee would, in accordance with GAAP consistently applied, be included in
determining total liabilities as shown on the liability side of a balance sheet
of the lessee.
"CAPITALIZED LEASE OBLIGATIONS" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases, calculated in accordance with GAAP consistently applied and
Statement of Financial Accounting Standards No. 13.
"CCL SHARE PURCHASE AGREEMENT" means the Share Purchase Agreement
dated July 17, 1997 between Continental Communications Limited ("CCL") and Newco
and the related Supplement to Share Purchase Agreement dated August 18, 1997
between CCL and IWCH.
A "CHANGE IN OWNERSHIP" will occur (i) if, for any reason (including
any issuance or transfer of Equity Securities of any Person or any merger,
consolidation or other transaction), Borrower ceases to be a Subsidiary of IWCH
or IWCH ceases to have the uncontrolled and unlimited right (directly or through
one or more of its Wholly-Owned Subsidiaries) to designate a majority of the
members of the board of directors or similar officials
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of Borrower, or (ii) if any Core Transaction-Related Document, or any right of
Borrower, Newco or Mobilink thereunder, terminates or ceases to be in effect, if
all such terminations or cessations which have occurred since the date of this
Agreement have had, or could reasonably be expected to have, a Material Adverse
Effect.
"CLOSING" means the making of the Loans under this Agreement.
"COLLATERAL AGREEMENTS" means the Security Agreement, the Senior
Pledge Agreement, and all other collateral security agreements or other
documents executed and delivered in connection with the Loans from time to time.
"CORE EQUITY DOCUMENTS" means the Exchange Agreement, the Warrants,
the IWCH Charter, the IWCH Sixth Amended and Rested Investor Rights Agreement
dated as of the date of this Agreement, and the Amended and Restated
Registration Rights Agreement dated as of the date of this Agreement among IWCH
and the "Stockholders" referred to therein.
"CORE FINANCING DOCUMENTS" means the Core Loan Documents and the Core
Equity Documents.
"CORE LOAN DOCUMENTS" means this Agreement, the Disclosure Letter, the
Exchange Agreement, the Pledge Agreement, the Security Agreement, the Notes and
the Warrants.
"CORE PAKISTAN DOCUMENTS" means the Share Purchase Agreements, the
Mobilink Shareholders Agreement, the Newco Shareholders Agreement, the
Memorandum of Understanding and the IWC Group Agreement.
"CORE TRANSACTION-RELATED DOCUMENT" means the Core Loan Documents, the
Core Equity Documents and the Core Pakistan Documents.
"DISCLOSURE LETTER" means the letter addressed to the Initial Lenders
from Borrower and dated the date of this Agreement disclosing certain matters
relating to this Agreement.
"DISTRIBUTION" means any dividend or other distribution or payment by
a Person (other than a natural person) with respect to its Equity Securities, or
any redemption, acquisition, purchase or other retirement of any Equity Security
of such Person, any of its Subsidiaries, or any Person of which such Person is a
Subsidiary or an Investee, in each case whether in cash, securities or other
property.
"EQUITY DOCUMENTS" the Core Equity Documents and all other documents,
agreements and instruments executed at any time in connection therewith.
"EQUITY SECURITY" of any Person means any capital stock, partnership
interest, membership interest or other ownership or equity interest or security
of or in such Person, any phantom equity, profit participation, appreciation or
similar right with respect to such Person, or
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any security or other right which directly or indirectly is convertible into or
exercisable or exchangeable for any other Equity Security of such Person.
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXCHANGE AGREEMENT" means the Exchange Agreement dated as of the date
hereof in the form of the attached EXHIBIT C between IWCH and the Initial
Lenders, as such agreement is in effect from time to time.
"EXERCISE OR EXCHANGE SECURITIES" means the Warrants, the Series H
Stock issuable upon the exchange of the Notes pursuant to the Exchange
Agreement, the IWCH Common Stock issuable upon the conversion of such Series H
Stock (or upon the conversion of Series H Stock issued upon the conversion of
other Series H Stock) and the IWCH Common Stock issuable upon the exercise of
the Warrants.
"FINANCING DOCUMENTS" means the Loan Documents and the Equity
Documents.
"GAAP" means generally accepted accounting principles as promulgated
by the Financial Accounting Standards Board, as in effect from time to time
(subject to the provisions of Section 1.02).
"GUARANTEE" means any guarantee of the payment or performance of any
Indebtedness or other obligation or any other arrangement whereby credit is
extended to an obligor on the basis of any promise of another Person to pay
money or any other arrangement having substantially similar economic effect,
including where the same is expressed in terms of an obligation to (i) pay the
Indebtedness or other monetary obligations of such obligor, (ii) purchase an
obligation owed by such obligor, or (iii) maintain the capital, working
capital, solvency or general financial condition of such obligor, whether or not
any such arrangement is listed on the balance sheet of such other Person or
referred to in a footnote thereto, but will not include endorsements of items
for collection in the ordinary course of business. Subject to the final
sentence of the definition of the term "Indebtedness," the amount of any
Guarantee will be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed or determined amount, the maximum amount
guaranteed or supported.
"INDEBTEDNESS" of any Person will include (i) all obligations for
borrowed money (including obligations incurred in exchange or replacement
thereof), (ii) all obligations evidenced by any note, bond, debenture or other
debt security, (iii) the balance deferred and unpaid of the purchase price for
any property or services (excluding unsecured trade payables incurred in the
ordinary course of business which are not more than 90 days past due or which
are in an aggregate amount for all such more-than-90-day-past-due trade payables
which does not exceed $500,000), (iv) all Capitalized Lease Obligations, (v) all
obligations arising under acceptance facilities, (vi) the undrawn face amount of
all outstanding letters of credit for the benefit of the Person in question and
(without duplication) all unreimbursed drafts drawn thereunder, (vii) all
obligations secured by a Lien on any property of the Person in question, (viii)
all obligations under interest rate or currency exchange or swap agreements,
(ix) all obligations under any Guarantee, and (x) all asserted withdrawal
liabilities under any employee benefit or welfare plan,
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if and to the extent the foregoing (other than items described in clause (vi)
above) would be required to be reflected on a balance sheet of the Person in
question prepared in accordance with GAAP. For purposes of this Agreement, the
"amount" at any time of any Indebtedness of a Person as to which the recourse of
any other Person is limited to one or more assets of such first Person will not
exceed the fair market value of such asset(s) at such time (determined without
regard to any Lien relating to such Indebtedness).
"INDENTURE" means the Indenture dated as of August 15, 1996 between
IWCH and Marine Midland Bank, as Trustee, as in effect on the date of this
Agreement.
"INITIAL LENDERS" has the meaning set forth in the preamble to this
Agreement.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVESTEE" means any Person (other than a Subsidiary of Borrower) in
which Borrower, any of its Subsidiaries or any other Investee has any direct or
indirect Investment (either itself or through one or more of its direct or
indirect Subsidiaries or Investees), including any Subsidiary of any other
Investee.
"INVESTMENT" means any amount paid for liabilities or assets of, or
loaned, advanced or contributed to, or acquisition for consideration of any
Equity Security or Indebtedness of, any other Person, or any other item that is
or would be classified as an investment on a balance sheet prepared in
accordance with GAAP. The term "Investment" will include the acquisition of a
company, business or product line.
"IWC GROUP AGREEMENT" means the IWC Group Agreement dated as of
August 18, 1997 between PWH and Vanguard Pakistan, together with the Voting
Trust Agreement dated on or about August 13, 1997 between Borrower and Vanguard
Pakistan.
"IWCH" means International Wireless Communications Holdings, Inc., a
Delaware corporation.
"IWCH CHARTER" means the Amended and Restated Certificate of
Incorporation of IWCH, in the form attached to the IWCH Loan Agreement.
"IWCH COMMON STOCK" mean IWCH Voting Common Stock or IWCH Non-Voting
Common Stock.
"IWCH LOAN AGREEMENT" means the Loan Agreement dated as of the date
hereof between IWCH and the Initial Lenders, as that Agreement is in effect from
time to time.
"IWCH NON-VOTING COMMON STOCK" means Class 2 Common Stock, par value
$0.01 per share, of IWCH.
"IWCH VOTING COMMON STOCK" means Class 1 Common Stock, par value $0.01
per share, of IWCH.
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"LAW" will be construed broadly to include any foreign, national,
federal, state, provincial, local or other law, rule, regulation, statute,
ordinance, judgment, decree, order, policy, guideline, directive, common law,
pronouncement, treaty, accord or similar item of any legislative, executive,
judicial or other governmental entity or authority.
"LENDER" means any holder of a Note.
"LIEN" means any security interest, pledge, bailment (in the nature of
a pledge or for purposes of security), mortgage, deed of trust, the grant of a
power to confess judgment, conditional sales and title retention agreement
(including any lease in the nature thereof), charge, encumbrance, restrictions
or other similar arrangement or interest in real or personal property.
"LOAN" has the meaning set forth in Section 2.1.
"LOAN DOCUMENTS" means the Core Loan Documents and all other
documents, agreements and instruments executed at any time in connection
therewith.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, properties, assets, liabilities, conditions (financial or otherwise)
or prospects (x) of Borrower, taking into account the direct and indirect
ownership interests of Borrower in its Subsidiaries and the Investees, or (y) of
Mobilink and its Subsidiaries taken as a whole, (b) the right or ability of
Borrower to influence the management and affairs of Newco or the rights of Newco
to influence the management and affairs of Mobilink and its Subsidiaries, (c)
the ability of Borrower or IWCH to perform any of its respective obligations
under the Loan Documents, or the ability of any Lender or Agent to exercise any
right or remedy with respect to, or otherwise to realize upon, any of the
security for the Loans under the Collateral Agreements or any other right or
remedy under any Loan Document, if the same would materially impair the value or
collectibility of the Notes (considered without regard to the right to exchange
the Notes pursuant to the Exchange Agreement), or (d) the ability of any Person
(other than any holder of any Exercise or Exchange Securities) to perform any of
its obligations under the Equity Documents, or the ability of any holder of
Exercise or Exchange Securities to exercise any rights or remedy under any
Equity Documents, if the same would materially impair the value of the Exercise
or Exchange Securities.
"MATURITY DATE" means August 17, 2002.
"MEMORANDUM OF AGREEMENT" means the Memorandum of Agreement dated July
16, 1997 among Saif, SAWC, MIDC and Newco.
"MIDC" means Motorola International Development Corporation, a
Delaware corporation.
"MOBILINK" means Pakistan Mobile Communications (Pvt) Ltd., a limited
liability company organized under the laws of Pakistan.
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"MOBILINK SHAREHOLDERS AGREEMENT" means the Restated and Amended
Shareholders Agreement dated as of August __, 1997 among MIDC, Saif and Newco,
together with the letter agreement dated as of such date among MIDC, Saif and
Newco relating to the business plan, debt to equity ratio, recapitalization,
sale of shares and other matters concerning Mobilink.
"MOTOROLA SHARE PURCHASE AGREEMENTS" means the Share Purchase
Agreement dated July 17, 1997 between MIDC and Newco, together with the letter
agreement between them dated July 17, 1997 with respect to the disclosure of
certain items, together with the Escrow Agreement to be entered into pursuant
thereto.
"NEWCO" means International Wireless Communications Pakistan Limited,
a company formed under the laws of Mauritius.
"NEWCO SHAREHOLDERS AGREEMENT" means the Amended and Restated
Shareholders' Agreement dated as of August 13, 1997 among Newco, Borrower,
Vanguard Pakistan and SAWC, together with the Letter Supplemental to
Shareholders Agreement Relating to International Wireless Communications
Pakistan Limited dated July 16, 1997 between MIDC, Borrower and SAWC and the
letter agreement dated August 13, 1997 among Borrower, Vanguard Pakistan and
SAWC regarding certain costs.
"NOTE" means a promissory note of Borrower issued pursuant to this
Agreement and in the form of the attached EXHIBIT D-1 or the attached EXHIBIT
D-2, including all amendments, modifications, extensions, replacements,
substitutions, renewals, refinancings or refundings thereof in whole or in part.
"ORGANIZATIONAL DOCUMENTS" has the meaning set forth in Section 3.01.
"PARTICIPANT" has the meaning set forth in Section 7.02.
"PARTICIPATING AGENT" has the meaning set forth in Section 7.02.
"PERMITTED INDEBTEDNESS" means (i) Capitalized Lease Obligations, to
the extent that the aggregate principal amount thereof does not exceed
$1,000,000 at any time outstanding, (ii) all obligations incurred in the
ordinary course of business under acceptance facilities, (iii) the undrawn
amount of letters of credit obtained in the ordinary course of business and all
unreimbursed drafts thereunder, (iv) Indebtedness secured by Permitted Liens,
and (v) all obligations under interest rate or currency exchange or swap
agreements entered into in the ordinary course of business.
"PERMITTED LIENS" means the Liens described in clauses (1) through (9)
of Section 5.02(b).
"PERSON" means any individual, corporation, partnership, limited
liability company, trust or other entity, including any governmental entity or
agency.
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"PLEDGE AGREEMENT" means the Pledge Agreement between Borrower and the
Agent, for the benefit of the Lenders, dated as of the date hereof, in the form
of the attached EXHIBIT E, as such agreement is in effect from time to time.
"POTENTIAL EVENT OF DEFAULT" means any occurrence, condition, act or
omission which, with the passage of time or the giving of notice, or both, would
constitute an Event of Default.
"QUARTERLY PAYMENT DATE" means the 17th day of each November,
February, May and August, beginning with November 17, 1997.
"REQUISITE LENDERS" means Lenders which hold Notes which represent a
majority of the aggregate unpaid principal amount of the outstanding Notes.
"SAIF" means Saif Telecom (Pvt) Ltd., a company organized under the
laws of Pakistan.
"SAWC" means South Asia Wireless Communications (Mauritius) Limited,
a corporation formed under the laws of Mauritius and a wholly-owned subsidiary
of Asia Infrastructure Fund.
"SECURITY AGREEMENT" means the Security Agreement between Borrower and
the Agent, for the benefit of the Lenders, dated the date hereof in the form
attached hereto as EXHIBIT F, providing for Borrower's grant to the Agent, for
the benefit of the Lenders, of a security interest in all of Borrower's assets,
and all other agreements, instruments and documents attached thereto, referred
to therein or delivered in connection therewith, as any or all of the foregoing
is in effect from time to time.
"SERIES H STOCK" means Series H-1 Preferred Stock, and Series H-2
Preferred Stock, each par value $0.10 per share, of IWCH.
"SHARE PURCHASE AGREEMENTS" means the CCL Share Purchase Agreement and
the Motorola Share Purchase Agreement.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, trust, association or other business
entity of which (i) if a corporation, a majority of the total voting power of
shares of stock entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
direct or indirect Subsidiaries of that Person or a combination thereof, or
(ii) if a partnership, limited liability company, association or other business
entity, a majority of the partnership or other voting or economic ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more direct or indirect Subsidiaries of that Person or a
combination thereof, in each case including control by agreement. A Person or
Persons will be deemed to have a majority ownership interest in a partnership,
limited liability
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company, association or other business entity if such Person or Persons is
allocated a majority of partnership, limited liability company, association or
other business entity gains or losses or is or controls a managing director,
managing member, manager, trustee, general partner or similar official or Person
with respect to such partnership, limited liability company, association or
other business entity.
"TDI" means Toronto Dominion Investments, Inc.
"TRANCHE A LOANS" has the meaning set forth in Section 2.01.
"TRANCHE A NOTES" has the meaning set forth in Section 2.02.
"TRANCHE B LOANS" has the meaning set forth in Section 2.01.
"TRANCHE B NOTES" has the meaning set forth in Section 2.02.
"TRANSACTION-RELATED DOCUMENTS" means the Loan Documents, the Equity
Documents, the Core Pakistan Documents, and all other documents, agreements and
instruments executed at any time in connection with the Core Pakistan Documents.
"20% LENDER" means any Lender which, together with its Affiliates,
holds Notes representing not less than 20% of the aggregate unpaid principal
amount of the outstanding Notes or which represent an aggregate unpaid principal
amount of the Notes which is not less than the aggregate unpaid principal amount
of the Notes held by any other Person and such other Person's Affiliates.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"UNRESTRICTED DISPOSITION PROCEEDS" means the Net Proceeds of any sale
or liquidation of any Investment in any Unrestricted Subsidiary or Unrestricted
Affiliate (each foregoing capitalized term used in this definition having the
meaning set forth in the Indenture).
"VANGUARD" means Vanguard Cellular Financial Corporation, a Delaware
corporation.
"VANGUARD PAKISTAN" means Vanguard Pakistan, Inc., a Delaware
corporation.
"WARRANT" means any Warrant, as that term is defined in the IWCH Loan
Agreement.
"WHOLLY-OWNED SUBSIDIARY" of any Person means any other Person of
which all of the Equity Securities are owned by such first Person, either
directly or indirectly through one or more Wholly-Owned Subsidiaries of such
first Person.
1.02 ACCOUNTING PRINCIPLES. The classification, character and
amount of all assets, liabilities, capital accounts and reserves and of all
items of income and expense to be determined, and any consolidation or other
accounting computation to be made, and the interpretation of any definition
containing any financial term, pursuant to this Agreement or any
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other Loan Document will be determined and made in accordance with GAAP
consistently applied, unless such principles are inconsistent with the express
requirements of this Agreement; PROVIDED that if, because of a change in GAAP
after the date of this Agreement, Borrower would be required to alter a
previously utilized accounting principle, method or policy in order to remain in
compliance with GAAP, such determination will continue to be made in accordance
with Borrower's previous accounting principles, methods and policies unless
Requisite Lenders agree to allow Borrower to recompute any relevant amount to
reflect any such accounting change.
ARTICLE II
THE LOANS AND RELATED MATTERS
2.01 LOANS.
(a) MAKING OF LOANS. Subject to the terms and conditions
of this Agreement and relying upon the representations, warranties and covenants
of Borrower and IWCH set forth in this Agreement and the other Financing
Documents, at the Closing the Initial Lenders will make loans (the "LOANS") to
Borrower in the respective amounts set forth opposite their names on the
attached EXHIBIT A. The Loans will be made simultaneously, in two tranches,
with the Loans made by the Initial Lenders named under the heading "Tranche A
Lenders" on the attached EXHIBIT A being "TRANCHE A LOANS" and the Loans made by
the Initial Lenders named under the heading "Tranche B Lenders" on the attached
EXHIBIT A being "TRANCHE B LOANS."
(b) FUNDING FEE. In consideration of the making of the
Loan made by an Initial Lender hereunder, at the Closing Borrower will pay to
such Initial Lender a funding fee in the amount of 1% of the amount of the Loan
made by such Initial Lender at the Closing.
2.02 NOTES. The obligation of Borrower to repay the Loans and
interest thereon will be evidenced by Notes dated the date of the Closing,
payable as specified in this Agreement to the order of the payee thereof, and
bearing interest and maturing as provided in this Agreement. Notes in the form
of the attached EXHIBIT D-1 ("TRANCHE A NOTES") will be issued in respect of the
Tranche A Loans, and Notes in the form of the attached EXHIBIT D-2 ("TRANCHE B
NOTES") will be issued in respect of the Tranche B Loans. Each Lender will, and
is hereby authorized by Borrower to, endorse on the schedule annexed to any Note
an appropriate notation evidencing the date and amount of each payment of
principal or interest by Borrower with respect thereto, and such notations will
be presumed correct until the contrary is established; PROVIDED that the failure
to make or any error in making any such notation will not limit or expand or
otherwise affect the obligations of Borrower under this Agreement, any Note or
any other Loan Document.
2.03 REPAYMENT OF PRINCIPAL. Borrower will repay in full the
entire unpaid principal amount of the Notes, and all unpaid accrued interest
thereon, on August 10, 2002.
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2.04 INTEREST.
(a) INTEREST RATES; PAYMENTS. Interest will accrue from
time to time on the unpaid principal amount of each Note at the Applicable Rate,
based on a 365- or 366-day year (as the case may be) and the actual number of
days elapsed. All unpaid accrued interest on the Notes will be due and payable
in full on the Maturity Date and, to the extent not paid (whether or not due),
will be compounded on each Quarterly Payment Date. In addition, all accrued and
unpaid interest on the Notes will be paid upon the payment in full of the entire
outstanding principal amount of Notes and, if payment in full is not made when
due, thereafter on demand.
(b) ADDITIONAL INTEREST. After the occurrence of and
during the continuance of any Event of Default, the outstanding principal amount
of the Notes, and, to the extent permitted by applicable law, all accrued and
unpaid interest thereon and all other amounts, fees and obligations then due and
payable to any Lender under any Note, this Agreement and any other Loan
Document, will bear interest at a rate per annum which is 200 basis points in
excess of the Applicable Rate then in effect, and such interest will be payable
on demand.
(c) SAVING CLAUSE. Notwithstanding any other provision
contained in this Agreement, the Notes or any of the other Loan Documents to the
contrary, the aggregate interest rate per annum charged with respect to the
Loans (including all charges and fees which are required to be treated as
interest pursuant to applicable laws imposing a maximum rate of interest) will
not exceed the maximum rate per annum permitted by applicable law. If that the
aggregate interest rate per annum payable with respect to the Loans (including
all charges and fees which are required to be treated as interest under
applicable laws imposing a maximum rate of interest) exceeds the maximum legal
rate, then (i) Borrower will pay the Lenders interest at the maximum permitted
rate only, (ii) Borrower will continue to make such interest payments at the
maximum permitted rate until all such interest payments and other charges and
fees payable hereunder or under the other Loan Documents (in the absence of such
legal limitations) have been paid in full, (iii) any interest in excess of the
maximum permitted rate received by any Lender will, at such Lender's option, be
applied to a prepayment of principal of the Loans or refunded to Borrower, and
(iv) neither Borrower nor any other Person will have any right of action against
any Lender for any damages or penalty arising out of the payment or collection
of any such excess interest.
2.05 PREPAYMENT OF LOANS.
(a) OPTIONAL PREPAYMENTS. Borrower will have the right, at
its option, to prepay the unpaid principal amount of the Notes and/or unpaid
interest accrued thereon in whole at any time or in part from time to time,
without premium or penalty.
(b) REQUIRED PREPAYMENTS.
(i) FROM CERTAIN PROCEEDS. Not later than the
Business Day after the receipt thereof, Borrower will use all of the cash
proceeds (net of related transaction expenses and an estimate of any resulting
taxes required to be paid) from any sale or disposition
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of assets of Borrower or the liquidation or otherwise in respect of any
Investment, or from any Distribution received by Borrower, to prepay the unpaid
principal amount of the Notes and unpaid accrued interest thereon (in whole or
in part, as the full application of such net proceeds permits), without premium
or penalty.
(ii) UPON CERTAIN OTHER EVENTS. The entire unpaid
principal amount of the Notes and all unpaid accrued interest thereon will be
immediately due and payable (without premium or penalty) upon (A) the sale of
all or substantially all of Borrower's, Newco's or Mobilink's consolidated
assets (computed on a consolidated basis either according to net book value,
determined in accordance with GAAP consistently applied, or fair market value,
determined by Borrower's Board of Directors in its reasonable good faith
judgment), (B) a Change in Ownership, or (C) a Liquidity Event, as that term is
defined in the IWCH Loan Agreement.
2.06 PAYMENTS.
(a) NOTICE, PLACE AND MANNER OF PAYMENTS. All payments
(including prepayments) to be made to any Lender in respect of any Note or other
amount under any other Loan Document will be made in lawful money of the United
States of America, by wire transfer of immediately available funds for the
account of the payee thereof to an account(s) specified by such payee. Promptly
after request by Borrower, each Lender will provide Borrower with instructions
for any such wire transfer. If no such instructions are received, then Borrower
may make any such payment (in lawful money of the United States of America) by
cashier's or certified check delivered to the place for notice to such Lender in
accordance with Section 8.05. Any such payment will be deemed received when
such wire transfer is received or when such check is deemed received in
accordance with this Agreement. Any payment deemed received after 1:00 p.m.,
New York, New York, time on any day will be deemed to have been paid by Borrower
on the next succeeding Business Day. In the case of any payment to be made
pursuant to Section 2.05, Borrower will give notice (which may be withdrawn by
contrary notice given on or prior to the date specified for payment, in the case
of any payment to be made pursuant to Section 2.05(a), or any payment
anticipated to be required by Section 2.05(b) if the event in question does not
occur on the specified date) to each Lender of each such payment not later than
1:00 p.m., New York, New York, time, on the second Business Day preceding the
date upon which such payment is to be made. Such notice will specify the
aggregate amount to be paid to all Lenders, the payment date, and the
application of such aggregate payment. Borrower will be liable for, and will
indemnify and hold harmless each Lender in respect of, all reasonable costs,
losses, liabilities and expenses incurred by such Lender by reason of any
failure by Borrower to make any payment when due or on any date so specified by
Borrower, whether or not any notice of such payment is subsequently withdrawn.
All payments under this Agreement or any other Loan Document will be made
without setoff, offset, deduction or counterclaim, free and clear of all taxes,
levies, imports, duties, fees and charges, and without any withholding,
restriction or conditions imposed by any governmental authority. If Borrower is
required by any law to deduct, setoff or withhold any amount from or in respect
of any payment to any Lender under this Agreement or any other Loan Document,
then the amount so payable to such Lender will be increased as may be necessary
so that, after making all required deductions, setoffs and
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withholdings, such Lender will receive an amount equal to the sum it would have
received had no such deductions, setoffs or withholding been made. Once repaid,
no amount of any Loan may be reborrowed.
(b) PAYMENTS OF CERTAIN AMOUNTS PRIOR TO APPLICATION TO
NOTES. Prior to their application to the principal amount of any Note or
interest thereon pursuant to Section 2.07, all payments made by Borrower will be
applied (i) first, to the payment of all expenses, fees and other amounts
(including attorneys' fees and other legal expenses which may be payable) for
which Borrower is obligated to pay any Agent under and in accordance with this
Agreement or any other Loan Document, pro rata among the Agents according to the
respective amounts of such items which are payable to them, and (ii) second, to
the payment of all expenses, fees and other amounts (other than such principal
and interest) for which Borrower is obligated to pay the Lenders under and in
accordance with this Agreement or any other Loan Document, pro rata among the
Lenders according to the respective amounts of such items which are payable to
them.
2.07 APPLICATION OF PAYMENTS.
(a) AS AMONG THE NOTES. Subject to the requirements of
Section 2.06(b), all payments in respect of the Notes will be made pro rata
among the Lenders, based on the aggregate amount of the unpaid accrued interest
on the Notes held by each Lender and the unpaid principal amount of such Notes.
Each Lender agrees that, if such Lender receives a payment which is in excess of
the amount which such Lender is entitled to receive by virtue of the operation
of Section 2.06(b) and the preceding sentence, then such Lender will transfer a
portion of such payment to one or more other Lenders or other Persons in order
that full effect may be given to such Section and the preceding sentence.
(b) AS BETWEEN PRINCIPAL AND INTEREST. Each payment in
respect of any Note will be applied (i) first, to reduce the unpaid accrued
interest on such Note (whether or not such interest is then due and payable), on
a last-accrued, first-paid basis, and (ii) second, to reduce the unpaid
principal amount of such Note.
2.08 INITIAL LENDERS' REPRESENTATIONS AND WARRANTIES. Each
Initial Lender makes the following representations and warranties (which
representations and warranties Borrower is relying upon in entering into this
Agreement), with respect to itself and not with respect to any other Initial
Lender:
(a) The Notes which such Initial Lender may acquire will be
acquired for such Initial Lender's own account, not as nominee or agent, and not
with a view to the resale or distribution of any part thereof in violation of
any applicable federal or state securities laws, and such Initial Lender has no
present intention of selling, granting a participation in or otherwise
distributing any such Note. Such Initial Lender has no contract, undertaking,
agreement or arrangement with any Person to sell, transfer or grant
participations to any other Person with respect to any such Note.
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(b) Such Initial Lender believes that it has received all
of the information which it considers necessary or appropriate for deciding
whether to acquire Notes. Such Committed Investor has had an opportunity to ask
questions and receive answers from Borrower regarding the terms and conditions
of the offering of the Notes and the business, properties, prospects and
financial conditions of the Company. The foregoing representation will not
limit or modify any representation or warranty of Borrower or any other Person
made in any Financing Document.
(c) Such Initial Lender is an investor in securities of
companies in the development stage and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Notes and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Notes. If such Initial
Lender is not a natural person, then such Committed Investor was not organized
for the purpose of acquiring Notes.
(d) Such Initial Lender understands that the Notes are
characterized as "restricted securities" under the federal securities laws,
inasmuch as they are being acquired from Borrower in a transaction not involving
a public offering and that under such laws and applicable regulations such
securities my be resold under the 1993 Act only under certain circumstances. In
this connection, such Initial Lender represents that it is familiar with
Rule 144 promulgated under the 1933 Act, as presently in effect, and understands
the resale limitations imposed thereby and by the 1933 Act.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
As a material inducement to the Initial Lenders to make the Loans and
each Lender to accept any Note, Borrower hereby makes the following
representations and warranties (which representations and warranties will
survive the execution and delivery of this Agreement and each issuance of Notes)
that, except as set forth on the Disclosure Letter (with a cross-reference in
the Disclosure Letter indicating the Section of this Article III to which each
disclosure thereon relates), after giving effect to the Borrower Contribution
and all related contemporaneous transactions pursuant to the Transaction-Related
Documents (except where otherwise expressly indicated):
3.01 ORGANIZATION AND QUALIFICATION. Borrower, each of its
Subsidiaries and each Investee is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its purported organization, possesses all material licenses,
permits and authorizations necessary to own its properties and to carry on its
businesses as now being conducted and as presently proposed to be conducted, and
is duly qualified to do business in each jurisdiction in which it is required to
be so qualified, except insofar as all failures to so qualify, in the aggregate,
have not had, and are not reasonably expected to have, a Material Adverse
Effect. Borrower has provided the Initial Lenders with correct and complete
copies of the articles or certificate of incorporation, bylaws and similar
organizational or constitutional documents (including any such items which may
come into existence after the date
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of this Agreement, and in each case as in effect from time to time, the
"ORGANIZATIONAL DOCUMENTS") of Borrower, each of its Subsidiaries and each
Investee.
3.02 CORPORATE POWER. Borrower, each of its Subsidiaries and each
Investee which is a party thereto has the requisite corporate power and
authority to execute, deliver and perform this Agreement, each of the other
Transaction-Related Documents to which it is or may become a party
(collectively, the "TRANSACTION-RELATED DOCUMENTS"). Borrower, each Subsidiary
of Borrower and each Investee has all requisite corporate or other power and
authority under the laws of its jurisdiction of incorporation to own and operate
its properties and to carry on its businesses as now conducted and as presently
proposed to be conducted.
3.03 SUBSIDIARIES AND INVESTMENTS. Borrower does not have, and has
not ever had, any Subsidiary or Investee other than any Subsidiary named under
the heading "Subsidiaries", or any Investee named under the heading "Investees,"
on the Disclosure Letter, and, except as contemplated by the Core Pakistan
Documents, neither Borrower nor any of its Subsidiaries owns or has any right to
acquire any Equity Security or any other Investment in any other Person. The
Disclosure Letter sets forth the authorized Equity Securities of each Subsidiary
of Borrower and each Investee, the record and beneficial ownership of its Equity
Securities and the jurisdiction of its purported organization. All such Equity
Securities which are indicated on the Disclosure Letter to be owned by Borrower
or a Subsidiary of Borrower are validly issued, fully-paid and nonassessable.
3.04 CONFLICT.
(a) GENERALLY. Neither the execution and delivery by
Borrower of this Agreement or any Transaction-Related Document to which it is or
may become a party, nor the borrowings contemplated by the provisions of this
Agreement, nor the execution, issuance and delivery of the Notes to evidence
such borrowings and in payment of interest thereon, nor the consummation of the
transactions herein or therein contemplated to be consummated by Borrower, nor
compliance by Borrower with the terms, conditions and provisions hereof or
thereof, will (i) conflict with or result in a breach or violation of any of the
terms, conditions or provisions of any Organizational Document of Borrower, any
of its Subsidiaries or any Investee, any law (including any usury laws
applicable to the Loans or the Notes), or any agreement, instrument or document
to which Borrower, any of its Subsidiaries or any Investee is a party or by
which Borrower, any of its Subsidiaries, any Investee or any of their respective
properties is bound, or constitute a default under or right to terminate or
modify any of the foregoing, or (ii) result in the creation or imposition of any
Lien (other than the Liens in favor of the Agents and the Lenders arising
pursuant to the Collateral Documents and such other matters of the type
described in clause (i) or clause (ii) above which in the aggregate have not
had, and are not reasonably expected to have, a Material Adverse Effect).
(b) CERTAIN ACTIONS. Without limiting the foregoing, and
without implying that Borrower or IWCH is required to take any action described
in clause (ii) or clause (iii) below, neither the Indenture nor any other
agreement, instrument or document to which IWCH or any of its Subsidiaries or
any Investee is a party or by which any of them or any of
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their respective properties is bound, nor any law: (i) prohibits Borrower
from applying the proceeds described in Section 2.05(b)(i) in the manner
described in Section 2.05(b)(i) or causing them to be so applied, (ii)
prohibits Borrower from applying the proceeds of capital contributions to
Borrower made by IWCH or any of its Subsidiaries as may be permitted by the
Indenture to the prepayment or repayment of the unpaid principal of and
unpaid accrued interest on the Notes, in whole or in part, or (iii) prohibits
IWCH from causing the net proceeds of the issuance or sale of Equity
Securities of IWCH (other than Disqualified Stock, as that term is defined in
the Indenture) or Subordinated Indebtedness (as that term is defined in the
Indenture), or causing not less than 50% of any Unrestricted Disposition
Proceeds, to be contributed to the capital of Borrower and used by Borrower
to repay or prepay the unpaid principal of or unpaid accrued interest on the
Notes, in whole or in part.
3.05 AUTHORIZATION, GOVERNMENTAL APPROVALS. The execution, delivery
and performance by Borrower of the Transaction-Related Documents to which
Borrower is or may become a party, the borrowings contemplated by the provisions
of this Agreement, the execution, issuance and delivery of the Notes to evidence
such borrowings and in payment of interest thereon, and the consummation by
Borrower of the transactions herein and therein contemplated to be consummated
by Borrower have been duly authorized by all necessary corporate action on the
part of Borrower. No authorization, consent, approval, license or exemption of,
and no registration, notice, qualification, designation, declaration or filing
with or to, any court, government or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, and no vote,
authorization, consent or approval of directors, shareholders or similar Persons
with respect to Borrower, is necessary to or for the valid execution and
delivery by Borrower of the Transaction-Related Documents to which Borrower is
or may become a party, the borrowings contemplated by the provisions of this
Agreement, the valid execution, issuance and delivery by Borrower of the Notes
to evidence such borrowings and in payment of interest thereon, or the
consummation by Borrower of the transactions herein and therein contemplated to
be consummated by Borrower, other than such items the absence of which, in the
aggregate, has not had, and are not reasonably expected to have, a Material
Adverse Effect.
3.06 VALIDITY AND BINDING EFFECT. Each Transaction-Related
Document to which Borrower is a party has been, and each Transaction-Related
Document to which Borrower may become a party will (when it becomes a party) be,
duly and validly executed and delivered by Borrower, and each such
Transaction-Related Document constitutes (or, as the case may be, will
constitute) a legal, valid and binding obligation of Borrower, and all such
obligations of Borrower are (or, as the case may be, will be) enforceable in
accordance with their respective terms.
3.07 OWNERSHIP OF BORROWER. The Disclosure Letter sets forth the
record and beneficial ownership of the outstanding Equity Securities of Borrower
and of each Subsidiary of IWCH of which Borrower is a Subsidiary, and the
authorized Equity Securities of Borrower. Borrower is not under any obligation
(contingent or otherwise) to redeem or otherwise acquire any Equity Securities
of Borrower or any other Person or to effect any other Distribution. Borrower
is a Wholly-Owned Subsidiary, and an "Unrestricted Subsidiary" (as that term is
defined in the Indenture), of IWCH.
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3.08 NO EVENT OF DEFAULT; COMPLIANCE WITH AGREEMENTS. No event,
act or omission has occurred, and no condition exists, which constitutes an
Event of Default or a Potential Event of Default. Neither Borrower, any of its
Subsidiaries nor any Investee is in violation in any material respect of any
provision of any of its Organizational Documents or any term of any material
agreement, instrument, contract or commitment to which it is a party or by which
it or any of its assets is bound, except in such respects as, in the aggregate,
have not had, and are not reasonably expected to have, a Material Adverse
Effect.
3.09 SOLVENCY, ETC. Borrower is solvent as of immediately prior to
the Closing and will not become insolvent as a result of the consummation of the
transactions contemplated by the Transaction-Related Documents (including the
borrowings under this Agreement and the Borrower Contribution). Borrower is
immediately prior to the Closing, and after giving effect to the transactions
contemplated by the Transaction-Related Documents will be, able to pay its debts
as they become due, and Borrower's property immediately prior to the Closing
has, and after giving effect to such transactions will have, a fair salable
value (determined on a going concern basis) greater than the amounts required to
pay its debts (including a reasonable estimate of the amount of all contingent
liabilities). Borrower immediately prior to the Closing has, and after giving
effect to the transactions contemplated by the Transaction-Related Documents
will have, adequate capital to conduct its business. No transfer of property is
being made and no obligation is being incurred in connection with the
transactions contemplated by the Transaction-Related Documents with the intent
to hinder, delay or defraud either present or future creditors of Borrower or
any other Person.
3.10 REGULATIONS G AND X. Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock (as
defined, from time to time, in Regulation G promulgated by the Board of
Governors of the Federal Reserve System), and no part of the proceeds of the
Loans will be used by Borrower, any of its Subsidiaries or any Investee, to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock in violation of Regulation G or
Regulation X promulgated by the Board of Governors of the Federal Reserve
System.
3.11 INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY. Neither
Borrower nor any of its Subsidiaries is an "investment company," or under the
control of an "investment company," within the meaning of the Investment Company
Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended. Borrower is not subject to any other law limiting its ability to
incur indebtedness for borrowed money.
3.12 [RESERVED.]
3.13 BROKERAGE. Other than pursuant to Section 2.01(b), there are
no claims for brokerage commissions, finders' fees, closing fees or similar
compensation in connection with the transactions contemplated by this Agreement
or any other Transaction-Related
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Document (other than pursuant to this Agreement) based on any arrangement or
agreement binding upon Borrower or any of its Subsidiaries.
3.14 OTHER AGREEMENTS. Each of the Transaction-Related Documents
(other than the Loan Documents) has been duly executed and delivered by each of
the parties thereto and is in full force and effect, there has been no material
amendment or modification thereof, and there are no uncured breaches or defaults
on the part of any party thereunder, except in such respects as in the aggregate
have not had, and are not reasonably expected to have, a Material Adverse
Effect. Borrower has furnished each Initial Lender, as requested, with an
accurate and complete copy of each such Transaction-Related Document and the
Indenture, each as currently in effect. The representations and warranties made
by each party to each such Transaction-Related Document (in each case,
disregarding any materiality qualification set forth therein) are true and
correct, except in such respects as in the aggregate have not had, and are not
reasonably expected to have, a Material Adverse Effect as compared with the
state of affairs which would exist if all such representations and warranties
were true in all respects, and are incorporated herein and made by Borrower
hereunder (PROVIDED that, notwithstanding any provision of any such
Transaction-Related Document to the contrary, each such representation and
warranty as so incorporated will survive the execution and delivery of this
Agreement and the issuance of the Notes hereunder). The Borrower Contribution
and each other transaction contemplated by such Transaction-Related Documents to
be consummated on the Closing Date have been and will be duly consummated as
contemplated in such Transaction-Related Documents, subject to the terms and
conditions therein, with only those waivers of conditions thereto which in the
aggregate have not had, and are not reasonably expected to have, a Material
Adverse Effect.
