<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) DECEMBER 23, 1998
DOBSON COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
OKLAHOMA 333-23769 73-1110531
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
13439 NORTH BROADWAY EXTENSION, SUITE 200
OKLAHOMA CITY, OKLAHOMA 73114
(Address of principal executive offices) (Zip Code)
(405) 391-8500
(Registrant's telephone number, including area code)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 23, 1998, Dobson Communications Corporation (the "Company")
acquired Sygnet Wireless, Inc. and its wholly-owned subsidiary, Sygnet
Communications, Inc. (together, "Sygnet") through the merger of an indirect,
wholly-owned subsidiary of the Company with and into Sygnet Wireless, Inc. (the
"Sygnet Acquisition"). Sygnet owns the FCC cellular licenses and related assets
and operates the systems for nine contiguous cellular markets (six rural service
areas and three municipal service areas) in northeastern Ohio, western
Pennsylvania and western New York, covering an area with a population of
approximately 2.4 million.
The purchase price paid for Sygnet was $337.5 million, subject to Sygnet's
outstanding liabilities which, at September 30, 1998, were approximately $302.6
million. The purchase price paid for Sygnet was determined through arm's length
negotiations and was based on the Company's evaluation of Sygnet's FCC licenses,
its markets, its historical and projected cash flows and operating income, its
customer lists, property and equipment and the significance of its location,
operations and markets in relation to the Company's operation. Prior to the
Sygnet Acquisition, there was no material relationship between Sygnet and its
shareholders and affiliates and the Company, its directors, shareholders and
affiliates. Upon consummation of the Sygnet Acquisition, Albert H. Pharis, Jr.,
the chief executive officer and a director of Sygnet, became a director of, and
entered into a consulting agreement with, the Company. In conjunction with the
consummation of the Sygnet Acquisition, Sygnet repurchased all of its
outstanding 11 1/2% Senior Notes due 2006 (the "Sygnet Note Repurchase").
The sources of funds used by the Company for the Sygnet Acquisition
included the following:
1. The Company obtained $50.0 million from the sale of 64,646
shares of its 12 1/4% Senior Exchangeable Preferred Stock Mandatorily
Redeemable 2008 (the "PIK Preferred Stock") in a private transaction pursuant
to Rule 144A promulgated under the Securities Act of 1933.
2. Dobson/Sygnet Communications Company, a direct, wholly-owned
subsidiary of the Company, obtained $200.0 million from the sale of its 12 1/4%
Senior Notes due 2008 in a private transaction pursuant to Rule 144A promulgated
under the Securities Act of 1933 (the "Dobson/Sygnet Notes").
3. The Company obtained $115.0 million from the sale of shares of
its Class D, Class F and Class G Preferred Stock in private transactions
pursuant to Rule 506 set forth in Regulation D promulgated under the
Securities Act of 1933.
4. Dobson/Sygnet Operating Company, an indirect,
<PAGE>
wholly-owned subsidiary of the Company (and the entity that merged into
Sygnet) obtained $430.0 million of financing pursuant to senior secured
credit facilities from NationsBank, N.A., consisting of a $50.0 million
reducing, revolving credit loan and $380.0 million of term loans.
5. Contemporaneously with the consummation of the Sygnet
Acquisition, Dobson Tower Company, a wholly-owned subsidiary of the Company,
purchased substantially all of Sygnet's cellular towers for $25.0 million using
funds provided under a separate bank facility provided by NationsBank, N.A.
6. The Company obtained $16.2 million under its existing bank credit
facilities.
The Company used the funds obtained as follows:
A. The Company paid the Sygnet shareholders the merger
consideration ($337.5 million).
B. Sygnet repaid all sums due under its existing bank facility
($192.6 million).
C. The Sygnet Note Repurchase was consummated ($110.0
million plus related tender offer premuim and expenses).
D. The Company purchased U.S. government securities which were
pledged to secure the first six installments of interest due on the
Dobson/Sygnet Notes ($67.6 million).
E. All of the Company's outstanding shares of its Class B
Preferred Stock were converted into the Company's Class A Common Stock. The
Company repurchased a portion of its outstanding shares of Class A Common
Stock and all of its outstanding shares of Class C Preferred Stock (an
aggregate of $33.0 million).
F. The Company paid estimated fees and expenses related to the
Sygnet Acquisition and the financings described above ($37.9 million).
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired
The audited financial statements of Sygnet Wireless, Inc. and its
subsidiaries, consisting of consolidated balance sheets as of December 31, 1996
and 1997 and consolidated statements of income and cash flows for the three
years ended December 31, 1997 and the unaudited 1998 interim consolidated
financial statements of Sygnet Wireless, Inc. and its subsidiaries will be filed
by amendment to this report on or before March 8, 1999.
(b) Pro Forma Financial Information
The unaudited pro forma financial statements required
<PAGE>
pursuant to Article 11 of Regulation S-X will be filed by amendment to this
report on or before March 8, 1999.
(c) Exhibits
The following exhibits are filed as a part of this report:
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
2.0 Agreement and Plan of Merger dated July 28, 1998 between Sygnet
Wireless, Inc. and Dobson/Sygnet Operating Company (formerly
known as Front Nine Operating Company) (without schedules).
3.1 Amended and Restated Certificate of Incorporation of the
Registrant.
3.2 Amended and Restated By-laws of the Registrant.
3.3 Certificate of Amendment to the Certificate of Designation of the
Registrant's Class A Preferred Stock.
3.4 Certificate of Amendment to the Certificate of Designation of the
Registrant's Class D Preferred Stock.
3.5 Certificate of Amendment to the Certificate of Designation of the
Registrant's Class E Preferred Stock.
3.6 Certificate of Designation for the Registrant's Class F Preferred
Stock.
3.7 Certificate of Designation for the Registrant's Class G Preferred
Stock.
3.8 Certificate of Amendment to the Certificate of Designation of the
Registrant's Class H Preferred Stock.
3.9 Certificate of Designation for the Registrant's 12 1/4% Senior
Exchangeable Preferred Stock Mandatorily Redeemable 2008.
4.1 Indenture dated December 23, 1998 between Dobson/Sygnet
Communications Company and United States Trust Company of
New York.
</TABLE>
<PAGE>
SIGNATURE
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.
Date: January 7, 1999 Dobson Communications Corporation
(Registrant)
By /s/ Everett R. Dobson
-------------------------------------
Everett R. Dobson
Chairman of the Board and
Chief Executive Officer
By /s/ Bruce R. Knooihuizen
-------------------------------------
Bruce R. Knooihuizen
Vice President and Chief
Financial Officer
<PAGE>
AGREEMENT AND PLAN OF MERGER
dated as of
July 28, 1998
among
SYGNET WIRELESS, INC.
and
FRONT NINE OPERATING COMPANY
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of July 28, 1998 between Sygnet
Wireless, Inc., an Ohio corporation (the "Company"), and Front Nine Operating
Company, an Ohio corporation ("Purchaser").
WHEREAS, the respective Boards of Directors of the Company and
Purchaser have approved, and deem it advisable and in the best interests of
their respective stockholders that Purchaser merge with and into the Company,
pursuant to and subject to the terms and conditions set forth herein; and
WHEREAS, as a condition and inducement to Purchaser entering into this
Agreement and incurring the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, Purchaser is entering into a
stockholder voting agreement with certain holders of securities of the Company
pursuant to which, among other things, such holders have agreed to vote all
shares of capital stock of the Company owned by such holders in favor of this
Agreement, the Merger provided for herein, the transactions contemplated by this
Agreement and certain other matters (the "Voting Agreement");
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein and in
the aforesaid Voting Agreement, the parties hereto agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1. THE MERGER.