3.15 COMPLIANCE WITH LAWS. Borrower, each of its Subsidiaries and
each Investee has complied and is in compliance with all laws applicable to it
or its business or property, except in such respects as in the aggregate have
not had, and are not reasonably expected to have, a Material Adverse Effect.
3.16 LITIGATION. There are no actions, suits or proceedings
pending or, to Borrower's knowledge, threatened against or affecting Borrower,
any of its Subsidiaries, any Investee or any of their respective businesses or
assets, before any court or governmental department, agency or instrumentality,
which (a) which reasonably be expected to prevent the transactions contemplated
by this Agreement or (b) otherwise involve or pertain to Borrower, any of its
Subsidiaries or any Investee (other than, in the case of this clause (b) only,
those which, in the aggregate, have not had, and are not reasonably expected to
have, a Material Adverse Effect).
3.17 AFFILIATED TRANSACTIONS. Other than any Core
Transaction-Related Document, no officer, director or similar official of
Borrower, no Affiliate of Borrower, no Person who holds 5% or more of the IWCH
Common Stock on a fully-diluted basis, no individual related by blood or
marriage to any Person described in this Section 3.17, and no entity in which
any Person described in this Section 3.17 directly or indirectly owns any
beneficial interest of 10% or more, is a party to any agreement, contract,
commitment, transaction or arrangement with Borrower, any of its Subsidiaries or
any Investee.
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3.18 TITLE TO PROPERTIES. Borrower, each of its Subsidiaries and
each Investee has good and marketable title to all of its material properties,
assets and other rights which it purports to own or which are reflected in its
books and records, free and clear of all Liens, except for Permitted Liens, and
all such assets are in good working order and condition, ordinary wear and tear
excepted, except in such respects as, in the aggregate, have not had, and are
not reasonably expected to have, a Material Adverse Effect. Borrower owns no
material asset other than the securities described on the Pledged Securities
Schedule attached to the Pledge Agreement and its rights under the
Transaction-Related Documents.
3.19 BANK ACCOUNTS. Borrower maintains no bank accounts or money
market accounts.
3.20 OUTSTANDING INDEBTEDNESS. Neither Borrower nor Newco has any
Indebtedness other than the Loans (in the case of Borrower) and loans from its
shareholders pursuant to the Newco Shareholders Agreement (in the case of
Newco).
3.21 OPERATIONS, AGREEMENTS, LIABILITIES. Neither Borrower nor any
of its Subsidiaries has conducted any business or engaged in any operations
other than in preparation for the consummation of the transactions contemplated
by the Transaction-Related Documents. Other than the Core Transaction-Related
Documents, neither Borrower nor any of its Subsidiaries is a party to (nor is
any of its assets or business subject to) any material document, agreement or
arrangement, and neither Borrower nor any of its Subsidiaries has any material
liability or obligation other than its liabilities and obligations under such
Documents and those which in the aggregate do not have, and are not reasonably
expected to have, a Material Adverse Effect.
3.22 FINANCIAL STATEMENTS. Borrower has provided to the Initial
Lenders the audited consolidated and consolidating balance sheets for Mobilink
and (if any) its Subsidiaries for the fiscal year ended December 31, 1996 and
the related consolidated and consolidating statements of income and cash flows.
Each of the foregoing financial statements (including in all cases the notes
thereto, if any) is accurate and complete in all material respects, is
consistent with the books and records of the Person in question (which, in turn,
are accurate and complete in all material respects), has been prepared in
accordance with GAAP or other applicable local accounting principles,
consistently applied, and presents fairly the financial condition, results of
operations and/or cash flows (as the case may be) of the Person in question in
accordance with GAAP or other applicable local accounting principles applied on
a consistent basis as of the dates and for the periods set forth therein.
3.23 NO MATERIAL ADVERSE CHANGE. Since December 31, 1996 nothing
has occurred (other than matters which have occurred in the ordinary course of
Mobilink's business prior to the date of this Agreement or which have been
disclosed in the Share Purchase Agreements) or failed to occur, and no condition
or fact exists, with respect to Borrower, any Subsidiary of Borrower, any
Investee or otherwise, except as, in the aggregate, have not had, and are not
reasonably expected to have, a Material Adverse Effect.
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3.24 DISCLOSURE. Neither any Transaction-Related Document nor any
other agreement, document or certificate when furnished to any Initial Lender by
or on behalf of Borrower or any of its Subsidiaries in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained herein and therein, at the time(s) made,
not misleading other than as to matters which in the aggregate have not had, and
are not reasonably expected to have, a Material Adverse Effect.
ARTICLE IV
CONDITIONS PRECEDENT
The respective individual obligations of the Initial Lenders to make
the Loans at the Closing and the effectiveness thereof are subject to the
satisfaction of the conditions set forth below, any of which may be waived with
respect to any Initial Lender only in a writing to that effect which is executed
by such Initial Lender:
4.01 REPRESENTATIONS, WARRANTIES, COVENANTS. The representations
and warranties contained in this Agreement and in the other Financing Documents
(considered without regard to any materiality qualification set forth therein)
will be true and correct as of the time of the Closing as though then made
(giving effect to the Borrower Contribution and other transactions, as may be
indicated in or with respect to such representations and warranties), except in
such respects as in the aggregate have not had, and are not reasonably expected
to have, a Material Adverse Effect as compared with the state of affairs which
would exist if all such representations and warranties were true in all
respects; and Borrower will have performed all obligations to be performed by it
under the Transaction-Related Documents to which it is a party (considered
without regard to any materiality qualification set forth therein) at or before
the time of the Closing, except in such respects as, in the aggregate, have not
had, and are not reasonably expected to have, a Material Adverse Effect as
compared with the state of affairs which would exist if such obligations had
been complied with in all respects.
4.02 DELIVERIES. There will be delivered to such Initial Lender:
(i) Opinions of Borrower's counsel as to the matters set
forth on the attached EXHIBIT B;
(ii) A duly completed and executed original Note (of the
proper Tranche) in the principal amount of the Loan to be made by such Initial
Lender;
(iii) Correct and complete copies of each Collateral
Agreement, this Agreement, each other Financing Document to be executed and
delivered in connection with the Closing, each other Transaction-Related
Document executed and delivered (or to be executed and delivered) prior to or in
connection with the Borrower Contribution or the contemporaneous related
transactions and all Organizational Documents of Borrower, its Subsidiaries and
the Investees;
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(iv) Certified copies of all documents evidencing corporate
action taken by Borrower with respect to the Financing Documents and the other
Transaction-Related Documents;
(v) A certificate executed on behalf of Borrower certifying
that the conditions set forth in Sections 4.01, 4.03, 4.04 and 4.05 have been
fully satisfied at the time of the making of the Loans;
(vi) A certificate or certificates, signed by the secretary
or a similar official of Borrower certifying as to the names of the respective
officers or other officials of Borrower or IWCH who are authorized to sign this
Agreement and the other Financing Documents on Borrower's or IWCH's behalf and
as to specimens of the true signatures of such officials, on which each Lender
may conclusively rely until a revised certificate is similarly so delivered; and
(vii) A certificate of Borrower signed on Borrower's behalf
by Borrower's chief financial officer regarding the matters set forth in Section
3.09.
4.03 CONTRIBUTIONS TO BORROWER. Borrower will have received
contributions to its capital by International Wireless Communications, Inc., a
Delaware corporation and a Wholly-Owned Subsidiary of IWCH, consisting of not
less than 493,510 shares of IWCH Voting Common Stock.
4.04 COLLATERAL ITEMS. There will have been delivered to the Agent
duly executed financing statements and other documents in form and substance as
any 20% Lender may request and may reasonably be required to effect the
provisions of the Collateral Agreements, and all "Collateral" (as such term is
defined in the Pledge Agreement) and all other items of collateral as to which
the security interest of the Agent (for the benefit of the Lenders) may be
perfected by possession, together with such stock or similar powers or other
forms of assignment, undated and executed in blank, as the Agent may request
with respect to such Collateral.
4.05 OTHER TRANSACTIONS. The Borrower Contribution and all other
contemporaneous transactions contemplated by the Transaction-Related Documents
will be consummated contemporaneously with the making of the Loans (in each
case, without any waiver or amendment thereof by any party), and all parties
thereto will stand ready to consummate such transactions.
4.06 FEES AND EXPENSES. Borrower will have paid all fees and
expenses required to be paid pursuant to Section 2.01(b) or Section 8.03.
4.07 CLOSING UNDER IWCH LOAN AGREEMENT. The Initial Closing (as
that term is defined in the IWCH Loan Agreement) will be consummated
contemporaneously with the Closing.
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4.08 VANGUARD PURCHASE. At the time of the Closing, Vanguard (or
an Affiliate thereof) will own shares of Newco representing 6.52% of the shares
of Newco.
4.09 SAWC ACTIONS. SAWC will have invested in Newco cash in the
amount of not less than $23,620,000 (representing the proceeds of contributions
to SAWC by Asian Infrastructure Fund), and SAWC will be a wholly-owned
subsidiary of Asian Infrastructure Fund.
4.10 LICENSE MATTERS. Such Initial Lender will be satisfied that
Mobilink will be granted the licenses required to conduct its business and
conducted and proposed or contemplated to be conducted.
4.11 NEWCO SHAREHOLDERS AGREEMENT. Borrower will have obtained,
and delivered to such Initial Lender true and correct copies of such waivers
and/or amendments of the provisions of the Newco Shareholders Agreement as may
be necessary to permit the consummation of the transactions contemplated by the
Loan Documents and to permit Borrower to perform its obligations thereunder.
4.12 COMMITMENT AND STRUCTURING FEES. IWCH will have paid in full
the commitment and structuring fees payable by it pursuant to the letter
agreement dated July 28, 1997 among IWCH, Borrower, TDC, Vanguard and any other
Person which has theretofore become a party thereto.
4.13 PROCEEDINGS. All legal proceedings in connection with the
transactions contemplated by this Agreement and the other Transaction-Related
Documents will be in form and substance satisfactory to such Initial Lender,
and such Initial Lender will have received all such counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and scope satisfactory to such Initial Lender's
counsel, as such Initial Lender may reasonably request.
ARTICLE V
COVENANTS
5.01 AFFIRMATIVE COVENANTS. Borrower covenants that, until the
payment in full of the principal amounts of the Notes and all accrued interest
thereon and all fees, other amounts and obligations outstanding or payable to
any Lender or Agent (or reasonably expected by any Lender or Agent to become
payable) under this Agreement or any other Loan Document, Borrower will, and
will cause each Subsidiary and each Investee to:
(a) CONDUCT OF BUSINESS, PRESERVATION OF CORPORATE
EXISTENCE, ETC. Conduct its business in the ordinary course, consistent with
its past practice (if any); preserve and maintain its corporate or other legal
existence, rights, franchises and privileges in the jurisdiction of its
incorporation; and qualify and remain qualified in each other jurisdiction
except insofar as all failures to do so in the aggregate do not have, and are
not reasonably expected to have, a Material Adverse Effect.
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(b) PAYMENT OF TAXES. Pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, would
become a Lien upon any of its properties or in the aggregate have, or are
reasonably expected to have, a Material Adverse Effect; PROVIDED that no such
entity will be required to pay any such tax, assessment, charge, levy or claim
which is being contested in good faith and by proper proceedings, so long as
neither such contest nor the existence of such proceedings in the aggregate
have, or are reasonably expected to have, a Material Adverse Effect.
(c) MAINTENANCE OF INSURANCE. Maintain insurance on its
properties and businesses with reputable insurance companies in such amounts, of
such types and covering such casualties, risks and contingencies, as is
ordinarily carried by companies engaged in similar businesses and owning similar
properties in the same general locations, except insofar as all failures to do
so, in the aggregate, have not had, and are not reasonably expected to have, a
Material Adverse Effect.
(d) MAINTENANCE OF PROPERTIES. Maintain and preserve its
properties in good working order and condition, ordinary wear and tear excepted,
except where the failure to do so, in the aggregate, has not had, and are not
reasonably expected to have, a Material Adverse Effect.
(e) RECORDS AND BOOKS OF ACCOUNT. Keep adequate records
and books of account, in which complete entries will be made in accordance with
GAAP or other applicable local accounting principles, consistently applied,
reflecting all of its financial transactions.
(f) VISITATION RIGHTS. At any reasonable time, permit any
20% Lender or any agent or representative of any such Lender (at such 20%
Lender's expense, if no Default or Event of Default then exists), to examine and
make copies of and abstracts from its records and books of account, to visit its
properties, and to discuss its affairs, finances and accounts with its officers,
directors, similar officials and independent accountants (any such Lender's
delivery of an executed copy of this Agreement evidencing Borrower's or the
relevant Subsidiary's or Investee's consent for such discussions).
(g) COMPLIANCE WITH LAWS. Comply with the applicable
requirements of all laws, except as such noncompliance in the aggregate does not
have, and are not reasonably expected to have, a Material Adverse Effect.
(h) RELATED DOCUMENTS. Keep, observe and comply with all
of its covenants and obligations which are set forth in the other
Transaction-Related Documents.
(i) AFTER-ACQUIRED PROPERTY. In the case of Borrower, as
promptly as possible, but in any event within ten Business Days, after an
acquisition by Borrower of any property as to which the security interest
granted pursuant to the Security Agreement or the Pledge Agreement has not
theretofore been perfected, deliver to the Agent pursuant to the Security
Agreement or the Pledge Agreement such documents and other items as are
reasonably
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necessary or desirable to effect such perfection and to make and cause such
security interest to be the first-priority security interest in such property or
to give effect to the Security Agreement or the Pledge Agreement, including
(where appropriate) undated stock or similar powers or other appropriate
instruments of assignment executed in blank.
(j) USE OF PROCEEDS. In the case of Borrower, use all
proceeds of the Loans to (i) make the Borrower Contribution, (ii) make any other
capital contribution or shareholder loan to Newco, or purchase shares of Newco,
pursuant to the Newco Shareholders Agreement, (iii) if Newco becomes a party to
the Mobilink Shareholders Agreement, make capital contributions and shareholder
loans to Mobilink, and purchase shares of Mobilink, pursuant to the Mobilink
Shareholders Agreement, and (iv) pay fees and expenses incurred by it in
connection with the foregoing. In the case of Newco, to make capital
contributions and shareholder loans to Mobilink, and purchase shares of
Mobilink, pursuant to the Mobilink Shareholders Agreement, and to pay expenses
incurred by it in connection with the foregoing.
(k) FINANCIAL STATEMENTS. Use reasonable efforts to
prepare and furnish the financial statements and reports required to be prepared
or furnished under the Newco Shareholders Agreement and the Mobilink
Shareholders Agreement, and at the request of any 20% Lender, use reasonable
efforts to (and to cause other Persons to) request, obtain or prepare, as the
case may be, any other financial information concerning Newco, Mobilink and
their respective Subsidiaries or Investees as they may request or be required to
prepare or furnish pursuant to the Transaction-Related Documents (other than the
Financing Documents).
(l) NEWCO SHARE CERTIFICATE AND NOTES. In the case of
Borrower, not later than September ___, 1997, obtain and deliver to the Agent,
as pledgee, pursuant to the Pledge Agreement, one or more certificates
representing the shares, and any promissory notes or other evidences of
indebtedness, of Newco held by PWH, registered in the name of PWH or in bearer
form, each accompanied by an undated stock power or similar transfer document
duly executed in blank. In the case of Borrower, not later than August __, 1997,
deliver to Newco notice of the pledge of the shares of Newco to be effected
pursuant to the Pledge Agreement and deliver to the Lenders notice from Newco to
the effect that Newco has made such notation in its books and records as is
necessary to put on notice a prospective transferee of such shares the rights of
the Agent and the Lenders with respect thereto.
5.02 NEGATIVE COVENANTS. Borrower covenants that, until the
payment in full of the principal amount of the Notes and all accrued interest
thereon and all fees, other amounts and obligations outstanding or payable to
any Lender or Agent (or reasonably expected by any Lender or Agent to become
payable) under this Agreement or any other Loan Document, it will not and will
not cause or permit any of its Subsidiaries or any Investee to:
(a) INDEBTEDNESS. In the case of Borrower and its
Subsidiaries only (but in no event Mobilink), create, incur, assume, guarantee
or be or remain liable for, contingently or otherwise, or suffer to exist, or
any Indebtedness, except for the following:
(i) Indebtedness under this Agreement and the Notes;
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(ii) Indebtedness representing intercompany loans and
advances solely among one or more of Borrower, its Subsidiaries and the
Investees;
(iii) Indebtedness of Newco representing shareholder loans
made by shareholders of Newco in accordance with the Newco Shareholders
Agreement; and
(iv) Permitted Indebtedness.
(b) NEGATIVE PLEDGE; LIENS. In the case of Borrower and
its Subsidiaries: (i) Create, assume, incur or suffer to be created, assumed,
incurred or to exist any Lien upon any of its respective properties or assets of
any character whether now owned or hereafter acquired, or upon the income or
profits therefrom; (ii) covenant in favor of any party (other than the Agent and
the Lenders) that it will not create, assume, incur or suffer to be created,
assumed, incurred or to exist any Lien upon its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (iii) permit or acquiesce in the perfection of any security interest
held by any party (other than the Agent and the Lenders) against any of its
properties or assets; (iv) transfer any of its respective properties or assets
or the income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (v) suffer to exist for a period of more than
30 days after the same has been incurred any Indebtedness which if unpaid would
by law or upon bankruptcy or insolvency, or otherwise, be given priority over
its general creditors; or (vi) sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles or chattel paper (as such terms
are defined in the UCC), with or without recourse; PROVIDED that Borrower or any
of its Subsidiaries may create, assume or incur or suffer to be created or
incurred or to exist, and may cause or permit any of its Subsidiaries to create,
assume or incur or suffer to be created or incurred or to exist:
(A) Liens in favor of the Agent and the Lenders
under the Loan Documents;
(B) Tax liens permitted by Section 5.01(b);
(C) Deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, utilities or similar
services, workers' compensation, unemployment insurance, old age pensions or
other insurance or social security obligations;
(D) Interests or title of a lessor under any lease
which is not prohibited by this Agreement;
(E) Easements, rights-of-way, restrictions and other
similar charges and encumbrances not interfering with the ordinary conduct of
the business of Borrower, its Subsidiaries and the Investees or detracting from
the value of their respective assets;
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(F) Mechanics', materialmen's or contractors' liens
or encumbrances or any similar statutory lien or restriction securing payments
and obligations incurred in the ordinary course of business which are not more
than 30 days past due or which are being contested in good faith by appropriate
proceedings, so long as neither such contest nor the existence of such
proceedings in the aggregate have, or are reasonably expected to have, a
Material Adverse Effect;
(G) Attachment or judgment liens securing amounts
not in excess of $25,000 individually or $100,000 in the aggregate which within
30 days after entry have been discharged or execution stayed pending appeal, or
discharged within 30 days after the expiration of such stay;
(H) Liens consisting of bankers' liens, rights of
setoff and similar Liens in favor of depository institutions, in each case
arising in the ordinary course of business; and
(I) Liens consisting of restrictions on transfer and
rights to purchase its property arising under the Newco Shareholders Agreement,
the IWC Group Agreement or the Mobilink Shareholders Agreement.
(c) [RESERVED.]
(d) DISPOSITION. Except as may be required by the
Transaction-Related Documents, transfer or otherwise dispose of all or any
portion of its interest in Newco or any interest therein, or cause or permit
Newco to transfer or otherwise dispose of all or any portion of its interest in
Mobilink or any interest therein.
(e) MERGERS, ETC. Merge or consolidate with, or sell,
assign, lease, transfer or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person or Persons (other than any merger
pursuant to which Borrower is the surviving Person and which does not result in
a Change in Ownership).
(f) DIVIDENDS AND STOCK PURCHASES. Directly or indirectly,
or through any Subsidiary or Investee, declare, make or pay, or incur any
liability to declare, make or pay, any Distribution, other than, in the case of
its Subsidiaries or any Investee, pro rata Distributions made in accordance with
its Organizational Documents, the Newco Shareholders Agreement and the Mobilink
Shareholders Agreement.
(g) AMENDMENTS OF OTHER AGREEMENTS. Amend, supplement,
modify, terminate, or cause or permit to be amended, supplemented, modified or
terminated, any Core Transaction-Related Document or any of its Organizational
Documents, or fail to enforce any provision thereof, except as in the aggregate
does not have, and is not reasonably expected to have, a Material Adverse
Effect.
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(h) INVESTMENTS. In the case of Borrower and its
Subsidiaries, make any Investment, except for those made pursuant to the Newco
Shareholders Agreement and the Mobilink Shareholders Agreement.
(i) RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Other than
any Transaction-Related Document, create or otherwise cause or suffer to exist
or become effective any encumbrance or restriction of any kind on the ability of
any of its Subsidiaries or any Investee to (i) pay any Distribution in respect
of any of such Subsidiary's or Investee's capital stock or other Equity
Securities owned by Borrower or any of Borrower's Subsidiaries or any Investee,
(ii) pay any Indebtedness owed to Borrower or any of Borrower's Subsidiaries or
any Investee, (iii) make loans or advances to Borrower or any Subsidiaries or
any Investee or (iv) transfer any of its property or assets to Borrower or any
of Borrower's Subsidiaries or any Investee.
(j) TRANSACTIONS WITH AFFILIATES. Other than any
Transaction Related Document, enter into, amend, supplement or modify any
agreement, contract or transaction which, if it exists or existed on the date of
this Agreement and were not disclosed on the Disclosure Letter, would constitute
a breach of the representations and warranties set forth in Section 3.17.
(k) CHANGE OF BUSINESS. Conduct or enter into any business
other than (i) in the case of Borrower and Newco, the ownership and management
of an Investment in Mobilink, and (ii) in the case of Mobilink, the ownership
and operation of a cellular mobile telephone company in Pakistan presently
operated under the service mark "Mobilink/a Motorola Network."
(l) LIMITATION ON CREATION OF SUBSIDIARIES. In the case of
Borrower or any of its Subsidiaries, establish, create or acquire any
Subsidiary; PROVIDED, that Borrower will be permitted to establish or create any
direct or indirect Wholly-Owned Subsidiary, so long as (i) all of the
outstanding Equity Securities of such new Subsidiary are pledged to the Agent,
for the benefit of the Lenders, to secure Loans and the other obligations of
Borrower under this Agreement and the other Loan Documents pursuant to a pledge
agreement in form and substance satisfactory to the Agent, for the benefit of
the Lenders, and the certificates representing such Equity Securities, together
with undated stock or similar powers or other instruments of assignment duly
executed in blank, are delivered to the Agent, for the benefit of the Lenders,
(ii) such new Wholly-Owned Subsidiary executes a guaranty, pledge agreement, and
security agreement, in each case in form and substance satisfactory to the
Agent, for the benefit of the Lenders, and (iii) such new Wholly-Owned
Subsidiary takes all other actions and executes and delivers such other
documents as are reasonably requested by the Agent or Required Lenders in
connection with any of the foregoing. In addition, each such new Subsidiary
will execute and deliver, or cause to be executed and delivered, all other
relevant documentation of the type described in Article IV as Borrower would
have been required to deliver with respect to such new Subsidiary if such new
Subsidiary were in existence on the date of the Closing.
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5.03 REPORTING REQUIREMENTS. Borrower covenants that, until the
payment in full of the principal amount of the Notes and all accrued interest
thereon and all other amounts, fees and obligations outstanding or payable to
any Lender or Agent (or reasonably expected by any Lender or Agent to become
payable) under this Agreement or any other Loan Document, it will furnish to
each 20% Lender:
(a) CERTIFICATE OF COMPLIANCE. As soon as practicable (but
in any event not less than 30 days) after the end of each fiscal quarter of
Borrower, a certificate of Borrower executed on Borrower's behalf by Borrower's
chief financial officer stating that he or she has caused the provisions of this
Agreement to be reviewed and that nothing has come to his or her attention to
lead him or her to believe that any Event of Default or Potential Event of
Default has occurred or exists hereunder or, if such is not the case, specifying
the nature thereof and what action Borrower has taken, is taking and proposes to
take with respect thereto.
(b) ANNUAL BUDGETS; NOTIFICATION OF DEVIATIONS. Prior to
(but not more than 90 days prior to) the end of each fiscal year, an annual
operating budget prepared on a quarterly basis for Borrower and its Subsidiaries
and for each Investee for the succeeding fiscal year (displaying anticipated
statements of income, cash flows and balance sheets) and an annual capital
budget for Borrower and its Subsidiaries or such Investee, as the case may be,
for the succeeding fiscal year (displaying anticipated expenditures for capital
assets), and promptly upon preparation thereof, any other significant budgets
which Borrower, any of its Subsidiaries or any Investee prepares (including any
material revisions of such annual or other budgets).
(c) NOTICES OF DEFAULT. As soon as possible, and in any
event within five Business Days, after Borrower discovers the occurrence of any
Event of Default or Potential Event of Default, a statement of Borrower executed
on Borrower's behalf Borrower's chief financial officer or president setting
forth details of such Event of Default or Potential Event of Default and the
action with respect thereto taken, or proposed to be taken, by Borrower.
(d) NOTICES OF LITIGATION. Promptly after the commencement
thereof, written notice of all actions, suits and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, other than such matters which, in the
aggregate have not had, and are not reasonably expected to have, a Material
Adverse Effect.
(e) NOTICES OF ADVERSE JUDGMENTS. Promptly after the
institution thereof, written notice of all adverse judgments in excess of
$500,000, or which in the aggregate have, or are reasonably expected to have, a
Material Adverse Effect, entered by any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
against Borrower or any of its Subsidiaries or any Investee, which notice will
include the dollar amount of any such adverse judgment as well as any other
expected adverse impact on Borrower and its Subsidiaries or the Investee in
question.
(f) MATERIAL ADVERSE CHANGES. Promptly after the
occurrence thereof, written notice of all events, conditions, acts, facts and
omissions (except general
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economic conditions) which in the aggregate have had, or are reasonably expected
to have, a Material Adverse Effect.
(g) POTENTIAL PREPAYMENT EVENTS. (A) As early as is
practicable prior to the date thereof, written notice of the anticipated
occurrence of any event described in Section 2.05(b), and (B) on the date of the
occurrence thereof, written notice of the occurrence of any event described in
Section 2.05(b).
(h) INFORMATION CONCERNING SUBSIDIARIES AND INVESTEES. As
and when received, all reports and other information received by Borrower or any
of its Subsidiaries or any Investee with respect to any of its Subsidiaries or
any Investee, including pursuant to the Newco Shareholders Agreement or the
Mobilink Shareholders Agreement.
(i) OTHER INFORMATION. Such other information with respect
to the business, properties, condition or operations, of Borrower, any of its
Subsidiaries or any Investee as any 20% Lender may from time to time reasonably
request.
ARTICLE VI
DEFAULT
6.01 EVENTS OF DEFAULT. An "EVENT OF DEFAULT" means the occurrence
of one or more of the following events:
(a) Borrower defaults in the payment of (i) any principal
amount with respect to any of the Notes when due, whether at maturity, by
acceleration or otherwise, (ii) any interest with respect to any of the Notes
when due or (iii) any other amount required to be paid to any Lender or Agent
under this Agreement or any other Loan Document when due (unless the same is
being contested in good faith), and, in the case of any occurrence described in
clause (iii) above, the default in payment continues uncured for a period of
five or more days;
(b) Borrower, any of its Subsidiaries or any Investee
defaults in (i) the payment of any principal of or any interest, premium or
other amount due and payable with respect to any Indebtedness with an aggregate
principal amount in excess of $500,000 beyond any period of grace provided with
respect thereto or (ii) the performance or observance of any other covenant,
agreement, term or condition contained in any agreement or instrument with
respect to any such Indebtedness, if in either case the effect of such default
is to cause (whether automatically or by acceleration), or permit the holder of
such Indebtedness to cause, after the expiration of any applicable cure period,
such obligation to become due prior to its stated maturity;
(c) The representations and warranties made by Borrower or
IWCH in this Agreement or in any of the other Core Financing Documents,
including or in any schedule, certificate or financial statement furnished to
any Lender or either Agent pursuant to the provisions thereof, considered
without regard to any materiality qualification set forth therein, were as of
the time made or furnished false or misleading in such respects as in the
aggregate
29
<PAGE>
have had, or are reasonably expected to have, a Material Adverse Effect as
compared with the state of affairs which would exist if all such representations
and warranties were in all respects true and not misleading;
(d) Any Core Loan Document or any provision thereof ceases
to be in full force and effect or is declared to be null and void by a court of
competent jurisdiction, or Borrower or IWCH or any Person acting by or on behalf
of Borrower or IWCH denies or disaffirms Borrower's or IWCH's obligations under
any Core Loan Document, if the same (in the aggregate with all other occurrences
of the type described above) have had, or are reasonably expected to have, a
Material Adverse Effect, or any material portion of the collateral described in
any Collateral Agreement is attached, seized, subjected to a writ, warrant,
assessment or Lien (other than a Permitted Lien) or levied upon or comes within
the control of any other creditor of any Person other than any Agent;
(e) Borrower defaults the performance of or compliance with
any provision of Section 5.01(i), Section 5.01(j), Section 5.01(l) or
Section 5.02;
(f) Borrower defaults in the performance of or compliance
with any other covenant, condition or provision of this Agreement or any other
Core Loan Document and such default continues for a period of 60 days after the
occurrence thereof;
(g) (A) There is entered against Borrower a final judgment
which, together with all other undischarged final judgments against Borrower,
exceeds $500,000, if, 30 days after the entry thereof, such judgment has not
been fully discharged or execution thereof stayed pending appeal, or if, 30 days
after the expiration of any such stay, such judgment has not been fully
discharged, or (B) there is entered against Borrower, any of its Subsidiaries or
any Investee a final judgment which, together with all other undischarged final
judgments against Borrower, any of its Subsidiaries or any Investee, has had or
are reasonably expected to have a Material Adverse Effect, if, 30 days after the
entry thereof, such judgment has not been fully discharged or execution thereof
stayed pending appeal, or if, 30 days after the expiration of any such stay,
such judgment has not been fully discharged;
(h) Any order, judgment, decree or injunction is entered
against Borrower, any of its Subsidiaries or any Investee requiring the
dissolution or split up of Borrower, any of its Subsidiaries or any Investee or
preventing Borrower, any of its Subsidiaries or any Investee from conducting all
or any material part of its business, and such order, judgment, decree or
injunction remains undischarged or unstayed for more than 30 days;
(i) A proceeding is instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
Borrower, any of its Subsidiaries or any Investee in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Borrower, any of its Subsidiaries
or any Investee or for any substantial part of the property of any of them, or
for the winding-up or liquidation of its affairs, and such proceeding remains
undismissed or unstayed and in effect for a period of
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<PAGE>
60 consecutive days or such court enters a decree or order granting the relief
sought in such proceeding;
(j) Borrower, any of its Subsidiaries or any material
Investee commences a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, consents to the entry of an
order for relief in an involuntary case under any such law, or consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Borrower, any of
its Subsidiaries or any Investee or for any substantial part of the property of
any of them, or makes a general assignment for the benefit of creditors, or
fails generally to pay its debts as they become due, or takes any corporate
action in furtherance of any of the foregoing;
(k) Any Core Equity Document or any provision thereof
ceases to be in full force and effect as to IWCH or IWCH or any Person acting by
or on behalf of IWCH denies or disaffirms IWCH's obligations under any Core
Equity Document, or IWCH defaults in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
any Core Equity Document, in all such cases except where the same, in the
aggregate, have not had, and are not reasonably expected to have, a Material
Adverse Effect of a type described in clause (d) of the definition of that term;
(l) Any "Event of Default" (as that term is defined in the
IWCH Loan Agreement) described in Section 6.01(i) or 6.01(j) of the IWCH Loan
Agreement, or any "Event of Default" (as that term is defined in the Indenture)
described in Section 6.01(6) or 6.01(7) of the Indenture, occurs; or
(m) Any "Event of Default" (as that term is defined in the
IWCH Loan Agreement), other than as described in Section 6.01(i) or 6.01(j) of
the IWCH Loan Agreement, or any "Event of Default" (as that term is defined in
the Indenture), other than as described in Section 6.01(6) or 6.01(7) of the
Indenture, occurs.
6.02 CONSEQUENCES OF EVENT OF DEFAULT.
(a) NON-BANKRUPTCY DEFAULTS. If an Event of Default (other
than any Event of Default described in Section 6.01(i), 6.01(j) or 6.01(l))
occurs and is continuing, then Requisite Lenders may at their option declare the
unpaid principal balance of the Notes, all interest accrued thereon and all
other liabilities and obligations of Borrower under this Agreement and under the
other Loan Documents to be forthwith due and payable, and the same will
thereupon become and be immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived
by Borrower.
(b) BANKRUPTCY. If an Event of Default specified in any of
Sections 6.01(i), 6.01(j) and 6.01(l) occurs, then the unpaid principal balance
of the Notes, all interest accrued thereon and all other liabilities and
obligations of Borrower under this Agreement and under the other Loan Documents
will be immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived by Borrower.
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<PAGE>
6.03 RIGHTS OF SETOFF. To the extent permitted by law:
(a) in case an Event of Default occurs and is continuing,
any Lender will have the right, in addition to all other rights and remedies
available to it, without notice to Borrower, to setoff against and to
appropriate and apply to the unpaid balance of the Notes, all accrued interest
thereon and all other obligations of Borrower under this Agreement and under the
Notes and the other Loan Documents, any debt owing to, and any other funds held
in any manner for the account of Borrower by, such Lender, including all funds
in all deposit accounts (general or special) now or hereafter maintained by
Borrower for its own account with such Lender, and such Lender is hereby granted
a security interest in and lien on all such debts (including all such deposit
accounts) for such purpose;
(b) the right described in clause (a) above will exist
whether or not any Lender or Agent has made any demand under this Agreement or
any other Loan Document and whether or not the Notes and such other obligations
are matured or unmatured; and
(c) Borrower hereby confirms each Lender's right of
banker's lien and setoff, as further specified in this Section 6.03, and nothing
in this Agreement or any other Loan Document will be deemed to be a waiver or
prohibition of any Lender's right of banker's lien and setoff.
6.04 OTHER RIGHTS. The rights and remedies of any Lender upon the
occurrence of an Event of Default set forth in Sections 6.02 and 6.03 are
cumulative and in addition to and not in derogation of any other rights each
Lender may have under applicable law, the Financing Documents or other
agreements.
ARTICLE VII
SUCCESSORS AND ASSIGNS; PARTICIPATIONS
7.01 SUCCESSORS AND ASSIGNS IN GENERAL. This Agreement will be
binding upon and, subject to Section 7.02, inure to the benefit of the parties
hereto and their respective successors and assigns, except that Borrower may not
assign or transfer its rights under this Agreement or any interest under this
Agreement or delegate its liabilities, obligations or duties, without the prior
written consent of Requisite Lenders. Any Person which is not already a party
to this Agreement and which becomes the holder of any Note will, by virtue of
becoming such a holder, become a party to this Agreement and as an additional
Lender. The assigning Lender will give Borrower prompt written notice of any
assignment of or participation in the Loans or any Note.
7.02 CONDITIONS. Each Lender may assign all or any portion of its
interest in and rights under this Agreement and the other Financing Documents to
any other Person (who will thereupon become a Lender as provided in Section
7.01), or grant a participating or beneficial interest in this Agreement and the
other Financing Documents to any other Person (a "PARTICIPANT"), subject to the
following conditions:
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<PAGE>
(a) SECURITIES LAWS. Such assignment or participation is
not made under such circumstances as may constitute a violation of the
Securities Act of 1933, as amended, or regulations thereunder, or any other
applicable securities laws.
(b) PARTICIPATING AGENT. In the case of any such
participating or beneficial interest, the granting Lender enters into an agency
relationship with all Participants of such Lender, pursuant to which such
Lender, as agent (in such capacity, the "PARTICIPATING AGENT"), will administer
its interest with respect to the Loans and the Notes on behalf of itself as a
Lender and all of its Participants. All payments to be made by Borrower for the
benefit of such Lender under this Agreement and the other Financing Documents
will be made to such Lender, as the Participating Agent, and all communications
by Borrower to such Lender or any of its Participants will be addressed to or in
the care of the Participating Agent.
7.03 FURTHER ASSURANCE. Borrower will, from time to time at the
request of any Lender, execute and deliver to such Lender or to such party or
parties as such Lender may designate any and all further instruments (including
substitute or replacement Notes) as may in the opinion of such Lender be
reasonably necessary or advisable to give full force and effect to any transfer
contemplated by this Article VII.
ARTICLE VIII
MISCELLANEOUS
8.01 MODIFICATIONS, AMENDMENTS OR WAIVERS. The provisions of this
Agreement, the Notes and the other Core Loan Documents may be modified, amended
or waived, but only by a written instrument signed by Borrower and Requisite
Lenders (and, in the case of any Collateral Agreement or any agreement,
instrument or document delivered thereunder, the Agent in question), except
Sections 6.01(a) and 6.02(a), and all provisions of this Agreement relating to
the rate at which interest accrues on the Loans and the Notes or the times at
which such interest becomes payable or the rate at which the Loans or the Notes
are to be repaid, may be amended only with the prior written consent of Borrower
and all Lenders.
8.02 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED. No
delay or failure of any Lender or Agent in exercising any right, power or remedy
under this Agreement or any other Loan Document will affect or operate as a
waiver thereof, nor will any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power or remedy
preclude any further exercise thereof, or of any other right, power or remedy.
The rights and remedies of each Lender and Agent under this Agreement and each
other Loan Document are cumulative and not exclusive of any rights or remedies
which it would otherwise have. Any waiver, permit, consent or approval of any
kind or character on the part of any Lender of any breach or default or any such
waiver of any provision or condition of this Agreement or any other Loan
Document must be in writing and will be effective only to the extent in such
writing specifically set forth.
8.03 REIMBURSEMENT OF EXPENSES; TAXES. Borrower will upon demand
pay or reimburse TDI, Vanguard and Agent for all reasonable out-of-pocket
expenses, including fees
33
<PAGE>
and expenses of counsel for TDI, Vanguard or Agent, from time to time
(i) arising in connection with the preparation and execution of this Agreement
and the other Financing Documents (which amount will be limited to $35,000 in
the case of Vanguard, in respect of this Agreement, the other Financing
Documents, the IWCH Loan Agreement and the "Loan Documents" referred to
therein), (ii) relating to any amendments, waivers or consents pursuant to the
provisions hereof or thereof, (iii) arising in connection with any merger
involving Borrower or any of its Subsidiaries or any Investee, any acquisition
by Borrower or any of its Subsidiaries or any Investee, any sale of Borrower or
any of its Subsidiaries or any Investee or any partial or total repayment of the
Loans or Notes, or (iv) arising in connection with the enforcement of the
provisions of this Agreement or any other Financing Document. Borrower will pay
and save each Lender harmless from all liability for any stamp or other similar
taxes which may be payable in connection with this Agreement and the other
Financing Documents or the performance of any transactions contemplated hereby
or thereby (but excluding any franchise tax, income tax, gross receipts tax or
other similar tax).
8.04 HOLIDAYS. Whenever any payment or action to be made or taken
under this Agreement or any other Loan Document is stated to be due or required
to be taken on a day which is not a Business Day, such payment or action will be
made or taken on the next following Business Day, and such extension of time
will be included in computing interest or fees, if any, in connection with such
payment or action.
8.05 NOTICES. All notices and other communications given to or
made upon any party hereto in connection with this Agreement or any other Loan
Document will, except as otherwise expressly provided herein or therein, be in
writing and mailed, telecopied or delivered by hand or by reputable overnight
courier service to the respective parties, as follows:
Borrower: c/o International Wireless Communications, Inc.
400 S. El Camino Real
Suite 1275
San Mateo, CA 94402
Attention: Douglas S. Sinclair
Aarti D. Gurnani
Telecopy: (650) 548-1842
with a copy (which will not constitute notice) to:
Brooks Stough, Esq.
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigan, LLP
155 Constitution Drive
Menlo Park, CA 94025
Telecopy: (650) 343-7502
To any
Lender: To the address (if any) for such Lender set forth on the
attached EXHIBIT A, with any copy described on such EXHIBIT A
34
<PAGE>
or in accordance with any subsequent written direction from the recipient party
to the sending party made in accordance with this Section 8.05. All such
notices and other communications will, except as otherwise expressly provided in
this Agreement or any other Loan Document, be effective upon (a) delivery if
delivered by hand; (b) on the Business Day after deposited with a reputable
overnight courier service, delivery charges prepaid; (c) on the third Business
Day after deposited in the mail, postage prepaid; or (d) in the case of
telecopy, when received.
8.06 SURVIVAL. All representations, warranties, covenants and
agreements of Borrower contained in this Agreement or any other Loan Document or
made in writing in connection herewith or therewith will survive the execution
and delivery of this Agreement, the making of the Loans hereunder and the
issuance of the Notes. The provisions of this Article VIII will survive
repayment of the Loans and the other amounts payable to the Lenders and under
this Agreement and the other Loan Documents and the termination of this
Agreement and the other Loan Documents.
8.07 GOVERNING LAW; WAIVERS AND JURISDICTION.
(a) GOVERNING LAW. This Agreement, the Notes and the other
Loan Documents will in all respects be governed by, and construed and enforced
in accordance with, the laws of the State of New York, without giving effect to
any choice of law or conflict of law rules or provisions (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York, except that the
filing, perfection, effect of perfection and enforcement of security interests
and liens under the Collateral Agreements in other jurisdictions will be
governed by the laws of the applicable jurisdictions in accordance with the UCC
as in effect in the State of New York.
(b) WAIVERS. To the extent permitted by law, each party
hereto hereby waives personal service of any and all process upon it in
connection with this Agreement or any other Loan Document and agrees that all
such service of process may be made as provided in Section 8.05, and service so
made will be deemed to be completed as provided in Section 8.05. In addition,
Borrower and each Lender each hereby waives trial by jury, any objections based
on FORUM NON CONVENIENS and any objections to venue of any action arising out
of, connected with, related to or incidental to the transactions contemplated by
or the relationships established in connection with this Agreement, the Notes
and the other Loan Documents.
(c) EXCLUSIVE JURISDICTION. Except as provided in Section
8.07(d), all disputes among or between any Lender or Agent and Borrower arising
out of, connected with, related to or incidental to the transactions
contemplated by or the relationship established between them in connection with
this Agreement, the Notes or the other Loan Documents, and whether arising in
contract, tort, equity or otherwise, will be resolved only by state or federal
courts located in New York County, New York, and Borrower and each Lender hereby
consents and submits to the jurisdiction of any state or federal court located
within such county and state. The Lenders and Borrower acknowledge, however,
that any appeals from those courts may be required to be heard by a court
located outside of New York County, New York. Borrower and each Lender waives
in all disputes any objection that it may have to the location of the court
35
<PAGE>
considering the dispute. Nothing in this Section 8.07 will affect the right of
any Lender or Agent or Borrower to serve legal process in any other manner
permitted by law or affect the right of any Lender or Agent to bring any action
or proceeding against Borrower or its property in the courts of any other
jurisdiction.
(d) OTHER JURISDICTIONS. Borrower and each Lender agrees
that any Lender or Agent or Borrower will have the right to proceed against
Borrower or any Lender in a court in any location to enable any Lender or Agent
or Borrower to enforce a judgment or other court order obtained in any
proceeding brought in accordance with Section 8.07(c) and entered in favor of
such Lender or Agent or Borrower. Borrower and each Lender waives any objection
that it may have to the location of the court in which any Lender or Agent or
Borrower has commenced a proceeding described in this Section 8.07(d).
8.08 HEREIN, ETC. Words such as "herein," "hereunder," "hereof"
and the like will be deemed to refer to this Agreement as a whole and not to any
particular document or Article, Section or other portion of a document.
Section, clause, Exhibit and Schedule references contained in this Agreement are
references to Sections, clauses, Exhibits and Schedules in or attached to this
Agreement, unless otherwise specified. Each defined term used in this Agreement
has a comparable meaning when used in its plural or singular form. Each
gender-specific term used in this Agreement has a comparable meaning whether
used in a masculine, feminine or gender-neutral form. As used in this
Agreement, the terms "knowledge" or "aware" will include the actual knowledge
and awareness of the Person in question, and the knowledge and awareness that
such Person would have obtained after making reasonable inquiry and exercising
reasonable diligence with respect to the matter in question. Whenever the term
"including" is used in this Agreement (whether or not that term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) in connection with a listing of items within a particular
classification, that listing will be interpreted to be illustrative only and
will not be interpreted as a limitation on, or an exclusive listing of, the
items within that classification. Each reference in this Agreement to any law
will be deemed to include such law as it hereafter may be amended, supplemented
or modified from time to time and any successor thereto.
8.09 SEVERABILITY. Whenever possible, each provision of this
Agreement and each other Loan Document will be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document is held to be prohibited by or invalid
under applicable law in any jurisdiction, such provision will be ineffective
only to the extent of such prohibition or invalidity, without invalidating any
other provision of this Agreement or any other Loan Document.
8.10 HEADINGS. Section and subsection headings in this Agreement
and each other Loan Document are included for convenience of reference only and
will not constitute a part of this Agreement or any other Loan Document for any
other purpose.
8.11 COUNTERPARTS. This Agreement and each other Loan Document may
be executed in multiple counterparts and by any party hereto or thereto on
separate counterparts,
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<PAGE>
each of which, when so executed and delivered, will be an original, but all such
counterparts will together constitute one and the same instrument.
8.12 BROKERS FEES. Borrower will indemnify each Lender and hold it
harmless for any liability, loss or expense (including reasonable attorneys'
fees) arising from any claim for brokerage commissions, finders' fees or similar
compensation in connection with any agreement or arrangement binding upon
Borrower, any of its Subsidiaries or any of their Affiliates.
8.13 INDEMNIFICATION. In consideration of each Lender's execution
and delivery of this Agreement and such Lender's making of the Loans hereunder
or acquisition of a Note, and in addition to all other obligations of Borrower
under this Agreement and the other Loan Documents, Borrower will defend,
protect, indemnify and hold harmless each Lender and its Participants and each
Agent, and all of their respective officers, directors, employees and agents
(including those retained in connection with the transactions contemplated by
this Agreement and the other Loan Documents) (collectively, the "INDEMNITEES")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements, but excluding claims and losses arising from
such Indemnitee's breach hereof or thereof or such Indemnitee's gross negligence
or willful misconduct (the "INDEMNIFIED LIABILITIES"), incurred by the
Indemnitees or any of them as a result of, or arising out of, or relating to (i)
any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the Loans, (ii) the execution, delivery,
performance or enforcement of this Agreement, the Notes or the other Loan
Documents and any instrument, document or agreement executed pursuant hereto by
any of the Indemnitees or (iii) such Lender's status as a lender to Borrower or
such Agent's status as an agent of the Lenders. To the extent that the
foregoing undertaking by Borrower may be unenforceable for any reason, Borrower
will make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. To the
extent that the undertaking to indemnify, pay and hold harmless by Borrower
under this Section 8.13 may be unenforceable because it violates any law or
public policy, Borrower will contribute the maximum portion that it is permitted
to pay and satisfy under applicable law or public policy to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnities or any
of them.
8.14 PAYMENT SET ASIDE. To the extent that Borrower makes a
payment or payments to any Lender or Agent hereunder or under the Notes or any
other Loan Document or any Lender or Agent enforces its security interests or
rights or exercises its right or setoff hereunder or thereunder, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to Borrower, a trustee, receiver or any other Person under
any law (including any bankruptcy law, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied and all
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<PAGE>
Liens created under the Collateral Agreements will be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
8.15 COMPLETE AGREEMENT. Except as otherwise expressly set forth
herein, this Agreement, the Notes and the other Loan Documents embody the
complete agreement and understanding of the parties hereto and thereto and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, whether written or oral, which may have related to the
subject matter hereof in any way, and such agreements may not be contradicted or
varied by evidence of prior, contemporaneous or subsequent oral discussions or
understandings of the parties. The parties hereto acknowledge and agree there
are no oral understandings or agreements between them with respect to the
subject matter hereof or thereof.
8.16 NO STRICT CONSTRUCTION. The language used in this Agreement
and the other Loan Documents will be deemed to be the language chosen by the
parties to express their mutual intent. In the event an ambiguity or question
of intent or interpretation arises, this Agreement and the other Loan Documents
will be construed as if drafted jointly by the parties, and no presumption or
burden of proof will arise favoring or disfavoring any Person by virtue of the
authorship of any of the provisions of this Agreement or any other Loan
Document.
8.17 REGISTER. Borrower will maintain a register in which it will
record the initial ownership of the Notes and changes in the ownership of Notes
of which it receives notice. For purposes of this Agreement (to the extent
Borrower so maintains such register), the holder of any Note indicated at any
time in such register will be the holder of such Note.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Loan Agreement as of the day and year first
above written.
PAKISTAN WIRELESS HOLDINGS LIMITED
By: /s/ Douglas S. Sinclair
------------------------------
Its: Executive Vice President
------------------------------
TORONTO DOMINION INVESTMENTS, INC.
By: /s/ Martha L. Gariepy
------------------------------
Its:
------------------------------
VANGUARD CELLULAR FINANCIAL CORPORATION
By: /s/ Haynes Griffin
------------------------------
Its:
------------------------------
[OTHER LENDERS]
<PAGE>
EXHIBIT A
INITIAL LENDER'S NAME AND ADDRESS LOAN AMOUNT
- --------------------------------- -----------
TRANCHE A LENDERS
- -----------------
Vanguard Cellular Financial Corporation [$_________]
2002 Pisgah Church Road, Suite 300
Greensboro, NC 27455
Attention: Haynes Griffin
Telecopy: (910) 545-2233
with a copy (which will not constitute notice) to
- -------------------------------------------------
Joe Blum
Latham & Watkins
One Angel Court
London EC2R 7HJ
England
Telecopy: 011 44 171 374 4460
TRANCHE B LENDERS
- -----------------
Toronto Dominion Investments, Inc.
909 Fanin Street
Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Fax No. (713) 652-2647
with copies (which will not constitute notice) to: [$_________]
- -------------------------------------------------
Toronto Dominion Investments, Inc.
31 West 52nd Street, 20th Floor
New York, NY 10019
Attention: Brian A. Rich
Telecopy: (212) 974-8429
<PAGE>
John Kuehn
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022
Telecopy: (212) 446-4900 [$__________]
--------------
--------------
Total $22,000,000
--------------
--------------
2
<PAGE>
THE SECURITY REPRESENTED BY THIS INSTRUMENT WAS ORIGINALLY ISSUED ON AUGUST
18, 1997, AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE TRANSFER OF SUCH SECURITY IS SUBJECT TO THE CONDITIONS SPECIFIED
IN THE LOAN AGREEMENT DATED AS OF AUGUST 18, 1997, AS IN EFFECT FROM TIME TO
TIME, BETWEEN THE ISSUER HEREOF ("BORROWER") AND CERTAIN LENDERS, AND
BORROWER RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITY UNTIL
SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON
WRITTEN REQUEST, A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY BORROWER TO
THE HOLDER HEREOF WITHOUT CHARGE.
THIS TRANCHE A EXCHANGEABLE SENIOR SECURED NOTE HAS BEEN ISSUED WITH ORIGINAL
ISSUE DISCOUNT AND, AS REQUIRED BY TREASURY REGULATION SECTION 1.1275-3(B)(1),
INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE AND THE YIELD TO MATURITY MAY BE OBTAINED FROM
BORROWER.
PAKISTAN WIRELESS HOLDINGS LIMITED
TRANCHE A EXCHANGEABLE SENIOR SECURED NOTE
August 18, 1997 $___________
Pakistan Wireless Holdings Limited, a Mauritius corporation
("BORROWER"), for value received, hereby promises to pay to the order of
[PAYEE] the principal amount of [________________________________________]
(US$___________) on August 17, 2002,* together with interest thereon
calculated from the date hereof in accordance with the provisions of the Loan
Agreement referred to below.
This Note was issued pursuant to the Loan Agreement, dated as of
August 18, 1997 (as in effect from time to time, the "LOAN AGREEMENT"), among
Borrower and the Lenders who from time to time are parties thereto and is one of
the "Tranche A Notes" referred to in the Loan Agreement. The Loan Agreement
contains terms governing the rights of the holder of this Note, and all
provisions of the Loan Agreement are hereby incorporated in this Note in full by
- ----------------------
* [The Maturity Date]
<PAGE>
this reference. Except as otherwise defined in this Note, each capitalized
term used in this Note has the meaning set forth in the Loan Agreement.
Subject to the transfer conditions referred to in the legend
endorsed on this Note, this Note and all rights hereunder are transferable,
in whole or in part, without charge to the holder, upon surrender of this
Note, properly endorsed for transfer, at the office of Borrower specified for
delivery of notices pursuant to the Loan Agreement.
This Note is exchangeable, upon the surrender of this Note by the
holder at the office of Borrower specified for delivery of notices pursuant
to the Loan Agreement, for one or more new Notes of like tenor representing
in the aggregate the rights under this Note, and each of such new Notes will
represent such portion of such rights as is designated by the holder at the
time of such surrender.
Upon receipt of evidence reasonably satisfactory to Borrower (it
being agreed that an affidavit of the holder will be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing this Note, and in the case of any such loss, theft or destruction,
upon receipt of indemnity reasonably satisfactory to Borrower (it being
agreed that such holder's its own unsecured agreement will be satisfactory),
or, in the case of any such mutilation upon surrender of such certificate,
Borrower will (at its expense) execute and deliver in lieu of such
certificate a new certificate of like kind representing the same rights
represented by such lost, stolen, destroyed or mutilated certificate and
dated the date of such lost, stolen, destroyed or mutilated certificate.
It is the intention of Borrower and the holder of this Note to
conform strictly to all applicable usury laws now or hereafter in force, and
any interest payable under this Note will be subject to reduction to the
amount not in excess of the maximum legal amount allowed under the applicable
usury laws as now or hereafter construed by the courts having jurisdiction
over such matters. If such interest does exceed the maximum legal rate, it
will be deemed a mistake.
Borrower and the Initial Lenders participated jointly in the
negotiation and drafting of this Note. In the event an ambiguity or question
of intent or interpretation arises, this Note will be construed as if drafted
jointly by Borrower and the holder hereof, and no presumption or burden of
proof will arise favoring or disfavoring any Person by virtue of the
authorship of any of the provisions of this Note.
The holder of this Note named as the payee hereof is the owner of
this obligation with respect to principal and interest. Furthermore,
transfer of this obligation can be effected by such named person only by
surrender of this obligation to Borrower and by either reissuance by Borrower
of this Note to a new holder or by the issuance of a new obligation to the
new holder. It is intended that interest paid on the obligation qualify for
the exemption from U.S. withholding tax as a portfolio debt instrument under
Section 871(h) or 881(c) of the Internal Revenue Code.
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IN WITNESS WHEREOF, Borrower has executed and delivered this Note on
the date specified above.
PAKISTAN WIRELESS
HOLDINGS LIMITED
By
------------------------------------
Its
-----------------------------------
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PAYMENT DATE PRINCIPAL PAID INTEREST PAID PRINCIPAL BALANCE
- ------------ -------------- ------------- -----------------
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PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of August 18, 1997 between PAKISTAN WIRELESS
HOLDINGS LIMITED, a private company formed under the laws of Mauritius (the
"PLEDGOR"), and TORONTO DOMINION INVESTMENTS, INC., as agent (in such capacity,
together with its successors in such capacity, the "AGENT") for the Lenders, as
that term is defined in the Loan Agreement dated as of the date of this
Agreement among the Pledgor and the Initial Lenders named therein (as the same
may be amended, modified, restated or supplemented from time to time, the "LOAN
AGREEMENT"). Capitalized terms used but not defined herein have the meanings
given to such terms in the Loan Agreement.
The Initial Lenders have agreed to make certain loans to the Pledgor
pursuant to, and subject to the terms and conditions specified in, the Loan
Agreement. The obligation of the Initial Lenders to lend under the Loan
Agreement are conditioned on, among other things, the execution and delivery by
the Pledgor of this Agreement.
Accordingly, the Pledgor and the Agent, on behalf of itself and the
Lenders as holders of the Obligations, hereby agree as follows:
SECTION 1. PLEDGE. As security for the timely payment and
performance in full of the obligations of the Pledgor under this Agreement and
the other Loan Documents (the "OBLIGATIONS"), the Pledgor hereby transfers,
hypothecates, pledges, sets over and delivers unto the Agent, and grants to the
Agent (for the benefit of the Lenders) a security interest in, all right, title
and interest the Pledgor now has or hereafter acquires in (a) the securities
described on the attached Schedule of Pledged Securities and all securities of
any of Pledgor's Subsidiaries or of any Investee obtained in the future by the
Pledgor and the certificates representing or evidencing all such securities (the
"PLEDGED STOCK"); (b) all other property which may be delivered to and held by
the Agent pursuant to the terms hereof; (c) all payments of principal or
interest, dividends, cash, instruments and other property or any Distribution
from time to time received, receivable or otherwise distributed in respect of,
in exchange for or upon the conversion of the securities and other property
referred to in clause (a) or clause (b) above; (d) except as provided in Section
5, all rights and privileges of the Pledgor with respect to the securities and
other property referred to in clauses (a), (b) and (c) above; and (e) all
proceeds of any of the foregoing (the items referred to in clauses (a) through
(e) being collectively called the "COLLATERAL"). Upon delivery to the Agent,
(i) any share certificates, notes or other securities or instruments now or
hereafter included in the Collateral (the "PLEDGED SECURITIES") will be duly
endorsed to the Agent or accompanied by stock powers duly executed in blank or
other instruments of transfer satisfactory to the Agent and by such other
instruments and documents as the Agent may reasonably request, and (ii) all
other property comprising part of the Collateral will be accompanied by proper
instruments of assignment duly executed by the Pledgor and such other
instruments or documents as the Agent may reasonably request. Each delivery of
Pledged Securities will be accompanied by a schedule describing the securities
theretofore and then being
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pledged hereunder, which schedule will be attached to this Agreement and made a
part hereof. Each schedule so delivered will supersede any prior schedules so
delivered.
SECTION 2. DELIVERY OF THE COLLATERAL. The Pledgor agrees to
promptly deliver or cause to be delivered to the Agent any and all Pledged
Securities, and any and all certificates or other instruments or documents
representing the Collateral.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS. The Pledgor
hereby represents, warrants and covenants to and with the Agent that:
(a) except for the security interest granted hereunder, the Pledgor
(i) is and will at all times continue to be the direct owner, beneficially and
of record, of the Pledged Stock, (ii) holds the same free and clear of all
Liens, (iii) except any other Permitted Lien, will make no assignment, pledge,
hypothecation or transfer of, or create or permit to exist any security interest
or other Lien with respect to, the Collateral, (iv) will cause all securities
included within the Collateral to be certificated securities, and (v) will cause
any and all certificates, instruments or other documents representing or
evidencing Collateral to be forthwith deposited with the Agent and pledged or
assigned hereunder;
(b) by virtue of the execution and delivery by Pledgor of this
Agreement, when the Pledged Securities are delivered to the Agent in accordance
with this Agreement, the Agent will obtain a valid, legal and perfected first
priority lien upon and security interest in such Pledged Securities as security
for the repayment of the Obligations, free and clear of all Liens (other than
other Permitted Liens);
(c) the pledge effected hereby is effective to vest in the Agent, for
the benefit of the Agent and the Lenders, the rights of the Agent in the
Collateral as set forth herein; and
(d) the Pledgor will cause each of its Subsidiaries and each Investee
not to issue to the Pledgor any Equity Securities or other securities unless
such securities are concurrently pledged and delivered to the Agent hereunder.
SECTION 4. REGISTRATION IN NOMINEE NAME; DENOMINATIONS. The
Agent, on behalf of the Lenders, will have the right (in its sole and absolute
discretion), to the extent permitted under the Newco Shareholders Agreement, to
hold the Pledged Securities in its own name, the name of its nominee or the name
of the Pledgor, endorsed or assigned in blank or in favor of the Agent. The
Pledgor will promptly give to the Agent copies of any notices or other
communications received by it with respect to Pledged Securities registered in
the name of the Pledgor. The Pledgor will take all actions as may be necessary
so that the Agent will at all times have the right to exchange the certificates
representing Pledged Securities for certificates of smaller or larger
denominations for any purposes consistent with this Pledge Agreement. If, and
to the extent that, the Pledged Securities of Newco are held in the name of the
Agent or its nominee, the Agent agrees that, notwithstanding such registration
arrangement, so long as no Event of Default is continuing, Pledgor will be
entitled to exercise all rights granted to Pledgor under the Newco Shareholders
Agreement, including purchasing Newco shares owned by other Newco shareholders
in accordance with the terms of the Newco Shareholders Agreement.
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SECTION 5. VOTING RIGHTS; DIVIDENDS AND INTEREST; ETC.
(a) Except as provided in paragraphs (b) and (c) of this Section 5:
(i) The Pledgor will be entitled to exercise any and all voting
rights accruing to it as the owner of Pledged Securities for any purpose
consistent with the terms of this Agreement, the Loan Agreement and the
other Loan Documents, so long as such exercise of rights could not
reasonably be expected to adversely affect the rights and remedies of the
Agent or the Lenders under this Agreement or the other Loan Documents or
the ability of the Agent or the Lenders to exercise the same.
(ii) The Agent will execute and deliver to the Pledgor, or cause
to be executed and delivered to the Pledgor, all such proxies, powers of
attorney, and other instruments as the Pledgor may reasonably request for
the purpose of enabling the Pledgor to exercise the voting rights which it
is entitled to exercise pursuant to subparagraph (i) above.
(iii) The Pledgor will be entitled to receive and retain any
and all cash Distributions paid in respect of the Pledged Securities to the
extent and only to the extent that the proceeds of such cash Distributions
are paid and applied in accordance with the terms and conditions of the
Loan Agreement and applicable laws. All other payments, dividends and
Distributions made on or in respect of Pledged Securities, whether paid or
payable in cash, securities or other property, and whether resulting from a
subdivision, combination or reclassification of the outstanding securities
of the issuer of any Pledged Securities or received in exchange for or in
redemption of Pledged Securities or any part thereof, or as a result of any
merger, consolidation, acquisition or other exchange of assets to which
such issuer may be a party or otherwise, will be and become part of the
Collateral and, if received by the Pledgor, will not be commingled by the
Pledgor with any of its other funds or property but will be held separate
and apart therefrom in trust for the benefit of the Agent and will be
delivered to the Agent in the same form as so received (with any necessary
endorsement and/or instruments of transfer, as the Agent may request).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor to Distributions which the Pledgor is
authorized to receive pursuant to subparagraph (a)(iii) of this Section 5 will
cease, and all such rights will thereupon become vested in the Agent, who will
have the sole and exclusive right and authority to receive and retain such
Distributions, which the Agent will apply to the Obligations as provided in
Section 8. All Distributions which are received by the Pledgor contrary to the
provisions of this paragraph 5(b) will be received in trust for the benefit of
the Agent and the Lenders, will be segregated from other property or funds of
the Pledgor and will be immediately delivered to the Agent in the same form as
so received (with any necessary endorsement and/or instruments of transfer, as
the Agent may request). Any and all money and other property paid over to or
received by the Agent pursuant to the provisions of this Section 5(b) will be
deposited by the Agent in an account to be
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established by the Agent for the benefit of the Agent and the Lenders upon
receipt of such money or other property and will be applied in accordance with
the provisions of Section 8.
(c) Upon written notice to that effect by the Agent to the Pledgor
after the occurrence and during the continuance of an Event of Default, all
rights of the Pledgor to exercise the voting rights which it is entitled to
exercise pursuant to subparagraph (a)(i) of this Section 5 will cease, and all
such rights will thereupon become vested in the Agent, which will have the sole
and exclusive right (but not the obligation) and authority to exercise such
voting rights. The Pledgor will execute and deliver to the Agent, all such
proxies, powers of attorney, and other instruments as the Agent will request for
the purpose of enabling the Agent to exercise the voting rights which it is
entitled to exercise pursuant to this Section 5(c) during the continuance of any
Event of Default.
SECTION 6. DISPOSITION OF PLEDGED SECURITIES. Notwithstanding any
other term hereof or any other Loan Document, the Agent agrees that Pledgor
shall have the right to transfer or otherwise dispose of any or all of the
Pledged Securities of Newco as may be required by the terms of the Newco
Shareholders Agreement or the IWC Group Agreement, whether or not an Event of
Default then exists, provided that Pledgor, concurrent with such transfer or
disposition, delivers to the Agent, as Collateral hereunder or under the
Security Agreement, the property received for such Pledged Securities of Newco.
The Agent acknowledges that if Pledgor fails to exercise its right of first
offer under the Newco Shareholders Agreement to acquire additional securities of
Newco, and other Newco shareholders or parties acquire such declined securities
of Newco, such securities shall not be deemed for any purpose hereof or any
other Loan Document to be Pledged Securities or Collateral.
SECTION 7. REMEDIES UPON DEFAULT. Upon the occurrence and during
the continuance of an Event of Default, whether or not all of the Obligations
have become due and payable, in addition to its rights under the Loan Agreement
or any other Loan Document:
(a) The Agent will have all of the rights and remedies with respect
to the Collateral of a secured party under the UCC (whether or not the UCC is in
effect in the jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled under any
applicable law in effect in any jurisdiction where any rights and remedies
hereunder may be asserted, including the right, to the maximum extent permitted
by applicable law, to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Agent were the sole and
absolute owner thereof (and the Pledgor agrees to take all such action as may be
appropriate to give effect to such right);
(b) The Agent in its discretion may, in its name or in the name of
the Pledgor or otherwise, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for any
of the Collateral, but will be under no obligation to do so; and
(c) The Agent may, upon not fewer than ten days' prior written notice
to the Pledgor and subject to the terms of the final paragraph of this
Section 7(c), with respect to the Collateral or any part thereof which is then
or may thereafter come into the possession, custody
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or control of the Agent, the Lenders, or any of their respective agents, sell,
lease, assign or otherwise dispose of all or part of such Collateral, at such
place or places as the Agent deems appropriate, and for cash or for credit or
for future delivery (without thereby assuming any credit risk), at public or
private sale, without demand of performance or notice of intention to effect any
such disposition or of the time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived), and the Agent or
any Lender or anyone else may be the purchaser, lessee, assignee or recipient of
any or all of the Collateral so disposed of at any public sale (or, to the
extent permitted by law, at any private sale) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including any right
or equity of redemption (statutory or otherwise) of the Pledgor, any such
demand, notice and right or equity being hereby expressly waived and released.
The Agent may, without notice or publication, adjourn any public or private sale
or cause the same to be adjourned from time to time by announcement at the time
and place fixed for the sale, and such sale may be made at any time or place to
which the sale may be so adjourned.
The Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state or
other securities laws, the Agent may be compelled or deem it advisable, with
respect to any sale of all or any part of the Collateral, to limit purchasers to
those who will agree, among other things, to acquire the Collateral for their
own account, for investment and not with a view to the distribution or resale
thereof, or who will agree to other restrictions which the Agent may deem to be
appropriate. The Pledgor acknowledges that any such private sales may be at
prices and on terms less favorable to the Agent than those obtainable through a
public sale without such restrictions, and, notwithstanding such circumstances,
agrees that any such private sale will be deemed to have been made in a
commercially reasonable manner and that the Agent will have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit registration such Collateral for public
sale.
The Agent acknowledges that the Pledged Securities of Newco are
subject to the Newco Shareholders Agreement and the IWC Group Agreement and that
any exercise of the Agent's rights and remedies with respect to such Pledged
Securities must be in accordance with the terms and conditions set forth in the
Newco Shareholders Agreement and the IWC Group Agreement regarding disposition
of such Pledged Securities, including, but not limited to, (i) the right of
first offer of Vanguard Pakistan to acquire such Pledged Securities in the event
of a bankruptcy proceeding involving IWCH, (ii) the tag along rights granted to
Vanguard Pakistan with respect to any sale of such Pledged Securities, (iii) the
right of other Newco shareholders to purchase such Pledged Securities in the
event that Pledgor fails to make certain loans or capital contributions to
Newco, and (iv) the right of first refusal of other Newco shareholders with
respect to sales of such Pledged Securities. The Agent further agrees that any
purchaser of such Pledged Securities through the exercise of the Agent's rights
and remedies hereunder (including the Agent or any of the Lenders) shall take
such Pledged Securities subject to the terms and conditions of the Newco
Shareholders Agreement and the IWC Group Agreement; PROVIDED, HOWEVER, that such
purchaser shall not succeed to the Pledgor's rights of first offer under the
Newco Shareholders Agreement. The Pledgor acknowledges that the Agent's
disposition of the Pledged Securities of Newco in accordance with the terms of
the Newco Shareholders
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Agreement, the IWC Group Agreement and this paragraph may be at prices and on
terms less favorable than those that would be obtained in connection with
dispositions not made in accordance with the Newco Shareholders Agreement, the
IWC Group Agreement and this paragraph and, notwithstanding the foregoing,
agrees that such dispositions so limited by the terms of the Newco Shareholders
Agreement, the IWC Group Agreement and this paragraph will be deemed to have
been made in a commercially reasonable manner.
SECTION 8. APPLICATION OF PROCEEDS OF SALE. The proceeds of any
sale of Collateral pursuant to Section 7, as well as any Collateral consisting
of cash, will be applied by the Agent as follows:
FIRST, to the payment of all costs and expenses incurred by the Agent
in connection with such sale or otherwise in connection with this Agreement
or any of the Obligations, including all court costs and the reasonable
fees and expenses of its agents and legal counsel, the repayment of all
advances made by the Agent hereunder on behalf of the Pledgor and any other
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder;
SECOND, to the payment in full of all unpaid accrued interest on the
Notes, pro rata among the Lenders in accordance with the amount of unpaid
accrued interest on the Notes held by them;
THIRD, to the payment in full of the unpaid principal of the Notes,
pro rata among the Lenders in accordance with the unpaid principal amount
of the Notes held by them;
FOURTH, to the payment in full of the Obligations (other than those
referred to above), pro rata among the Persons to whom such Obligations are
owed in accordance with the aggregate amount of such Obligations owing to
such Persons; and
FIFTH, to the Pledgor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
SECTION 9. AGENT APPOINTED ATTORNEY-IN-FACT. Except as otherwise
provided herein, the Pledgor hereby appoints the Agent the attorney-in-fact of
the Pledgor for the purposes of carrying out the provisions of this Agreement or
taking any action or executing any instrument which the Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Agent will have the right, upon the occurrence and during the continuance of
an Event of Default, with full power of substitution either in the Agent's name
or in the name of the Pledgor, to ask for, demand, sue for, collect, receive and
give acquittance for any and all monies due or to become due under or by virtue
of any Collateral, to endorse checks, drafts, orders and other instruments for
the payment of money payable to the Pledgor constituting Collateral or any part
thereof or on account thereof and to give full discharge for the same, to
settle, compromise, prosecute or defend any action, claim or proceeding with
respect thereto, and to sell, assign, endorse, pledge, transfer and make any
agreement respecting, or otherwise deal
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with, the same; provided, however, that nothing herein contained will be
construed as requiring or obligating the Agent or any Lender to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the monies due or
to become due in respect thereof or any property covered thereby, and no action
taken by the Agent or omitted to be taken with respect to the Collateral or any
part thereof will give rise to any defense, counterclaim or offset in favor of
any Pledgor or to any claim or action against the Agent. The Agent acknowledges
that the power of attorney granted to it under this Section 9 will not give it
the right, except during the continuance of an Event of Default, to exercise any
of the rights granted to the Pledgor under the Newco Shareholders Agreement,
other than the right to sell or otherwise dispose of the Pledged Securities of
Newco in accordance with the terms of the Newco Shareholders Agreement.
SECTION 10. NO WAIVER. No failure on the part of the Agent to
exercise, and no delay in exercising, any right, power or remedy hereunder will
operate as a waiver thereof, nor will any single or partial exercise of any such
right, power or remedy by the Agent preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law. The Agent and the Lenders will not be deemed to have waived any rights
hereunder or under any other agreement or instrument unless such waiver is in
writing and signed by the Agent and Requisite Noteholders.
SECTION 11. SECURITY INTEREST ABSOLUTE. All rights of the Agent
hereunder, the grant of a security interest in the Collateral and all
obligations of the Pledgor hereunder will be absolute and unconditional
irrespective of (a) any lack of validity or enforceability of any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from any other Loan Document or any other agreement or instrument, (c) any
exchange, release, amendment or waiver of, or consent to or departure from, any
guaranty for all or any of the Obligations or (d) any other circumstance which
might otherwise constitute a defense available to, or a discharge of, the
Pledgor in respect of the Obligations or in respect of this Agreement.
SECTION 12. FURTHER ASSURANCES. The Pledgor agrees to do such
further acts and things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Agent may at any time request in
connection with the administration and enforcement of this Agreement, with
respect to the Collateral or any part thereof or in order better to assure and
confirm unto the Agent its rights and remedies hereunder.
SECTION 13. FEES AND EXPENSES. The Pledgor agrees to pay upon
demand to the Agent (for the account of the Lenders, if appropriate) the amount
of any and all expenses, including the fees and expenses of its counsel and of
any experts or agents, and any other amount in respect of the Pledged Stock or
other Collateral, which the Agent or any Lender may incur or pay in connection
with the administration of this Agreement, the custody or preservation of, or
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the sale of, collection from, or other realization upon, any of the Collateral,
the exercise or enforcement of any of the rights of the Agent hereunder, the
failure by the Pledgor to perform or observe any of the provisions hereof, or
otherwise, including any contribution of capital to any other Person which in
the Agent's sole discretion may be required or reasonably necessary to preserve
any right with respect to, or the value of, any Collateral (including any
contribution to the capital of Newco which in the Agent's sole discretion may be
required of the Pledgor or reasonably necessary pursuant to the Newco
Shareholders Agreement or otherwise), any which contribution the Agent or any
Lender is authorized, but will not be required, to make on the Pledgor's behalf.
Any such amounts payable as provided hereunder or thereunder will be additional
Obligations secured by this Agreement and the other Loan Documents.
SECTION 14. BINDING AGREEMENT; ASSIGNMENTS. This Agreement, and
the terms, covenants and conditions hereof, will be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, except that the Pledgor will not be permitted to assign this Agreement
or any interest herein or in the Collateral or any part thereof, or otherwise
pledge, encumber or grant any option with respect to the Collateral or any part
thereof, or any cash or property held by or required to be delivered to the
Agent as Collateral under this Agreement, except with the prior written consent
of the Agent and Requisite Lenders.
SECTION 15. HOLIDAYS. Whenever any payment or action to be made or
taken under this Agreement is stated to be due or required to be taken on a day
which is not a Business Day, such payment or action will be made or taken on the
next following Business Day, and such extension of time will be included in
computing interest or fees, if any, in connection with such payment or action.
SECTION 16. NOTICES. All notices and other communications given to
or made upon any party hereto in connection with this Agreement will, except as
otherwise expressly provided herein, be in writing and mailed, telecopied or
delivered by hand or by reputable overnight courier service to the respective
parties, as follows:
Pledgor: c/o International Wireless Communications, Inc.
400 S. El Camino Real
Suite 1275
San Mateo, CA 94402
Attention: John D. Lockton
Telecopy: (415) 548-1842
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Brooks Stough, Esq.
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigan, LLP
155 Constitution Drive
Menlo Park, CA 94025
Telecopy: (415) 343-7502
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Agent: Toronto Dominion Investments, Inc.
909 Fanin Street
Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Telecopy: (713) 652-2647
WITH COPIES (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Toronto Dominion Investments, Inc.
31 West 52nd Street, 20th Floor
New York, NY 10019
Attention: Brian A. Rich
Telecopy: (212) 974-8429
and
John Kuehn
Kirkland & Ellis
153 E. 53rd Street
New York, NY 10022
Telecopy: (212) 446-4900
or in accordance with any subsequent written direction from the recipient party
to the sending party made in accordance with this Section 16. All such notices
and other communications will, except as otherwise expressly provided in this
Agreement, be effective upon (a) delivery if delivered by hand; (b) on the
Business Day after deposited with a reputable overnight courier service,
delivery charges prepaid; (c) on the third Business Day after deposited in the
mail, postage prepaid; or (d) in the case of telecopy, when received.
SECTION 17. SURVIVAL. All representations, warranties, covenants
and agreements of the Pledgor contained in this Agreement or made in writing in
connection herewith will survive the execution and delivery of this Agreement,
the making of the Loans hereunder and the issuance of the Notes. The provisions
of Sections 10 through 27 will survive repayment of the Loans and the other
amounts payable to the Lenders under this Agreement and the other Loan Documents
and the termination of this Agreement and the other Loan Documents.
SECTION 18. GOVERNING LAW; WAIVERS AND JURISDICTION.
(a) GOVERNING LAW. This Agreement will in all respects be governed
by, and construed and enforced in accordance with, the laws of the State of
California, without giving effect to any choice of law or conflict of law rules
or provisions (whether of the State of California or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of California, except that the filing, perfection, effect of perfection
and enforcement of security interests and liens under this Agreement in other
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jurisdictions will be governed by the laws of the applicable jurisdictions in
accordance with the UCC as in effect in the State of California.
(b) WAIVERS. To the extent permitted by law, each party hereto
hereby waives personal service of any and all process upon it in connection with
this Agreement and agrees that all such service of process may be made as
provided in Section 16, and service so made will be deemed to be completed as
provided in Section 16. In addition, the Pledgor and the Agent each hereby
waives trial by jury, any objections based on FORUM NON CONVENIENS and any
objections to venue of any action arising out of, connected with, related to or
incidental to the transactions contemplated by or the relationships established
in connection with this Agreement.
(c) EXCLUSIVE JURISDICTION. Except as provided in Section 18(d), all
disputes between the Pledgor and the Agent arising out of, connected with,
related to or incidental to the transactions contemplated by or the relationship
established between them in connection with this Agreement, and whether arising
in contract, tort, equity or otherwise, will be resolved only by state or
federal courts located in New York County, New York, and the Pledgor and the
Agent hereby consent and submit to the jurisdiction of any state or federal
court located within such county and state. The Pledgor and the Agent
acknowledge, however, that any appeals from those courts may be required to be
heard by a court located outside of New York County, New York. The Pledgor and
the Agent waive in all disputes any objection that they may have to the location
of the court considering the dispute. Nothing in this Section 18 will affect
the right of the Pledgor or the Agent to serve legal process in any other manner
permitted by law or affect the right of the Agent to bring any action or
proceeding against the Pledgor or its property in the courts of any other
jurisdiction.
(d) OTHER JURISDICTIONS. The Pledgor and the Agent agree that the
other of them will have the right to proceed against it in a court in any
location to enable the proceeding Person to enforce a judgment or other court
order obtained in any proceeding brought in accordance with Section 18(c) and
entered in favor of the proceeding Person. The Pledgor and the Agent waive any
objection that they may have to the location of the court in which the other of
them has commenced a proceeding described in this Section 18(d).