(a) Upon the terms and subject to the conditions set forth in this
Agreement (including approval of the Federal Communications Commission (the
"FCC")), at the Effective Time (as defined below), Purchaser shall be merged
(the "Merger") with and into the Company in accordance with Chapter 1701 of the
Ohio Revised Code (the "Ohio Law") whereupon the separate existence of Purchaser
shall cease, and the Company shall be the surviving corporation (the "Surviving
Corporation").
(b) Upon the terms and subject to the conditions of this Agreement,
the closing of the Merger (the "Closing") shall take place at 10:00 a.m. on a
date to be specified by the parties (the "Closing Date"), which shall be no
later than the tenth business day after satisfaction of the conditions set forth
in Sections 7.1(a), (b), (c), (f), and (g), at the offices of Bryan Cave LLP,
700 13th Street, N.W., Washington, D.C., unless another time, date or place is
agreed to in writing by the parties hereto.
(c) Upon the Closing, the Company and Purchaser will file a
certificate of merger with the Secretary of State of the State of Ohio and make
all other filings or recordings required by Ohio Law in connection with the
Merger. The Merger shall become effective at such
<PAGE>
time as the certificate of merger is duly filed with the Secretary of State
of the State of Ohio or at such later time as is specified in the certificate
of merger (the "Effective Time").
(d) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject
to all of the restrictions, disabilities and duties of the Company and
Purchaser, all as provided under Ohio Law.
SECTION 1.2. CONVERSION OF SHARES. At the Effective Time:
(a) all shares of capital stock of the Company held by the Company as
treasury stock or owned by Purchaser or any subsidiary of Purchaser immediately
prior to the Effective Time shall be canceled, and no payment shall be made with
respect thereto;
(b) each share of common stock of Purchaser outstanding immediately
prior to the Effective Time shall be converted into and become one share of
common stock of the Surviving Corporation with the same rights, powers and
privileges as the shares so converted and shall constitute the only outstanding
shares of capital stock of the Surviving Corporation;
(c) except as otherwise provided in Section 1.2(a) or as provided in
Section 1.4 with respect to Shares (as defined below) as to which appraisal
rights have been exercised, each share of (i) Class A Common Stock, par value
$0.01 per share, of the Company ("Class A Shares") issued and outstanding
immediately prior to the Effective Time and (ii) Class B Common Stock, par value
$0.01 per share, of the Company (the "Class B Shares" and, together with the
Class A Shares, the "Shares") issued and outstanding immediately prior to the
Effective Time, shall in each case be converted into the right to receive the
Merger Consideration (as defined below) in cash, without interest. The Merger
Consideration shall mean the quotient of (i) the sum of (x) $337,500,000 plus
(y) the sum of the aggregate exercise prices of Company Options (as defined
below) outstanding immediately prior to the Effective Time, divided by (ii) the
sum of (x) the number of Shares issued and outstanding immediately prior to the
Effective Time plus (y) the number of Shares issuable upon exercise of all
options to acquire Shares outstanding immediately prior to the Effective Time
(collectively, the "Company Options" and individually a "Company Option"); and
(d) all shares of the Company's preferred stock which are authorized
and unissued shall cease to exist.
SECTION 1.3. SURRENDER AND PAYMENT.
(a) Prior to the Effective Time, Purchaser shall appoint an agent
satisfactory to the Company (the "Exchange Agent") for the purpose of exchanging
certificates representing Shares for the Merger Consideration and for the
purpose of making payments to holders of Company Options in accordance with
Section 1.5. At the Effective Time, Purchaser shall deposit with the Exchange
Agent, the Merger Consideration to be paid in respect of the Shares and the
amount to be paid in respect of the Company Options held by holders electing to
receive cash in accordance with Section 1.5. For purposes of determining the
Merger Consideration to be deposited, Purchaser shall assume that no holder of
Shares will perfect his right to appraisal of his
2
<PAGE>
Shares. Prior to the Effective Time, Purchaser will send, or will cause the
Exchange Agent to send, to each holder of record of Shares a letter of
transmittal for use in such exchange (which shall specify that the delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery of the certificates representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right to
receive the Merger Consideration, upon surrender to the Exchange Agent of a
certificate or certificates representing such Shares, together with a properly
completed letter of transmittal covering such Shares, will be entitled to
receive, and shall be paid by the Exchange Agent promptly, the Merger
Consideration payable in respect of such Shares. Until so surrendered, each
such certificate shall, after the Effective Time, represent for all purposes,
only the right to receive such Merger Consideration.
(c) The Merger Consideration shall be paid to each holder of Shares
free and clear of any withholding under Section 1445 of the Code; PROVIDED that
Purchaser receives (x) a certification from such holder of non-foreign status as
described in Treasury Regulation Section 1.1445-2(b) or (y) other documentation
reasonably satisfactory to Purchaser establishing an exemption from such
withholding, in either such case at or prior to the Closing Date.
(d) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Shares or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable. For purposes of
this Agreement, "Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
(e) After the Effective Time, there shall be no further registration
of transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be canceled and
exchanged for the consideration provided for, and in accordance with the
procedures set forth, in this Article 1.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.3(a) that remains unclaimed by the holders
of Shares six months after the Effective Time shall be returned to Purchaser,
upon demand, and any such holder who has not exchanged his Shares for the Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to Purchaser for payment of the Merger Consideration in
respect of his Shares. Notwithstanding the foregoing, Purchaser shall not be
liable to any holder of Shares for any amount paid to a public official pursuant
to applicable abandoned property laws. Any amounts remaining unclaimed by
holders of Shares two years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any governmental entity) shall, to the extent permitted by
applicable law,
3
<PAGE>
become the property of the Surviving Corporation free and clear of any claims
or interest of any Person previously entitled thereto.
(g) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.3(a) to pay for Shares for which appraisal
rights have been perfected shall be returned to the Surviving Corporation, upon
demand.
SECTION 1.4. DISSENTING SHARES. Notwithstanding Section 1.2, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Ohio Law shall not be
converted into a right to receive the Merger Consideration, unless such holder
fails to perfect or withdraws or otherwise loses his right to appraisal. If
after the Effective Time such holder fails to perfect or withdraws or loses his
right to appraisal, such Shares shall be treated as if they had been converted
as of the Effective Time into a right to receive the Merger Consideration. The
Company shall give Purchaser prompt notice of any demands received by the
Company for appraisal of Shares, and Purchaser shall have the right to
participate in all negotiations and proceedings with respect to such demands.
The Company shall not, except with the prior written consent of Purchaser, make
any payment with respect to, or settle or offer to settle, any such demands.
SECTION 1.5. STOCK OPTIONS. At the Effective Time, each holder of an
outstanding Company Option, including without limitation any employee stock
option to purchase Shares granted under the Company's 1996 Stock Option Plan, as
amended (the "Employee Plan"), and the Company's 1996 Stock Option Plan for
Non-Employee Directors, as amended (the "Director Plan") (collectively, the
Employee Plan and the Director Plan are referred to herein as the "Company
Option Plans"), will be given the opportunity to receive cash for such
Company Option. Each holder of a Company Option who so requests prior to the
Effective Time, whether or not such Company Option is then vested or
exercisable, will be entitled to receive, and shall be paid by the Exchange
Agent promptly after the Effective Time for each Company Option an amount
determined by multiplying (i) the excess, if any, of the Merger Consideration
over the applicable exercise price of such option by (ii) the number of
Shares such holder could have purchased (assuming full vesting of all
options) had such holder exercised such option in full immediately prior to
the Effective Time. Prior to the Effective Time, the Company shall send to
each holder of a Company Option a letter seeking the consent of such holder
to receive cash for such option. To consent to receive cash for a Company
Option as described in this Section 1.5, any such holder must deposit with
the Exchange Agent a letter of consent and assignment and the original option
agreements relating to the options for which such consent is given, and such
holder shall be entitled to receive payment for such options after the
Effective Time. Such consent shall be irrevocable unless this Agreement is
terminated before the Effective Time. Any such payment shall be subject to
all applicable federal, state and local tax withholding requirements. If
this Agreement is terminated before the Effective Time, the option agreements
shall be returned to each such holder.
SECTION 1.6. ARTICLES OF INCORPORATION. The articles of
incorporation of Purchaser in effect at the Effective Time shall be the Articles
of Incorporation of the Surviving
4
<PAGE>
Corporation until amended in accordance with applicable law, except that the
name of the Surviving Corporation shall be changed to "Sygnet Wireless, Inc."
SECTION 1.7. CODE OF REGULATIONS. The code of regulations of
Purchaser in effect at the Effective Time shall be the code of regulations of
the Surviving Corporation until amended in accordance with applicable law.
SECTION 1.8. DIRECTORS AND OFFICERS. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, the directors and officers of Purchaser at the Effective
Time shall be the directors and officers of the Surviving Corporation.
SECTION 1.9. ESCROW DEPOSIT.
(a) The Company and Purchaser shall appoint PNC Bank, National
Association (the "Escrow Agent") for the purpose of holding Purchaser's earnest
money deposit hereunder.
(b) Purchaser shall cause to be delivered to the Escrow Agent
$25,000,000 (the "Deposit") in immediately available funds as Purchaser's
earnest money deposit within three (3) business days after the execution of this
Agreement, to be held and applied pursuant to the terms of an escrow agreement
(the "Escrow Agreement") to be entered into by the Company, Purchaser and the
Escrow Agent. If the Closing occurs, then the Deposit and all earnings on the
Deposit shall be paid to the Exchange Agent at Closing pursuant to the Escrow
Agreement as a portion of the total Merger Consideration. If the Company
terminates this Agreement in accordance with the provisions of Section 8.1(d),
unless at the time of such termination the Company is in material breach of this
Agreement or the requisite vote of the stockholders of the Company under the
Ohio Law for the approval of this Agreement, the Merger and the transactions
contemplated by this Agreement shall not have been obtained at the meeting (or
any adjournment thereof) called for such purpose, the Company shall be entitled
to and shall be paid the Deposit as liquidated damages (the "Liquidated Damages
Amount"), which Liquidated Damages Amount the parties agree is a fair and
reasonable measure of the damages that the Company would sustain as a result of
such termination. Notwithstanding anything else set forth in this Agreement,
the Company's sole and exclusive recourse for Purchaser's breach of its
representations or obligations under this Agreement shall be to receive the
Liquidated Damages Amount on the terms and conditions set forth in this Section
1.9. In any other case if the Closing does not occur, then, pursuant to the
Escrow Agreement, the Deposit and all earnings thereon shall be paid to
Purchaser. All payments by the Escrow Agent shall be made in accordance with
the procedures and other provisions set forth in the Escrow Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Purchaser that, except as
otherwise disclosed in the Schedules to this Agreement or in any Company Filings
(as defined herein):
5
<PAGE>
SECTION 2.1. CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio, and has all corporate powers required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The
Company has heretofore delivered to Purchaser true and complete copies of the
Company's Articles of Incorporation and Code of Regulations as currently in
effect. For purposes of this Agreement, a "Company Material Adverse Effect"
means a material adverse effect on the assets, liabilities, business,
operations, condition (financial or otherwise), or results of operations of the
Company and its subsidiary, Sygnet Communications, Inc., an Ohio corporation
("SCI"), taken as a whole, or on the ability of the Company to perform its
obligations hereunder. For purposes of this Agreement, any reference to any
event, change or effect being "material" with respect to any Person means an
event, change or effect that is material in relation to the assets, liabilities,
business, operations, condition (financial or otherwise), or results of
operations of such Person (and its subsidiaries, if any) taken as a whole or on
the ability of such Person to perform its obligations hereunder.
Notwithstanding anything to the contrary herein, a Company Material Adverse
Effect shall not include events, changes or effects (i) caused by general
economic conditions or (ii) affecting the cellular telephone industry generally.
SECTION 2.2. SUBSIDIARIES. SCI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio, and
has all corporate powers required to carry on its business as now conducted.
The Company has heretofore delivered to Purchaser true and complete copies of
SCI's Articles of Incorporation and Code of Regulations as currently in effect.
The authorized capital stock of SCI consists of 750 shares of Common Stock, $.01
par value per share, of which 200 shares are issued and outstanding, all of
which are held beneficially and of record by the Company. Except as set forth
in SCHEDULE 2.2, the shares of capital stock of SCI owned by the Company are
validly issued, fully paid and non-assessable (subject to statutory obligations
of holders, if any), and are owned free and clear of all options, pledges,
restrictions on transfer (other than pursuant to federal and state securities
laws), taxes, warrants, contracts, purchase rights, commitments, equities,
claims, demands, obligations, security interests, liens, mortgages, charges,
rights of third parties, community property rights and other encumbrances
(collectively, "Encumbrances"). Except as set forth in this Section 2.2, there
are outstanding (i) no other shares or capital stock or other voting securities
of SCI, (ii) no securities of SCI convertible into or exchangeable for shares of
capital stock or voting securities of SCI, (iii) no options or other rights to
acquire from SCI, and no obligation of SCI to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of SCI, and (iv) no obligations of SCI to repurchase, redeem,
or otherwise acquire shares of its capital stock or other equity securities.
The Company (i) does not have any direct or indirect Subsidiaries (as defined
below) other than SCI, and (ii) except as set forth in SCHEDULE 2.2, has not
made any advances to or investments in, and does not own any securities of or
equity or other interests in, any Person other than SCI. SCI is duly qualified
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
6
<PAGE>
the failure so to qualify would not reasonably be expected to have a Company
Material Adverse Effect. For purposes of this Agreement, a "Subsidiary" of any
Person means any corporation, partnership, joint venture or other legal entity
of which such Person (either alone or through or together with any other
Subsidiary) (i) owns, directly or indirectly, fifty percent (50%) or more of the
stock, partnership interests or other equity interests the holders of which are
generally entitled to vote for the election of the board of directors or other
governing body of such corporation, partnership, joint venture or other legal
entity; or (ii) possesses, directly or indirectly, control over the direction of
management or policies of such corporation, partnership, joint venture or other
legal entity (whether through ownership of voting securities, by agreement or
otherwise).
SECTION 2.3. CORPORATE RECORDS. The corporate minute books, transfer
books and stock ledgers of the Company and SCI are complete and accurate in all
material respects.