SECTION 19. HEREIN, ETC. Words such as "herein," "hereunder,"
"hereof" and the like will be deemed to refer to this Agreement as a whole and
not to any particular document or Article, Section or other portion of a
document. Section, clause, Exhibit and Schedule references contained in this
Agreement are references to Sections, clauses, Exhibits and Schedules in or
attached to this Agreement, unless otherwise specified. Each defined term used
in this Agreement has a comparable meaning when used in its plural or singular
form. Each gender-specific term used in this Agreement has a comparable meaning
whether used in a masculine, feminine or gender-neutral form. As used in this
Agreement, the terms "knowledge" or "aware" will include the actual knowledge
and awareness of the Person in question, and the knowledge and awareness that
such Person would have obtained after making reasonable inquiry and exercising
reasonable diligence with respect to the matter in question. Whenever the term
"including" is used in this Agreement (whether or not that term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) in connection with a listing of
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items within a particular classification, that listing will be interpreted to be
illustrative only and will not be interpreted as a limitation on, or an
exclusive listing of, the items within that classification. Each reference in
this Agreement to any law will be deemed to include such law as it hereafter may
be amended, supplemented or modified from time to time and any successor
thereto.
SECTION 20. SEVERABILITY. Whenever possible, each provision of
this Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law in any jurisdiction, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating any other provision of this Agreement or any
other Loan Document.
SECTION 21. HEADINGS. Section and subsection headings in this
Agreement are included for convenience of reference only and will not constitute
a part of this Agreement for any other purpose.
SECTION 22. COUNTERPARTS. This Agreement may be executed in
multiple counterparts and by any party hereto or thereto on separate
counterparts, each of which, when so executed and delivered, will be an
original, but all such counterparts will together constitute one and the same
instrument.
SECTION 23. INDEMNIFICATION. In consideration of the Agent's
execution and delivery of this Agreement and the Initial Lenders' making of the
Loans, and in addition to all other obligations of the Pledgor under this
Agreement and the other Loan Documents, the Pledgor will defend, protect,
indemnify and hold harmless the Agent and all of its officers, directors,
employees and agents (including those retained in connection with the
transactions contemplated by this Agreement and the other Loan Documents)
(collectively, the "INDEMNITEES") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements, but
excluding claims and losses arising from such Indemnitee's breach hereof or
thereof or such Indemnitee's gross negligence or willful misconduct (the
"INDEMNIFIED LIABILITIES"), incurred by the Indemnitees or any of them as a
result of, or arising out of, or relating to (i) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
the Loans, (ii) the execution, delivery, performance or enforcement of this
Agreement, the Notes or the other Loan Documents and any instrument, document or
agreement executed pursuant hereto by any of the Indemnitees or (iii) the
Agent's status as an agent of the Lenders. To the extent that the foregoing
undertaking by the Pledgor may be unenforceable for any reason, the Pledgor will
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. To the
extent that the undertaking to indemnify, pay and hold harmless by the Pledgor
under this Section 23 may be unenforceable because it violates any law or public
policy, the Pledgor will contribute the maximum portion
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that it is permitted to pay and satisfy under applicable law or public policy to
the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnities or any of them.
SECTION 24. PAYMENT SET ASIDE. To the extent the Pledgor makes a
payment or payments to any Lender or Agent hereunder or under the Notes or any
other Loan Document or any Lender or Agent enforces its security interests or
rights or exercises its right or setoff hereunder or thereunder, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid
or otherwise restored to the Pledgor, a trustee, receiver or any other Person
under any law (including any bankruptcy law, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied and all Liens
created under this Agreement will be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.
SECTION 25. COMPLETE AGREEMENT. Except as otherwise expressly set
forth herein, this Agreement, the Notes and the other Loan Documents embody the
complete agreement and understanding of the parties hereto and thereto and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, whether written or oral, which may have related to the
subject matter hereof in any way, and such agreements may not be contradicted or
varied by evidence of prior, contemporaneous or subsequent oral discussions or
understandings of the parties. The parties hereto acknowledge and agree there
are no oral understandings or agreements between them with respect to the
subject matter hereof or thereof.
SECTION 26. NO STRICT CONSTRUCTION. The language used in this
Agreement and the other Loan Documents will be deemed to be the language chosen
by the parties to express their mutual intent. In the event an ambiguity or
question of intent or interpretation arises, this Agreement and the other Loan
Documents will be construed as if drafted jointly by the parties, and no
presumption or burden of proof will arise favoring or disfavoring any Person by
virtue of the authorship of any of the provisions of this Agreement or any other
Loan Document.
SECTION 27. TERMINATION.
(a) This Agreement and the pledges and security interests granted
hereby will terminate when all the Obligations have been indefeasibly paid in
full, at which time the Agent will execute and deliver to the Pledgor all
Uniform Commercial Code termination statements and similar documents prepared by
the Pledgor which the Pledgor may reasonably request to evidence such
termination.
(b) Notwithstanding anything to the contrary contained in this
Agreement, this Agreement will remain in full force and effect and continue to
be effective should any petition be filed by or against the Pledgor for
liquidation or reorganization, should the Pledgor become insolvent or make an
assignment for any benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Pledgor's assets, and will
continue to be effective
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or be reinstated, as the case may be, if at any time payment and performance of
the obligations, or any part thereof, is, pursuant to applicable law, rescinded
or reduced in amount, or must otherwise be restored or returned by any obligee
of the obligations, whether as a "voidable, preference," "fraudulent conveyance"
or otherwise, all as though such payment, or any part thereof, is rescinded,
reduced, restored or returned.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have duly executed this Pledge
Agreement, or caused this Pledge Agreement to be duly executed, as of the day
and year first above written.
PAKISTAN WIRELESS HOLDINGS LIMITED
By: /s/ Douglas S. Sinclair
-------------------------------
Its:
-------------------------------
TORONTO DOMINION INVESTMENTS, INC.,
as Agent
By: /s/ Martha L. Gariepy
-------------------------------
Its:
-------------------------------
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SCHEDULE I
ISSUER CERTIFICATE NO. QUANTITY
- ------ --------------- --------
Newco -- --
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SECURITY AGREEMENT
SECURITY AGREEMENT dated as of August 18, 1997, among PAKISTAN
WIRELESS HOLDINGS LIMITED, a private company formed under the laws of
Mauritius (the "GRANTOR"), and TORONTO DOMINION INVESTMENTS, INC., as agent
(in such capacity, together with its successors in such capacity, the
"AGENT") for the Lenders, as that term is defined in the Loan Agreement dated
as of the date of this Agreement among the Grantor and the Initial Lenders
named therein (as the same may be amended, modified, restated or supplemented
from time to time, the "LOAN AGREEMENT"). Capitalized terms used but not
defined herein have the meanings given to such terms in the Loan Agreement.
The Initial Lenders have agreed to make certain loans to the Grantor
pursuant to, and subject to the terms and conditions specified in, the Loan
Agreement. The obligation of the Initial Lenders to lend under the Loan
Agreement are conditioned on, among other things, the execution and delivery
by the Grantor of this Agreement.
Accordingly, the Grantor and the Agent, on behalf of itself and the
Lenders as holders of the Obligations, hereby agree as follows:
1. DEFINITIONS.
As used herein, the following terms will have the following meanings:
"ACCOUNTS" means "accounts" (as that term is defined in the UCC) and
all rights to receive payments, whether for goods sold or leased, for
services rendered or otherwise, whether or not earned by performance,
together with all security interests or other security held by or granted to
the Grantor to secure such rights to payment, all other rights related
thereto including any right of stoppage in transit and all rights in any of
such sold or leased goods which are returned or repossessed, in each case
whether now in existence or hereafter acquired.
"CHATTEL PAPER" means any writing or group of writings which
evidences both a monetary obligation and a security interest in or a lease of
specific goods and all "chattel paper" (as defined in the UCC).
"COLLATERAL" means all personal property, wherever located, in which
the Grantor now has or hereafter acquires any right, title or interest
(including all Accounts, Chattel Paper, Contracts, Documents, Equipment,
General Intangibles, Instruments, Intellectual Property Collateral,
Inventory, Pledged Deposits, cash, bank accounts, special collateral
accounts, "uncertificated securities" (as that term is defined in the UCC)
and all books and records, customer lists and credit files related to any of
the foregoing), all Fixtures, and all proceeds (including all "proceeds," as
that term is defined in the Code), insurance proceeds, rents, profits and
products of the foregoing, but excluding Excluded Contracts and Excluded
Intellectual
<PAGE>
Property Collateral (provided that payments paid or payable thereunder and
any other proceeds relating thereto or arising therefrom are not excluded and
constitute Collateral).
"CONTRACTS" means all contracts, agreements and other similar
consensual obligations, as the same may from time to time be amended,
supplemented, modified or otherwise in effect from time to time, including
(a) all rights to receive moneys due and to become due thereunder orin
connection therewith, (b) all rights to damages arising out of any breach or
default in respect thereof and (c) all rights to perform and to exercise
remedies thereunder.
"DOCUMENTS" means all documents of title and goods evidenced
thereby, including all bills of lading, dock warrants, dock receipts, all
"documents" (as that term is defined in the Code), warehouse receipts and
orders for the delivery of goods, and any other document which in the regular
course of business or financing is treated as adequately evidencing that the
Person in possession thereof is entitled to receive, hold and dispose of such
document and the goods it covers.
"EQUIPMENT" means any "equipment," as such term is defined in the
UCC, now or hereafter acquired and, in any event, will include all machinery,
equipment, furnishings, movable trade fixtures and vehicles now or hereafter
owned by the Grantor and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon
or affixed thereto.
"EXCLUDED CONTRACTS" means any Contract to the extent, and only to
the extent, that such Contract contains a legally enforceable provision which
would be breached by the grant of the security interest created herein
pursuant to the terms of this Agreement; PROVIDED, HOWEVER, that if and when
any prohibition on the assignment, pledge or grant of a security interest in
such Contract is removed, the Agent will be deemed to have been granted a
security interest in such Contract as of the date hereof, and the Collateral
will be deemed to include such Contract.
"EXCLUDED INTELLECTUAL PROPERTY COLLATERAL" means any Intellectual
Property Collateral to the extent, and only to the extent, that such
Intellectual Property Collateral is governed by or contains a legally
enforceable provision which would be breached by the grant of the security
interest created herein pursuant to the terms of this Agreement; PROVIDED,
HOWEVER, that if and when any prohibition on the assignment, pledge or grant
of a security interest in such Intellectual Property Collateral is removed,
the Agent will be deemed to have been granted a security interest in such
Intellectual Property Collateral as of the date hereof, and the Collateral
will be deemed to include such Intellectual Property Collateral.
"GENERAL INTANGIBLES" means all intangible personal property,
including all contract rights, rights to receive payments of money, choses in
action, judgments, tax refunds and tax refund claims, Intellectual Property
Collateral, leasehold interests in real or personal property, rights to
receive rentals of real or personal property or payments under letters of
credit,
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insurance proceeds, know-how, trade secrets, goodwill, computer software,
guarantee claims and all "general intangibles" (as that term is defined in
the UCC).
"INSTRUMENTS" means all "instruments" (as that term is defined in
the UCC), "certificated securities" (as that term is defined in the UCC) and
any replacements therefor, and other writings which evidence a right to the
payment of money (whether absolute or contingent) and which are not
themselves security agreements or leases and are of a type which in the
ordinary course of business are transferred by delivery with any necessary
endorsement or assignment, including all checks, drafts, notes, bonds,
debentures, government securities, certificates of deposit, letters of
credit, preferred and common stocks, options and warrants.
"INTELLECTUAL PROPERTY COLLATERAL" means all patents, patent
applications, patent disclosures and inventions (whether or not patentable
and whether or not reduced to practice); all trademarks, service marks, trade
dress, trade names and corporate names and all the goodwill associated
therewith; all registered and unregistered statutory and common law
copyrights; all registrations, applications and renewals for any of the
foregoing; all trade secrets, confidential information, ideas, formulae,
compositions, know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, improvements, proposals, technical and computer data,
financial, business and marketing plans, and customer and supplier lists and
related information; all other proprietary rights (including all computer
software and documentation and all license agreements and sublicense
agreements to and from third parties relating to any of the foregoing); all
copies and tangible embodiments of the foregoing (in whatever form or
medium); all damages and payments for past, present and future infringements
of the foregoing; all royalties and income due with respect to the foregoing;
and the right to sue and recover for past, present and future infringements
of the foregoing.
"INVENTORY" means all "inventory" (as that term is defined in the
UCC), raw materials, work in process, finished goods, returned or repossessed
goods, goods held for sale or lease or furnished or to be furnished under
contracts of service and goods released under trust receipts or similar
Documents.
"OBLIGATIONS" means all obligations of the Grantor pursuant to this
Agreement and the other Loan Agreements.
"PLEDGED DEPOSITS" means all deposits of money, whether or not
evidenced by certificates, with any lender rights to receive interest on such
deposits and all other sums credited by or due from third parties with
respect thereto.
"RECEIVABLES" means the Accounts, Chattel Paper, Pledged Deposits,
Documents, General Intangibles, Intellectual Property Collateral representing
rights to the payment of money (however arising), and any related
Instruments.
"VEHICLES" means all cars, trucks, trailers, construction and
earth-moving equipment and other vehicles covered by a certificate of title
of any jurisdiction and, in any event, will include all tires and other
appurtenances to any of the foregoing.
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2. GRANT OF SECURITY INTEREST.
The Grantor hereby pledges, and grants a continuing security
interest in, and a right of setoff against, the Collateral to the Agent, for
the benefit of the Agent and the Lenders, to secure payment, performance and
observance of the Obligations.
3. REPRESENTATIONS AND WARRANTIES.
The Grantor makes the representations, warranties and covenants set
forth in this Section 3 to the Agent, for the benefit of the Agent and the
Lenders.
3.1 NECESSARY FILINGS. All filings, registrations (except
registrations in the U.S. Copyright Office with respect to copyright
Collateral and filings in the U.S. Patent and Trademark Office with respect
to intent to use trademark Collateral and any filings necessary to perfect
the security interest granted hereunder in non-U.S. Intellectual Property
Collateral) and recordings necessary or appropriate to create, preserve,
protect and perfect the security interest granted by the Grantor to the Agent
hereby in respect of the Collateral have been accomplished and the security
interest granted to the Agent pursuant to this Agreement in and to the
Collateral constitutes a perfected security interest therein prior to the
rights of all other Persons therein and subject to no other Liens (other than
other Permitted Liens) and is entitled to all the rights, priorities and
benefits afforded by the UCC or other relevant law as enacted in any relevant
jurisdiction to perfected security interests.
3.2 PRINCIPAL LOCATION. The Grantor's mailing address, and
the location of its chief executive office andeach location of any books and
records (including all computer data and related software including source
codes) relating to Receivables or General Intangibles is disclosed in ANNEX I
hereto (as the same may be modified pursuant to Section 4.4); and the Grantor
has no other places of business except those set forth in ANNEX I hereto (as
the same may be modified pursuant to Section 4.4).
3.3 PROPERTY LOCATIONS. The Inventory, Equipment and Fixtures
are located solely at the locations described in ANNEX I hereto (as the same
may be modified pursuant to Section 4.4). None of said locations are leased
by the Grantor as lessee except those designated in Part C of ANNEX I hereto
(as the same may be modified pursuant to Section 4.4).
3.4 NO OTHER NAMES. Except as listed on ANNEX II hereto, the
Grantor does not conduct and has not conducted any trade or business under
any name except the name in which it has executed this Agreement. The
Grantor has not been a party to any merger or consolidation in the last five
years.
3.5 FILING REQUIREMENTS. None of the Equipment is covered by
any certificate of title. None of the Collateral consists of property
subject to a statute or treaty referred to in Section 9-302(3) of the UCC
(other than Intellectual Property Collateral). None of the Collateral is of a
type with respect to which Liens may be filed under any federal statute
except for patents and patent applications, registered copyrights, registered
trademarks and
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trademark applications held by the Grantor and described in ANNEX III hereto
(as the same may be modified pursuant to Section 4.14).
3.6 NO FINANCING STATEMENTS. No financing statement
describing all or any portion of the Collateral which has not lapsed or been
terminated has been filed in any jurisdiction except financing statements
naming the Agent as secured party for the benefit or on behalf of the Lenders
and financing statements filed in respect of Permitted Liens.
3.7 TITLE TO PROPERTIES. The Grantor has good and
merchantable title to and ownership of the Collateral held by it, free and
clear of all Liens except Permitted Liens.
3.8 INSURANCE. The Grantor has insured the Collateral against
loss or damage by fire, theft, burglary, pilferage, and loss in transit, and
has insured against loss as required pursuant to the Loan Agreement.
3.9 INTELLECTUAL PROPERTY. ANNEX III (as the same may be
modified pursuant to Section 4.14) hereto contains a complete and accurate
list as of the date hereof of all patented and registered Intellectual
Property Collateral owned by the Grantor and all pending U.S. patent
applications and U.S. applications for the registration of other Intellectual
Property Collateral and all foreign trademark registrations owned or filed by
the Grantor. ANNEX III (as the same may be modified pursuant to Section 4.14)
also contains a complete and accurate list of all licenses and other rights
granted by the Grantor to any third party with respect to the Intellectual
Property Collateral and licenses and other rights granted by any third party
to the Grantor. Except as set forth in ANNEX III, (as the same may be
modified pursuant to Section 4.13) (a) the Grantor owns and possesses all
right, title and interest in and to, or has a valid and enforceable license
to use, all of the Intellectual Property Collateral necessary for the
operation of its business as presently conducted or as currently proposed to
be conducted; (b) no claim by any third party contesting the validity,
enforceability, use or ownership of any Intellectual Property Collateral has
been made, is currently outstanding or to Grantor's knowledge, is threatened,
and to the Grantor's knowledge, there are no grounds for any such claim; (c)
the Grantor has not received any notices of, and is not aware of any facts
which indicate a likelihood of, any infringement or misappropriation by, or
conflict with, any third party with respect to the Intellectual Property
Collateral, nor has the Grantor received any claims of infringement or
misappropriation of or other conflict with any intellectual property rights
of any third party which remains outstanding; (d) the Grantor has not
infringed, misappropriated or otherwise conflicted with any intellectual
property rights of any third parties, nor is the Grantor aware of any
material infringement, misappropriation or conflict which will occur as a
result of the continued operation of its business as conducted or as
currently proposed to be conducted; (e) the Grantor has made all necessary
filings and recordations and has paid all required fees and taxes to record
and maintain its ownership of the patented and registered intellectual
property rights set forth on Annex III in the United States Patent and
Trademark Office and the United States Copyright Office; and (f) no consents
are required under any licenses listed in ANNEX III to the grant of the
security interest to, and exercise of any rights and remedies of, the Agent.
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3.10 ACCOUNTS. The bank accounts with the Lenders described
on ANNEX IV (as the same may be modified by written notice to the Agent) are
the only bank or deposit accounts which the Grantor maintains.
3.11 CONTRACTS. No consent of any party to any Contract is
required in connection with the execution, delivery and performance of this
Agreement. Without limiting the foregoing, no Contract is an Excluded
Contract, and no Intellectual Property Collateral is Excluded Intellectual
Property Collateral.
4. COVENANTS.
From the date of this Agreement, and thereafter until this Agreement
is terminated:
4.1 INSPECTION AND VERIFICATION. The Agent and such Persons
as the Agent may designate will have the right, at any reasonable time or
times upon prior notice and during the Grantor's usual business hours, to
inspect the Collateral, all records related thereto (and to make extracts and
copies from such records), and the premises upon which any of the Collateral
is located, to discuss the Grantor's affairs with the officers of the Grantor
and their independent auditors, and to verify under reasonable procedures the
validity, amount, quality, quantity, value and condition of, or any other
matter relating to, the Collateral. In addition, in the case of Accounts or
Collateral in the possession of a third party, the Agent will have the right
to contact account debtors (after the occurrence and during the continuance
of an Event of Default) or third parties possessing such Collateral in order
to verify the validity, amount, quality, quantity, value and condition of
such Collateral; provided, however, that prior to the occurrence of an Event
of Default the Agent may contact account debtors only upon prior notice to
the Grantor and, to the extent practicable, with the participation of the
Grantor's officers. The Agent will have the absolute right without liability
on the part of the Agent to share any information it gains from such
inspection or verification with any or all of the Lenders.
4.2 RECORDS AND REPORTS. The Grantor will maintain complete
and accurate books and records with respect to the Collateral, and furnish to
the Agent such reports relating to the Collateral as the Agent may from time
to time reasonably request.
4.3 FINANCING STATEMENTS AND OTHER ACTIONS. The Grantor will
execute and deliver to the Agent all financing statements and amendments
thereto and other documents, and take such other actions, as are from time to
time reasonably requested by the Agent in order to perfect and to maintain
and protect a first priority (subject only to other Permitted Liens)
perfected security interest in the Collateral or to enable the Agent, on
behalf of the Lenders, to exercise and enforce its rights and remedies
hereunder with respect to the Collateral.
4.4 CHANGE IN LOCATION OR NAME. The Grantor will not (a) have
any Inventory or Equipment or products thereof at a location other than a
location specified in ANNEX I hereto, except for Inventory in transit between
such locations, (b) maintain records relating to the Receivables at a
location other than those locations specified on ANNEX I hereto as
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a location where such records are kept, (c) maintain a place of business at a
location other than a location specified on ANNEX I hereto, (d) change its
name, or (e) change its mailing address, unless, in each case, the Grantor
has given the Agent at least 30 days' prior written notice thereof and
delivered to Agent a revised Annex I, and delivered any financing statements
or other documents requested by the Agent, including opinions of counsel, and
the Agent will have advised such Grantor in writing of the Agent's
determination that, after giving effect to such change of name, address or
location and any filings to be made in connection therewith, the Agent will
have a continuing perfected security interest in the Collateral, the priority
of which will not be adversely affected by such change.
4.5 OTHER FINANCING STATEMENTS. The Grantor will not sign or
authorize the signing on its behalf of any financing statement naming it as
debtor which covers all or any portion of the Collateral, except financing
statements naming the Agent as secured party and those signed in respect of
other Permitted Liens.
4.6 RECEIVABLES.
(a) Except as otherwise provided in this Agreement, the
Grantor will collect and enforce in accordance with the Grantor's past
collection practices and procedures, at the Grantor's sole expense, all
amounts due or hereafter due to the Grantor under the Receivables.
(b) After the occurrence and during the continuance of any
Event of Default, the Grantor will not, without the Agent's prior written
consent, grant any extension of the time of payment of any of the
Receivables, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon.
(c) The names of the obligors, amounts owing, due dates
and other information with respect to the Receivables are and will be
correctly stated in all material respects in all records of the Grantor
relating thereto and in all invoices and reports with respect thereto
furnished to the Agent by the Grantor from time to time.
4.7 MAINTENANCE OF INVENTORY AND EQUIPMENT. The Grantor will
do all things necessary to maintain, preserve, protect and keep the Inventory
in good repair and saleable condition and the Equipment in good repair and
working condition.
4.8 INSURANCE. Effective upon the occurrence and during the
continuance of an Event of Default, the Grantor hereby irrevocably makes,
constitutes, and appoints the Agent (and all officers, employees, or agents
designated by the Agent) as the Grantor's true and lawful attorney (and
agent-in-fact) for the purpose of making, settling, and adjusting claims
under policies of insurance, endorsing the name of the Grantor on any check,
draft, instrument, or other item of payment for the proceeds of such policies
of insurance and for making all determinations and decisions with respect
thereto (but in no event will the Agent have the power to terminate or cancel
any such insurance). In the event that the Grantor at any time or times
fails to obtain or maintain any of the policies of insurance required by any
Loan Document
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or to pay any premium in whole or part relating thereto, the Agent may,
without waiving or releasing any obligation or liability of the Grantor
hereunder or any Potential Event of Default or Event of Default, in its sole
discretion, obtain and maintain such policies of insurance and pay such
premium and take any other action with respect thereto as the Agent deems
advisable. All such sums so disbursed by the Agent, including reasonable
attorney's fees, court costs, expenses and other charges relating thereto,
will be payable, upon demand, by the Grantor to the Agent and will be
additional Obligations secured hereby.
4.9 TITLED VEHICLES. The Grantor will promptly give the Agent
notice of its acquisition of any Vehicle and, upon request of the Agent, the
Grantor will promptly execute and deliver any instruments and documents that
may be necessary or that the Agent may request in order to perfect the
Agent's security interest (for the benefit of the Lenders) in all property
subject to a certificate of title.
4.10 BAILEES. If any Inventory or Equipment is in the
possession or control of any warehouseman, processor or other bailee, the
Grantor will notify such warehouseman, processor and other bailee in writing
(with a copy to the Agent) of the Agent's security interest therein and, upon
the Agent's request, instruct such Person to hold all such Inventory and
Equipment for the Agent's account and subject to the Agent's instructions.
If more than $25,000 of Inventory or Equipment is held by a bailee, the
Grantor will file a financing statement in the appropriate jurisdiction
against such bailee in a form appropriate for the underlying transaction.
4.11 FAIR LABOR STANDARDS ACT. None of the Inventory of the
Grantor has been or will be produced in violation of any provision of the
Fair Labor Standards Act of 1938, 29 U.S.C. Section 201 ET SEQ., or in
violation of any other law.
4.12 DELIVERY OF PLEDGED COLLATERAL. The Grantor will hold in
trust for the Agent upon receipt and promptly thereafter deliver to the Agent
the originals of all Instruments, Chattel Paper, letters of credit and
certificates issued in respect of Pledged Deposits, which will be endorsed in
blank, marked with such legends and accompanied by such undated stock powers
and assignments, executed in blank, as the Agent may specify. Upon request
by the Grantor in the absence of a Potential Event of Default or Event of
Default, the Agent will deliver to the Grantor any certificate of title
required to enable the Grantor to dispose of Vehicles in accordance with the
Loan Documents, and any Instruments and Chattel Paper required for purposes
of collection of Accounts, so long as the Grantor takes such actions as the
Agent may request to maintain the Agent's perfected security interest therein
and in the proceeds thereof. Upon the Agent's request, the Grantor will
promptly deliver to the Agent the originals of all Documents.
4.13 UNCERTIFICATED SECURITIES. If, notwithstanding the
provisions of the Pledge Agreement, the Grantor acquires any uncertificated
security, the Grantor (a) will cause the issuers of such uncertificated
securities or other appropriate parties under Sections 8-313 and 8-321 of the
UCC to mark their books and records with the numbers and face amounts of such
uncertificated securities and all rollovers and replacements therefor to
reflect the
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Lien of the Agent granted pursuant to this Agreement, (b) will obtain from
such issuers and other Persons, for the benefit of the Agent and the Lenders,
written confirmation of the Lien granted to the Agent hereunder in such
uncertificated securities, and (c) will take and will cause such parties to
take all other action necessary or appropriate to create and maintain a
perfected first priority Lien in such uncertificated securities in favor of
the Agent.
4.14 INTELLECTUAL PROPERTY COVENANTS. The Grantor will:
(a) consistent with commercially reasonable practices,
continue to use each of its trademarks on each and every trademark class of
goods as reflected in its current catalogs, brochures and price lists in
order to maintain each trademark in full force free from any claim of
abandonment for non-use;
(b) maintain the quality of products and services offered
under each of its trademarks;
(c) use all commercially reasonable efforts to employ each
of its trademarks or copyrights with the appropriate notice of its
registration on applicable products or services;
(d) use all commercially reasonable efforts to employ each
of its patents with the appropriate notice of existence on applicable
products or processes;
(e) consistent with commercially reasonable practices (and
in accordance with the reasonable business judgment of the Grantor's Board of
Directors as to whether any of the Intellectual Property Collateral is needed
for the present and anticipated conduct of the Grantor's business, if no
Event of Default has then occurred and is continuing), not perform or omit to
perform any act whereby any patent rights may become dedicated, invalidated
or unenforceable, any trademark rights may become abandoned or unenforceable,
any copyright rights may become abandoned or unenforceable, any other
Intellectual Property Collateral may become unenforceable or placed in the
public domain, or any license rights may lapse or be terminated;
(f) consistent with commercially reasonable practices,
prosecute diligently any patent, trademark or copyright application which is
pending as of the date of this Agreement or hereafter;
(g) make application on unpatented but patentable
inventions and unregistered but registrable trademarks, as appropriate
(unless the Grantor and the Agent determine that such application is of
insufficient economic value to the Grantor to justify such action);
(h) consistent with commercially reasonable practices (and
in accordance with the reasonable business judgment of the Grantor's Board of
Directors as to whether any of the Intellectual Property Collateral is needed
for the present and anticipated
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conduct of the Grantor's business, if no Event of Default has then occurred
and is continuing), maintain all rights in and to the Intellectual Property
Collateral;
(i) make all necessary filings and recordings and pay all
required fees and taxes to record and maintain its registration and ownership
of each item of Intellectual Property Collateral owned by it;
(j) promptly notify the Agent if it knows, or has reason
to know, that any application or registration relating to the Intellectual
Property Collateral may become abandoned or dedicated to the public, or of
any adverse determination or development (including any claim) regarding the
Grantor's ownership of any Intellectual Property Collateral, or its right
to register the same or to keep and maintain the same;
(k) in the event that any item of the Intellectual
Property Collateral is infringed or misappropriated by a third party,
promptly notify the Agent after it learns thereof and will, unless the
Grantor and the Agent determine that such item of Intellectual Property
Collateral is of insufficient economic value to the Grantor to justify such
action, promptly sue for infringement or misappropriation or take other
commercially reasonable action (as determined by the Grantor) to cause such
infringement to cease;
(l) within 10 days after acquiring any U.S. Intellectual
Property Collateral which, if owned on the date hereof would have been
disclosed on Annex III hereto, provide to the Agent an Annex III which has
been revised to reflect such additional Intellectual Property Collateral; and
(m) not grant any license the terms of which limit or do
not permit the grant of rights to the Agent in Section 4.15 or the taking by
the Agent of the action described in Section 8.4(j) (without regard to any
limitation on such grant of rights or taking of action by virtue of the terms
of any preexisting licenses), without the prior written consent of the Agent.
4.15 GRANT OF LICENSE TO USE GENERAL INTANGIBLES. For the
purpose of enabling the Agent to exercise rights and remedies thereunder
during the continuation of an Event of Default, the Grantor hereby grants to
the Agent an irrevocable, nonexclusive license (exercisable without payment
of royalty or other compensation to the Grantor) to use, license or
sublicense any of the General Intangibles to the extent not inconsistent with
the terms of any preexisting licenses issued by or to Grantor, wherever the
same may be located, including in such license reasonable access to all media
in which any of the General Intangibles may be recorded or stored and to all
computer programs used for the compilation or printout thereof; PROVIDED that
the Agent will comply with all quality control standards and trademark use
requirements of the Grantor. Except as set forth in the preceding sentence,
the Agent will have no obligations or liabilities regarding any or all or the
General Intangibles by reason of, or arising out of, this Agreement.
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4.16 FEDERAL CLAIMS.
(a) CLAIMS. The Grantor will notify the Agent of any
Collateral which constitutes a claim against the United States government or
any instrumentality or agency thereof, the assignment of which claim is
restricted by federal law.
(b) ACTION. Upon the request of the Agent, the Grantor
will take all reasonable actions required to comply, to the Agent's
satisfaction, with the Assignment of Claims Act of 1940, as amended, or any
similar applicable law, with respect to any such Collateral.
5. REMEDIES UPON DEFAULT.
5.1 REMEDIES UPON DEFAULT. If any Event of Default occurs and
is continuing, whether or not any or all of the Obligations have become due
and payable, the Agent may, in addition to its rights under the Loan
Agreement or any other Loan Document:
(a) Exercise any or all of the rights and remedies
provided (i) in this Agreement, (ii) to a secured party when a debtor is in
default under a security agreement governed by the UCC or (iii) to a secured
party when a debtor is in default by any other applicable law including any
law governing the exercise of a lender's right of setoff or lender's lien.
Without precluding any other methods of sale, the sale of Collateral will be
deemed to have been made in a commercially reasonable manner if conducted in
conformity with reasonable commercial practices of commercial lenders
disposing of similar property, but in any event the Agent may sell Collateral
on such terms as the Agent may choose without assuming any credit risk and
without any obligation to advertise or give notice of any kind not expressly
required under this Agreement.
(b) With respect to Obligations which are contingent and
cannot be accelerated by their nature, require the Grantor to deposit cash
collateral in an amount equal to the maximum exposure of the Agent with
respect thereto (as determined in good faith by the Agent).
(c) Sell, resell, assign, transfer and deliver all or any
part of the Instruments or uncertificated securities owned or held by the
Grantor and pledged to the Agent hereunder. Upon any such sale, the Agent,
unless prohibited by a provision of any applicable statute, may purchase all
or any part of the Instruments or uncertificated securities being sold, free
from all trusts, claims, rights of redemption and equities of the Grantor.
If, at any time when the Agent determines to exercise its rights to sell all
or any part of the Instruments or uncertificated securities pursuant to this
Section5.1(c), such Collateral or the sale thereof is not effectively
registered or exempt from registration under the Securities Act of 1933, the
Agent, in its sole and absolute discretion, is hereby expressly authorized to
sell such Instruments or uncertificated securities, or any part thereof, by
private sale in such manner and under such circumstances as the Agent may
deem necessary or advisable in order that such sale may be legally effected
without such registration. Without limiting the generality of the foregoing,
the Agent, in its sole and absolute discretion, may approach and negotiate
with a restricted number
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of potential purchasers to effect such sale or restrict such sale to a
purchaser or purchasers who will represent and agree that it or they are
purchasing for its or their own account, for investment only, and not with a
view to the distribution of such Instruments or uncertificated securities or
any part thereof. Any such sale will be deemed to be a sale made in a
commercially reasonable manner within the meaning of the Code and the Grantor
hereby consents and agrees that the Agent will not incur any responsibility
or liability for the Agent's selling all or any part of the Instruments or
uncertificated securities under such procedures, notwithstanding the
possibility that a substantially higher price might be realized if
registration was accomplished and a public sale thereof was effected.
(d) Immediately enter upon any premises leased by the
Grantor for the storage, warehousing or maintenance of Inventory and remove,
take possession and dispose of, or store at another site, such Inventory in
the Agent's sole discretion.
(e) Without any necessity on the Agent's part to resort to
other security or sources of reimbursement for the Obligations, at any time
during the continuance of an Event of Default and with notice to the Grantor
given contemporaneously or within a reasonable time thereafter, exercise
rights of set-off against any of the Pledged Deposits (general or special,
time or demand, provisional or final) or other sums of the Grantor in the
possession of or in transit to the Agent for application to the Obligations,
which rights will be cumulative with the Agent's other rights and remedies
including other rights of set-off.
5.2 CASH PROCEEDS. It is agreed that if an Event of Default
will occur and be continuing, all proceeds and any cash in a Deposit Account
received by the Grantor consisting of cash, checks and other near-cash items,
including any payments of Accounts, when collected by the Grantor, will be
forthwith (and, in any event, within two Business Days) deposited by the
Grantor in the exact form received, duly endorsed by the Grantor to the Agent
if required, in a special collateral account maintained by the Agent, subject
to withdrawal by the Grantor for the account of the Lenders only, and, until
so turned over, will be held by the Grantor in trust for the Agent,
segregated from other funds of the Grantor. All proceeds while held by the
Agent (or by the Grantor-in-trust for the Agent) will continue to be
collateral security for all of the Obligations and will not constitute
payment thereof until applied. If an Event of Default occurs and is
continuing, the Agent may at any time and from time to time apply all or any
part of the funds on deposit in said special collateral account on account of
the Obligations in such order as provided in Section 7.2. Upon cure or
written waiver of all then-existing Events of Default and Defaults, the
Grantor's obligation to direct funds to such special collateral account will
cease (unless and until the Agent once again exercises its rights pursuant to
this Section 5.2) and all funds in such special collateral account will be
released to the Grantor.
5.3 SPECIFIC PERFORMANCE. The Grantor agrees that, in
addition to all other rights and remedies granted to the Agent in this
Agreement and any other Loan Documents, the Agent will be entitled to
specific performance and injunctive and other equitable relief, and the
Grantor further agrees to waive any requirement for the securing or posting
of any bond or other security in connection with the obtaining of any such
specific performance and injunctive or other equitable relief.
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5.4 GRANTOR'S SECURED LIABILITIES UPON EVENT OF DEFAULT. Upon
the request of the Agent after the occurrence and during the continuance of
an Event of Default, the Grantor will promptly:
(a) Assemble and make available to the Agent the
Collateral and all records relating thereto at any place or places specified
by the Agent within the State of California.
(b) Permit the Agent, or the Agent's representatives and
agents, to enter any premises where all or any part of the Collateral, or the
books and records relating thereto, or both, are located, to take possession
of all or any part of the Collateral and to remove all or any part of the
Collateral.
5.5 REMEDIES CUMULATIVE. All rights, powers and remedies
contained in this Agreement or afforded by law will be cumulative and all
will be available to the Agent until the Obligations have been paid in full.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of the Agent to exercise any right, power or
remedy granted under this Agreement will impair such right, power or remedy
or be construed to be a waiver of any Event of Default or an acquiescence
therein, and any single or partial exercise of any such right, power or
remedy will not preclude other or further exercise thereof or the exercise of
any other right, power or remedy, and no waiver, amendment or other variation
of the terms, conditions or provisions of this Agreement whatsoever will be
valid unless signed by each of the parties hereto and Requisite Noteholders,
and then only to the extent specifically set forth in such writing.
7. PROCEEDS; COLLECTION OF RECEIVABLES.
7.1 COLLECTION OF RECEIVABLES. The Agent may at any time
after the occurrence and during the continuance of an Event of Default, by
giving the Grantor written notice, elect to enforce collection of any
Receivable and to require that the Receivables be paid directly to the Agent.
In such event, the Grantor will, and will permit the Agent to, promptly
notify the account debtors or obligors under the Receivables of the Agent's
interest therein and direct such account debtors or obligors to make payment
of all amounts then or thereafter due under the Receivables directly to the
Agent. Upon receipt of any such notice from the Agent, the Grantor will
thereafter hold in trust for the Agent all amounts and proceeds received by
it with respect to the Receivables and other Collateral, will segregate all
such amounts and proceeds from other funds of the Grantor, and will at all
times thereafter promptly deliver to the Agent all such amounts and proceeds
in the same form as so received, whether by cash, check, draft or otherwise,
with any necessary endorsements.
7.2 APPLICATION OF PROCEEDS. (a) During the continuance of an
Event of Default, the Agent will have the continuing and exclusive right to
apply or reverse and re-apply any and all payments to any portion of the
Obligations. To the extent that the Grantor
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makes a payment or payments to the Agent or the Agent receives any payment or
proceeds of the Collateral, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or proceeds, the Obligations or
part thereof intended to be satisfied and this Agreement will be revived and
continue in full force and effect, as if such payment or proceeds had not
been received by such party.
(b) The Agent will apply the proceeds of any collection or
sale of the Collateral as follows:
FIRST, to the payment of all costs and expenses incurred by the Agent
in connection with such collection or sale or otherwise in connection
with this Agreement or any of the Obligations, including all court
costs and the reasonable fees and expenses of its agents and legal
counsel, the repayment of all advances made by the Agent hereunder on
behalf of the Grantor and any other costs or expenses incurred in
connection with the exercise of any right or remedy hereunder.
SECOND, to the payment in full of all unpaid accrued interest on the
Notes, pro rata among the Lenders in accordance with the amount of
unpaid accrued interest on the Notes held by them;
THIRD, to the payment in full of the unpaid principal amount of the
Notes, pro rata among the Lenders in accordance with the unpaid
principal amount of the Notes held by them.
FOURTH, to the payment and discharge in full of the Obligations (other
than those referred to above), pro rata among the Persons to whom such
Obligations are owed in accordance with the aggregate amount of such
Obligations owing to such Persons.
FIFTH, to the Grantor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Agent will have absolute discretion as to the time of application of any
such proceeds, moneys or balances in accordance with this Agreement. Upon
any sale of the Collateral by the Agent (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
Agent or of the officer making the sale will be a sufficient discharge to the
purchaser or purchasers of the Collateral so sold and such purchaser or
purchasers will not be obligated to see to the application of any part of the
purchase money paid over to the Agent or such officer or be answerable in any
way for the misapplication thereof.
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8. GENERAL PROVISIONS.
8.1 NOTICE OF DISPOSITION OF COLLATERAL. To the extent
required by law, Grantor will be given reasonable advance notice of the time
and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be made, and
Grantor and the Agent agree that any such notice made will be deemed
reasonable if given to the Grantor at least 10 days prior to the time of any
such public sale or the time after which any such private sale or other
disposition may be made.
8.2 COMPROMISES AND COLLECTION OF COLLATERAL. The Grantor
recognizes that setoffs, counterclaims, defenses and other claims may be
asserted by obligors with respect to certain of the Receivables, that certain
of the Receivables may be or become uncollectible in whole or in part and
that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be
recovered with respect to a Receivable. In view of the foregoing, the
Grantor agrees that the Agent may at any time and from time to time during
the continuance of an Event of Default compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the Agent
in its sole discretion determines or abandons any Receivable, and any such
action by the Agent will be deemed commercially reasonable so long as the
Agent acts in good faith based on information known to it at the time it
takes any such action.
8.3 SECURED PARTY PERFORMANCE OF GRANTOR SECURED LIABILITIES.
Without having any obligation to do so, the Agent may, upon notice to the
Grantor, perform or pay any obligation which the Grantor has agreed to
perform or pay in this Agreement but has not performed or paid and the
Grantor will reimburse the Agent for any amounts paid or incurred pursuant to
this Section 8.3. The Grantor's obligation to reimburse the Agent pursuant to
the preceding sentence will be an Obligation payable on demand.
8.4 AUTHORIZATION FOR SECURED PARTY TO TAKE CERTAIN ACTION.
The Grantor irrevocably authorizes the Agent at any time and from time to
time in the sole discretion of the Agent, and appoints the Agent as its
attorney-in-fact to act on behalf of the Grantor, in the name of the Grantor
or otherwise, from time to time in the Agent's discretion, to take any action
and to execute any instrument which the Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including (a) to execute on
behalf of the Grantor as debtor and to file financing statements necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the Agent's security interest in the Collateral;
(b) during the continuance of an Event of Default, to endorse, deposit and
collect any cash, Instruments and other proceeds of the Collateral; (c) to
file a carbon, photographic or other reproduction of this Agreement or any
financing statement with respect to the Collateral as a financing statement
in such offices as the Agent in its sole discretion deems necessary or
desirable to perfect and to maintain the perfection and priority of the
Agent's security interest in the Collateral; (d) during the continuance of an
Event of Default, to enforce payment of the Receivables in the name of the
Agent or the Grantor; (e) to cause the proceeds of any Collateral received by
the Agent during the continuance of an Event of Default to be applied to the
Obligations; (f) during the continuance of an Event of Default, to sign the
Grantor's name on any invoice or bill of lading
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relating to any Receivable, on drafts against customers, on schedules and
assignments of Receivables, on notices of assignment, financing statements
and other public records, on verifications of accounts and on notices to
customers; (g) during the continuance of an Event of Default, to notify the
post office authorities to change the address for delivery of the Grantor's
mail to an address designated by the Agent, and to receive, open and dispose
of all mail addressed to the Grantor (and the Agent will promptly forward to
the Grantor all mail that does not pertain to or constitute Collateral); (h)
during the continuance of an Event of Default, to send requests for
verification of Receivables to customers or account debtors (provided that
this clause (h) will not limit the Agent's rights under Section 4.01); (i) to
do all things necessary to carry out this Agreement; (j) during the
continuance of an Event of Default, to grant or issue any exclusive or
nonexclusive license under the Collateral to any Person, to the extent
consistent with the terms of any pre-existing licenses granted by the Grantor
and to apply the license revenues to the Obligations; and (k) during the
continuance of an Event of Default, to assign, pledge, convey or otherwise
transfer title in or to or dispose of the Collateral to anyone, including to
make assignments, recordings, registrations and applications therefor in the
United States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency of the United States, any state thereof or
any other country or political subdivision thereof, and to execute and
deliver any and all agreements, documents, instruments of assignment or other
papers necessary or advisable to effect any of the foregoing or the
recordation, registration, filing or perfection thereof. The Grantor
ratifies and approves all acts of such attorney-in-fact. The Agent will not
be liable for any acts or omissions except those determined pursuant to a
final, non-appealable order of a court of competent jurisdiction to have
resulted solely from the Agent's gross negligence or willful misconduct. The
power conferred on the Agent hereunder is solely to protect its interests in
the Collateral and will not impose any duty upon the Agent to exercise such
power. This power, being coupled with an interest, is irrevocable.
8.5 USE AND POSSESSION OF CERTAIN PREMISES. Upon the
occurrence and during the continuance of an Event of Default, the Agent or
its agents or representatives will be entitled to occupy and use any premises
owned or leased by the Grantor where any of the Collateral or any records
relating to the Collateral are located until the Obligations are paid in full
or until the Collateral is removed therefrom, whichever occurs first, without
any obligation to pay the Grantor for such use and occupancy.
8.6 GRANTOR REMAINS LIABLE.
(a) CONTRACTS AND AGREEMENTS. Anything contained in this
Agreement to the contrary notwithstanding, (i) the Grantor will remain solely
liable to perform its duties and obligations under the contracts and
agreements included in the Collateral to the extent set forth therein to the
same extent as if this Agreement had not been executed, (ii) the exercise by
the Agent of any of its rights and remedies hereunder will not release the
Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral except to the extent the exercise of
such rights renders the performance of such duties or obligations by the
Grantor impracticable under any such agreement or contract, and (iii) the
Agent and the Lenders will not have any obligation or liability under any
contract or agreement included in the Collateral by reason of this Agreement,
and the Agent and the Lenders will not
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be obligated in any manner to perform any of the obligations or duties of the
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
(b) ACCOUNTS AND LICENSES. Anything contained in this
Agreement to the contrary notwithstanding, the Grantor will remain solely
liable under each of the Accounts and all licenses, permits and
authorizations granted to the Grantor by any governmental entity
(collectively, the "LICENSES") and to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to any such Account or
License. Neither the Agent nor any Lender will have any obligation or
liability under any Account (or any agreement giving rise thereto) or License
by reason of or arising out of this Agreement or the receipt by the Agent or
any Lender of any payment relating to such Account or License pursuant
hereto, nor will the Agent or any Lender be obligated in any manner to
perform any of the obligations of the Grantor under or pursuant to any
Account (or any agreement giving rise thereto) or License, to make any
payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any
party under any Account (or any agreement giving rise thereto) or License, to
present or file any claim, to take any action to enforce any performance or
to collect the payment of any amount which may have been assigned to it or to
which it may be entitled at any time or times.
8.7 LIMITATION ON DUTY OF AGENT REGARDING THE COLLATERAL.
Beyond the exercise of reasonable care in the custody of any Collateral in
its possession, the Agent will have no duty as to any Collateral in its
possession or control or in the possession or control of any agent or bailee,
or any income thereon, or as to the preservation of rights against prior
parties or any other rights pertaining thereto. The Agent will be deemed to
have exercised reasonable care in the custody of the Collateral in the
Agent's possession if the Collateral is accorded treatment substantially
equal to that which the Agent accords its own property. The Agent will not
be liable or responsible for any loss or damage to any of the Collateral, or
for any diminution in the value thereof, by reason of the act or omission of
any warehouseman, carrier, forwarding agency, consignee or other agent or
bailee selected by the Agent in good faith.
8.8 LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL.
The Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
UCC or otherwise, will be to deal with it in the same manner as the Agent
would deal with similar property for its own account. Neither the Agent nor
any Lender, nor any of their respective directors, officers, employees or
agents will be liable for failure to demand, collect or realize upon all or
any part of the Collateral or for any delay in doing so or will be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Grantor or otherwise.
9. MISCELLANEOUS.
9.1 SECURITY INTEREST ABSOLUTE. All rights of the Agent
hereunder, the security interest granted hereby, and all obligations of the
Grantor hereunder, will be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Loan
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Agreement, any other Loan Document, any agreement with respect to any of the
Obligations or any other agreement or instrument relating to any of the
foregoing, (b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from any Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of any
other Collateral, or any release, amendment or waiver of, or consent to or
departure from, any guaranty for all or any of the Obligations, or (d) any
other circumstance which might otherwise constitute a defense available to,
or a discharge of, the Grantor in respect of the Obligations or in respect of
this Agreement.
9.2 FEES AND EXPENSES. The Grantor agrees to pay upon demand
to the Agent (for the account of the Lenders, if appropriate) the amount of
any and all expenses, including the fees and expenses of its counsel and of
any experts or agents, which the Agent or any Lender may incur or pay in
connection with the administration of this Agreement, the custody or
preservation of, or the sale of, collection from, or other realization upon,
any of the Collateral, the exercise or enforcement of any of the rights of
the Agent hereunder, or the failure by the Grantor to perform or observe any
of the provisions hereof, or otherwise. Any such amounts payable as provided
hereunder or thereunder will be additional Obligations secured by this
Agreement and the other Loan Documents.
9.3 BINDING AGREEMENT; ASSIGNMENTS. This Agreement, and the
terms, covenants and conditions hereof, will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, except that the Grantor will not be permitted to assign this
Agreement or any interest herein or in the Collateral or any part thereof, or
otherwise pledge, encumber or grant any option with respect to the Collateral
or any part thereof, or any cash or property held by the Agent as Collateral
under this Agreement, except for Permitted Liens or with the prior written
consent of the Agent and Requisite Lenders.
9.4 HOLIDAYS. Whenever any payment or action to be made or
taken under this Agreement is stated to be due or required to be taken on a
day which is not a Business Day, such payment or action will be made or taken
on the next following Business Day, and such extension of time will be
included in computing interest or fees, if any, in connection with such
payment or action.
9.5 NOTICES. All notices and other communications given to or
made upon any party hereto in connection with this Agreement will, except as
otherwise expressly provided herein, be in writing and mailed, telecopied or
delivered by hand or by reputable overnight courier service to the respective
parties, as follows:
Grantor: c/o International Wireless Communications, Inc.
400 S. El Camino Real
Suite 1275
San Mateo, CA 94402
Attention: John D. Lockton
Telecopy: (415) 548-1842
18
<PAGE>
WITH A COPY (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Brooks Stough, Esq.
Gunderson Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, CA 94025
Telecopy: (415) 343-7502
Agent: Toronto Dominion Investments, Inc.
909 Fanin Street
Suite 1700
Houston, TX 77010
Attention: Martha Gariepy
Telecopy: (713) 652-2647
WITH COPIES (WHICH WILL NOT CONSTITUTE NOTICE) TO:
Toronto Dominion Investments, Inc.
31 West 52nd Street, 20th Floor
New York, NY 10019
Attention: Brian A. Rich
Telecopy: (212) 974-8429
and
John Kuehn
Kirkland & Ellis
153 E. 53rd Street
New York, NY 10022
Telecopy: (212) 446-4900
or in accordance with any subsequent written direction from the recipient
party to the sending party made in accordance with this Section 9.5. All
such notices and other communications will, except as otherwise expressly
provided in this Agreement, be effective upon (a) delivery if delivered by
hand; (b) on the Business Day after deposited with a reputable overnight
courier service, delivery charges prepaid; (c) on the third Business Day
after deposited in the mail, postage prepaid; or (d) in the case of telecopy,
when received.
9.6 SURVIVAL. All representations, warranties, covenants and
agreements of the Grantor contained in this Agreement or made in writing in
connection herewith will survive the execution and delivery of this
Agreement, the making of the Loans hereunder and the issuance of the Notes.
The provisions of this Section 9 will survive repayment of the Loans and the
other amounts payable to the Agent and the Lenders under this Agreement and
the other Loan Documents and the termination of this Agreement and the other
Loan Documents.
19
<PAGE>
9.7 GOVERNING LAW; WAIVERS AND JURISDICTION.
(a) GOVERNING LAW. This Agreement will in all respects
be governed by, and construed and enforced in accordance with, the laws of
the State of California, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of California or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California, except that the filing,
perfection, effect of perfection and enforcement of security interests and
liens under this Agreement in other jurisdictions will be governed by the
laws of the applicable jurisdictions in accordance with the UCC as in effect
in the State of California.
(b) WAIVERS. To the extent permitted by law, each party
hereto hereby waives personal service of any and all process upon it in
connection with this Agreement and agrees that all such service of process
may be made as provided in Section 9.5, and service so made will be deemed to
be completed as provided in Section 9.5. In addition, the Grantor and the
Agent each hereby waives trial by jury, any objections based on FORUM NON
CONVENIENS and any objections to venue of any action arising out of,
connected with, related to or incidental to the transactions contemplated by
or the relationships established in connection with this Agreement.
(c) EXCLUSIVE JURISDICTION. Except as provided in
Section 9.7(d), all disputes arising out of, connected with, related to or
incidental to the transactions contemplated by or the relationship
established between them in connection with this Agreement, and whether
arising in contract, tort, equity or otherwise, will be resolved only by
state or federal courts located in New York County, New York, and the Grantor
and the Agent hereby consent and submit to the jurisdiction of any state or
federal court located within such county and state. The Grantor and the
Agent acknowledge, however, that any appeals from those courts may be
required to be heard by a court located outside of New York County, New York.
The Grantor and the Agent waive in all disputes any objection that it may
have to the location of the court considering the dispute. Nothing in this
Section 9.7(d) will affect the right of the Grantor or the Agent to serve
legal process in any other manner permitted by law or affect the right of the
Agent to bring any action or proceeding against the Grantor or its property
in the courts of any other jurisdiction.
(d) OTHER JURISDICTIONS. The Grantor and the Agent agree
that the other of them will have the right to proceed against it in a court
in any location to enable the proceeding Person to enforce a judgment or
other court order obtained in any proceeding brought in accordance with
Section 9.7(c) and entered in favor of the proceeding Person. The Grantor
and the Agent waive any objection that they may have to the location of the
court in which the other of them has commenced a proceeding described in this
Section 9.7(d).
9.8 HEREIN, ETC. Words such as "herein," "hereunder,"
"hereof" and the like will be deemed to refer to this Agreement as a whole
and not to any particular document or Article, Section or other portion of a
document. Section, clause, Exhibit and
20
<PAGE>
Schedule references contained in this Agreement are references to Sections,
clauses, Exhibits and Schedules in or attached to this Agreement, unless
otherwise specified. Each defined term used in this Agreement has a
comparable meaning when used in its plural or singular form. Each
gender-specific term used in this Agreement has a comparable meaning whether
used in a masculine, feminine or gender-neutral form. As used in this
Agreement, the terms "knowledge" or "aware" will include the actual knowledge
and awareness of the Person in question, and the knowledge and awareness that
such Person would have obtained after making reasonable inquiry and
exercising reasonable diligence with respect to the matter in question.
Whenever the term "including" is used in this Agreement (whether or not that
term is followed by the phrase "but not limited to" or "without limitation"
or words of similar effect) in connection with a listing of items within a
particular classification, that listing will be interpreted to be
illustrative only and will not be interpreted as a limitation on, or an
exclusive listing of, the items within that classification. Each reference
in this Agreement to any law will be deemed to include such law as it
hereafter may be amended, supplemented or modified from time to time and any
successor thereto.
9.9 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law in any jurisdiction, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating any other provision of this Agreement or any
other Loan Document.
9.10 HEADINGS. Section and subsection headings in this
Agreement are included for convenience of reference only and will not
constitute a part of this Agreement for any other purpose.
9.11 COUNTERPARTS. This Agreement may be executed in multiple
counterparts and by any party hereto or thereto on separate counterparts,
each of which, when so executed and delivered, will be an original, but all
such counterparts will together constitute one and the same instrument.
9.12 INDEMNIFICATION. In consideration of the Agent's
execution and delivery of this Agreement and the Initial Lenders' making of
the Loans, and in addition to all other obligations of the Grantor under this
Agreement and the other Loan Documents, the Grantor will defend, protect,
indemnify and hold harmless the Agent, and all of its officers, directors,
employees and agents (including those retained in connection with the
transactions contemplated by this Agreement) (collectively, the
"INDEMNITEES") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages and expenses
in connection therewith (irrespective of whether any such Indemnitee is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys' fees and disbursements, but excluding claims
and losses arising from such Indemnitee's breach hereof or thereof or such
Indemnitee's gross negligence or willful misconduct (the "INDEMNIFIED
LIABILITIES"), incurred by the Indemnitees or any of them as a result of, or
arising out of, or relating to (i) any transaction financed or to be financed
in whole or in part, directly or indirectly,
21
<PAGE>
with the proceeds of the Loans, (ii) the execution, delivery, performance or
enforcement of this Agreement, the Notes or the other Loan Documents and any
instrument, document or agreement executed pursuant hereto by any of the
Indemnitees or (iii) the Agent's status as an agent of the Lenders. To the
extent that the foregoing undertaking by the Grantor may be unenforceable for
any reason, the Grantor will make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. To the extent that the undertaking to indemnify, pay
and hold harmless by the Grantor under this Section 9.12 may be unenforceable
because it violates any law or public policy, the Grantor will contribute the
maximum portion that it is permitted to pay and satisfy under applicable law
or public policy to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnities or any of them.
9.13 PAYMENT SET ASIDE. To the extent that the Grantor makes
a payment or payments to the Agent or any Lender hereunder or under the Notes
or any other Loan Document or any Lender or Agent enforces its security
interests or rights or exercises its right or setoff hereunder or thereunder,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by or are required to be
refunded, repaid or otherwise restored to the Grantor, a trustee, receiver or
any other Person under any law (including any bankruptcy law, state or
federal law, common law or equitable cause of action), then to the extent of
any such restoration the obligation or part thereof originally intended to be
satisfied and all Liens created under this Agreement will be revived and
continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
9.14 COMPLETE AGREEMENT. Except as otherwise expressly set
forth herein, this Agreement, the Notes and the other Loan Documents embody
the complete agreement and understanding of the parties hereto and thereto
and supersede and preempt any prior understandings, agreements or
representations by or among the parties, whether written or oral, which may
have related to the subject matter hereof in any way, and such agreements may
not be contradicted or varied by evidence of prior, contemporaneous or
subsequent oral discussions or understandings of the parties. The parties
hereto acknowledge and agree there are no oral understandings or agreements
between them with respect to the subject matter hereof or thereof.
9.15 NO STRICT CONSTRUCTION. The language used in this
Agreement and the other Loan Documents will be deemed to be the language
chosen by the parties to express their mutual intent. In the event an
ambiguity or question of intent or interpretation arises, this Agreement and
the other Loan Documents will be construed as if drafted jointly by the
parties, and no presumption or burden of proof will arise favoring or
disfavoring any Person by virtue of the authorship of any of the provisions
of this Agreement or any other Loan Document.
22
<PAGE>
9.16 TERMINATION.
(a) This Agreement and the security interest granted
hereby will terminate when all the Obligations have been paid in full, at
which time the Agent will execute and deliver to the Grantor all Uniform
Commercial Code termination statements and similar documents prepared by the
Grantor which the Grantor will reasonably request to evidence such
termination.
(b) Notwithstanding anything to the contrary contained in
this Agreement, this Agreement will remain in full force and effect and
continue to be effective should any petition be filed by or against the
Grantor for liquidation or reorganization, should the Grantor become
insolvent or make an assignment for any benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of the
Grantor's assets, and will continue to be effective or be reinstated, as the
case may be, if at any time payment and performance of the obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
obligations, whether as a "voidable preference," "fraudulent conveyance" or
otherwise, all as though such payment, or any part thereof, is rescinded,
reduced, restored or returned.
* * * * *
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Security
Agreement as of the date first above written.
PAKISTAN WIRELESS HOLDINGS LIMITED
By: /s/ DOUGLAS S. SINCLAIR
---------------------------------
Its: Executive Vice President
--------------------------------
TORONTO DOMINION INVESTMENTS, INC.,
as Agent
By: /s/ MARTHA L. GARIEPY
---------------------------------
Its:
--------------------------------
<PAGE>
ANNEX I
A. Mailing Address: c/o International Wireless Communications, Inc.
400 S. El Camino Real, Suite 1275
San Mateo, CA 94402 USA
Attn: Douglas S. Sinclair, CFO
Aarti C. Gurnani, VP, Legal Affairs
With a copy to:
PO Box 1130
3rd Floor Li Wan Po Building
12 Remy Ollier Street
Port Louis, Mauritius
Attn: J. Jingree
B. Location of Chief
Executive Office: PO Box 1130
3rd Floor Li Wan Po Building
12 Remy Ollier Street
Port Louis, Mauritius
C. Location of Inventory
Equipment and Fixtures: Not applicable.
<PAGE>
ANNEX II
TRADE NAMES
None
<PAGE>
ANNEX III
VEHICLES
None
<PAGE>
ANNEX IV
INTELLECTUAL PROPERTY COLLATERAL
None
<PAGE>
ANNEX V
BANK ACCOUNTS
Bank Account Type and No.
- ---- --------------------
Bank of America Checking Account
The Private Bank No. 13293-05814
San Francisco - #1329
50 California, Suite 2800
San Francisco, CA 94111
The Hongkong & Shanghai Banking Corporation US Dollar Account
Offshore Banking Unit No. 080-026362
Edith Cavell Street
Port Louis, Mauritius
<PAGE>
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT dated as of August 18, 1997 (this
"Agreement"), is made and entered into by and among International Wireless
Communications Holdings, Inc., a Delaware corporation ("IWCH"), and Pakistan
Wireless Holdings Limited, a Mauritius company ("PWH").
RECITALS
WHEREAS, IWCH has formed PWH as an indirect wholly owned subsidiary
and agreed to transfer 493,510 shares of IWCH Class 1 Common Stock, par value
$.01 per share, to PWH (the "Transferred Shares");
WHEREAS, PWH has borrowed funds pursuant to that certain Loan
Agreement dated August 18, 1997 among PWH, Toronto Dominion Investments, Inc.
("TDI") and the other lenders named therein (together with TDI, the "Lenders")
(the "PWH Loan Agreement") to purchase ordinary shares (the "Shares") of
International Wireless Communications Pakistan, Limited. ("IWCPL").
WHEREAS, the Shares have been pledged to TDI, as agent for the
Lenders, to secure the obligations of PWH under the PWH Loan Agreement; and
WHEREAS, as a condition to transferring the Transferred Shares to PWH,
IWCH will receive an option to purchase the Shares in accordance with the terms
and conditions of this Agreement;
NOW, THEREFORE, based on the foregoing premises and for good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:
1. GRANT OF OPTION. PWH hereby grants to IWCH, an exclusive and
irrevocable option (the "Option") to purchase, subject to the terms and
conditions of this Agreement, all or any portion of the ordinary and preference
shares of IWCPL owned by PWH (together with any shares of capital stock into
which such ordinary and preference shares have been converted, whether by
merger, exchange, reclassification or otherwise, the "Option Shares").
2. EXERCISE PRICE; PAYMENT. The exercise price of the Option Shares
purchased by IWCH pursuant to Section 1 hereof shall be the original purchase
price of such Option Shares paid by PWH for such shares together with any
amounts funded PWH as additional capital contributions with respect to such
shares (the "Exercise Price"). The Exercise Price shall be paid in cash (by
check or wire transfer) or cancellation of all indebtedness of PWH held by IWCH,
the value of which indebtedness shall be as determined in good faith by the
Board of Directors of IWCH.
<PAGE>
3. EXERCISE OF OPTION; DURATION; CLOSINGS.
(a) The Option may be exercised at any time after the Exercise
Date (as defined below) and prior to the Expiration Date (as defined below).
(b) The "Exercise Date" is the first date on which the
obligations of the borrower under the PWH Loan Agreement and under the loan
agreement dated August __, 1997 among IWCH, TDI and the other lenders named
therein are satisfied or discharged in full, whether by repayment at or prior to
maturity, exchange or cancellation of the promissory notes issued thereunder
(the "Notes").
(c) The "Expiration Date" shall be the date 180 days after the
Exercise Date.
(d) To exercise the Option, IWCH shall, prior to the Expiration
Date, send a written notice (a "Notice of Exercise") to PWH specifying (i) the
location, date and time for the closing (a "Closing") of the purchase (which
date shall be no later than five calendar days and no earlier than the next day
after the date such notice is mailed, but in no event earlier than the date on
or by which the condition specified in Section 4(a) has been satisfied); and
(ii) the form(s) in which the Exercise Price is to be paid with respect to the
Option. If the Closing is to occur sooner than three calendar days from the
date on which a Notice of Exercise is sent, notice shall also be given to PWH by
confirmed telecopy, at the time the Notice of Exercise is sent, of the
information contained in such Notice of Exercise.
(e) At the Closing:
(i) IWCH shall: (A) if it has elected to pay all or a
portion of the Exercise Price in cash, deliver to PWH by check or wire transfer
an amount equal to the cash portion of Exercise Price; and/or (B) if it has
elected to pay all or a portion of the Exercise Price by cancellation of
indebtedness, deliver to PWH the PWH appropriate documents evidencing the
indebtedness to be canceled and a certificate executed by the Chief Financial
Officer of IWCH setting forth the fair market value of such indebtedness.
(ii) PWH shall deliver to IWCH one or more certificates
registered in the name of IWCH representing Options Share being acquired by IWCH
at the Closing.
4. CONDITION TO CLOSING.
(a) CONDITIONS TO CLOSING OBLIGATIONS OF PWH AND IWCH. The
respective obligations of PWH and IWCH to proceed with the Closing shall be
subject to the satisfaction prior to the Closing of the condition that no order,
statute, rule, regulation, executive order, stay, decree, judgment or injunction
shall have been enacted, entered, issued, promulgated or enforced by any court
or governmental authority, subsequent to the date of this Agreement, that
prohibits or restricts the effectuation of any of the transactions contemplated
by this Agreement.
2
<PAGE>
(b) ADDITIONAL CONDITIONS TO PWH'S CLOSING OBLIGATIONS. In
addition to the condition specified in Section 4(a), the obligation of PWH to
proceed with the Closing shall also be subject to the satisfaction of the
following conditions (except to the extent waived by IWCH in its sole
discretion), notwithstanding the prior giving of Notice of Exercise providing
for the Closing:
(i) PWH shall have performed and complied in all material
respects with the agreements and obligations contained in this Agreement that
are required to be performed and complied with by it at or prior to the date of
the Closing; and
(ii) The representations and warranties of PWH contained
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement, and shall be deemed to have been made again at and as of
the Closing and shall then be true and correct in all material respects.
(c) ADDITIONAL CONDITION TO IWCH'S CLOSING OBLIGATIONS. In
addition to the condition specified in Section 4(a), the obligation of IWCH to
proceed with any Closing shall also be subject to the satisfaction (except to
the extent waived by PWH, in its sole discretion), of the following conditions:
(i) IWCH shall have performed and complied in all
material respects with the agreements and obligations contained in this
Agreement that are required to be performed and complied with by it at or prior
to the date of the Closing; and
(ii) The representations and warranties of IWCH contained
in this Agreement shall be true and correct in all material respects as of the
date of this Agreement, and shall be deemed to have been made again at and as of
the Closing and shall then be true and correct in all material respects.
5. COVENANT BY PWH. Without IWCH's written consent (which may be
withheld at its sole discretion) PWH shall at no time prior to the Expiration
Date take, or refrain from taking, any action where the effect of so doing would
be to (i) prevent or disable PWH from delivering the Option Shares to IWCH upon
exercise of the Option, (ii) prevent or disable PWH from performing any of its
other obligations under this Agreement, or (iii) prevent or disable IWCH from
exercising any of its rights under this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF PWH. PWH represents and
warrants that, as of the date of this Agreement:
(a) PWH has full right, power and authority to enter into and
perform this Agreement (including, without limitation, full right, power and
authority to sell the Option Shares), and this Agreement has been duly
authorized by all necessary action on the part of PWH, and has been duly
executed and delivered by PWH and is valid, binding and enforceable against PWH
in accordance with its terms.
3
<PAGE>
(b) Subject to the PWH Loan Agreement and the transactions
contemplated thereby, PWH is the holder and beneficial owner of the Shares.
7. REPRESENTATIONS AND WARRANTIES OF IWCH. IWCH represents and
warrants that, as of the date of this Agreement:
(a) IWCH has full right, power and authority to enter into and
perform this Agreement, and this Agreement has been duly authorized by all
necessary action on the part of IWCH, and has been duly executed and delivered
by IWCH and is valid, binding and enforceable against IWCH in accordance with
its terms.
8. SPECIFIC PERFORMANCE. PWH and IWCH acknowledge that their
respective rights under this Agreement are unique and that neither of them will
have adequate remedies at law if another fails to perform any of its obligations
under this Agreement. Accordingly, PWH and IWCH agree that each shall have the
right, in addition to any other rights which it may have, to specific
performance and equitable injunctive relief if the other shall fail or threaten
to fail to perform any of its obligations under this Agreement.
9. MISCELLANEOUS.
(a) GOVERNING LAWS. It is the intention of the parties to this
Agreement that the internal laws of the State of California (irrespective of its
choice of law principles) shall govern the validity of its terms, and the
interpretation and enforcement of the provisions to this Agreement.
(b) NOT ASSIGNABLE. No party to this Agreement shall be
permitted to assign any of its rights or delegate any of its duties under this
Agreement without the prior written consent of the other parties.
(c) SEVERABILITY. If any provision of this Agreement, or the
application of such provision, shall for any reason and to any extent be invalid
or unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances shall be interpreted so as best to
reasonably effect the intent of the parties to this Agreement. The parties
further agree to replace such void or unenforceable provision of this Agreement
with a valid and enforceable provision which will achieve, to the extent
possible, the economic, business and other purposes of the void or unenforceable
provision.
(d) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be an original as against any party whose
signature appears on such counterpart and all of which together shall constitute
one and the same instrument.
(e) OTHER REMEDIES. Except as otherwise provided in this
Agreement, any and all remedies expressly conferred by a party in this Agreement
shall be deemed cumulative with and not exclusive of any other remedy conferred
by this Agreement or by law on such party, and the exercise of any one remedy
shall not preclude the exercise of any other.
4
<PAGE>
(f) AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only by a writing signed by the party to be bound. The waiver
by a party of any breach of this Agreement or default in the performance of this
Agreement shall not be deemed to constitute a waiver of any other default or any
succeeding breach or default. The failure of any party to enforce any of the
provisions of this Agreement shall not be construed to be a waiver of the right
of such party thereafter to enforce such provisions.
(g) NOTICES. Whenever any party to this Agreement desires or is
required to give any notice, demand, or request with respect to this Agreement,
each such communication shall be in writing and shall be effective only if it is
delivered by personal service, by commercial overnight courier service, by
confirmed telecopy, or by mail (registered or certified mail, postage prepaid,
return receipt requested) to the respective parties at the addresses set forth
on the signature page hereto. Such communications shall be effective when they
are received by the addressee of such communication.
(h) HEADINGS. The titles and headings in this Agreement are for
reference purposes only and shall not in any manner limit the construction of
this Agreement which shall be considered as a whole.
(i) FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances, as may be reasonably
requested by any other party to better evidence and reflect the transactions
described in this Agreement and contemplated by this Agreement and to carry into
effect the intents and purposes of this Agreement.
(j) ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. No provisions of
this Agreement are intended, nor shall be interpreted, to provide or create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder or partner of any party to this Agreement or
any other person or entity unless specifically provided otherwise to this
Agreement, and, except as so provided, all provisions of this Agreement shall be
personal solely between the parties to this Agreement.
5
<PAGE>
The parties have executed this Stock Option Agreement as of the date
first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By: /s/ Douglas S. Sinclair
--------------------------------
Name: Douglas S. Sinclair
--------------------------------
Title: Executive Vice President
--------------------------------
PAKISTAN WIRELESS HOLDINGS, LTD.
By: /s/ Aarti C. Gurnani
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
SIGNATURE PAGE TO STOCK OPTION AGREEMENT
<PAGE>
SUPPLEMENT TO SHARE PURCHASE AGREEMENT
THIS SUPPLEMENT TO SHARE PURCHASE AGREEMENT is made as of the 18th day
of August, 1997, by and between International Wireless Communications Holdings,
Inc., a Delaware corporation (the "Company"), and Continental Communications
Limited, a company established under the laws of the Republic of Ireland
("CCL").
RECITALS
WHEREAS, CCL has previously received 493,510 shares of IWCH common
stock pursuant to that certain Share Purchase Agreement between International
Wireless Communications Pakistan Limited and CCL, dated July 17, 1997; and
WHEREAS, IWCH and CCL wish to provide for an adjustment in the number
of shares of IWCH common stock ("IWCH Shares") that may be issued to CCL, and to
grant to CCL certain other rights as a stockholder of IWCH;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
1. BOARD OBSERVATION RIGHTS. A representative of CCL (the "CCL
Representative") shall have the right to be present at all duly convened
meetings of the Board of Directors of IWCH (the "Board"); PROVIDED, HOWEVER,
that (a) in the event the Board intends to discuss or vote upon any matter in
which CCL may have an interest or any matter that is subject to the
attorney-client privilege, the CCL Representative may be excluded from the
portion of the meeting at which such matter is discussed by the vote of a
majority of the directors present; (b) IWCH may exclude from any meeting of the
Board the CCL Representative unless both CCL and its representative shall have
executed and delivered to IWCH a nondisclosure agreement, in the form to be
provided by IWCH; and (c) the Chairman of the Board may exclude from a meeting
of the Board of Directors the CCL Representative if CCL or any affiliate of CCL
is, or has an interest in, a direct or indirect competitor of IWCH, from any
discussion of matters relating to the area of competition.
2. ADJUSTMENTS. IWCH covenants and agrees as follows:
2.1 If, within 18 months of the sale and purchase of the
Pakistan Mobile Communications Limited ("PMCL") shares held by CCL (the "CCL
Closing"), an initial underwritten public offering of IWCH shares is consummated
(the "IPO"), and the valuation of IWCH made in connection with the IPO is less
than US$300,000,000, then, upon the consummation of the IPO, IWCH will issue to
CCL additional IWCH Shares, which number shall be the difference between (x)
US$6,159,000, divided by the IPO price per IWCH Share (excluding any
underwriting or similar discounts), and (y) 493,510 (which number represents the
total number of IWCH Shares issued to CCL as of the CCL Closing).
<PAGE>
2.2 If, within 18 months of the CCL Closing, there is an IPO,
and the valuation of IWCH made in connection with the IPO is equal to or more
than US$300,000,000, then there shall be no adjustment made to the 493,510
IWCH Shares issued to CCL as of the CCL Closing.
2.3 If an IPO is not consummated within 18 months after the
CCL Closing, then, at the election of CCL, CCL shall have the right, by written
notice to IWCH, to:
(a) require IWCH to issue to CCL on the date that is
18 months after the CCL Closing, and on each anniversary of such date thereafter
until an IPO is consummated, 49,351 additional IWCH Shares; or
(b) require IWCH to file a registration statement
under the Securities Act of 1933, as amended (the "Act"), covering the
registration of the IWCH Shares issued to CCL. The Company shall, within ninety
(90) days of the receipt thereof, use all reasonable efforts to effect, as soon
as practicable, the registration under the Act of all IWCH Shares that CCL
requests to be registered.
(i) If CCL intends to distribute the IWCH Shares
covered by its request by means of an underwriting, it shall so advise IWCH as a
part of its request made pursuant to this subsection 2.3(b). In such event the
right of CCL to include the IWCH Shares in such registration shall be
conditioned upon CCL's participation in such underwriting. CCL shall enter into
an underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company (which underwriter or
underwriters shall be reasonably acceptable to CCL).
(ii) IWCH shall not be required to effect a
registration pursuant to this subsection 2.3(b):
A. in any particular jurisdiction in which IWCH
would be required to execute a general consent to service of process in
effecting such registration, unless IWCH is already subject to service in such
jurisdiction and may be required under the Act; or
B. after IWCH has effected one (1) registration
pursuant to this subsection 2.3(b), and such registration has been declared or
ordered effective; or
C. if IWCH shall furnish to CCL a certificate
signed by IWCH's Chief Executive Officer or Chairman of the Board stating that
in the good faith judgment of the Board of Directors of IWCH, it would be
seriously detrimental to IWCH and its stockholders for such registration
statement to be effected at such time, in which event IWCH shall have the right
to defer such filing for a period of not more than one hundred and twenty (120)
days after receipt of the request of CCL; provided that such right to delay a
request shall be exercised by IWCH not more than once in any twelve (12)-month
period; or
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D. until the first anniversary of the closing of
an IPO.
(iii) All expenses, other than underwriting discounts
and commissions, incurred in connection with registrations, filings or
qualifications pursuant to this subsection 2.3(b) and including (without
limitation) all registration, filing and qualification fees, printers' and
accounting fees, fees and disbursements of counsel for IWCH, shall be borne by
IWCH. Notwithstanding the foregoing, IWCH shall not be required to pay for any
expenses of any registration proceeding begun pursuant to this subsection 2.3(b)
if the registration request is subsequently withdrawn at the request of CCL.
(iv) It shall be a condition precedent to the
obligations of IWCH to take any action pursuant to this subsection 2.3(b) with
respect to the IWCH Shares that CCL shall furnish to IWCH such information
regarding itself, the IWCH Shares held by it, and the intended method of
disposition of such securities as shall be required to effect the registration
of CCL's IWCH Shares.
(v) If such registration statement is not filed
within six (6) months after the date of CCL's written notice to IWCH, CCL shall
have the right to sell its IWCH Shares to any third party purchaser for cash
consideration only.
(vi) If the net cash proceeds received by CCL from
any sale under subsection 2.3(b) above (net of reasonable costs and expenses
related to the sale of IWCH Shares) is less than US$6,159,000, then IWCH shall,
within five (5) business days after written notice from CCL, which notice shall
include supporting documentation, engage an appraiser to value IWCH. Within 10
days after the issuance of a report by the appraiser, based upon the valuation
in such report, IWCH shall issue warrants to CCL to purchase such number of
additional IWCH Shares with a value equivalent to the difference between
US$6,159,000 and such net cash proceeds. The valuation of such warrants shall
be determined in good faith by IWCH and shall be reasonably satisfactory to CCL.
2.4 If (x) an IPO is consummated after 18 months of the CCL
Closing, (y) CCL has exercised its rights under subsection 2.3(a) above, and (z)
the valuation of IWCH made in connection with the IPO is less than
US$300,000,000, then, upon the consummation of the IPO, IWCH will issue to CCL
additional IWCH Shares, which number shall be the difference between (i)
US$6,159,000, divided by the IPO price per IWCH Share (excluding any
underwriting or similar discounts) and (ii) 493,510 (which number represents the
number of IWCH Shares issued to CCL as of the CCL Closing).
2.5 If (x) an IPO is consummated after 18 months of the CCL
Closing, (y) CCL has exercised its rights under subsection 2.3(a) above, and (z)
the valuation of IWCH made in connection with the IPO is equal to or more than
US$300,000,000, then there shall be no adjustment made to the 493,510 IWCH
Shares issued to CCL as of the CCL Closing.
2.6 The valuation of IWCH in an IPO shall be calculated as the
IPO price per IWCH Share (excluding any underwriting or similar discounts)
multiplied by the sum
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<PAGE>
of (a) the number of IWCH Shares outstanding at the IPO closing, (b) the number
of IWCH Shares issuable upon the exercise of in the money options and warrants
to purchase IWCH Shares outstanding at the IPO closing and (c) the number of
IWCH Shares issuable at the IPO closing upon the exchange of exchangeable notes
of IWCH and Pakistan Wireless Holdings Limited outstanding at the IPO closing.