SECTION 2.4. CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the Voting Agreement and the
consummation by the Company of the transactions contemplated hereby and thereby
are within the Company's corporate powers, subject to the conditions set forth
in this Agreement. The Board of Directors of the Company has approved this
Agreement and the Voting Agreement, has determined that the transactions
contemplated by this Agreement and the Voting Agreement are in the best
interests of the Company and its stockholders and has resolved to recommend to
such stockholders that they vote in favor of the Merger. The affirmative vote
of a majority of the votes entitled to be cast by the holders of outstanding
shares of the Class A Common Stock and Class B Common Stock, voting together as
a single class, is the only vote of any class or series of capital stock of the
Company necessary to amend the Company's Code of Regulations to effect the
Opt-Out Amendment (as defined in Section 4.8 below). The affirmative vote of
two-thirds of the votes entitled to be cast by the holders of outstanding
shares of the Class A Common Stock and Class B Common Stock, voting together
as a single class, is the only vote of any class or series of capital stock
of the Company necessary to approve the Merger and other transactions
contemplated under this Agreement (other than to effect the Opt-Out
Amendment). Except as set forth in this Section 2.4, no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement and the Voting Agreement and the transactions contemplated hereby.
This Agreement and the Voting Agreement have been duly executed and delivered
by the Company and, subject to approval of the Merger by the Company's
stockholders, constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting generally the enforcement of creditors rights and by
the availability of equitable remedies.
SECTION 2.5. GOVERNMENTAL AUTHORIZATION.
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby by the
Company require no action by or in respect of, or filing with, any federal,
state or local governmental body, agency, commission, department, board,
official, administration, or authority or any judicial body thereof
("Governmental Authority") other than (a) compliance with any applicable
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act");
7
<PAGE>
(b) compliance with the Communications Act of 1934, as amended (the
"Communications Act") and applicable rules, regulations, practices and
policies of the Federal Communications Commission (the "FCC"); (c) compliance
with any applicable laws, rules, regulations, practices and orders of any
state public utility commissions ("PUCs") or similar state regulatory bodies;
(d) compliance with any applicable federal securities laws, state securities
or Blue Sky laws or state takeover laws; and (e) such actions by or filings
with Governmental Authorities, the failure of which to obtain or make would
not reasonably be expected to: (1) have, individually or in the aggregate, a
Company Material Adverse Effect; (2) impair the ability of the Company to
perform its obligations under this Agreement; or (3) prevent the consummation
of the transactions contemplated by this Agreement.
(b) The Company or SCI holds all licenses, permits, certificates,
franchises, ordinances, registrations, or other rights, applications and
authorizations filed with, granted or issued by, or entered by the FCC, or any
state or local public service commission or PUC asserting jurisdiction over the
Company's or SCI's business or operations (each a "State Authority"), that are
required for the conduct of their businesses as now being conducted, and the
Company or SCI holds all licenses, permits, certificates, franchises,
ordinances, registrations, or other rights, applications and authorizations
filed with, granted or issued by, or entered by any other Governmental Authority
that are required for the conduct of their businesses as now being conducted,
except for those the absence of which would not, individually or in the
aggregate, have a Company Material Adverse Effect (all of the Company's and
SCI's licenses, permits, certificates, franchises, ordinances, registrations,
rights, applications and authorizations may sometimes hereinafter be referred to
collectively as the "Company Licenses"). The Company Licenses are valid, in
full force and effect, and the terms of said Company Licenses are not subject to
any restrictions or conditions that materially limit or would materially limit
the operations of the business of the Company or SCI as presently conducted,
other than restrictions or conditions generally applicable to licenses of that
type. There are no proceedings pending or, to the knowledge of the Company,
complaints or petitions by others, or threatened proceedings, before the FCC or
any other Governmental Authority relating to the business or operations of the
Company or SCI or the Company Licenses, and there are no facts or conditions
that reasonably could constitute grounds for the FCC to revoke, terminate,
suspend, deny, annul, or impose conditions on any renewal of any Company
Licenses, that would reasonably be expected to: (1) have, individually or in the
aggregate, a Company Material Adverse Effect; (2) impair the ability of the
Company to perform its obligations under this Agreement; or (3) prevent the
consummation of the transactions contemplated by this Agreement. Each of the
Company and SCI is operating its business in all material respects in accordance
with the Company Licenses and the applicable requirements of the Communications
Act.
(c) SCHEDULE 2.5(c) contains a true and complete list of (i) each
application of the Company and SCI pending before the FCC, and each FCC permit
and FCC license in which the Company or SCI has an interest; and (ii) all
licenses, certificates, consents, permits, approvals, and authorizations pending
before or issued by any State Authority (the "Company State Certificates"). The
Company has provided the Purchaser with a copy of each of the Company Licenses
and Company State Certificates listed in SCHEDULE 2.5(c). For all of the
Company Licenses that are cellular licenses in which the five-year fill-in
period expired prior to the date of this Agreement, the Company or SCI (as
appropriate) timely filed appropriate applications or
8
<PAGE>
notifications with the FCC such that none of the original authorized area
became "unserved area" as defined in 47 C.F.R. Part 22, except where all such
unserved areas have subsequently been added to the Company's Cellular
Geographic Service Area pursuant to Phase 2 applications and Form 489
notifications or as identified in SCHEDULE 2.5(c). SCHEDULE 2.5(c) identifies
all of the Company Licenses that are cellular licenses for which the
five-year fill-in period has not yet expired as of the date of this Agreement.
Except where a lack of compliance individually or in the aggregate
would not have or would not reasonably be expected to have a Company Material
Adverse Effect, (i) all reports required by the Communications Act or required
to be filed with the FCC by the Company or SCI have been filed and are accurate
and complete and (ii) all reports required to be filed by the Company or SCI
with all other Governmental Authorities have been filed and are accurate and
complete.
SECTION 2.6. NON-CONTRAVENTION. Except as set forth in SCHEDULE 2.6,
the execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the transactions contemplated hereby do not and
will not (a) assuming approval of the Merger by the Company's stockholders,
contravene or conflict with the Articles of Incorporation or Code of Regulations
of the Company or SCI; or (b) except for any such matters that, individually or
in the aggregate, have not had, and would not reasonably be expected to have, a
Company Material Adverse Effect, (i) assuming compliance with the matters
referred to in Section 2.5, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to the Company, SCI or any of their
respective properties or assets; (ii) assuming compliance with the matters
referred to in Section 2.5 and assuming satisfaction or waiver of all of the
conditions of the Indenture dated as of September 26, 1996, between the Company
and Fleet National Bank, as trustee (the "Indenture") to permit the consummation
of the Merger, result in a violation or breach of, or constitute a default
under, or give rise to a right of termination, cancellation or acceleration of
any right or obligation of the Company or SCI or to a loss of any benefit to
which the Company or SCI is entitled under any provision of any Company Material
Contract, any Company License or Company State Certificate; or (iii) result in
the creation or imposition of any Encumbrance on any asset of the Company or
SCI.
SECTION 2.7. CAPITALIZATION.
(a) The authorized capital stock of the Company consists of (i)
60,000,000 shares of Class A Common Stock, $.01 par value per share, each of
which is entitled to one vote per share; (ii) 10,000,000 shares of Class B
Common Stock, $.01 par value per share, each of which is entitled to ten votes
per share; (iii) 5,000,000 shares of Nonvoting Preferred Stock, $.01 par value
per share, of which 500,000 are designated as Series A Senior Cumulative
Nonvoting Preferred Stock; and (d) 10,000,000 shares of Voting Preferred Stock,
$.01 par value per share. As of the date of this Agreement, there are
outstanding 4,730,091 shares of Class A Common Stock; 4,440,539 shares of Class
B Common Stock; no shares of Nonvoting or Voting Preferred Stock; and options
to purchase an aggregate of 926,700 shares of Class A Common Stock. SCHEDULE
2.7(a) accurately sets forth the record and beneficial owners (as reflected
on the
9
<PAGE>
Company's books) of the Company's outstanding shares of Class A Common Stock
and Class B Common Stock and the number of shares owned by each such
shareholder.