3. IPO LOCK-UP. CCL hereby agrees that it will not, without the
prior written consent of the managing underwriter, during the period commencing
on the date of the final prospectus relating to the IPO, and ending on the date
specified by IWCH and the managing underwriter (such period not to exceed one
hundred eighty (l80) days), (i) lend, offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any of the IWCH Shares or any securities
convertible into or exercisable or exchangeable for IWCH Shares (whether such
shares or any such securities are then owned by CCL or are thereafter acquired),
or (ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the IWCH
Shares, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of IWCH Shares or such other securities, in cash or
otherwise; provided that all directors, executive officers and five percent (5%)
or greater beneficial owners of IWCH Shares enter into similar agreements. The
underwriters in connection with the IPO are intended third party beneficiaries
of this subsection 2.3(b)(iv) and shall have the right, power and authority to
enforce the provisions hereof as though they were a party hereto. In order to
enforce the foregoing covenant, IWCH may impose stop-transfer instructions with
respect to the IWCH Shares until the end of such period.
4. INDEMNIFICATION. In the event any IWCH Shares are included in a
registration statement under subsection 2.3(b) above.
4.1 To the extent permitted by law, IWCH will indemnify and
hold harmless each holder of IWCH Shares ("Holder"), the partners or officers,
directors and shareholders of each Holder, legal counsel and accountants for
each Holder, any underwriter (as defined in the Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the meaning of
the Act or the Securities Exchange Act of 1934, as amended (the "1934 Act"),
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Act, the 1934 Act or any state securities
laws, insofar as such losses, claims, damages, or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by IWCH of the Act, the 1934 Act, any state securities laws
or any rule or regulation promulgated under the Act, the 1934 Act or any state
securities laws; and IWCH will reimburse each such Holder, underwriter or
controlling person for any legal or other expenses reasonably incurred by them
in connection with
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<PAGE>
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 4
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of IWCH
(which consent shall not be unreasonably withheld), nor shall IWCH be liable in
any such case for any such loss, claim, damage, liability, or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person; provided further, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus shall not inure to the
benefit of any Holder or underwriter, or any person controlling such Holder or
underwriter, from whom the person asserting any such losses, claims, damages or
liabilities purchased shares in the offering (the "Shares"), if a copy of the
prospectus (as then amended or supplemented if IWCH shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Holder or underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Shares to
such person, and if the prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability.
4.2 To the extent permitted by law, each selling Holder will
indemnify and hold harmless IWCH, each of its directors, each of its officers
who has signed the registration statement, each person, if any, who controls
IWCH within the meaning of the Act, legal counsel and accountants for IWCH, any
underwriter, any other Holder selling securities in such registration statement
and any controlling person of any such underwriter or other Holder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, the 1934 Act or any state
securities laws, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any person intended to be indemnified pursuant to this
Section 4, any legal or other expenses reasonably incurred in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 4
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder (which consent shall not be unreasonably withheld) provided, that, in no
event shall any indemnity under this Section 4 exceed the gross proceeds from
the offering received by such Holder.
4.3 Promptly after receipt by an indemnified party under this
Section 4 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 4, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented
5
<PAGE>
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
Section 4, but the omission so to deliver written notice to the indemnifying
party will not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 4.
4.4 If the indemnification provided for in this Section 4 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement.
4.5 Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
4.6 The obligations of IWCH and the Holders under this
Section 4 shall survive the completion of any offering of IWCH Shares in a
registration statement under subsection 2.3(b) above, and otherwise.
5. MISCELLANEOUS.
5.1 IWCH OBLIGATIONS. IWCH shall have no further
responsibilities or obligations with regard to the IWCH Shares owned or to be
acquired by CCL pursuant to the terms of this Agreement, other than those
explicitly set forth herein.
5.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
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<PAGE>
5.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York as applied to agreements among
New York residents entered into and to be performed entirely within New York.
5.4 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.5 TITLES AND SUBTITLES. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.6 NOTICES. Unless otherwise provided, any notice required
or permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified, two days
after deposit with an overnight courier service or five days after deposit with
the United States Post Office, by first class mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other parties.
5.7 EXPENSES. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
5.8 ENTIRE AGREEMENT: AMENDMENTS AND WAIVERS. This Agreement
(including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority of the IWCH Shares.
Any amendment or waiver effected in accordance with this paragraph shall be
binding upon each holder of any IWCH Shares, each future holder of all such IWCH
Shares, and IWCH.
5.9 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
5.10 AGGREGATION OF STOCK. All of the IWCH Shares held or
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By: /s/ Douglas S. Sinclair
--------------------------------------
Title: Executive Vice President
--------------------------------------
CONTINENTAL COMMUNICATIONS LIMITED
By: /s/ S.M.J. Ford
-----------------------------------------
Title: Director
--------------------------------------
<PAGE>
INTERNATIONAL WIRELESS COMMUNICATIONS HOLDINGS, INC.
SIXTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
As of August 18, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
1. Registration Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Request for Registration . . . . . . . . . . . . . . . . . . . . 3
1.3 Company Registration . . . . . . . . . . . . . . . . . . . . . . 5
1.4 Obligations of the Company . . . . . . . . . . . . . . . . . . . 5
1.5 Furnish Information. . . . . . . . . . . . . . . . . . . . . . . 7
1.6 Expenses of Demand Registration. . . . . . . . . . . . . . . . . 7
1.7 Expenses of Company Registration . . . . . . . . . . . . . . . . 7
1.8 Underwriting Requirements. . . . . . . . . . . . . . . . . . . . 7
1.9 Delay of Registration. . . . . . . . . . . . . . . . . . . . . . 8
1.10 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 8
1.11 Reports Under Securities Exchange Act of 1934. . . . . . . . . . 10
1.12 Form S-3 Registration. . . . . . . . . . . . . . . . . . . . . . 11
1.13 Assignment of Registration Rights. . . . . . . . . . . . . . . . 12
1.14 Limitations on Subsequent Registration Rights;
Registration Rights Agreement. . . . . . . . . . . . . . . . . . 12
1.15 "Market Stand-Off" Agreement . . . . . . . . . . . . . . . . . . 13
1.16 Termination of Registration Rights . . . . . . . . . . . . . . . 13
2. Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . 14
2.1 Delivery of Financial Statements . . . . . . . . . . . . . . . . 14
2.2 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Right of First Offer on Primary Sales. . . . . . . . . . . . . . 15
2.4 Restrictions on Sale or Other Disposition of Securities. . . . . 17
2.5 Right of First Offer on Certain Secondary Sales. . . . . . . . . 19
2.6 Board Representation . . . . . . . . . . . . . . . . . . . . . . 21
2.7 Observer Rights. . . . . . . . . . . . . . . . . . . . . . . . . 22
2.8 Co-Sale Rights . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9 Stock Purchases by Employees, Officers, Directors
and Consultants. . . . . . . . . . . . . . . . . . . . . . . . . 27
2.10 Additional Liquidity Rights. . . . . . . . . . . . . . . . . . . 27
2.11 Termination of Certain Covenants . . . . . . . . . . . . . . . . 28
2A Toronto Dominion Regulatory Compliance. . . . . . . . . . 28
2A.1 Violation of BHCA or SBIA . . . . . . . . . . . . . . . . 28
2A.2 SBIC Requirements . . . . . . . . . . . . . . . . . . . . 28
2A.3 Acquisition of Securities . . . . . . . . . . . . . . . . 29
2A.4 BHCA Issue, SBIC Issue and SBIC Requirements Defined. . . 29
3. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 30
3.2 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 30
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3.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.4 Titles and Subtitles . . . . . . . . . . . . . . . . . . . . . . 30
3.5 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.6 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.7 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . 31
3.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.9 Aggregation of Stock . . . . . . . . . . . . . . . . . . . . . . 31
3.10 Entire Agreement; Amendment; Waiver. . . . . . . . . . . . . . . 31
Schedule A Schedule of Investors
ii
<PAGE>
SIXTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS SIXTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT is made as
of the 18th day of August, 1997, by and among International Wireless
Communications Holdings, Inc., a Delaware corporation (the "Company"), and the
investors listed on SCHEDULE A hereto, each of which is herein referred to as an
"Investor."
RECITALS
WHEREAS, certain of the Investors (the "Existing Investors") hold
shares of the Company's Preferred Stock and/or shares of Common Stock issued
upon conversion thereof and/or other securities convertible or exchangeable into
the Company's Preferred Stock and possess registration rights, information
rights, rights of first offer, and other rights pursuant to the Fifth Amended
and Restated Investor Rights Agreement dated as of December 18, 1995, among the
Company and such Investors, as amended prior to the date hereof (as assigned to
and assumed by the Company pursuant to the Consent, Waiver, Amendment,
Assignment and Assumption Agreement executed by the Company, the "Prior
Agreement"); and
WHEREAS, certain of the Investors are lenders under the Loan Agreement
dated August 18, 1997 among the Company and the lenders named therein (the "IWCH
Loan Agreement") and under the Loan Agreement dated August 18, 1997 among
Pakistan Wireless Holdings Limited, a Mauritius Company ("PWH"), and the lenders
named therein (the "PWH Loan Agreement;" together with the IWCH Loan Agreement,
the "Loan Agreements"); and
WHEREAS, subject to certain terms and conditions, the Notes, as that
term is defined in the IWCH Loan Agreement (the "IWCH Notes") may be exchanged
for Series G-1 or Series G-2 Preferred Stock of the Company and the Notes, as
that term is defined in the PWH Loan Agreement (the "PWH Notes;" together with
the IWCH Notes, the "IWCH/PWH Notes") may be exchanged for shares of Series H-1
or Series H-2 Preferred Stock of the Company (the shares of Series G-1,
Series G-2, Series H-1 and Series H-2 Preferred Stock issuable upon exchange of
the IWCH/PWH Notes or the conversion of other shares of Series G-1, Series G-2,
Series H-1 or Series H-2 Preferred Stock being referred to as the "Series G/H
Preferred Shares"); and
WHEREAS, the Company has issued or may issue to certain of the
Investors the Warrants, as that term is defined in the IWCH Loan Agreement
(individually an "IWCH/PWH Warrant"; collectively, the "IWCH/PWH Warrants"); and
WHEREAS, the Company desires to grant certain information rights,
rights of first offer and other rights to holders of the Company's Preferred
and/or Common Stock issuable upon exchange or exercise of the IWCH/PWH Notes and
the IWCH/PWH Warrants or the conversion of the Series G/H Preferred Shares; and
<PAGE>
WHEREAS, the Existing Investors desire to amend and restate the Prior
Agreement and to accept the rights created pursuant hereto in lieu of the rights
granted to them under the Prior Agreement;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
1. REGISTRATION RIGHTS. The Company covenants and agrees as
follows:
1.1. DEFINITIONS. For purposes of this Agreement:
(a) The term "Act" means the Securities Act of 1933, as
amended.
(b) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(c) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.13 hereof. For purposes of this Agreement, the holders of
securities which are convertible or exchangeable into Registrable Securities, or
which are convertible or exchangeable into other securities which are
convertible or exchangeable into Registrable Securities, shall be treated as
Holders of such underlying Registrable Securities, and references to Registrable
Securities held by such holders shall include such underlying Registrable
Securities.
(d) The term "1934 Act" shall mean the Securities Exchange
Act of 1934, as amended.
(e) The term "register", "registered", and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document.
(f) The term "Registrable Securities" means (i) the Common
Stock of the Company ("Common Stock") issuable or issued upon conversion of the
Series B, Series C, Series D, and Series E Preferred Stock of the Company,
(ii) the Common Stock issuable or issued upon conversion of Preferred Stock of
the Company issuable or issued (A) upon exercise of the warrants issued to
Vanguard pursuant to that certain Series C Preferred Stock Purchase Agreement
dated as of February 24, 1994, as such warrants are amended and restated
pursuant to the Warrant Amendment Agreement dated as of July 31, 1995 (the
"Vanguard Warrant Shares"), (B) upon the exercise of warrants issued to certain
Investors pursuant to that certain Note and Warrant Purchase Agreement dated as
of May 6, 1994 (the "1994 Warrant Shares"), (C) upon exercise of warrants (the
"1995 Warrant Shares") issued to certain Investors pursuant to that certain
Securities Purchase Agreement dated as of July 12,
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1995 (the "Securities Purchase Agreement"), (D) upon exercise of warrants issued
to Vanguard pursuant to the Note and Warrant Purchase Agreement dated as of July
31, 1995 (the "Additional Vanguard Warrant Shares"), and (E) upon exercise of
warrants issued to Toronto Dominion Investments, Inc. or its Affiliates
(collectively, "Toronto Dominion"), pursuant to the Note and Warrant Purchase
Agreement (the "TD Purchase Agreement") and the Loan Agreement, each dated as of
August 14, 1995 (the "TD Warrant Shares", together with Vanguard Warrant Shares,
the 1994 Warrant Shares, the 1995 Warrant Shares, and the Additional Vanguard
Warrant Shares, the "Warrant Shares"), (iii) [intentionally left blank],
(iv) the Common Stock issuable or issued upon conversion of Preferred Stock
issuable or issued upon conversion of the two $900,000 notes issued to Vanguard
pursuant to that certain Note Purchase Agreement dated as of October 26, 1994,
as amended by the Amendment to Note Purchase Agreement dated as of July 12, 1995
between the Company and Vanguard (collectively, the "Vanguard Notes"), and
(v) Common Stock issued as (or issuable upon the conversion or exercise of any
warrant, right or other security that is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, the
shares referenced in (i) above, excluding in all cases, however, any Registrable
Securities sold by a person in a transaction in which the related rights under
this Section 1 are not assigned pursuant to Section 1.13.
(g) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2. REQUEST FOR REGISTRATION.
(a) If the Company shall receive at any time after the
earlier of (i) December 31, 1997, or (ii) six (6) months after the effective
date of the first registration statement for a public offering of securities of
the Company (other than a registration statement relating either to the sale of
securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan or a SEC Rule 145 transaction), a written request from
the Holders of at least forty percent (40%) of the Registrable Securities then
outstanding that the Company file a registration statement under the Act
covering the registration of at least forty percent (40%) of the Registrable
Securities then outstanding (or a lesser percent if the anticipated aggregate
offering price, net of underwriting discounts and commissions, would exceed
$2,500,000), then the Company shall:
(i) within twenty (20) days of the receipt thereof,
give written notice of such request to all Holders; and
(ii) use its best efforts to effect as soon as
practicable, and in any event within 60 days of the receipt of such request, the
registration under the Act of all Registrable Securities which the Holders
request to be registered, subject to the limitations of subsection 1.2(b),
within twenty (20) days of the mailing of such notice by the Company in
accordance with Section 3.5.
(b) If the Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made
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pursuant to subsection 1.2(a) and the Company shall include such information in
the written notice referred to in subsection 1.2(a). The underwriter will be
selected by the Company and shall be reasonably acceptable to holders of a
majority of the Registrable Securities then held by Initiating Holders. In such
event, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by holders of a majority of the
Registrable Securities then held by Initiating Holders and such Holder) to the
extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in
subsection 1.4(e)) enter into an underwriting agreement in usual and customary
form with the underwriter or underwriters selected for such underwriting.
Notwithstanding any other provision of this Section 1.2, if the underwriter
advises the Initiating Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the Initiating
Holders shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company held by each Holder; provided, however, that, except as provided in
that certain Amended and Restated Registration Rights Agreement dated as of
August 18, 1997 among the Company and the holders of "Registrable Securities" as
defined therein (the "Registration Rights Agreement"), the number of shares of
Registrable Securities to be included in such underwriting shall not be reduced
unless all other securities are first entirely excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this Section
1.2, a certificate signed by the Chief Executive Officer of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it
would be seriously detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, the Company shall have the right to defer
taking action with respect to such filing for a period of not more than 120 days
after receipt of the request of the Initiating Holders; provided, however, that
the Company may not utilize this right more than once in any twelve-month
period.
(d) In addition, the Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 1.2:
(i) After the Company has effected two registrations
pursuant to this Section 1.2 and such registrations have been declared or
ordered effective;
(ii) During the period starting with the date sixty
(60) days prior to the Company's good faith estimate of the date of filing of,
and ending on a date one hundred eighty (180) days after the effective date of,
a registration subject to Section 1.3 hereof; provided that the Company is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or
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(iii) If the Initiating Holders propose to dispose of
shares of Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 1.12 below.
1.3. COMPANY REGISTRATION. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holders) any of its
stock or other securities under the Act in connection with the public offering
of such securities solely for cash (other than a registration relating solely to
the sale of securities to participants in a Company stock plan, a registration
on any form which does not include substantially the same information as would
be required to be included in a registration statement covering the sale of the
Registrable Securities or a registration in which the only Common Stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered), the Company shall, at such time, promptly give each
Holder written notice of such registration. Upon the written request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 3.5, the Company shall, subject to the provisions of
Section 1.8, cause to be registered under the Act all of the Registrable
Securities that each such Holder has requested to be registered.
1.4. OBLIGATIONS OF THE COMPANY. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for a period of up to one hundred twenty
(120) days or until the distribution contemplated in the Registration Statement
has been completed; provided, however, that (i) such 120-day period shall be
extended for a period of time equal to the period the Holder refrains from
selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 120-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Act, permits an offering on a continuous or delayed
basis, and provided further that applicable rules under the Act governing the
obligation to file a post-effective amendment permit, in lieu of filing a post-
effective amendment which (I) includes any prospectus required by Section
10(a)(3) of the Act or (II) reflects facts or events representing a material or
fundamental change in the information set forth in the registration statement,
the incorporation by reference of information required to be included in (I) and
(II) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the 1934 Act in the registration statement.
(b) Prepare and file with the SEC such amendments and
supplements to such
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registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration.
(i) Furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is
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customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.
1.5. FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.6. EXPENSES OF DEMAND REGISTRATION. All expenses other than
underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printing
and accounting fees, fees and disbursements of counsel for the Company
(including fees and disbursements of counsel for the Company in its capacity as
counsel to the selling Holders hereunder; if Company counsel does not make
itself available for this purpose, the Company will pay the reasonable fees and
disbursements of one counsel for the selling Holders selected by them) shall be
borne by the Company; provided, however, that the Company shall not be required
to pay for any expenses of any registration proceeding begun pursuant to Section
1.2 if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered (in which
case all participating Holders shall bear such expenses on a pro rata basis
based on the number of Registrable Securities requested to be registered),
unless the Holders of a majority of the Registrable Securities requested to be
registered agree to forfeit their right to one demand registration pursuant to
Section 1.2; provided further, however, that if at the time of such withdrawal,
the Holders have learned of a material adverse change in the condition,
business, or prospects of the Company from that known to the Holders at the time
of their request and have withdrawn the request with reasonable promptness
following disclosure by the Company of such material adverse change, then the
Holders shall not be required to pay any of such expenses and shall retain their
rights pursuant to Section 1.2.
1.7. EXPENSES OF COMPANY REGISTRATION. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder, including (without limitation) all
registration, filing and qualification fees, printing and accounting fees
relating or apportionable thereto and the fees and disbursements of counsel for
the Company (including fees and disbursements of counsel for the Company in its
capacity as counsel to the selling Holders hereunder; if Company counsel does
not make itself available for this purpose, the Company will pay the reasonable
fees and disbursements of one counsel for the selling Holders selected by them),
but excluding underwriting discounts and commissions relating to Registrable
Securities.
1.8. UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be
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required under Section 1.3 to include any of the Holders' securities in such
underwriting unless they accept the terms of the underwriting as agreed upon
between the Company and the underwriters selected by it (or by other persons
entitled to select the underwriters), and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders)
but in no event, except as otherwise required by the Registration Rights
Agreement, shall (i) the amount of securities of the selling Holders included in
the offering be reduced below thirty percent (30%) of the total amount of
securities included in such offering, unless such offering is the initial public
offering of the Company's securities in which case the selling stockholders may
be excluded entirely if the underwriters make the determination described above
and no other stockholder's securities are included or (ii) notwithstanding (i)
above, any shares being sold by a stockholder exercising a demand registration
right similar to that granted in Section 1.2 be excluded from such offering.
For purposes of the preceding parenthetical concerning apportionment, for any
selling stockholder which is a holder of Registrable Securities and which is a
partnership or corporation, the partners, retired partners and stockholders of
such holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single "selling stockholder", and any pro-rata reduction with
respect to such "selling stockholder" shall be based upon the aggregate amount
of shares carrying registration rights owned by all entities and individuals
included in such "selling stockholder", as defined in this sentence.
1.9. DELAY OF REGISTRATION. No Holder shall have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.10. INDEMNIFICATION. In the event any Registrable
Securities are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, any underwriter (as defined in the Act)
for such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue statement or alleged
untrue statement of a material fact contained in such
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registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, any
state securities law or any rule or regulation promulgated under the Act, the
1934 Act or any state securities law; and the Company will pay to each such
Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this subsection 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder
will indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, the 1934 Act or other federal or state law,
insofar as such losses, claims, damages, or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this subsection 1.10(b), in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this subsection
1.10(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; provided, that,
in no event shall any indemnity under this subsection 1.10(b) exceed the gross
proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under
this Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such
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indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve such indemnifying party of
any liability to the indemnified party under this Section 1.10, but the omission
so to deliver written notice to the indemnifying party will not relieve it of
any liability that it may have to any indemnified party otherwise than under
this Section 1.10.
(d) If the indemnification provided for in this
Section 1.10 is held by a court of competent jurisdiction to be unavailable to
an indemnified party with respect to any loss, liability, claim, damage, or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amount
paid or payable by such indemnified party as a result of such loss, liability,
claim, damage, or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) The obligations of the Company and Holders under this
Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
1.11. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a
view to making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, at all times after ninety
(90) days after the effective date of the first registration statement filed by
the Company for the offering of its securities to the general public;
(b) take such action, including the voluntary registration
of its Common Stock under Section 12 of the 1934 Act, as is necessary to enable
the Holders to utilize Form S-3 for the sale of their Registrable Securities,
such action to be taken as soon as practicable after the end of the fiscal year
in which the first registration statement filed by the Company for the offering
of its securities to the general public is declared effective;
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(c) file with the SEC in a timely manner all reports and
other documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after ninety (90) days after the effective date of the first
registration statement filed by the Company), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested in
availing any Holder of any rule or regulation of the SEC which permits the
selling of any such securities without registration or pursuant to such form.
1.12. FORM S-3 REGISTRATION. In case the Company shall
receive from any Holder or Holders of at least 20% in the aggregate of
Registrable Securities a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice of the proposed
registration, and any related qualification or compliance, to all other Holders;
and
(b) as soon as practicable, effect such registration and
all such qualifications and compliances as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any other
Holder or Holders joining in such request as are specified in a written request
given within 15 days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this section 1.12: (1) if
Form S-3 is not available for such offering by the Holders; (2) if the Holders,
together with the holders of any other securities of the Company entitled to
inclusion in such registration, propose to sell Registrable Securities and such
other securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $250,000; (3) if the
Company shall furnish to the Holders a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company and its
stockholders for such Form S-3 registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement for a period of not more than 60 days after receipt of
the request of the Holder or Holders under this Section 1.12; provided, however,
that the Company shall not utilize this right more than once in any twelve month
period; or (4) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to service of
process in effecting such registration, qualification or compliance.
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(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to Section 1.12, including (without limitation)
all registration, filing, qualification, printer's and accounting fees and the
reasonable fees and disbursements of counsel for the selling Holder or Holders
and counsel for the Company, but excluding any underwriters' discounts or
commissions associated with Registrable Securities, shall be borne by the
Company, unless the Company has within the 12 month period preceding the date of
such request paid the expenses incurred in connection with a registration
pursuant to Section 1.12, in which case the expenses shall be borne pro rata by
the Holder or Holders participating in the Form S-3 registration. Registrations
effected pursuant to this Section 1.12 shall not be counted as demands for
registration or registrations effected pursuant to Sections 1.2 or 1.3,
respectively.
1.13. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause
the Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities, provided: (a) the transferee or assignee receives
at least 10,000 shares of Registrable Securities (subject to adjustment for
stock splits, stock dividends and the like) in the transfer of such securities;
(b) the Company is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being assigned;
(c) such transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement, including without limitation the
provisions of Section 1.15 below; and (d) such assignment shall be effective
only if immediately following such transfer the further disposition of such
securities by the transferee or assignee is restricted under the Act.
1.14. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS;
REGISTRATION RIGHTS AGREEMENT. From and after the date of this Agreement, the
Company shall not, without the prior written consent of the Holders of a
majority of the outstanding Registrable Securities, enter into any agreement
with any holder or prospective holder of any securities of the Company which
would allow such holder or prospective holder (a) to include such securities in
any registration filed under Section 1.2 hereof, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of his securities will
not reduce the amount of the Registrable Securities of the Holders which is
included or (b) to make a demand registration which could result in such
registration statement being declared effective prior to the earlier of either
of the dates set forth in subsection 1.2(a) or within one hundred twenty
(120) days of the effective date of any registration effected pursuant to
Section 1.2. Notwithstanding anything herein to the contrary, the holders of
Registrable Securities acknowledge the terms and provisions of the Registration
Rights Agreement and agree that to the extent that this Agreement conflicts in
any respect with the Registration Rights Agreement, the terms and provisions of
the Registration Rights Agreement shall govern in all respects, including,
without limitation, the terms and provisions of Sections 2, 3, and 12 of the
Registration Rights Agreement governing the priorities of inclusion of
securities of the Company in a registration, whether such registration is by the
Company for
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its own account or on behalf of any security holder of the Company (including
the Holders) exercising a demand or incidental registration right.
1.15. "MARKET STAND-OFF" AGREEMENT. Each Investor hereby
agrees that, during the period of duration specified by the Company and an
underwriter of common stock or other securities of the Company, following the
date of the first sale to the public pursuant to a registration statement of the
Company filed under the Act, it shall not, to the extent requested by the
Company and such underwriter, directly or indirectly sell, offer to sell,
contract to sell (including, without limitation, any short sale), grant any
option to purchase or otherwise transfer or dispose of (other than to donees who
agree to be similarly bound) any securities of the Company held by it at any
time during such period except common stock included in such registration;
provided, however, that:
(a) such agreement shall be applicable only to the first
such registration statement of the Company which covers common stock (or other
securities) to be sold on its behalf to the public in an underwritten offering;
(b) all officers and directors of the Company and all other
persons with registration rights (whether or not pursuant to this Agreement)
enter into similar agreements;
(c) such market stand-off time period shall not exceed one
hundred and twenty (120) days; and
(d) such agreement shall not preclude transfer in a private
transaction to an institutional buyer who agrees to be bound by such agreement.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of each
Investor (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
Notwithstanding the foregoing, the obligations described in this
Section 1.15 shall not apply to a registration relating solely to employee
benefit plans on Form S-l or Form S-8 or similar forms which may be promulgated
in the future, or a registration relating solely to a SEC Rule 145 transaction.
1.16. TERMINATION OF REGISTRATION RIGHTS. The right of any
Holder to request registration or inclusion in any registration pursuant to
Section 1.3 shall terminate on the closing of the first Company-initiated
registered public offering of Common Stock of the Company if all shares of
Registrable Securities held or entitled to be held upon conversion by such
Holder may immediately be sold under Rule 144 during any 90-day period, or on
such date after the closing of the first Company-initiated registered public
offering of Common Stock of the Company as all shares of Registrable Securities
held or entitled to be held upon conversion by such Holder may immediately be
sold under Rule 144 during any 90-day period.
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2. COVENANTS OF THE COMPANY
2.1. DELIVERY OF FINANCIAL STATEMENTS. The Company shall deliver
to each Investor:
(a) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, an income statement
for such fiscal year, a balance sheet of the Company and statement of
stockholder's equity as of the end of such year, and a statement of cash flows
for such year, including notes thereto, such year-end financial reports to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles ("GAAP"), and audited and certified by independent public accountants
of nationally recognized standing selected by the Company;
(b) within thirty (30) days of the end of each month, an
unaudited income statement, a balance sheet and a statement of cash flows for
and as of the end of such month, in reasonable detail;
(c) as soon as practicable, but in any event sixty
(60) days prior to the end of each fiscal year, a budget and business plan for
the next fiscal year, prepared on a monthly basis, including income statements,
balance sheets and statements of cash flows for such months and, as soon as
prepared, any other budgets, including internally prepared quarterly budget
forecasts or revised budgets prepared by the Company;
(d) within fifteen (15) days of the end of each calendar
quarter, a quarterly operations reports summarizing activities during preceding
quarter;
(e) with respect to the financial statements called for in
subsection (b) of this Section 2.1, an instrument executed by the Chief
Financial Officer or President of the Company and certifying that such financial
statements were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company and
its results of operation for the period specified, subject to year-end audit
adjustment; and
(f) such other information relating to the financial
condition, business, prospects or corporate affairs of the Company as the
Investor or any assignee of the Investor may from time to time request,
provided, however, that the Company shall not be obligated under this subsection
(f) or any other subsection of Section 2.1 to provide information which it deems
in good faith to be a trade secret or similar confidential information.
2.2. INSPECTION. The Company will also permit each Investor and
its authorized representatives, at all reasonable times and as often as
reasonably requested, to visit and inspect, at the expense of such Investor, any
of the properties of the Company, to inspect its books and records and to make
extracts therefrom, and to discuss the affairs, finances and accounts of the
Company with its officers and consult with and advise the officers of the
Company as to the management of the Company, provided that the Investors shall
maintain the
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confidentiality of any proprietary information of the Company thereby obtained
and provided further that the Investors shall conduct all such inspections in a
manner that is not disruptive to the employees or operations of the Company.
2.3. RIGHT OF FIRST OFFER ON PRIMARY SALES. Subject to the terms
and conditions specified in this Section 2.3, the Company hereby grants to each
Major Investor (as hereinafter defined) a right of first offer with respect to
future sales by the Company of its Securities (as hereinafter defined). For
purposes of this Section 2.3, a Major Investor shall mean (i) any Investor who
is a Holder of at least 10% of either the Registrable Securities or the Other
Registrable Securities (as defined below) initially acquired by such Investor,
but in any event not less than 4000 shares of either the Registrable Securities
or the Other Registrable Securities and (ii) any person who acquires at least
10% in the aggregate of any of the Series B, Series C, Series D, Series E,
Series F, Series G or Series H Preferred Stock (or the Common Stock issued or
issuable upon conversion thereof) outstanding as of the date hereof. For
purposes of this Agreement, the term "Other Registrable Securities" and the term
"Holder" as used in relation thereto shall have the meanings given to the terms
"Registrable Securities" and "Holder" in the Registration Rights Agreement, and
the term "Affiliates" shall have the meaning given to such term in Section
2.4(e) below. For purposes of this Section 2.3, Investor includes any general
partners and Affiliates of an Investor. An Investor shall be entitled to
apportion the right of first offer hereby granted it among itself and its
partners and affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock or any debt securities ("Securities"), the Company shall first make an
offering of such Securities to each Major Investor in accordance with the
following provisions:
(a) The Company shall deliver a notice by certified mail
("Section 2.3 Notice") to each Major Investor stating (i) its bona fide
intention to offer such Securities, (ii) the number of such Securities to be
offered, and (iii) the price and terms, if any, upon which it proposes to offer
such Securities.
(b) By written notification received by the Company within
twenty (20) calendar days after receiving the Section 2.3 Notice, each Major
Investor may elect to purchase or obtain, at the price and on the terms
specified in the Section 2.3 Notice, up to that portion of such Securities which
equals the total number of Securities multiplied by a fraction, (a) the
numerator of which is the sum of the number of Registrable Securities referred
to in clauses (i) and (iv) of Section 1.1(f) and the number of Other Registrable
Securities then held by such Major Investor, and (b) the denominator of which is
the total number of shares of Common Stock then outstanding (assuming full
conversion of all then outstanding securities that are convertible into and
exchangeable and exercisable for shares of Common Stock of the Company). The
Company shall promptly, in writing, inform each Major Investor which purchases
all of the Securities available to it under this Section 2.3 ("Fully Exercising
Investor") of any other Major Investor's failure to do likewise. During the ten
(10)-day period commencing after receipt of such information, each Fully
Exercising Investor shall be entitled to purchase up
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<PAGE>
to that portion of the Securities for which Major Investors were entitled to
subscribe but which were not subscribed for by the Major Investors which is
equal to the total number of unsubscribed Securities multiplied by a fraction,
(a) the numerator of which is the sum of the number of Registrable Securities
referred to in clauses (i) and (iv) of Section 1.1(f) and the number of Other
Registrable Securities, as the case may be, then held by such Fully Exercising
Investor, and (B) the denominator of which is the total number of Registrable
Securities referred to in clauses (i) and (iv) of Section 1.1(f) and the number
of Other Registrable Securities then held by all Fully Exercising Investors who
wish to purchase some of the unsubscribed shares.
(c) If all Securities which Investors are entitled to
purchase pursuant to subsection 2.3(b) are not elected to be purchased as
provided in subsection 2.3(b) hereof, the Company may, during the ninety (90)-
day period following the expiration of the period provided in subsection 2.3(b)
hereof, offer the remaining unsubscribed portion of such Securities to any
person or persons at a price not less than, and upon terms no more favorable to
the offeree than those specified in the Section 2.3 Notice. If the Company does
not enter into an agreement for the sale of the Securities within such period,
or if such agreement is not consummated within thirty (30) days of the execution
thereof, the right provided hereunder shall be deemed to be revived and such
Securities shall not be offered unless first reoffered to the Major Investors in
accordance herewith.
(d) The right of first offer in this paragraph 2.3 shall
not be applicable (i) to the issuance or sale of up to 2,811,526 shares of
Common Stock (or such additional number of shares of Common Stock as may be
approved in writing by holders of a majority of the number of outstanding
Registrable Securities and holders of a majority of the Other Registrable
Securities at the time of such approval) (in each case, as appropriately
adjusted for any stock dividends, contributions, splits, reclassifications or
the like) to officers, directors and employees of and consultants to the Company
for the primary purpose of soliciting or retaining their services, provided each
such person executes an agreement, pursuant to which such person agrees to
resell to the Company at the original purchase price thereof all shares of the
Company's Common Stock that are not vested on the date of termination of such
employee's term of service with the Company and not to transfer any unvested
shares of the Company's Common Stock to any person except to members of his or
her immediate family or to a trust for the benefit of members of his or her
immediate family, or (ii) to or after consummation of a Threshold Public
Offering (as defined in the Amended and Restated Certificate of Incorporation of
the Company), (iii) to the issuance of securities pursuant to the conversion or
exercise of convertible or exercisable securities (including the Warrant Shares
and the Series G/H Preferred Shares and the Common Stock issuable upon
conversion thereof and upon exercise of the IWCH/PWH Warrants), (iv) to the
issuance of securities in connection with a bona fide business acquisition of or
by the Company, whether by merger, consolidation, sale of assets, sale or
exchange of stock or otherwise, (v) to the issuance of stock, warrants or other
securities or rights to persons or entities with which the Company has business
relationships provided such issuances are for other than primarily equity
financing purposes (provided that no more than 1% of the total number of shares
of Common Stock then outstanding (assuming full conversion of all then
outstanding convertible securities of the Company) may be excluded from the
right of first
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offer pursuant to this clause (v) during any twelve (12)-month period), and
(vi) to the issuance of Securities upon conversion of the Vanguard Notes and
exchange of the IWCH/PWH Notes.
(e) The right of first offer set forth in this Section 2.3
may not be assigned or transferred, except that (i) such right is assignable by
each Holder and each Holder (within the meaning of the Registration Rights
Agreement) of Other Registrable Securities (an "Other Holder") to any wholly
owned subsidiary or parent of, or to any corporation or entity that is, within
the meaning of the Act, controlling, controlled by or under common control with,
any such Holder or Other Holder, and (ii) such right may be transferred to a
third party who buys (x) at least 40,000 shares of the Registrable Securities or
Other Registrable Securities (subject to adjustment for stock splits, stock
dividends and the like) or (y) all shares held by an Investor.
2.4. RESTRICTIONS ON SALE OR OTHER DISPOSITION OF SECURITIES.
(a) No Investor shall, either directly or indirectly, sell, assign, mortgage,
hypothecate, transfer, pledge, create a security interest in or lien upon,
encumber, give, place in trust, or otherwise voluntarily or involuntarily
dispose of (collectively hereinafter sometimes referred to as "Transfer") any of
the shares of Capital Stock (as defined in the Securities Purchase Agreement (as
defined in the Registration Rights Agreement)) then owned or controlled by such
party except in accordance with Section 2.4(b), 2.4(d), 2.4(f), 2.5 or 2.8. No
Transfer of any shares of Capital Stock in violation of the provisions of this
Agreement shall be made or recorded on the books of the Corporation and any such
purported transfer shall be void and of no force or effect.
(b) Notwithstanding anything to the contrary contained in
this Agreement, any Investor shall have the right at any time to Transfer any of
its shares of Capital Stock of the Company to any Affiliate, upon such terms as
may be agreed upon by such party and its transferee; PROVIDED, HOWEVER, that
(i) any such Transfer shall be made in compliance with the Securities Act and
applicable state securities laws, or pursuant to an exemption therefrom, and
(ii) any such transferee shall (A) acquire the shares so transferred subject to
all the terms and conditions of this Agreement, (B) shall agree in writing, at
the time of the Transfer, to be bound by all of the provisions of this Agreement
which would be applicable to the Investor if it continued to own the shares so
transferred, and (C) shall be an "accredited investor" within the meaning of
Regulation D under the Securities Act. In addition to and subject to compliance
with the foregoing, Electra Investment Trust P.L.C. ("EIT") and Electra
Associates, Inc. (collectively, "Electra"), shall have the right to Transfer any
of its shares of Capital Stock of the Company to Electra Fleming Equity Partners
(provided that at the time of such Transfer such entity is an Affiliate of EIT).
Notwithstanding anything to the contrary in this Agreement, each Investor other
than a Section 2.5 Stockholder (as defined below) shall be permitted to Transfer
such Investor's shares of Capital Stock of the Company, subject only to
compliance with clauses (i) and (ii) of the proviso to the first sentence of
this Section 2.4(b). Notwithstanding anything to the contrary contained in this
Agreement, Toronto Dominion Investments, Inc. ("Toronto Dominion") shall have
the unrestricted right to assign or transfer any of its shares of Capital Stock
of the Company to an indirect or direct wholly or majority owned subsidiary of
the ultimate parent of Toronto Dominion including, without limitation, a
subsidiary established as (or which is expected by Toronto Dominion to become) a
small business investment company pursuant to the Small Business Investment Act
of 1958, as amended from time to time, subject to
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compliance with clauses (i) and (ii) of the proviso to the first sentence of
this Section 2.4(b). Notwithstanding anything to the contrary contained in this
Agreement, Vanguard shall have the right at any time to Transfer any shares of
Capital Stock of the Company (whether now owned or hereafter acquired by
Vanguard) to the Vanguard Lenders (as defined below) pursuant to that certain
Amended and Restated Subsidiary Pledge Agreement dated as of December 23, 1994
between Vanguard and Toronto Dominion (Texas), Inc., as Collateral Agent, as
amended, subject to and in accordance with the Fourth Amended and Restated
Investor Rights Agreement dated as of July 31, 1995, among the Company and the
investors name therein (the "Fourth Amended and Restated Investor Rights
Agreement") and, Vanguard Lenders shall have the right to Transfer any such
shares acquired upon the exercise of their rights under such Amended and
Restated Subsidiary Pledge Agreement subject to and in accordance with the
Fourth Amended and Restated Investor Rights Agreement, in each case as if the
Prior Agreement were in full force and effect on the date of Transfer.
"Vanguard Lenders" shall have the meaning given to the term "Lenders" in that
certain Amended and Restated Loan Agreement dated as of December 23, 1994 among
Vanguard, the Lenders, and the other parties thereto. Any Transfer under this
Section 2.4(b) shall not be subject to the provisions of Section 2.5.
(c) In the event of any Transfer in accordance with the
provisions of Section 2.4(b), prompt written notice of the Transfer shall be
delivered by the Transferor to the Corporation, and, in the case of any Transfer
pursuant to Section 2.4 hereof, references herein to the Investor shall include,
from and after the date of such permitted transfer, each such permitted
transferee (transferees acquiring such shares pursuant to Section 2.4(b) are
hereinafter sometimes referred to as "Permitted Transferees").
(d) For so long as any shares of Series F Preferred Stock
shall remain outstanding, none of John D. Lockton, Hugh B. L. McClung, Douglas
S. Sinclair, Samuel Endy, Patrick Ciganer, or James Dixon (collectively,
"Management") may Transfer any Capital Stock of the Company owned at any time by
such individual. The foregoing transfer restrictions shall not (i) apply to any
member of Management (other than a director of the Company) who owns 20,000 or
fewer shares of Capital Stock of the Company or (ii) prevent any member of
Management (other than a director of the Company) who as of the date of this
Agreement owns 20,000 or fewer shares of Capital Stock of the Company and who
hereafter owns more than 20,000 shares of Capital Stock of the Company from
Transferring up to 20,000 shares of Capital Stock of the Company.
(e) For purposes of this Agreement, the term "Affiliate"
means, (i) with respect to any person, any other person (A) which directly or
indirectly of record or beneficially owns or holds fifty percent (50%) or more
of the equity interest of such person, or (B) fifty percent (50%) or more of the
equity interest which is owned or held, directly or indirectly, of record or
beneficially, by such person and (ii) with respect to any person that is an
investment fund, any other person which is an investment fund and which has as
its investment managers or adviser, the same investment manager or adviser as
such a person or an investment manager or adviser a majority of the individual
investment professionals of which are the same as the individual investment
professionals of the investment manager or adviser of such other person.
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(f) Prior to the earlier of the second anniversary of the
date of this Agreement and the date on which any shares of Series F Preferred
Stock no longer remain outstanding, except as set forth in Section 2.4(b) above,
neither Vanguard nor any of its Affiliates may Transfer any of its Capital Stock
of the Company unless (i) immediately following such Transfer Vanguard and its
Affiliates collectively own not less than 30% of the then issued and outstanding
shares of Capital Stock of the Company and (ii) the consideration per share
received by Vanguard or such Affiliate of Vanguard, as the case may be, with
respect to such Transfer equals or exceeds 9.375 per share (as appropriately
adjusted for stock splits, stock dividends, combinations and other
recapitalizations).
2.5. RIGHT OF FIRST OFFER ON CERTAIN SECONDARY SALES. Subject to
the terms and conditions specified in this Section 2.5, each Investor who, as of
the date of this Agreement or hereafter, holds at least 100,000 shares of
Registrable Securities referred to in clauses (i) and (iv) of Section 1.1(f)
and/or Other Registrable Securities (as appropriately adjusted for any stock
dividends, contributions, splits, reclassifications or the like) (individually a
"Section 2.5 Stockholder," and collectively the "Section 2.5 Stockholders"),
hereby grants to each other Section 2.5 Stockholder (but excluding each holder
of Series A Preferred Stock) (individually a "Section 2.5 Rights Holder," and
collectively the "Section 2.5 Rights Holders") a right of first offer with
respect to future sales of Securities by such Section 2.5 Stockholder.
Notwithstanding any other provision of this Agreement, a Section 2.5
Stockholder; (i) includes any general partners and Affiliates of such Section
2.5 Stockholder; and (ii) excludes each Investor listed on SCHEDULE 1 attached
hereto, provided that each such Investor shall be excluded only for so long as
such Investor and its Affiliates own in the aggregate in excess of 800,000
shares of the Capital Stock of the Company (as appropriately adjusted for any
stock dividends, contributions, splits, reclassifications or the like). The
Section 2.5 Stockholder, shall be entitled to a portion of the right of first
offer hereby granted it among itself and its partners and Affiliate in such
proportions as it deems appropriate.
Each time a Section 2.5 Stockholder (an "Initiating Section 2.5
Stockholder") proposes to offer any Securities, except as provided in
Section 2.4(b) above, the Section 2.5 Stockholder shall first make an offering
of such shares to each other Section 2.5 Rights Holder in accordance with the
following provisions:
(a) The Initiating Section 2.5 Stockholder shall deliver a
written notice by certified mail ("Section 2.5 Notice") to the Section 2.5
Rights Holders stating (i) its bona fide intention to offer such Securities,
(ii) the number of Securities to be offered ("Section 2.5 Shares") and (iii) the
price and terms, if any, upon which it proposes to offer the Section 2.5 Shares.
(b) By written notification received by the Initiating
Section 2.5 Stockholder within ten (10) business days after receiving the
Section 2.5 Notice, each Section 2.5 Rights Holder may elect to purchase or
obtain, at the price and on the terms specified in the Section 2.5 Notice, up to
that number of the Section 2.5 Shares equal to the product of the total number
of Section 2.5 Shares multiplied by a fraction (A) the numerator of which is the
sum of the number of Registrable Securities referred to in clauses (i) and (iv)
of Section 1.1(f)
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and the number of Other Registrable Securities, as the case may be, then held by
such Section 2.5 Rights Holder and (B) the denominator of which is the total
number of shares of Common Stock then outstanding (assuming full conversion of
all then outstanding securities that are convertible into and exchangeable and
exercisable for shares of Common Stock of the Company). The Initiating Section
2.5 Stockholder shall promptly, in writing, inform each Section 2.5 Rights
Holder which purchases all of the Section 2.5 Shares available to it ("Fully
Exercising Section 2.5 Rights Holder") of any other Section 2.5 Rights Holder's
failure to do likewise. During the ten (10) business day period commencing
after receipt of such information, each Fully Exercising Section 2.5 Rights
Holder shall be entitled to purchase up to that portion of the Section 2.5
Shares that the Section 2.5 Rights Holders were entitled to subscribe but which
were not subscribed for by the Section 2.5 Rights Holders which is equal to the
proportion that the sum of the number of Registrable Securities referred to in
clauses (i) and (iv) of Section 1.1(f) and the number of Other Registrable
Securities then held, by such Fully Exercising Section 2.5 Rights Holder bears
to the sum of the number of Registrable Securities referred to in clauses (i)
and (iv) of Section 1.1(f) and the number of Other Registrable Securities then
held, by all Fully Exercising Section 2.5 Rights Holders who wish to purchase
some of the unsubscribed Securities.
(c) If all of the Section 2.5 Shares which Section 2.5
Rights Holders are entitled to purchase pursuant to subsection 2.5(b) hereof are
not elected to be purchased as provided in such subsection and if such purchases
have not been consummated within thirty (30) days of the expiration of the
periods provided in such subsection 2.5(b), the Initiating Section 2.5
Stockholder may, during the sixty (60)-day period following the expiration of
the period provided in such subsection 2.5(b), offer the remaining unsubscribed
portion of such Section 2.5 Shares to the offeree at a price not less than, and
upon terms more favorable to the offeree than those specified in the Section 2.5
Notice. If the Initiating Section 2.5 Stockholder does not enter into an
agreement for the sale of such Section 2.5 Shares within such period, or if such
agreement is not consummated within the ninety (90)-day period following the
expiration of the period provided in such subsection 2.5(b), the right provided
herein shall be deemed to be revived in such Section 2.5 Shares shall not be
offered unless first reoffered to the Non-Initiating Section 2.5 Stockholders in
accordance herewith.
(d) The Company may, at its discretion, cause any
additional purchaser of Capital Stock of the Company to agree to comply with the
provisions of this Section 2.5 as a Section 2.5 Stockholder.
(e) Notwithstanding the foregoing, the provisions of this
Section 2.5 shall not apply to the sale of any Securities (i) to the public
pursuant to a registration statement filed with, and declared effective by, the
SEC under the Act or pursuant to Rule 144 or 701 under the Act or (ii) to the
Company.
Notwithstanding any other provision of this Agreement, each of Mitsui
& Co. Ltd. and its Affiliates and Mitsubishi Corporation and its Affiliates
(individually, a "Section 2.5A Stockholder;" collectively, the "Section 2.5A
Stockholders") may, at its sole
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discretion, elect not to be a Section 2.5 Stockholder for purposes of this
Agreement if all of the following conditions are satisfied:
(i) the Company shall acquire a direct or indirect
interest in a United States PCS License ("License") or an entity that holds a
License;
(ii) at the time of such acquisition by the Company,
such Section 2.5A Stockholder holds a direct or indirect interest in a License
or an entity that holds a License;
(iii) as a result of such acquisition by the Company,
such Section 2.5A Stockholder would violate applicable United States federal or
state communications laws, including the United States Federal Communications
Act, or the rules and regulations thereunder, by continuing to hold both its
equity interest in the Company and a direct or indirect interest in a License or
an entity that holds a License; and
(iv) such Section 2.5A Stockholder notifies the Company
within sixty days after receiving notice from the Company that the Company has
acquired a direct or indirect interest in a License or an entity that holds a
License.
2.6. BOARD REPRESENTATION. (a) [intentionally left blank]
(b) From and after such time as the criteria set forth in
Section V.B.5(b) of the Company's Amended and Restated Certificate of
Incorporation with respect to the election of directors by the Series F Holders
are no longer satisfied, for so long as 20% of the Series F Conversion Shares
(as defined below) are held by Series F Holders, each Investor covenants to vote
his or its shares in favor of at least three (3) directors (the "Series F
Directors") designated by the holders of a majority of the Series F Conversion
Shares held by the Series F Holders at each annual meeting of stockholders of
the Corporation at which any director is elected or at the time of any written
consent to action in lieu of any such meeting; PROVIDED, that (i) for so long as
Electra (or its assignee) owns at least 213,360 Series F Conversion Shares (as
such number may be adjusted appropriately for stock splits, stock dividends,
combinations and other recapitalizations), Electra (or its assignee, provided
such assignee is an Affiliate of Electra) shall have the right to designate
one (1) of the directors (the "Electra Director") to be designated by the
holders of the Series F Conversion Shares, (ii) for so long as Central
Investment Holdings, Inc. ("CIH") (or its assignee) owns at least 213,360 Series
F Conversion Shares (as such number may be adjusted appropriately for stock
splits, stock dividends, combinations and other recapitalizations), CIH (or its
assignee, provided such assignee is an Affiliate of CIH) shall have the right to
designate one (1) of the directors to be designated by the holders of the Series
F Conversion Shares; and (iii) for so long as Toronto Dominion (or its assignee)
owns at least 213,360 Series F Conversion Shares (as such number may be adjusted
appropriately for stock splits, stock dividends, combinations and other
recapitalizations), Toronto Dominion (or its assignee, provided such assignee is
an Affiliate) shall have the right to designate one (1) of the directors to be
designated by the holders of the Series F Conversion Shares, PROVIDED, HOWEVER,
that Toronto Dominion or such Affiliate shall not be entitled to so designate
such director if exercising this right would be in violation of the Bank Holding
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Company Act (as defined in Section 2A.4). At least one of the Series F
Directors, which shall be the Electra Director, if any, shall have the right to
be a member of the Audit and Compensation Committees of the Board, if any, or of
any committee of the Board performing comparable functions. For purposes of
this Section 2.6(b), "Series F Conversion Shares" shall mean the shares of
Common Stock issued or issuable upon conversion of the shares of Series F-1
Preferred Stock originally issued pursuant to the Series F Purchase Agreement or
shares of Common Stock issued or issuable upon conversion of the shares of
Series F-1 Preferred Stock issued upon conversion of the Series F-2 Preferred
Stock originally issued pursuant to the Series F Purchase Agreement.
No director(s) so designated by the holders of the Series F Conversion
Shares, or Electra, CIH or Toronto Dominion (or its respective assignee,
provided such assignee is a Section 2.4 Affiliate of Electra, CIH or Toronto
Dominion), as the case may be, may be removed without the prior consent, given
in person or by proxy, either in writing or at a special meeting called for that
purpose, of the holders of such Series F Conversion Shares, voting separately as
a class. In case of the death, resignation or other removal of any Series F
Director, including the Electra Director, the holders of a majority of the
Series F Conversion Shares held by the Series F Holders, or Electra (or its
assignee), as the case may be, shall have the right to designate a successor
director to hold such office for the unexpired term of such removed director.
Each Investor covenants and agrees to vote his or its shares, as promptly as
possible, either at a special meeting called for such purpose or by written
consent in lieu of a meeting, in favor of the election of such successor
designee.
Until the Company completes an initial public offering of its Common
Stock or is sold to or merges with another entity, none of Vanguard or Electra,
in their capacity as stockholders of the Company, will take any actions which
would result in the representative of BEA Associates, as the manager of certain
investment funds that are stockholders of the Company, being removed from the
Board of Directors of IWC, so long as such investment funds retain their current
level of ownership of Registrable Securities (as defined in Section 1.1(f)
hereof) and Registrable Securities (as defined in the Registration Rights
Agreement).
2.7. OBSERVER RIGHTS. Each Investor who is the Holder of not
less than either 80,000 Registrable Securities referred to in clauses (i), (iii)
and (iv) of Section 1.1(f) or the Holder (within the meaning of the Registration
Rights Agreement) of not less than 80,000 Other Registrable Securities (subject
to appropriate adjustment for stock splits, stock dividends, combinations and
other recapitalizations) is entitled to have one representative designated by
such Investor attend all meetings of its Board in the capacity of a nonvoting,
observer who may participate in discussions and, in this respect, copies of all
notices, minutes, consents, and other materials that the Company provides to its
directors shall be given to such representative; provided, however, that such
representative shall agree to hold in confidence and trust and to act in a
fiduciary manner with respect to all information so provided; and, provided
further, that the Company reserves the right to withhold any information and to
exclude such representative from any meeting or portion thereof if access to
such information or attendance at such meeting could adversely affect the
attorney-client privilege between the Company and its counsel or would result in
disclosure of trade secrets to such representative of if such Investor or its
representative
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is a direct competitor of the Company. Each Investor that is an entity may
designate a representative to attend such meetings on its behalf. Each Investor
(or representative thereof) may designate an alternate to attend such meetings
on its behalf if such Investor (or representative thereof) is unable to attend.
The Company acknowledges that it is contractually required to comply with the
obligations of this Section 2.7.
2.8. CO-SALE RIGHTS.
(a) Any Section 2.5 Rights Holder which does not elect to
purchase any of the Section 2.5 Shares available to it may elect to participate
(a Section 2.5 Rights Holder so electing being herein a "Participant") in the
Initiating Section 2.5 Stockholder's sale of Securities in accordance with this
Section 2.8
(b) Subject to subsection 2.8(l) below, each Participant
shall have the right (the "Participation Right") to Transfer to the purchaser
and any Section 2.5 Rights Holders who has exercised the Right of First Offer
set forth in Section 2.5 above a number of Securities equal to the product of
(i) the aggregate number of Section 2.5 Shares and (ii) such Participant's Pro
Rata Percentage Amount (as defined below); PROVIDED, HOWEVER, that (A) with
respect to any Participant (other than an Original Series G/H Participant) which
is a holder of Series G/H Registrable Securities (as defined in the Registration
Rights Agreement), until such time as such Participant shall have received
proceeds upon the Transfer of Series G/H Registrable Securities and the
Preferred Stock of the Company underlying such Registrable Securities which
equals or exceeds the product of (x) the aggregate liquidation preference of all
such Series G/H Registrable Securities and underlying Preferred Stock acquired
by such participant (where the "liquidation preference" of Series G Preferred
Stock and Series H Preferred Stock means the Original Series G Issue Price and
the Original Series H Issue Price (as those terms are defined in the Company's
certificate of incorporation), respectively) and (y) 0.50, and (B) with respect
to any Participant which is a Series F Holder, until such time as such
Participant shall have received proceeds upon the Transfer of Series F
Registrable Securities (as defined in the Registration Rights Agreement) which
equals or exceeds the product of (x) the number of Series F Registrable
Securities purchased by such Participant, (y) $9.375 (as appropriately adjusted
for any stock dividends, combinations, splits or the like with respect to such
shares), and (z) .50, each such Participant specified in clause (A) and (B)
above shall have the right to Transfer a number of Securities equal to the
product of (i) the aggregate number of Section 2.5 Shares, (ii) such
Participant's Pro Rata Percentage Amount and (iii) 150%. For purposes of this
Section 2.8, a Participant's Pro Rata Percentage Amount shall be equal to the
fraction, the numerator of which is the number of shares of Common Stock owned
by such Participant at the time of the sale or transfer (assuming the full
conversion, exchange and exercise of all convertible, exchangeable and
exercisable securities of the Company then owned by such Participant) and the
denominator of which is the total number of shares of Common Stock owned by the
Initiating Section 2.5 Stockholder and all Participants at the time of the
Transfer (assuming the full conversion, exchange and exercise of all
convertible, exchangeable and exercisable securities of the Company then owned
by the Initiating Section 2.5 Stockholder and all Participants), and rounded to
the nearest whole number.
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(c) Each Participant shall effect its participation in the
sale by promptly delivering to the Initiating Section 2.5 Stockholder for
transfer to the prospective purchaser one or more certificates, properly
endorsed for transfer, which represent:
(i) the type and number of shares of Common Stock
which such Participant elects to sell; or
(ii) that number of shares of Preferred Stock which is
at such time convertible into the number of shares of Common Stock which such
Participant elects to sell; provided, however, that if the prospective purchaser
objects to the delivery of Preferred Stock in lieu of Common Stock, such
Participant shall convert such Preferred Stock into Common Stock and deliver
Common Stock as provided in subsection 2.8(c)(i) above. The Company agrees to
make any such conversion concurrent with the actual transfer of such shares to
the purchaser.
(d) The stock certificate or certificates that the
Participant delivers to the Initiating Section 2.5 Stockholder pursuant to
paragraph 2.8(c) shall be transferred to the prospective purchaser in
consummation of the sale of the Securities pursuant to the terms and conditions
specified in the Notice, and the Initiating Section 2.5 Stockholder shall
concurrently therewith remit to such Participant that portion of the sale
proceeds to which such Participant is entitled by reason of its participation in
such sale. To the extent that any prospective purchaser or purchasers prohibits
such assignment or otherwise refuses to purchase shares or other securities from
a Participant exercising its rights of co-sale hereunder, the Initiating
Section 2.5 Stockholder shall not sell to such prospective purchaser or
purchasers any Securities unless and until, simultaneously with such sale, the
Initiating Section 2.5 Stockholder shall purchase such shares or other
securities from such Participant.
(e) The exercise or non-exercise of the rights of the
Participants hereunder to participate in one or more sales of Securities made by
an Initiating Section 2.5 Stockholder shall not adversely affect their rights to
participate in subsequent sales of Securities subject to this Section 2.8.
(f) Notwithstanding the foregoing, the co-sale rights of
the Investors shall not apply to (i) any pledge of Securities made pursuant to a
bona fide loan transaction that creates a mere security interest; (ii) any
transfer to the ancestors, descendants or spouse or to trusts for the benefit of
such persons of a Investor; (iii) any bona fide gift, provided that the
transferring Investor shall inform the other Investors of such pledge, transfer
or gift prior to effecting it; (iv) a transfer by an Investor that is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner or (v) a transfer by any Investor to any Affiliate of
such Investor; provided that in each such case the pledgee, transferee or donee,
as the case may be, shall furnish to the Company and the other Investor a
written agreement to be bound by and comply with all the provisions of this
Section 2.8. Such transferred Securities shall remain "Securities" hereunder.
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(g) Notwithstanding the foregoing, the provisions of this
Section 2.8 shall not apply to (A) the sale of any Securities (i) to the public
pursuant to a registration statement filed with, and declared effective by, the
SEC under the Act or pursuant to Rule 144 or 701 under the Act or (ii) to the
Company or (B) the Post-Exchange Sale (as that term is defined in the Exchange
Agreement).
(h) In the event an Initiating Section 2.5 Stockholder
should sell any Securities in contravention of the co-sale rights of the
Investor under this agreement (a "Prohibited Transfer"), the Investors, in
addition to such other remedies as may be available at law, in equity or
hereunder, shall have the put option provided below, and the Initiating
Section 2.5 Stockholder shall be bound by the applicable provisions of such
option.
(i) In the event of a Prohibited Transfer, each Investor
shall have the right to sell to the Initiating Section 2.5 Stockholder the type
and number of Securities equal to the number of shares each Investor would have
been entitled to transfer to the purchaser had the Prohibited Transfer been
effected pursuant to and in compliance with the terms hereof. Such sale shall
be made on the following terms and conditions:
(i) The price per share at which the Securities are to
be sold to the Initiating Section 2.5 Stockholder shall be equal to the price
per share paid by the purchaser to the seller in the Prohibited Transfer. The
Initiating Section 2.5 Stockholder shall also reimburse each Investor for any
and all fees and expenses, including legal fees and expenses, incurred pursuant
to the exercise or the attempted exercise of the Investor's rights under this
Section 2.8.
(ii) Within 90 days after the later of the dates on
which the Investor (A) received notice of the Prohibited Transfer or
(B) otherwise become aware of the Prohibited Transfer, each Investor shall, if
exercising the option created hereby, deliver to the Initiating Section 2.5
Stockholder the certificate or certificates representing shares to be sold, each
certificate to be properly endorsed for transfer.
(iii) The Initiating Section 2.5 Stockholder shall, upon
receipt of the certificate or certificates for the shares to be sold by a
Investor, pursuant to this subsection 2.8(i), pay the aggregate purchase price
therefor and the amount of reimbursable fees and expense, as specified in clause
(i) of this subsection 2.8(i), in cash or by other means acceptable to the
Investor.
(iv) Notwithstanding the foregoing, any attempt by an
Initiating Section 2.5 Stockholder to transfer Securities in violation of this
Section 2.8 hereof shall be void and the Company agrees it will not effect such
a transfer nor will it treat any alleged transferee as the holder of such shares
without the written consent of a majority in interest of the Investors.
(j) Each certificate representing shares of Capital Stock
of the Company now or hereafter owned by each Investor or issued to any person
in connection with a
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transfer pursuant to Subsections 2.8(d) and (i) hereof shall be endorsed with
the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN CO-SALE AGREEMENT BY AND
BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS
OF STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY
BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE
CORPORATION."
(k) Each Investor agrees that the Company may instruct its
transfer agent to impose transfer restrictions on the shares represented by
certificates bearing the legend referred to in subsection 2.8(j) above to
enforce the provisions of this Agreement and the Company agrees to promptly do
so. The legend shall be removed upon termination of this Agreement.
(l) Each Original Series G/H Participant (as defined below)
shall have the right (the "Original Series G/H Participation Right") to transfer
to the purchaser and any Section 2.5 Rights Holders who have exercised the Right
of First Offer set forth in Section 2.5 above, Original Series G/H Registrable
Securities pro rata according to the respective Original Series G/H Pro Rata
Percentage Amounts (as defined below) of the Original Series G/H Participants
who exercise the Original Series G/H Participation Right with respect to such
transfer. The Original Series G/H Participation Right of each holder of
Original Series G/H Registrable Securities shall terminate when the aggregate
amount of the proceeds received by Original Series G/H Participants in respect
of Original Series G/H Registrable Securities that all Original Series G/H
Participants have included in Transfers pursuant to this subsection 2.8(l)
(regardless of whether such holders have exercised such right) is at least equal
to the aggregate principal amount of, and accrued but unpaid interest on, the
IWCH/PWH Notes exchanged for Series G and Series H Preferred Stock pursuant the
Exchange Agreement. The Original Series G/H Participation Right may be
exercised prior to and in preference over any Participation Right in subsection
2.8(b) hereof. For purposes of this subsection 2.8(l):
(i) "Original Series G/H Participant" means any holder of
Original Series G/H Registrable Securities;
(ii) "Original Series G/H Pro Rata Percentage Amount" for
any Original Series G/H Participant means the fraction, the numerator of which
is the number of Original Series G/H Registrable Securities owned by such
participant at the time of the Transfer and the denominator of which is the
total number of Original Series G/H Registrable Securities held by all Original
Series G/H Participants at such time; and
(iii) "Original Series G/H Registrable Securities" means (A)
all shares of Series G and Series H Preferred Stock that were acquired by the
holder thereof (or an Affiliate of such holder) pursuant to Sections 2, 2A or 3
of the Exchange Agreement and not
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transferred to any third party (other than an Affiliate of such holder), (B) all
shares of Series G and Series H Preferred Stock held by such holder (or an
Affiliate thereof) and issued upon the conversion of any shares of Series G or
Series H Preferred Stock described in clause (A) above and (C) all shares of
Common Stock held by such holder (or an Affiliate thereof) and issued or
issuable upon conversion of such shares of Series G and Series H Preferred Stock
described in clause (A) or clause (B).
2.9. STOCK PURCHASES BY EMPLOYEES, OFFICERS, DIRECTORS AND
CONSULTANTS. Each employee who purchases any of the shares of the Company's
Common Stock that are subject to vesting and are reserved for issuance to
officers and employees of the Company shall execute and deliver to the Company
an employee stock purchase agreement committing each such person to resell to
the Company at the original purchase price thereof all shares of the Company's
Common Stock that are not vested on the date of termination of such employee's
term of employment with the Company, and restricting each such person from
transferring any unvested shares of the Company's Common Stock to any person
except to members of his or her immediate family or to a trust for the benefit
of members of his or her immediate family.
2.10. ADDITIONAL LIQUIDITY RIGHTS. Each Investor with a
representative on the Board shall cause such representative to take all steps
necessary to cause the Board to maintain a committee of the Board (the
"Committee") consisting of a representative of the Board designated by Vanguard
(as long as Vanguard or Affiliate thereof owns not less than fifty percent (50%)
of the shares of Series C Preferred Stock it holds as of the date hereof (or an
equivalent amount of Common Stock issued upon conversion thereof)), a Series F
Director (but only so long as the holders of Series F-1 Preferred stock shall be
entitled to elect the Series F Directors pursuant to subsection V.B.6(b) of the
Restated Certificate), which shall be the Electra Director, if any, a
representative of the Board designated by the other outside investors and a
representative of the Company's Executive Management. (If Vanguard shall at any
time fail the ownership requirements set forth in the preceding sentence, the
Board at its sole discretion may elect to the Committee a representative of the
Board not designated by Vanguard.) The Committee shall, from time to time at
the request of any member, consult with an investment banking firm of recognized
national standing that is unaffiliated with the Committee members. The
Committee shall request such investment banking firm to thereafter make a formal
presentation to the Committee as to the commercial reasonableness of proceeding
with an initial public offering of the Company's Common Stock ("IPO") in light
of then prevailing market conditions and the condition and performance of the
Company. Based on the recommendation of such investment banking firm, the
Committee shall make a recommendation to the full Board about proceeding with an
IPO. If the Board approves proceeding with an IPO, the Company shall, subject
to the rights of the Series F Holders under the Series F Registration Rights
Agreement, use commercially reasonable efforts to proceed with an IPO unless
three directors vote to oppose proceeding with the IPO. In such event, the
Company shall submit to binding arbitration to be completed within 30 days
whether it is commercially feasible to proceed with an IPO. Such arbitration
shall be conducted in accordance with the procedures set forth in Section 8.3 of
the Reorganization Agreement. The arbitrators shall be representatives of
nationally known investment banking firms unaffiliated with the Company. Upon a
finding of
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commercial feasibility, the Company shall, subject to the rights of the Series F
Holders under the Series F Registration Rights Agreement, use commercially
reasonable efforts to proceed with an IPO. If no IPO occurs by December 31,
1996, the Committee shall then explore in good faith other means to provide
liquidity for all outside investors. The Committee shall again consult with an
investment banking firm of recognized national standing that is unaffiliated
with any of the Committee members and request such investment banking firm to
submit a written report to the Committee regarding liquidity alternatives,
including the sale of the Company, the repurchase of the Company's stock by all
electing investors and any other commercially feasible liquidity strategies.
2.11. TERMINATION OF CERTAIN COVENANTS. The covenants set
forth in Sections 2.1, 2.2, 2.3, 2.4, 2.5, 2.6(a), 2.7, 2.8, 2.9, and 2.10 shall
terminate and be of no further force or effect upon the consummation of a
Threshold Public Offering.
2A. TORONTO DOMINION REGULATORY COMPLIANCE.
2A.1 VIOLATION OF BHCA OR SBIA. If Toronto Dominion or an
affiliate of Toronto Dominion determines that it has a BHCA Issue (as defined
below) or an SBIC Issue (as defined below), the Company and all other Investors
agree to take all such actions as are reasonably requested by Toronto Dominion
or such affiliate in order to, at the option of Toronto Dominion or such
affiliate, either (a) permit Toronto Dominion or such affiliate to convert all
or any portion of any shares of Series F-1 Preferred Stock held by Toronto
Dominion or its affiliate into an equal number of shares of Series F-2 Preferred
Stock (which Series F-2 Preferred Stock shall be convertible back into Series
F-1 Preferred Stock on such terms as may be permitted by regulatory
considerations then prevailing) or (b) effectuate and facilitate a Transfer by
Toronto Dominion or such affiliate of all or a part of its interest in the
Company to a person or entity designated by Toronto Dominion or such affiliate,
provided that such assignment or transfer is in compliance with applicable
federal and state securities laws and the assignee or transferee agrees to be
bound by the Agreement.
2A.2 SBIC REQUIREMENTS.
(a) The Company and each Investor hereby agree to take all
action and execute all such instruments as may be reasonably required by Toronto
Dominion or its permitted assignee or transferee, in either case which may
hereafter become (or which is expected by Toronto Dominion to become) a small
business investment company (an "SBIC") subject to the SBIC Requirements, so
that such SBIC shall be entitled to legally hold its shares of Capital Stock of
the Company as a small business investment company under the SBIC Requirements.
Such actions shall be taken at the reasonable request of Toronto Dominion or
such affiliate within a reasonable time in advance of the earlier of (i) Toronto
Dominion or such affiliate becoming an SBIC or (ii) Toronto Dominion assigning
or transferring the shares of Capital Stock in the Company held by it to an SBIC
or an affiliate of Toronto Dominion which is expected by Toronto Dominion to
become an SBIC.
(b) Such actions referred to in clause (a) above shall include,
without limitation, an amendment to this Agreement providing for (i) the
provision of financial statements
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and other information by the Company as required by and on forms specified by
SBIC Requirements (including information with respect to the Company's use of
proceeds and to confirm the Company's size for purposes of eligibility under the
SBIC Requirements), (ii) in the event that the SBIC Requirements are not met for
such SBIC to legally hold such Capital Stock (including, without limitation, as
a result of a diversion of the proceeds from the reported use thereof or a
change in the Company's business activities), the SBIC's right to put its shares
of Capital Stock of the Company back to the Company for prompt payment at the
original purchase price of such shares and (iii) such other representations,
warranties and covenants for the benefit of such SBIC as may be reasonably
required by the SBIC Requirements. Notwithstanding any other provision of this
Agreement, SBIC's right under clause (ii) of the first sentence of this Section
2A.2(b) shall arise solely if (i) the Company shall become an ineligible
investment for SBIC (within the meaning of the SBIC Requirements) as a result of
(A) changing its business activity (within the meaning of the SBIC Requirements)
from that contemplated by the Memorandum or (B) using the proceeds from the sale
of Series F Preferred Stock pursuant to the Series F Purchase Agreement in a
manner different than that contemplated by the Memorandum (as defined in the
Series F Purchase Agreement) and the Series F Purchase Agreement and (ii) as a
result of such change in business activity or use of proceeds, SBIC would
violate the SBIC Requirements by maintaining its investment in the Company. In
addition, before exercising its rights under clause (ii) of the first sentence
of this Section 2A.2(b), SBIC shall use commercially reasonable efforts to
obtain approval of the Small Business Administration to permit it to maintain
its investment in the Company notwithstanding such change in business activity.
2A.3 ACQUISITION OF SECURITIES. Notwithstanding anything
contained in this Agreement to the contrary, Toronto Dominion shall not be
entitled to acquire any shares of Capital Stock of the Company hereunder,
including, without limitation, under Sections 2.3 and 2.5, if the acquisition of
such shares would cause Toronto Dominion to hold shares of Capital Stock in the
Company in excess of the amount permitted under the Bank Holding Company Act (as
defined below).
2A.4 BHCA ISSUE, SBIC ISSUE AND SBIC REQUIREMENTS DEFINED.
(a) For purposes of this Agreement, a "BHCA Issue" means any
facts or circumstances under which Toronto Dominion or an affiliate of Toronto
Dominion is or may be in violation or potential violation of the Bank Holding
Company Act of 1956, as amended from time to time (and any successor law
thereto), or the rules and regulations promulgated from time to time thereunder
(collectively, the "Bank Holding Company Act"), or any assertion by any
governmental regulatory agency that Toronto Dominion or an affiliate of Toronto
Dominion is or may be in violation or potential violation of the Bank Holding
Company Act by virtue of Toronto Dominion or an affiliate of Toronto Dominion
holding, or exercising any significant right with respect to, any Capital Stock
of the Company.
(b) For purposes of this Agreement, an "SBIC Issue" means any
facts or circumstances under which Toronto Dominion or an affiliate of Toronto
Dominion is or may be in violation or potential violation of the Small Business
Investment Act of 1958, as amended from time to time (and any successor law
thereto), or the rules and regulations promulgated thereunder
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<PAGE>
(collectively, the "Small Business Investment Act"), or any assertion by the
U.S. Small Business Administration or other governmental agency that Toronto
Dominion or an affiliate of Toronto Dominion is or may be in violation or
potential violation of the Small Business Investment Act or other laws or
regulations pertaining to small business investment companies by virtue of
Toronto Dominion or an affiliate of Toronto Dominion holding, or exercising any
significant right with respect to, any Capital Stock of the Company.
(c) For purposes of this Agreement, "SBIC Requirements" means
all of the requirements of the Small Business Investment Act relating to small
business investment companies and investments by small business investment
companies as in effect on the date hereof or as they may be amended or
supplemented from time to time.
3. MISCELLANEOUS.
3.1. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of any shares of Registrable Securities). Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
3.2. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware.
3.3. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
3.5. NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof, or at such other address
as such party may designate by at least ten (10) days' advance written notice to
the other parties.
3.6. EXPENSES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
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3.7. AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
seventy-five percent (75%) of the then outstanding Registrable Securities and
Holders (as defined in the Registration Rights Agreement) of a majority of the
Series F Registrable Securities and a majority of the Series G/H Registrable
Securities (as defined in the Registration Rights Agreement). Any amendment or
waiver effected in accordance with this Section 3.7 shall be binding upon each
Holder of any Registrable Securities, Series F Registrable Securities or
Series G/H Registrable Securities then outstanding, each future Holder of all
such Registrable Securities or the Series F Registrable Securities, and the
Company. Notwithstanding the foregoing, (i) the rights of Section 2.5
Stockholders pursuant to Section 2.5 hereof, (ii) the rights of Investors
pursuant to Section 2.7 hereof and (iii) the rights of Investors pursuant to
Section 2.10 hereof may not be amended without the written consent of Holders of
a majority of the Registrable Securities and seventy-five percent (75%) of the
Series F Registrable Securities and seventy-five percent (75%) of the Series G/H
Registrable Securities then held by the Section 2.5 Stockholders in the case of
clause (i) hereof, each Holder of at least 80,000 Registrable Securities in the
case of clause (ii) hereof, and Holders of a majority of the Registrable
Securities and Other Registrable Securities in the case of clause (iii) hereof.
By executing this Agreement, an Existing Investor hereby consents to amending
and restating the Prior Agreement in its entirety as set forth herein upon the
effectiveness of this Agreement and to waive any rights that would otherwise
arise under the Prior Agreement by virtue of the transactions contemplated by
the Loan Agreements.
3.8. SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
3.9. AGGREGATION OF STOCK. All shares of Registrable Securities
and Other Registrable Securities held or acquired by affiliated entities or
persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
3.10. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement
hereby amends and restates the Prior Agreement in its entirety and any other
previous agreements among any of the parties hereto with respect to the subject
matter of this Agreement, and any such previous agreements shall be of no
further force and effect.
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IN WITNESS WHEREOF, the parties have executed this Fifth Amended and
Restated Investor Rights Agreement as of the date first above written.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS, INC.
By: /s/ Douglas S. Sinclair
---------------------------------
Name: Douglas S. Sinclair
---------------------------------
Title: Executive Vice President
---------------------------------
Address: 400 So. El Camino Real, Suite 1275
San Mateo, CA 94402
INVESTOR
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
----------------------------------------
----------------------------------------
SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
<PAGE>
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT, dated as of
August 18, 1997, between International Wireless Communications Holdings, Inc., a
corporation organized under the laws of Delaware (the "Company"), and the
individuals and entities listed on SCHEDULE 1 hereto (each such individual or
entity, a "Stockholder;" and collectively, the "Stockholders").
W I T N E S S E T H:
WHEREAS, certain of the Stockholders purchased shares of Series F-1
and Series F-2 Preferred Stock, par value $0.01 per share of International
Wireless Communications, Inc., a Delaware Corporation and wholly owned
subsidiary of the Company ("IWC"), that were converted into shares of Series F-1
and Series F-2 Preferred Stock of the Company, respectively (the "Series F-1
Preferred Stock" and "Series F-2 Preferred Stock," respectively; collectively,
the "Series F Preferred Stock"), on August 8, 1996 pursuant to the Agreement and
Plan of Merger among the Company and IWC;
WHEREAS, such Stockholders were granted registration rights pursuant
to the Registration Rights Agreement dated as of December 18, 1995 among IWC and
such Stockholders; and
WHEREAS, the Company succeeded to the rights and obligations of IWC
under such agreement pursuant to the Consent, Waiver, Amendment, Assignment and
Assumption Agreement among the Company and the parties thereto (such
Registration Rights Agreement, as so amended, being referred to as the "Prior
Agreement"); and
WHEREAS, certain of the Stockholders are lenders under the Loan
Agreement dated as of August 18, 1997 (the "IWCH Loan Agreement") among the
Company and the lenders named therein and the Loan Agreement dated as of August
18, 1997 (the "PWH Loan Agreement;" together with the IWCH Loan Agreement, the
"Loan Agreements") among Pakistan Wireless Holdings Limited, an indirect wholly
owned subsidiary of the Company ("PWH") and the lenders named therein; and
WHEREAS, subject to certain terms and conditions, the Notes, as that
term is defined in the IWCH Loan Agreement (individually, an "IWCH Note;"
collectively, the "IWCH Notes") may be exchanged for shares of Series G-1 and
Series G-2 Preferred Stock, par value $0.01 per share of the Company (the
"Series G-1 Preferred Stock" and "Series G-2 Preferred Stock," respectively;
collectively, the "Series G Preferred Stock"); and
WHEREAS, subject to certain terms and conditions, the Notes, as that
term is defined in the PWH Loan Agreement (individually, a "PWH Note";
collectively, the "PWH Notes" and, together with the IWCH Notes, the "Notes")
may be exchanged for Series H-1 and Series H-2 Preferred Stock, par value $0.1
per share of the Company (the "Series H-1 Preferred
<PAGE>
Stock" and "Series H-2 Preferred Stock," respectively; collectively, the "Series
H Preferred Stock"); and
WHEREAS, the Company has issued or will issue to certain of the
Investors the Warrants, as that term is defined in the IWCH Loan Agreement
(individually, a "Warrant"; collectively, the "Warrants"); and
WHEREAS, the Company has agreed to grant to holders of Series G and
Series H Preferred Stock issuable upon exchange of the Notes and to holders of
the Warrants the registration rights set forth herein; and
WHEREAS, the Stockholders desire to amend and restate the Prior
Agreement and certain of the Stockholders desire to accept in lieu of the
registration rights granted to them thereunder the registration rights granted
to them under this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, capitalized terms
used herein shall have the meanings set forth in the preambles hereto and in
this Section 1.
1.1 "Class A Holder" shall mean any Holder which has received,
as of the date of any registration request, aggregate proceeds (net of selling
expenses and fees and expenses of counsel), whether received by such Holder in
the form of dividends, redemption payments or other distributions from the
Company in respect of Series F Registrable Securities, or upon the sale or other
disposition of Series F Registrable Securities in a distribution pursuant to a
registration statement filed by the Company under the Securities Act or pursuant
to a sale under Rule 144 under the Securities Act, equal to or in excess of
one-half of the purchase Price paid by such Holder for the Series F Preferred
Shares purchased by such Holder under the Securities Purchase Agreement.