(b) Except as set forth in SCHEDULE 2.7(b), all of the Company
Options were issued pursuant to the Company Option Plans. SCHEDULE 2.7(a)
accurately sets forth the record and beneficial owners (as reflected in the
Company's books) of the Company Options and the number of Company Options owned
by each optionholder. The exercise prices of the Company Options as of the
Company Balance Sheet Date are set forth in SCHEDULE 2.7(b).
(c) All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable and free
of pre-emptive rights. Except as set forth in this Section 2.7, there are
outstanding (i) no other shares of capital stock or other voting securities of
the Company; (ii) no securities of the Company convertible into or exchangeable
for shares of capital stock or voting securities of the Company; (iii) except
for the Company Options set forth on SCHEDULE 2.7(a) and except as set forth in
SCHEDULE 2.7(c), no other options, warrants or other rights to acquire from the
Company, and no obligation of the Company to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of the Company; and (iv) no obligations of the Company to
repurchase, redeem or otherwise acquire shares of its capital stock or other
equity securities.
SECTION 2.8. SEC FILINGS.
(a) The Company has timely filed all reports, forms, statements and
documents required to be filed with the Securities and Exchange Commission (the
"SEC") pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and has delivered or made available to Purchaser (i) its annual
report on Form 10-K for its fiscal year ended December 31, 1997; (ii) its
quarterly report on Form 10-Q for its fiscal quarter ended June 30, 1998
("Company June 10-Q"); and (iii) all of its other reports, statements, schedules
and registration statements filed with the SEC since June 30, 1998 (collectively
the "Company Filings").
(b) As of their respective filing dates, the Company Filings (i)
complied as to form in all material respects with the requirements of the
Exchange Act and (ii) did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
SECTION 2.9. FINANCIAL STATEMENTS.
(a) The audited consolidated financial statements and unaudited
consolidated interim financial statements of the Company, including all related
notes and schedules, included in the Company Filings fairly present, in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of the Company and SCI as of the dates thereof and their
consolidated results of operations and cash flow for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements). For purposes of this Agreement,
10
<PAGE>
"Company Balance Sheet" means the Company's balance sheet dated as of June
30, 1998, as set forth in the Company June 10-Q, and "Company Balance Sheet
Date" means June 30, 1998.
(b) Except as and to the extent set forth on the Company Balance
Sheet, the Company and SCI do not have any liability or obligation of any nature
(whether accrued, absolute, contingent or otherwise) that would be required to
be reflected on the Company Balance Sheet, except for liabilities and
obligations incurred since the Company Balance Sheet Date in the ordinary course
of business which would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect.
SECTION 2.10. ABSENCE OF CERTAIN CHANGES. Except as set forth in
SCHEDULE 2.10, since the Company Balance Sheet Date, the Company and SCI have
conducted their business in the ordinary course consistent with their past
practices and there has not been:
(a) any event that has had a Company Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company,
or any repurchase, redemption or other acquisition by the Company of any
outstanding shares of capital stock or other ownership interests in, the
Company;
(c) any incurrence, assumption or guarantee by the Company or SCI of
any outstanding amount of indebtedness for borrowed money other than in the
ordinary course of business;
(d) any material transaction or commitment made, or any material
contract or agreement entered into, by the Company or SCI relating to their
respective assets or businesses (including the acquisition or disposition of any
assets) or any loss or relinquishment by the Company or SCI of any material
contract or other material right, other than transactions and commitments in the
ordinary course of business in accordance with their customary practices;
(e) any material change in any method of accounting or accounting
practice or policy or application thereof by the Company or SCI;
(f) any material increase in (or commitment, oral or written, to
increase) the rate or terms (including, without limitation, any acceleration of
the right to receive payment) of compensation payable or to become payable by
the Company or SCI to their directors, officers, employees or consultants,
except increases occurring in the ordinary course of business; or
(g) any material increase in (or commitment, oral or written, to
increase) the rate or terms (including, without limitation, any acceleration of
the right to receive payment) of any bonus, insurance, pension or other employee
benefit plan or contract, payment or arrangement made to, for or with any
director, officer, employee or consultant of the Company or SCI, except
increases occurring in the ordinary course of business.
SECTION 2.11. LITIGATION. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of the Company threatened
against or affecting, the
11
<PAGE>
Company or SCI or any of their respective properties before any court or
arbitrator or any Governmental Authority that, would reasonably be expected
to have a Company Material Adverse Effect or which in any manner challenges
or seeks to prevent, enjoin, alter or delay any of the transactions
contemplated hereby. There are no judgments, decrees, injunctions or orders
of any Governmental Authority outstanding against the Company or SCI that
would reasonably be expected to have a Company Material Adverse Effect.
SECTION 2.12. EMPLOYEE BENEFIT PLANS.
(a) SCHEDULE 2.12 contains a list of each employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), which are hereinafter referred to individually as a "Plan"
and collectively as the "Plans") pursuant to which the Company or SCI has any
present or future obligations or liabilities with respect to its employees or
former employees or their dependents or beneficiaries. There are no
investigations by any Governmental Authority, termination proceedings, suits or
proceedings, negotiations, demands or proposals (other than routine claims for
benefits) that are pending or threatened that concern matters now covered, or
that would be covered, by the foregoing types of Plans.
(b) The Company has delivered or made available to Purchaser, or will
deliver or make available prior to the Closing, copies of the following
documents, as they may have been amended to the date of this Agreement,
embodying or relating to the Plans: (i) each of the Plans listed on SCHEDULE
2.12, including all amendments thereto, and any related trust agreements, group
annuity contracts, insurance policies or other funding agreements; (ii) the most
recent determination letter, if any, from the Internal Revenue Service with
respect to the plans that are benefit pension plans as defined in Section
3(2)(A) of ERISA (hereinafter referred to as "Pension Plans"); (iii) current
summary plan descriptions and prospectuses; (iv) the two most recently filed
annual returns/reports on Form 5500 for each of the Plans; and (v) general
notification to employees of their rights under Code Section 4980B and form of
letter(s) distributed upon the occurrence of a qualifying event described in
Code Section 4980B, in the case of a plan that is a "group health plan" as
defined in Code Section 5000(b)(1).
(c) Except as set forth in SCHEDULE 2.12: (i) the written terms of
each of the Plans and any related trust agreement, group annuity contract,
insurance policy or other funding arrangement are in substantial compliance with
ERISA, the Code and all other applicable legal requirements, and each of the
Plans has been administered in substantial compliance with, and has no direct or
indirect material liability in connection with such regulatory requirements;
(ii) each of the Plans has been administered in substantial compliance with its
terms; (iii) each Plan that is a Pension Plan meets the requirements of Section
401(a), and, if applicable, Sections 409 and 4975(e), of the Code and has been
so qualified since its inception date to the date of this Agreement, and each
trust forming a part thereof is exempt from income tax pursuant to Section
501(a) of the Code; (iv) the Company has not engaged in any "prohibited
transaction" (as defined in Section 4975 of the Code or Section 406 or 407 of
ERISA) that could subject the Company to any tax or penalty under Section 4975
of the Code or Title I of ERISA; (v) as of the date of this Agreement, there are
no actions, suits, arbitrations or claims pending (other than routine claims for
benefits), legal, administrative or other proceedings or governmental
investigations pending or, to the Company's knowledge, threatened, against (X)
the Plans, the Plan fiduciaries or the
12
<PAGE>
Plan assets, or (Y) the Company or SCI with respect to claims related to such
Plans, (vi) all contributions due and payable from the Company with respect
to each of the Plans have been made and all expenses and liabilities relating
to each of the Plans for all calendar (plan) years through December 31, 1997
are reflected on the financial statements of the Company and of SCI; (vii) no
Pension Plan that is a "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA, nor any single-employer plan of any entity which is
considered a predecessor of the Company or one employer with the Company
under Section 4001 of ERISA or Section 414 of the Code (an "ERISA Affiliate")
is subject to Section 412 of the Code or Title IV of ERISA; (viii) no Plan
currently maintained by the Company or an ERISA affiliate, and no other
"employee benefit plan" under which the Company or an ERISA affiliate has any
liability or other obligation, is or was a "multiple employer plan" (within
the meaning of Section 413(c) of the Code and Section 4063 of ERISA) or a
"multiemployer plan" (as defined in Section 3(37) of ERISA); (ix) neither the
Company nor any of its ERISA Affiliates has incurred any withdrawal liability
under Subtitle E of Title IV of ERISA with respect to a multiemployer plan;
(x) neither the Company nor SCI has any current or projected obligations for
retiree health, life or other welfare benefits under any Plan; (xi) with
respect to the qualified status of each Pension Plan under Section 401(a) of
the Code, a favorable determination letter has been received, or an
application for a favorable determination letter has been filed, is pending,
and no indication of an adverse response has been received; and (xii) the
Company and the Company's ERISA Affiliates have materially complied with all
applicable notice requirements and have provided group health care
continuation and conversion coverage under Section 4980B of the Code and/or
any other applicable law.
(d) SCHEDULE 2.12 lists each employment, severance or other similar
contract, arrangement or policy, each cafeteria, educational assistance,
dependent care assistance, and fringe benefit plan or arrangement, and each plan
or arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, retirement benefits or
deferred compensation, profit-sharing, bonuses, stock options, stock
appreciation or other forms of incentive compensation or post retirement
insurance, compensation or benefits that (i) is not one of the Company's Plans
and (ii) is entered into, maintained or contributed to, as the case may be, by
the Company or SCI. Such contracts, plans and arrangements as are described
above are referred to collectively herein as the "Benefit Arrangements." Each
Benefit Arrangement has been maintained in material compliance with its terms
and with the requirements prescribed by any and all statutes, orders, rules and
regulations that are applicable to such Benefit Arrangement. Neither the
Company nor SCI has any obligations for post-retirement benefits under any
Benefit Arrangement. There are no investigations by any Governmental Authority,
termination proceedings, suits, negotiations, demands or proposals (other than
routine claims for benefits) that are pending or threatened that concern matters
now covered, or that would be covered, by the foregoing types of Benefit
Arrangements. The Company has delivered or made available to Purchaser, or will
deliver or make available prior to the Closing, copies of documents evidencing
or describing the Benefit Arrangements, including documents of the type listed
in Section 2.12(b). The Company, SCI and each of their respective executive
officers have agreed to terminate such officer's employment agreement as of the
Effective Time.
(e) Except as set forth in SCHEDULE 2.12, the Company is not a party
to or subject to any collective bargaining agreement with any union or any
employment contract or
13
<PAGE>
arrangement providing for annual future compensation of any officer,
consultant, director or employee.
(f) Except as set forth in SCHEDULE 2.12, no Plan or Benefit
Arrangement (including any Plan or Benefit Arrangement covering former employees
of the Company) restricts the ability of either the Company or Purchaser to
amend or terminate the Plan on or any time after the Closing.
(g) Except as set forth in SCHEDULE 2.12, there will be no
acceleration of vesting, benefit accrual or benefit entitlement under either the
Plans or the Benefit Arrangements as a result of the transactions contemplated
by this Agreement, and there will be no incidence of severance payments or any
other termination benefits for which Purchaser will be responsible as a result
of the transaction contemplated hereby or otherwise.
(h) Except as set forth in SCHEDULE 2.12, the Company is not liable
for any future payment to any current or former employee resulting from the
long- or short-term disability of such person, whether such payments are to be
made pursuant to the Company's disability plan, if any, or otherwise.
(i) Except as set forth in SCHEDULE 2.12, there is no contract,
agreement or arrangement covering any employee that, individually or
collectively could give rise to the payment of any amount that would not be
deductible pursuant to the terms of Section 280G of the Code.
(j) Neither the Company nor SCI has communicated to employees or
other persons any additional Plan or Benefit Arrangement not set forth in
SCHEDULE 2.12 or any change in or termination of any existing Plan or Benefit
Arrangement.
SECTION 2.13. TAXES.
(a) All tax returns, including estimated tax and informational
returns ("Tax Returns"), of or relating to any Taxes heretofore required to be
filed by the Company or SCI have been duly filed on a timely basis, other than
any such Tax Returns, the failure of which to file would not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect. All such Tax Returns were complete and accurate in all material
respects and the Company and SCI have timely paid or made adequate provision (by
establishing adequate reserves on its books and records) for the payment of all
Taxes shown as due and payable on such Tax Returns. There are no grounds for
the assertion or assessment of any additional Taxes against the Company, SCI or
their assets with respect to such periods. All unpaid Taxes are properly
accrued on the Company's or SCI's books. Set forth in SCHEDULE 2.13 are all Tax
Returns for periods up to and including the date hereof (whether the period ends
on such date) that have not been filed as of the date hereof. Except as set
forth in SCHEDULE 2.13, there are no claims or assessments pending against the
Company or SCI for any alleged deficiency in any Tax, and the Company has not
been notified in writing of any proposed Tax claims or assessments against the
Company or SCI (other than, in each case, those for which adequate reserves have
been established or which are being contested in good faith as reflected in
records made available
14
<PAGE>
to Purchaser prior to the date of this Agreement or are immaterial in
amount). Except as set forth in SCHEDULE 2.13, neither the Company nor SCI
has made an election under Section 338 of the Code or has taken any action
that would result in any Tax liability of the Company or SCI as a result of a
deemed election within the meaning of Section 338 of the Code. Except as set
forth in SCHEDULE 2.13, neither the Company nor SCI has any waivers or
extensions of any applicable statute of limitations to assess any material
amount of Taxes. Except as set forth in SCHEDULE 2.13, there are no
outstanding requests by the Company or SCI for any extension of time within
which to file any material Tax Return or within which to pay any material
amount of Taxes shown to be due on any Tax Return. Except as set forth in
SCHEDULE 2.13, no taxing authority is conducting or has notified or, to the
knowledge of the Company, has threatened the Company or SCI that it intends
to conduct, an audit of any prior Tax period of the Company or any of its
past or present Subsidiaries. SCI has never been an "S" corporation under
the Code. The Company terminated its "S" corporation status in 1996. The
Company and SCI have withheld from each payment made to any of its present or
former employees, officers and directors all amounts required by applicable
law to be withheld and have, where required, remitted such amounts within the
applicable periods to the appropriate Governmental Authorities.