1.2 "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
1.3 "Common Stock" shall mean the Common Stock of the Company,
par value $.01 per share, or in the case of a conversion, reclassification or
exchange of such shares of such Common Stock, shares of the stock into or for
which such shares of Common Stock shall be converted, reclassified or exchanged,
and all provisions of this Agreement shall be applied appropriately thereto and
to any stock resulting from any subsequent conversion, reclassification or
exchange therefor.
1.4 "Electra" means Electra Investment Trust P.L.C, a
corporation organized under the laws of England and Wales ("EIT"), and Electra
Associates, Inc., a corporation organized under the laws of Delaware.
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1.5 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute enacted hereafter, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect from time to time.
1.6 "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any registration form under the Securities Act
subsequently adopted by the Commission which permits inclusion or incorporation
of substantial information by reference to other documents filed by the Company
with the Commission.
1.7 "Holder" shall mean any holder of Registrable Securities,
and for purposes of this Agreement holders of Series F, Series G and Series H
Preferred Stock and the Warrants shall be treated as Holders of the Registrable
Securities underlying such series of Preferred Stock or Warrants, and references
to Registrable Securities held by such Holders shall include such underlying
Registrable Securities; PROVIDED, HOWEVER, that any Person who acquires any of
the Registrable Securities in a distribution pursuant to a registration
statement filed by the Company under the Securities Act or pursuant to a sale
under Rule 144 of the Securities Act shall not be considered a Holder with
respect to such securities.
1.8 "Initiating Holders" shall mean the Holders of Registrable
Securities representing at least twenty percent (20%) of either (a) the Series F
Registrable Securities then outstanding or (b) the Series G/H Registrable
Securities then outstanding.
1.9 "IPO" shall mean (i) the time at which the Company becomes a
registered public company under the Exchange Act subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, or (ii) the first time
at which an offering, whether primary or secondary, of Common Stock or options,
warrants or other securities convertible into or exchangeable or exercisable for
Common Stock, is registered pursuant to an effective registration statement
(other than a registration statement on Form S-4 or Form S-8 or any successor
forms thereto) filed by the Company under the Securities Act or (iii) the merger
of the Company into a corporation or other entity which at the time of such
merger is required to file reports, proxy statements and other information with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act. An Initial Public Offering will be deemed to be consummated (i) on the
date such registration is declared effective by the Commission and (ii) in the
case of a merger, upon the effectiveness of the merger.
1.10 "Person" shall mean any individual, firm, corporation,
limited liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any kind.
1.11 "Preferred Stock" shall mean the Preferred Stock par value
$.01 per share, of the Company, including the Series F, Series G and Series H
Preferred Stock.
1.12 "Register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement with the
Commission in
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compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement by the Commission.
1.13 "Registrable Securities" shall mean the Series F Registrable
Securities and the Series G/H Registrable Securities
1.14 "Registration Expenses" shall mean all expenses incurred by
the Company in compliance with this Agreement, excluding underwriters' discounts
and commissions but including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company, the
compensation of regular employees of the Company and the fees and expenses of a
single counsel for the Holders (provided such counsel shall also be counsel to
the Company or the fees and expenses of such counsel payable by the Company in
connection with any registration hereunder shall not exceed $50,000), all blue
sky fees and expenses, and the expense of any special audits incident to or
required by any such registration.
1.15 "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute enacted hereafter, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
1.16 "Securities Purchase Agreement" shall mean that certain
Securities Purchase Agreement, dated as of December 18, 1995, among the Company
and certain of the Stockholders, as amended from time to time.
1.17 "Selling Expenses" shall mean all underwriting discounts and
commissions applicable to the sale of Registrable Securities.
1.18 "Series F Preferred Shares" shall mean the Series F
Preferred Stock issued by the Company pursuant to the Securities Purchase
Agreement.
1.19 "Series F Registrable Securities" shall mean the (i) the
shares of Common Stock issued or issuable upon conversion of the Series F
Preferred Shares (including, without limitation, any shares of Series F-1
Preferred Stock into which any shares of Series F-2 Preferred Stock constituting
Preferred Shares are converted) and (ii) any other shares of Common Stock
acquired after the date of this Agreement, or shares of Common Stock issued or
issuable upon conversion of securities acquired after the date of this Agreement
(other than the Series G/H Preferred Shares or Warrants), in each case pursuant
to Section 2.3 or 2.5 of the Stockholders' Agreement and held by the
Stockholders and their Permitted Transferees (as defined in the Stockholders'
Agreement) from time to time; PROVIDED, HOWEVER, that any such Registrable
Securities shall cease to be included within the definition of Registrable
Securities when (a) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (b) they shall have been sold as permitted by Rule 144 (or any
successor provision) under the Securities Act, (c) they shall have been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by
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the Company and subsequent public distribution of them shall not require
registration of them under the Securities Act or (d) they shall have ceased to
be outstanding.
1.20 "Series G/H Preferred Shares" shall mean the shares of
Series G and Series H Preferred Stock of the Company issuable upon exchange of
the Notes or upon the conversion of any other Series G or Series H Preferred
Stock.
1.21 "Series G/H Registrable Securities" shall mean the (i)
shares of Common Stock issued or issuable upon conversion of the Series G/H
Preferred Shares (or the exercise of any Warrants), (ii) any other shares of
Common Stock acquired after the date of this Agreement, or shares of Common
Stock issued or issuable upon conversion of securities acquired after the date
of this Agreement, in each case pursuant to Section 2.3 or 2.5 of the
Stockholders' Agreement and held by the Stockholders and their Permitted
Transferees (as defined in the Stockholders' Agreement) from time to time (other
than Series F Registrable Securities) and (iii) shares of Common Stock issued or
issuable upon the exercise of warrants to purchase Common Stock issued pursuant
to the Loan Agreements; PROVIDED, HOWEVER, that any such Registrable Securities
shall cease to be included within the definition of Registrable Securities when
(a) a registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of in accordance with such registration statement, (b) they shall
have been sold as permitted by Rule 144 (or any successor provision) under the
Securities Act, (c) they shall have been otherwise transferred, new certificates
for them not bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent public distribution of them shall not
require registration of them under the Securities Act or (d) they shall have
ceased to be outstanding.
1.22 "Stockholders' Agreement" shall mean that certain Sixth
Amended and Restated Investor Rights Agreement, dated as of the date hereof,
among the Company and certain stockholders of the Company.
2. REQUESTED REGISTRATION.
2.1 REQUEST FOR REGISTRATION. The Initiating Holders, by
written request to the Company, may require the Company to effect a registration
(a "Demand Registration") with respect to Registrable Securities at any time
after the earlier of (i) December 31, 1997 or (ii) the consummation of an IPO.
If the Initiating Holders elect to exercise their rights as permitted by clause
(i) above prior to an IPO, then in connection therewith the Company shall take
(or prior thereto the Company shall have taken) all such actions as shall be
necessary to effect a stock-split with respect to its shares of Common Stock
such that, after giving effect to such stock-split and after giving effect to
the distribution of the Registrable Securities contemplated by the IPO, the
public float criteria with respect to a NASDAQ-NMS listed company shall be
satisfied. Upon any such registration request, the Company shall:
(i) promptly give written notice of the proposed
registration to all other Holders (the "Demand Registration Notice"); and
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<PAGE>
(ii) as soon as practicable, but not later than sixty
(60) days after receipt of the request from the Initiating Holders, use its best
efforts and take all appropriate action to file such registration statement with
the Commission, and shall use its best efforts and take all appropriate action
to effect such registration as soon as possible following such filing
(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualifications under the blue sky or
other state securities laws reasonably requested by Initiating Holders and
appropriate compliance with applicable regulations issued under the Securities
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request given within thirty (30) days after receipt of the Demand
Registration Notice.
The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 2 after the second of
such registrations pursuant to this Section 2 have been declared or ordered
effective; PROVIDED that, if neither the first registration pursuant to this
Section 2 to be declared or ordered effective nor the second registration
pursuant to this Section 2 to be declared or ordered effective is a
Series F-Initiated No-Cutback Registration (as defined below), then thereafter
Holders of Registrable Securities representing at least twenty percent (20%) of
the Series F Registrable Securities then outstanding (as the Initiating Holders)
will have the right to request additional registrations pursuant to this
Section 2 until one such additional registration is a Series F-Initiated
No-Cutback Registration. A "SERIES F-INITIATED NO-CUTBACK REGISTRATION" is a
registration pursuant to this Section 2 which is declared or ordered effective,
is requested by Holders of Series F Registrable Securities as the Initiating
Holders and in which no Series F Registrable Securities requested to be included
are excluded pursuant to Section 2.5 below.
Notwithstanding the foregoing, if the Company shall furnish to Holders
requesting registration pursuant to this Section 2 a certificate signed by the
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company and its stockholders for such registration statement to be filed and
it is therefore essential to defer the filing of such registration statement,
the Company shall have the right to defer taking action with respect to such
filing for a period of not more than 120 days after receipt of the request of
the Initiating Holders; PROVIDED, that the Company may not utilize this right
more than once in any twelve-month period.
2.2 ADDITIONAL SHARES TO BE INCLUDED. The registration
statement filed pursuant to the request of the Initiating Holders may, subject
to the provisions of Section 2.5 below, include (a) other securities of the
Company (the "Additional Shares") which are held by Persons who by virtue of
agreements with the Company (other than this Agreement) are entitled to include
their securities with the Holders referred to in Section 2.1 above
(collectively, the "Other Stockholders"), and (b) securities of the Company
being sold for the account of the Company (the "Company Shares").
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<PAGE>
2.3 WITHDRAWAL OF REGISTRATION. If the Initiating Holders
inform the Company by written notice that they are withdrawing their
registration request made pursuant to Section 2.1 above and the Initiating
Holders pay all of the Company's third party Registration Expenses with respect
to such registration incurred to the date of such notice, then the registration
statement need not be filed and all efforts pursuant to this Agreement will not
count as a registration (or an exercise of rights) under this Section 2;
PROVIDED, HOWEVER, that (a) if at the time of such withdrawal, the Initiating
Holders have learned of a material adverse change in the condition, business or
prospects of the Company from that known to the Initiating Holders at the time
of their request and have withdrawn the request with reasonable promptness
following disclosure by the Company of such material adverse change, then the
Initiating Holders shall not be required to pay any of such expenses and all
efforts pursuant to this Agreement will not count as a registration (or an
exercise of rights) under this Section 2, or (b) if the Company decides to
proceed with the registration on its own behalf, or on behalf of Other
Stockholders, then the Initiating Holders shall not be required to pay any of
the Company's third party Registration Expenses and such registration will not
count as a registration (or an exercise of rights) under this Section 2.
2.4 UNDERWRITING.
(a) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section 2 and the Company shall include such information in the Demand
Registration Notice, and such Demand Registration Notice shall also state that
any registration pursuant to this Section 2 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein and
subject to the limitations provided herein. A Holder may elect to include in
such underwriting all or a part of the Registrable Securities he holds.
(b) The Company shall (together with all Holders and Other
Stockholders proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form with the representative
of the underwriter or underwriters selected by the Company, provided that a
majority in interest of the Initiating Holders shall approve such selection in
their sole discretion.
2.5 LIMITATIONS ON SHARES TO BE INCLUDED. Notwithstanding any
other provision of this Section 2, if the representative of the underwriters
advises the Company or the Initiating Holders in writing that marketing factors
require a limitation on the number of shares to be underwritten or that the
inclusion of Additional Shares or Company Shares may adversely affect the sale
price (of the shares to be registered) that may be obtained, then, FIRST, the
Company Shares shall be excluded from such registration to the extent so
required by such limitation, SECOND, the Series F Registrable Securities
requested to be included in such registration
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<PAGE>
held by the Class A Holders and the Additional Shares requested to be included
in such registration statement held by Other Stockholders, if any, shall be
excluded from such registration to the extent so required by such limitation,
pro rata based upon the number of Registrable Securities or Additional Shares,
as the case may be, which they have requested be included in such registration
at the time of filing such registration statement, THIRD, the Series F
Registrable Securities requested to be included in such registration statement
held by Holders (other than Class A Holders), if any, shall be excluded from
such registration to the extent so required by such limitation, pro rata based
on the number of Series F Registrable Securities which they have requested be
included in such registration at the time of filing such registration statement,
and FOURTH, the Series G/H Registrable Securities requested to be included in
such registration held by Holders, if any, shall be excluded from such
registration to the extent so required by such limitation, pro rata based on the
number of Series G/H Registrable Securities which they have requested be
included in such registration at the time of filing such registration statement,
PROVIDED, HOWEVER, that if at the time of such registration request the Common
Stock of the Company shall be publicly traded, and on each day on which the
Common Stock is traded during the three-month period immediately preceding the
date on which the Initiating Holders shall have requested such registration the
Common Stock shall have a Daily Closing Price (as defined in Section 11 below)
which is equal to or greater than $18.75 (as such number may be adjusted
appropriately for stock splits, subdivisions, combinations, reclassifications or
other recapitalizations), then FIRST, the Company Shares shall be excluded from
such registration to the extent so required by such limitation, SECOND, the
Series F Registrable Securities requested to be included in such registration
held by all Holders and the Additional Shares requested to be included in such
registration held by Other Stockholders, if any, shall be excluded from such
registration to the extent so required by such limitation, pro rata based on the
number of Series F Registrable Securities and Additional Securities, as the case
may be, which they have requested be included in such registration at the time
of filing such registration statement, and THIRD, the Series G/H Registrable
Securities requested to be included in such registration held by Holders, if
any, shall be excluded from such registration statement to the extent so
required by such limitation, pro rata based on the number of Series G/H
Registrable Securities which they have requested be included in such
registration at the time of filing such registration statement PROVIDED,
FURTHER, HOWEVER, that in any event the Holders shall be entitled to include not
less than 25% of the shares being registered in such offering.
If the Company or any Holder or Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of any
such underwriting, such Person may elect to withdraw such Person's Registrable
Securities, Additional Shares or Company Shares, as the case may be, therefrom
by written notice to the Company, the underwriter and the Initiating Holders;
PROVIDED, HOWEVER, that if the Holders, in consultation with their financial and
legal advisors, determine that such revocation would materially delay the
registration or otherwise require a recirculation of the prospectus contained in
the registration statement, then such Person shall have no such right to revoke
its request. If the withdrawal of any Registrable Securities, Additional Shares
or Company Shares, as the case may be, would allow, within the marketing
limitations set forth above, the inclusion in the underwriting of a greater
number of shares of Registrable Securities, Company Shares or Additional Shares,
then, to the extent practicable and without delaying the underwriting, the
Company, the Holders and the Other Stockholders shall have an opportunity to
include additional shares of Registrable
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Securities, Company Shares or Additional Shares, as the case may be, in the
proportions discussed above.
3. COMPANY REGISTRATION.
3.1 If the Company shall determine to register any of its
securities either for its own account or the account of a security holder or
holders exercising any demand registration rights, other than a registration
relating solely to employee benefit plans, or a registration relating solely to
a Rule 145 (under the Securities Act) transaction, the Company will:
(a) promptly give to each Holder written notice thereof
(which shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or other state
securities laws); and
(b) the Company shall include in such registration (and any
related qualification under blue sky laws or other compliance), and in any
underwriting involved therein (the "Piggy-back Registration"), all the
Registrable Securities specified in a written request or requests made by any
Holder within thirty (30) days after receipt of the written notice from the
Company described in clause (a) above, except as set forth in Section 3.3 below.
Such written request may specify all or a part of a Holder's Registrable
Securities.
3.2 UNDERWRITING. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 3.1(a). The right of any Holder to require registration
pursuant to this Section 3 shall be conditioned upon such Holder's participation
in such underwriting and the inclusion of such Holder's Registrable Securities
in the underwriting to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company and any Other Stockholders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters selected by the Company.
3.3 LIMITATIONS ON SHARES TO BE INCLUDED. With respect to
Company registrations or registrations effected by the Company for the account
of a security holder or holders exercising any demand registration rights,
notwithstanding any other provision of this Section 3, if the representative of
the underwriters advises the Company in writing that marketing factors require a
limitation or elimination on the number of shares to be underwritten, the
representative may (subject to the allocation priority set forth below) limit
the number of Registrable Securities to be included in the registration and
underwriting. The Company shall so advise all Holders of securities requesting
registration.
(a) The number of shares of securities that are entitled to
be included in the registration and underwriting shall be allocated FIRST, to
Company Shares being sold for the Company's own account, SECOND, to Series G/H
Registrable Securities requested to be included in such registration at the time
of filing of such registration statement, pro rata based
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on the number of such Series G/H Registrable Securities requested to be included
by each holder thereof, THIRD, to Series F Registrable Securities requested to
be included in such registration at the time of filing such registration
statement by Holders (other than Class A Holders, if any), pro rata based on the
number of such Series F Registrable Securities, and FOURTH, to Series F
Registable Securities requested to be included in such registration at the time
of filing such registration statement by Class A Holders and Additional Shares
requested to be included in such registration by Other Stockholders (including
those stockholders exercising demand registration rights and on whose account
the Company determined to register securities pursuant to the exercise of such
demand registration right, or otherwise), pro rata based on the number of such
Series F Registrable Securities and Additional Shares, as the case may be
PROVIDED, HOWEVER, that if at the time of such registration request the Common
Stock of the Company shall be publicly traded, and on each day on which the
Common Stock is traded during the three-month period immediately preceding the
date on which the Holders shall have requested such registration the Common
Stock shall have a Daily Closing Price which is equal to or greater than $18.75
(as such number may be adjusted appropriately for stock splits, subdivisions,
combinations, reclassifications or other recapitalizations), then the number of
shares of securities that are entitled to be included in the registration and
underwriting shall be allocated FIRST, to Company Shares for securities being
sold for the Company's own account, SECOND, to Series G/H Registrable Securities
requested by Holders to be included in such registration at the time of filing
of such registration statement, pro rata based on the number of such Series G/H
Registrable Securities and THIRD, to Series F Registrable Securities requested
by Holders to be included in such registration at the time of filing such
registration statement and to Additional Shares requested to be included in such
registration by Other Stockholders at the time of filing such registration
statement (including those Stockholders exercising demand registration rights
and on whose account the Company determined to register its securities pursuant
to the exercise of such demand registration right, or otherwise), pro rata based
on the number of such Series F Registrable Securities and such Additional Shares
PROVIDED, FURTHER, HOWEVER, that in any event the Holders shall be entitled to
include not less than 25% of the shares (other than Company Shares) being
registered in such offering.
(b) If any Holder or Other Stockholder disapproves of the
terms of any such underwriting, he may elect to withdraw therefrom by written
notice to the Company and the underwriter.
3.4 WITHDRAWAL FROM REGISTRATION. Any Holder requesting
inclusion of Registrable Securities pursuant to this Section 3 may, at any time
prior to the effective date of the registration statement relating to such
registration, revoke such request by delivering written notice of such
revocation to the Company. If the withdrawal of any Registrable Securities or
Additional Shares would allow, within the marketing limitations set forth above,
the inclusion in the underwriting of a greater number of shares of Registrable
Securities or Additional Shares, then, to the extent practicable and without
delaying the underwriting, the Company shall offer to the Holders and to the
Other Stockholders an opportunity to include additional shares of Registrable
Securities or Additional Shares, as the case may be, in the proportions
discussed in Section 3.3 above.
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3.5 TERMINATION OR WITHDRAWAL BY COMPANY. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 3 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. Upon such
termination or withdrawal, the Company shall give to each Holder which had
elected to include securities in such registration, written notice of such
termination or withdrawal.
4. REGISTRATION ON FORM S-3. In addition to the rights set forth in
Sections 2 and 3 above, if at any time (i) Initiating Holders request that the
Company file a registration statement on Form S-3 (or any successor form
thereto) for a public offering of all or any portion of the Registrable
Securities held by such requesting Holder or Holders, and (ii) the Company is a
registrant entitled to use Form S-3 (or any successor form thereto) to register
such securities, then the Company shall use its best efforts to register
(including by means of a shelf registration pursuant to Rule 415 under the
Securities Act if so requested in such request) under the Securities Act on Form
S-3 (or any successor form thereto), for public sale in accordance with the
method of disposition specified in such notice, the number of shares of
Registrable Securities specified in such notice. Registrations effected
pursuant to this Section 4 shall not be counted as demands for registration or
registrations effected pursuant to Section 2 or 3, respectively.
5. EXPENSES OF REGISTRATION. All Registration Expenses incurred in
connection with the registration or qualification of, or compliance with, any
registration statement under Sections 2, 3 or 4 of this Agreement, shall be
borne by the Company. Each seller shall bear his or its own Selling Expenses
with respect to the securities sold by him or it.
6. REGISTRATION PROCEDURES.
6.1 In the case of each registration to be effected by the
Company pursuant to this Agreement, the Company will keep each Holder advised in
writing as to the initiation of each registration and all amendments thereto and
as to the completion thereof, advise any such Holder, upon request, of the
progress of such proceedings, use its best efforts to effect the registration of
any Registrable Securities under the Securities Act, and will, at its expense:
(a) Prepare and file with the Commission a registration
statement covering such Registrable Securities and use its best efforts to cause
such registration statement to be declared effective by the Commission and to
keep such registration effective for a period of one hundred twenty (120) days
or until the Holder or Holders have completed the distribution described in the
registration statement relating thereto, whichever first occurs; PROVIDED,
HOWEVER, that such one hundred twenty (120) day period shall be extended for a
period of time equal to the period the Holders refrain from selling any
securities included in such registration at the request of an underwriter of
Common Stock (or other securities) of the Company; PROVIDED, FURTHER, HOWEVER,
that the Company shall keep such registration effective for longer than one
hundred and twenty (120) days (or such longer period if extended in accordance
with the previous proviso), up to an additional period of one hundred twenty
(120) days or until the Holder or Holders have completed the distribution
described in the registration statement relating thereto, whichever first
occurs, if the direct third party costs and expenses
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<PAGE>
associated with such extended registration are borne by the selling Holders;
PROVIDED, FURTHER, HOWEVER, that in the case of any registration of Registrable
Securities on Form S-3 which are intended to be offered on a continuous or
delayed basis, such 120-day period (or such longer period as provided above)
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, and the costs and expenses
associated with such extended registration shall be borne by the Company;
PROVIDED that (1) Rule 415 under the Securities Act, or any successor rule under
the Securities Act, permits an offering on a continuous or delayed basis, and
(2) applicable rules and regulations under the Securities Act governing the
obligation to file a post-effective amendment permit the incorporation by
reference into the registration statement of information contained in periodic
reports filed pursuant to Section 13 or l5(d) of the Exchange Act, in lieu of
filing a post-effective amendment which (y) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (z) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement;
(b) Subject to the provisos set forth in Section 6.1(a)
above, prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement until such time as
all of such Registrable Securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement;
(c) Furnish to each seller of Registrable Securities
covered by such registration statement and each Holder two conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller or Holder, as the case may be, may
reasonably request;
(d) Promptly notify each seller of Registrable Securities
covered by such registration statement and each Holder at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete
in the light of the circumstances then existing, and at the request of any such
seller, prepare and furnish to such seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or incomplete in the light of the circumstances then existing;
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<PAGE>
(e) Use its best efforts (i) to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or blue sky laws of such states of the
United States of America where an exemption is not available and as the sellers
of Registrable Securities covered by such registration statement shall
reasonably request, (ii) to keep such registration or qualification in effect
for so long as such registration statement remains in effect and (iii) to take
any other action which may be reasonably necessary or advisable to enable such
sellers to consummate the disposition in such jurisdictions of the securities to
be sold by such sellers, except that the Company shall not for any such purpose
be required to (x) qualify generally to do business as a foreign corporation in
any jurisdiction wherein it would not but for the requirements of this clause
(e) be obligated to be so qualified, (y) subject itself to taxation in any such
jurisdiction or (z) consent to general service of process in any such
jurisdiction;
(f) Use its best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities as
may be necessary in the opinion of counsel to the Company and counsel to the
seller or sellers of Registrable Securities to enable the seller or sellers
thereof to consummate the disposition of such Registrable Securities;
(g) Use its best efforts to list all such Registrable
Securities registered in such registration on each securities exchange or
automated quotation system on which the Common Stock of the Company is then
listed, or, if the Common Stock of the Company is not then listed, to list all
such Registrable Securities registered in such registration on the Nasdaq
National Market, or any other securities exchange or automated quotation system
on which the Company's Common Stock then qualifies for listing;
(h) Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
(i) Enter into such customary agreements (including
underwriting agreements in customary form and reasonably acceptable to the
Company) and take all such other actions as the holders of a majority of the
Registration Securities being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such Registrable
Securities;
(j) Make available for inspection by any seller of
Registrable Securities and each Holder, any underwriter participating in any
disposition pursuant to such registration statement, and any attorney or
accountant retained by any such seller, Holder or underwriter, all financial and
other records, pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors, employees and independent accountants
to supply all information reasonably requested by any such seller, Holder,
underwriter, attorney or accountant in connection with such registration
statement, which information shall be subject to reasonable restrictions
concerning confidentiality and non-disclosure;
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(k) Furnish to each selling Holder upon request a signed
counterpart, addressed to the selling Holder, of
(i) an opinion of counsel for the Company, dated the
effective date of the registration statement and in form reasonably acceptable
to the Company and such Holder, and
(ii) "comfort" letters signed by the Company's
independent public accountants who have examined and reported on the Company's
financial statements included in the registration statement, to the extent
permitted by the standards of the American Institute of Certified Public
Accountants,
in the case of (i) and (ii) covering substantially the same matters with respect
to the registration statement (and the prospectus included therein) and (in the
case of the accountants' "comfort" letters) with respect to events subsequent to
the date of the financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' "comfort" letters delivered to the
underwriters in underwritten public offerings of securities;
(l) Furnish to each selling Holder upon request a copy of
all correspondence from or to the Commission in connection with any such
offering;
(m) In the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction, the Company will use its reasonable best
efforts promptly to obtain the withdrawal of such order; and
(n) Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and, if required, make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first month after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
6.2 In connection with the preparation and filing of each
registration statement under this Agreement, the Company will give the Holders
on whose behalf such Registrable Securities are to be registered and their
underwriters, if any, and their respective counsel and accountants, the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each such Holder such
access to the Company's books and records and such opportunities to discuss the
business of the Company with its officers, its counsel and the independent
public accountants who have certified the Company's financial statements, as
shall be necessary, in the opinion of such Holders or such underwriters or their
respective counsel, in order to conduct a reasonable and diligent investigation
within the meaning of the Securities Act, subject in all cases to the limitation
on reimbursement of fees and expenses of such Holders' counsel provided in
Section 1.12 hereof. Without limiting the
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foregoing, each registration statement, prospectus, amendment, supplement or any
other document filed with respect to a registration under this Agreement shall
be subject to review and reasonable approval by the Holders registering
Registrable Securities in such registration and by their counsel, subject in all
cases to the limitation on reimbursement of fees and expenses of such Holders'
counsel provided in Section 1.14 hereof.
7. INDEMNIFICATION.
7.1 INDEMNIFICATION BY THE COMPANY. In the event of any
registration of any securities of the Company under the Securities Act, to the
extent permitted by law, the Company will indemnify and hold harmless each
Holder, each of its officers, directors, partners, employees, agents, attorneys
and consultants and each Person controlling such Holder, and each underwriter,
if any, and each Person who controls any underwriter, against all claims,
losses, damages and liabilities, joint and several (or actions, proceedings or
settlements in respect thereof) arising out of or based upon any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based upon any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any violation by
the Company of the Securities Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each such Holder, each of its officers, directors, partners,
employees, agents, attorneys and consultants and each Person controlling such
Holder, each such underwriter and each Person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending or settling any such claim, loss, damage, liability
or action; PROVIDED, HOWEVER, that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission made in reliance
upon and based upon written information furnished to the Company by such Holder
or underwriter and expressly stated to be specifically for use therein.
7.2 INDEMNIFICATION BY THE HOLDERS. To the extent permitted by
law, each Holder will, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its officers,
directors, partners, employees, agents, attorneys and consultants, and each
underwriter, if any, of the Company's securities covered by such a registration
statement, each Person who controls the Company (other than such Holder) or such
underwriter within the meaning of the Securities Act and the rules and
regulations thereunder, each other Holder and each of their officers, directors,
partners, employees, agents, attorneys and consultants, and each Person
controlling such Holder, against all claims, losses, damages, expenses and
liabilities, joint and several (or actions in respect thereof) arising out of or
based upon any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company, each of its officers,
directors, partners,
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employees, agents, attorneys and consultants, each underwriter, each Person who
controls the Company (other than such Holder) or such underwriter, each other
Holder and each of their officers, directors, partners, employees, agents,
attorneys and consultants and each Person controlling such Holder for any legal
or any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in or omitted from such
registration statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by such Holder with respect to such Holder and expressly stated to be
specifically for use therein; PROVIDED, HOWEVER, that the liability of any such
Holder under this Section 7.2, shall be limited to the amount of proceeds
received by such Holder in the offering giving rise to such liability.
7.3 NOTICES OF CLAIMS, PROCEDURES, ETC. Each party entitled to
indemnification under this Section (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; PROVIDED,
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at the Indemnified Party's
sole expense, PROVIDED, FURTHER, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 7 unless such failure is prejudicial to the
ability of the Indemnifying Party to defend such claim or action.
Notwithstanding the foregoing, such Indemnified Party shall have the right to
employ its own counsel in any such litigation, proceeding or other action if (i)
the employment of such counsel has been authorized by the Indemnifying Party, in
its sole and absolute discretion, or (ii) the named parties in any such claims
(including any impleaded parties) include any such Indemnified Party and the
Indemnifying Party and the Indemnifying Party shall have been advised in writing
(in suitable detail) by counsel to the Indemnified Party either (A) that there
may be one or more legal defenses available to such Indemnified Party which are
different from or additional to those available to the Indemnifying Party, or
(B) that there is a conflict of interest by virtue of the Indemnified Party and
the Indemnifying Party having common counsel, in any of which events, the legal
fees and expenses of a single counsel for all Indemnified Parties with respect
to each such claim, defense thereof, or counterclaims thereto, shall be borne by
Indemnifying Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement (x) which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation, or (y) which requires action other than the payment of money by the
Indemnifying Party. Each Indemnified Party shall cooperate to the extent
reasonably required and furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with defense of such claim and
litigation resulting therefrom.
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7.4 CONTRIBUTION. If the indemnification provided for in this
Section 7 shall for any reason be held by a court to be unavailable to an
Indemnified Party under Section 7.1 or 7.2 hereof in respect of any loss, claim,
damage or liability, or any action in respect thereof, then, in lieu of the
amount paid or payable under Section 7.1 or 7.2, the Indemnified Party and the
Indemnifying Party under Section 7.1 or 7.2 shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating the same), (i) in such
proportion as is appropriate to reflect the relative fault of the Indemnified
Party and the Indemnifying Party, with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action or proceeding
in respect thereof, as well as any other relevant equitable considerations or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as shall be appropriate to reflect the
relative benefits received by the Indemnified Party and the Indemnifying Party
from the offering of the securities covered by such registration statement;
PROVIDED, that for purposes of this clause (ii), the relative benefits received
by a selling Holder shall be deemed not to exceed the amount of proceeds
received by such seller. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be unreasonably
withheld.
8. INFORMATION BY HOLDER. Each Holder shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement.
9. TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS. The rights with
respect to any Registrable Securities to cause the Company to register such
securities granted to a Holder by the Company under this Agreement may be
transferred or assigned by a Holder, in whole or in part, to a transferee or
assignee of at least 20,000 Registrable Securities, and, in such case, the
Company shall be given written notice stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned. Any such transferee or
assignee shall execute an agreement whereby such transferee or assignee agrees
to be bound by all of the terms and conditions of this Agreement.
10. RECORDS UNDER EXCHANGE ACT. With a view to making available to
the Holders the benefits of Rule 144 under the Securities Act and any other rule
or regulation of the Commission that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after ninety (90) days (or such shorter period as may then be permitted by the
rules and regulations of the Commission
17
<PAGE>
in effect at such timed) after the effective date of the first registration
statement filed by the Company for the offering of its securities to the general
public;
(b) take such action, including the voluntary registration of
its Common Stock under Section 12 of the Exchange Act, as is necessary to enable
the Holders to utilize Form S-3 for the sale of their Registrable Securities,
such action to be taken as soon as practicable after the end of the fiscal year
in which the first registration statement filed by the Company for the offering
of its securities to the general public is declared effective;
(c) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(d) furnish to any Holder forthwith upon request (i) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144 under the Securities Act (at any time after ninety (90) days after the
effective date of the first registration statement filed by the Company, or such
shorter period as may be then permitted by the rules and regulations of the
Commission in effect at such time), the Securities Act and the Exchange Act (at
any time after it has become subject to such reporting requirements), or that it
qualifies as a registrant whose securities may be resold pursuant to Form S-3
(at any time after it so qualifies), (ii) a copy of the most recent annual and
quarterly reports of the Company and such other reports and documents so filed
by the Company, and (iii) such other information as may be reasonably requested
in availing any Holder of any rule or regulation of the Commission which-permits
the selling of any such securities without registration or pursuant to such
form.
11. DAILY CLOSING PRICE. For purposes of this Agreement, the "Daily
Closing Price" for each day shall be, as reported in The Wall Street Journal or,
if not reported therein, as reported in another newspaper of national
circulation chosen by the Board of Directors of the Corporation, the closing
sales price or, in case no such sale takes place on such day, the average of the
closing bid and asked prices regular way, on the New York Stock Exchange
Composite Tape, or if the Common Stock is not then listed or admitted to trading
on the New York Stock Exchange, on the largest principal national securities
exchange on which such stock is then listed or admitted to trading, or if not
listed or admitted to trading on any national securities exchange, then the
average of the last reported sales price for such shares in the over-the-counter
market, as reported on the National Association of Securities Dealers Automated
Quotation System, or, if such sales prices shall not be reported thereon, the
average of the closing bid and asked prices so reported, or, if such bid and
asked prices shall not be reported thereon, as the same shall be reported by the
National Quotation Bureau Incorporated, or, if such firm at the time is not
engaged in the business of reporting such prices, as furnished by any similar
firm then engaged in such business and selected by the Company or, if there is
no such firm, as furnished by any member of the National Association of
Securities Dealers, Inc., selected by the Company.
12. NO INCONSISTENT AGREEMENTS; AGREEMENTS BY STOCKHOLDERS. The
Company will not hereafter enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Holders in this
Agreement. Without limiting the generality of the foregoing, the Company will
not hereafter enter into any agreement with respect to its securities
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which grants or modifies any existing agreement with respect to its securities
to grant to the holder of its securities (a) in connection with an incidental
registration of such securities registration rights with equal or higher
priority to the rights granted to the Holders under Sections 2 and 3 of this
Agreement or (b) in connection with a demand registration the right to require
registration of any of such holder's securities before the earlier of (i) the
date on which the Holders shall have exercised any demand registration rights
under Section 2 hereof or (ii) the date on which the Company shall have
consummated an IPO and a period ending 6 months after any lock-up period
applicable to the Holders of the Registrable Securities shall have terminated.
In addition, the Company hereby covenants and agrees to cause all of
its stockholders to which it grants (or has previously granted) registration
rights to (i) acknowledge the priorities and limitations of inclusion of
securities set forth in this Agreement and (ii) agree that in connection with
any sale of securities registered on Form S-3 which includes Registrable
Securities on behalf of any Holders, such other stockholder shall provide at
least three (3) business days notice to the Holders of any intended sale of
securities registered on such Form and shall afford the Holders an opportunity
to participate in such sale, and further agree that no such sale by such other
stockholder shall be effected unless the priorities and limitations set forth in
Section 3.3(a) of this Agreement (without reference to the first paragraph of
Section 3.3), as between the Holders and such other stockholder, are respected.
13. BENEFITS OF AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns, legal representatives and heirs.
This Agreement does not create, and shall not be construed as creating any
rights enforceable by any other Person.
14. COMPLETE AGREEMENT. This Agreement constitutes the complete
understanding among the parties with respect to its subject matter and
supersedes all existing agreements and understandings, whether oral or written,
among them. No alteration or modification of any provisions of this Agreement
shall be valid unless made in writing and signed, (a) by Holders of at least
seventy-five percent (75%) of the Series F Registrable Securities then
outstanding, (b) by holders of at least a majority of the Series G/H Registrable
Securities then outstanding and (c) and by the Company. By entering into this
Agreement, each party thereto agrees to terminate the Prior Agreement effective
upon the effectiveness of this Agreement.
15. SECTION HEADINGS. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
16. NOTICES. All notices, offers, acceptances and other
communications required or permitted to be given or to otherwise be made to any
party to this Agreement shall be deemed to be sufficient if contained in a
written instrument delivered by hand, first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, if to the Company, to it at 400 South E1 Camino
Real, Ste. 1275, San Mateo, California 94402 Attention: Mr. John D. Lockton,
President, with a copy to
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Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, 155 Constitution
Drive, Menlo Park, California 94025, Attention: Brooks Stough, Esq., and if to
any Holder, to the address of such Holder as set forth in the stock transfer
books of the Corporation.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery. Any party may change the address to
which each such notice or communication shall be sent by giving written notice
to the other parties of such new address in the manner provided herein for
giving notice.
17. GOVERNING LAW; CHOICE OF FORUM. THIS AGREEMENT SHALL BE DEEMED
TO HAVE BEEN EXECUTED AND DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN
NEW YORK, NEW YORK. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAW RULES OR PRINCIPLES). ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT HERETO SHALL ONLY BE BROUGHT IN THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS AND IRREVOCABLY WAIVES ANY DEFENSE OR CLAIM TO SUCH JURISDICTION WHICH
EITHER OR BOTH MAY HAVE BASED, DIRECTLY OR INDIRECTLY, ON THE GROUNDS OF FORUM
NON CONVENIENS. IF ANY ACTION IS COMMENCED IN ANY OTHER JURISDICTION, THE
PARTIES HERETO HEREBY CONSENT TO THE REMOVAL OF SUCH ACTION TO THE SOUTHERN
DISTRICT OF NEW YORK. THE COMPANY HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
SYSTEM, AS THE DESIGNEE, APPOINTEE AND AGENT, OF THE COMPANY TO RECEIVE, FOR AND
ON BEHALF OF THE COMPANY, SERVICE OF PROCESS IN SUCH RESPECTIVE JURISDICTIONS IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR THE RIGHTS AND
OBLIGATIONS HEREUNDER AND SUCH SERVICE SHALL BE DEEMED COMPLETED UPON DELIVERY
THEREOF TO SUCH AGENT. IT IS UNDERSTOOD THAT A COPY OF SUCH PROCESS SERVED ON
SUCH AGENT WILL BE PROMPTLY FORWARDED BY MAIL TO THE COMPANY AT ITS ADDRESS SET
FORTH IN SECTION 16, BUT THE FAILURE OF THE COMPANY TO RECEIVE SUCH COPY SHALL
NOT AFFECT IN ANY WAY THE SERVICE OF SUCH PROCESS. THE COMPANY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF
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ELECTRA, OR ANY HOLDER OF ANY OF THE SECURITIES TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
18. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same agreement.
19. SEVERABILITY. Any provision of this Agreement which is
determined to be illegal, prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such illegality,
prohibition or unenforceability without invalidating the remaining provisions
hereof which shall be severable and enforceable according to their terms and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first set forth above.
INTERNATIONAL WIRELESS
COMMUNICATIONS HOLDINGS INC.
By: /s/ Douglas S. Sinclair
-----------------------------------
Name: Douglas S. Sinclair
Title: Executive Vice President
STOCKHOLDER
-----------------------------------
(Print Name of Stockholder)
-----------------------------------
(Signature of Stockholder or Authorized
Signatory)
-----------------------------------
(Print Name and Title of Authorized
Signatory, if applicable)