(b) Except as set forth in SCHEDULE 2.13, there are no
investigations, audits or administrative proceedings, court proceedings or
claims pending or, to the Company's knowledge, threatened against the Company or
SCI with respect to any Taxes and no assessment, deficiency or adjustment has
been asserted or, to the knowledge of the Company, proposed with respect to any
Tax Return of or with respect to the Company or SCI and there are no liens for
Taxes upon the assets or properties of the Company or SCI, except for liens for
Taxes not yet due and owing.
(c) Except as set forth in SCHEDULE 2.13, neither the Company nor SCI
are a party to or bound by any affiliated group consolidated return tax
allocation agreement, tax sharing agreement or tax indemnification agreement.
(d) Except as set forth in SCHEDULE 2.13, neither the Company nor SCI
has made or become obligated to make, or will, as a result of the transactions
contemplated by this Agreement, make or become obligated to make, any "excess
parachute payment" as defined in Section 280G of the Code (without regard to
Subsection (b)(4) thereof).
(e) Except as set forth in SCHEDULE 2.13, neither the Company nor SCI
is or has been a United States real property holding company (as defined in
Section 897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.
(f) None of the assets of the Company or of SCI is property which the
Company or SCI is required to treat as being owned by any other Person pursuant
to the so-called "safe harbor lease" provisions of former Section 168(f)(8) of
the Code.
(g) The Company and SCI have disclosed on their federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income Tax liability within the meaning of
Section 6662(d) of the Code.
15
<PAGE>
(h) Except as set forth in SCHEDULE 2.13, the Company and SCI are not
and have never been includable corporations in an affiliated group of
corporations, within the meaning of Section 1504 of the Code, other than in the
affiliated group of which the Company is the common parent corporation.
(i) Except as set forth in SCHEDULE 2.13, neither the Company nor SCI
is a partner or member in or subject to any joint venture, partnership, limited
liability company or other arrangement or contract that is or should be treated
as a partnership for federal income tax purposes.
(j) As used in this Agreement, "Taxes" means all taxes, charges,
fees, levies, or other like assessments, including without limitation income,
gross receipts, ad valorem, value added, premium, excise, real property,
personal property, windfall profit, sales, use, transfer, license, withholding,
employment, payroll, and franchise taxes imposed by any Governmental Authority,
and shall include any interest, fines, penalties, assessments, or additions to
tax resulting from, attributable to, or incurred in connection with any such
Taxes or any contest or dispute thereof.
SECTION 2.14. COMPLIANCE WITH LAWS. Except as disclosed in the
Company Filings, and except for matters that individually or in the aggregate
would not reasonably be expected to have a Company Material Adverse Effect,
neither the Company nor SCI is in violation of any applicable provisions of any
laws, statutes, ordinances or regulations; provided that no representation or
warranty is made in this Section 2.14 with respect to Environmental Laws (as
hereafter defined).
SECTION 2.15. FINDERS' FEES. Lehman Brothers, Inc. ("Lehman") is
entitled to fees and expenses in an amount not to exceed $5,000,000 from the
Company by virtue of the transactions contemplated hereby. Except for Lehman,
there is no investment banker, broker, finder or other intermediary that has
been retained by or is authorized to act on behalf of the Company who might be
entitled to any fee or commission upon consummation of the transactions
contemplated by this Agreement.
SECTION 2.16. ENVIRONMENTAL MATTERS.
(a) Except for matters which individually and in the aggregate would
not reasonably be expected to have a Company Material Adverse Effect, (i) the
Company and SCI are in compliance with all applicable Environmental Laws (as
defined below); (ii) neither the Company nor SCI has received any written
communication that alleges that the Company or SCI is not in compliance in all
material respects with all applicable Environmental Laws; (iii) all material
permits and other governmental authorizations held by the Company and SCI
pursuant to the Environmental Laws are in full force and effect, the Company and
SCI are in compliance with all of the terms of such permits and authorizations,
and no other permits or authorizations are required by the Company or SCI for
the conduct of their respective businesses; and (iv) the management, handling,
storage, transportation, treatment, and disposal by the Company and SCI of any
Hazardous Materials (as defined below) have been in compliance with all
applicable Environmental Laws.
16
<PAGE>
(b) Except for Environmental Claims (as defined below) which
individually and in the aggregate would not reasonably be expected to have a
Company Material Adverse Effect, there is no Environmental Claim pending or, to
the knowledge of the Company, threatened against or involving the Company or SCI
or against any Person whose liability for any Environmental Claim the Company or
SCI has or may have retained or assumed or be liable for either contractually or
by operation of law.
(c) Except for matters which individually and in the aggregate would
not reasonably be expected to have a Company Material Adverse Effect, to the
knowledge of the officers, directors and managerial employees of the Company and
SCI, there are no past or present actions or activities by the Company or SCI,
including, without limitation, the storage, treatment, release, emission,
discharge, disposal or arrangement for disposal of any Hazardous Materials, that
could reasonably form the basis of any Environmental Claim against the Company
or SCI or against any Person whose liability for any Environmental Claim the
Company or SCI may have retained or assumed or be liable for either
contractually or by operation of law.
(d) As used herein, these terms shall have the following meanings:
(i) "Environmental Claim" means any and all administrative,
regulatory, or judicial actions, suits, demands, demand letters,
directives, claims, liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any Governmental Authority
or other person alleging potential liability arising out of, based on or
resulting from the present, or release or threatened release into the
environment, of any Hazardous Materials at any location owned or leased by
the Company or SCI or other circumstances forming the basis of any
violation or alleged violation of any Environmental Law.
(ii) "Environmental Laws" means all applicable federal, state
and local laws, statutes, codes, rules, regulations, ordinances, judgments,
orders and decrees of any Governmental Authority relating to pollution, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or protection of human
health as it relates to the environment including, without limitation,
federal, state and local laws, statutes, codes, rules, regulations,
ordinances, judgments, orders and decrees of any Governmental Authority
relating to releases of Hazardous Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials or relating to management of
asbestos in buildings.
(iii) "Hazardous Materials" means wastes, substances, PCBs,
asbestos, petroleum products or byproducts, or materials (whether solids,
liquids or gases) that are deemed hazardous, toxic, pollutants, or
contaminants, including without limitation, substances defined as
"hazardous substances", "toxic substances", "radioactive materials", or
other similar designations in, or otherwise subject to regulation under,
any Environmental Laws.
17
<PAGE>
SECTION 2.17. MATERIAL CONTRACTS.
(a) SCHEDULE 2.17 sets forth a complete and correct list, as of the
date of this Agreement, of all agreements of the following type to which the
Company or SCI is a party or may be bound (collectively, the "Company Material
Contracts"): (i) each agreement filed as an exhibit to the Company Filings and
each agreement that has been entered into since the Company Balance Sheet Date
that would be required to be filed as an exhibit to the Company Filings; (ii)
each employment, severance, termination, consulting and retirement agreement not
otherwise disclosed elsewhere in this Agreement; (iii) each loan agreement,
indenture, letter of credit, lease required to be capitalized under GAAP,
mortgage, note and other debt instrument evidencing, individually, indebtedness
or an annual obligation to pay in excess of Two Hundred Fifty Thousand Dollars
($250,000); and (iv) each other agreement that requires annual payments of more
than Two Hundred Fifty Thousand Dollars ($250,000) (other than purchase orders
and advertising sales contracts entered into in the ordinary course of
business).
(b) Except as set forth in SCHEDULE 2.17, all the Company Material
Contracts are valid and in full force and effect except to the extent they have
previously expired in accordance with their terms, and neither the Company nor
SCI has (or has any knowledge that any other party thereto has) violated any
provision of, or committed or failed to perform any act which with or without
notice, lapse of time or both would constitute a default under the provisions
of, any Company Material Contract, except for defaults which individually or in
the aggregate would not reasonably be expected to have a Company Material
Adverse Effect. True and complete copies of all Company Material Contracts have
been delivered to Purchaser or made available for inspection.
SECTION 2.18. SEVERANCE. Set forth in SCHEDULE 2.18 is a complete
and accurate description of all severance payments or other compensation under
any Company or SCI severance policy, employment agreement or other commitment to
be paid on or after the Closing Date, the amounts due, and the terms under which
such amounts are to be paid.
SECTION 2.19. INTELLECTUAL PROPERTY. Except as set forth in
SCHEDULE 2.19, the Company and SCI own or possess all rights to use the service
marks, copyrights, franchises, trademarks, trade names, jingles, slogans,
logotypes, patents and other similar intangible assets (the "Intellectual
Property") maintained, owned, used, held for use or otherwise held or used by
the Company and SCI, and all of the rights, benefits and privileges associated
therewith material to the conduct of the business of the Company and SCI as
currently conducted. To the knowledge of the Company, except as set forth in
SCHEDULE 2.19, neither the Company nor SCI is infringing upon any Intellectual
Property right or other legally protectable right of any other Person. The
Company and SCI are taking reasonable action to assess, evaluate and correct
their hardware, software, embedded microchips and other processing capabilities
that they use directly or indirectly, to ensure that they will be able to
function accurately and without interruption or ambiguity using date information
before, during and after January 1, 2000.
SECTION 2.20. PROPERTIES; ASSETS. Except as set forth in
SCHEDULE 2.20, the Company or SCI (a) has good and marketable title to all the
assets reflected in the Company Balance Sheet as being owned by the Company or
SCI except properties sold or otherwise
18
<PAGE>
disposed of since the date thereof in the ordinary course of business, or
acquired after the date thereof which are material to the Company's business
on a consolidated basis, free and clear of all Encumbrances except (i)
Encumbrances arising in connection with those matters set forth on SCHEDULE
2.20, (ii) statutory liens securing payments not yet due, and (iii) such
imperfections or irregularities of title, claims, liens, charges, security
interests or encumbrances as do not materially affect the use of the
properties or assets subject thereto or affected thereby or otherwise
materially impair business operations at such properties (the items described
in clauses (i), (ii) and (iii) being "Permitted Encumbrances"), and (b) is
the lessee of all leasehold estates reflected in the Company Balance Sheet
(except for leases that have expired by their terms since the date thereof)
or acquired after the date thereof which are material to its business on a
consolidated basis and is in possession of the properties purported to be
leased thereunder, and to the knowledge of the Company, each such lease is
valid without default thereunder by the lessee or, to the Company's
knowledge, lessor. The assets are in such operating condition as to permit
the operation of the business of the Company and SCI as being conducted as of
the date hereof, constitute all of the assets, rights and properties which
are required for the conduct of the business of the Company and SCI as of the
date hereof, except for such assets, rights and properties, the lack of which
would not reasonably be expected to have a Company Material Adverse Effect.
SECTION 2.21. INSURANCE. SCHEDULE 2.21 contains a list of all
insurance policies of title, property, fire, casualty, liability, life,
workmen's compensation, business interruption, libel and slander, and other
forms of insurance in force at the date hereof with respect to the Company and
SCI. All such insurance polices: (a) insure against such risks, and are in
such amounts, as appropriate and reasonable considering the Company and SCI's
properties, businesses and operations; (b) are in full force and effect; and (c)
are valid, outstanding, and enforceable. Neither the Company nor SCI has
received or given notice of cancellation with respect to any of the material
insurance policies.
SECTION 2.22. REAL PROPERTY.
(a) SCHEDULE 2.22 contains a true, correct and complete list and
brief description of each parcel of real property owned by the Company and SCI
(the "Owned Real Property"). The Company or SCI has good and marketable title
to all such Owned Real Property.
(b) SCHEDULE 2.22 contains a true, correct and complete list and
brief description of all real property leased by the Company and SCI, all of
which are hereinafter referred to as the "Leased Real Property". The Company
has made available to Purchaser true, correct and complete copies of all leases
of the Leased Real Property (the "Leases"). No option has been exercised under
any Lease except options whose exercise has been evidenced by a written
document, a true, correct and complete copy of which has been made available to
Purchaser with the corresponding Lease.
SECTION 2.23. RELATED PARTY TRANSACTIONS.
(a) Except as set forth in the Company Filings or as set forth in
SCHEDULE 2.23, no beneficial owner of 5% or more of the Company's outstanding
equity securities or officer or director of the Company or any Person (other
than the Company) in which any such Person owns
19
<PAGE>
any beneficial interest (other than a publicly held corporation whose stock
is traded on a national securities exchange or in the over-the-counter market
and less than 1% of the stock of which is beneficially owned by all such
Persons) (collectively, "Related Parties") has any interest in: (i) any
contract, arrangement or understanding with, or relating to, the business or
operations of, the Company or SCI, or (ii) any loan, arrangement,
understanding, agreement or contract for or relating to indebtedness of the
Company or SCI, or any property (real, personal or mixed), tangible or
intangible, used in the business or operations of the Company or SCI;
excluding any such contract, arrangement, understanding or agreement
disclosed in this Agreement.
(b) Following the Effective Time, except as set forth in this
Agreement, neither the Company nor SCI will have any obligations of any kind to
any Related Party except for (i) accrued salary for the pay period commencing
immediately prior to the Effective Time and (ii) the obligations set forth in
the Company Filings.
SECTION 2.24. DISCLOSURE.
(a) No representation or warranty of the Company herein and no
information contained or referenced in a Schedule delivered by the Company to
the Purchaser pursuant hereto or in any other document subsequently delivered by
the Company to Purchaser pursuant hereto 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 or therein not
misleading.
(b) At the time the Company Proxy Statement (as defined in Section
4.8) or any amendment or supplement thereto is first mailed to stockholders of
the Company and at the time such stockholders vote on adoption of this
Agreement, the Company Proxy Statement, as supplemented or amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
The representations and warranties contained in this Section 2.24(b) shall not
apply to statements in, or omissions from, the Company Proxy Statement based
upon information furnished to the Company, or omitted therefrom, by Purchaser
for use therein, or in information concerning Purchaser or any of its affiliates
that is incorporated therein, all with the prior written consent of Purchaser.
SECTION 2.25. NO OTHER REPRESENTATIONS. Neither the Company nor any
Person affiliated therewith shall be deemed to have made to Purchaser or any
other Person affiliated therewith any representation or warranty in connection
with this Agreement or the transactions contemplated hereby other than as
expressly set forth in this Article 2. Neither the Company nor any Person
affiliated therewith makes any representation or warranty regarding any
projections, estimates, budgets or forward-looking information heretofore
delivered to or made available to Purchaser or any other Person regarding future
revenues, expenses or expenditures, future results of operations or, except as
expressly set forth in this Article 2, any other information or documents made
available to Purchaser or any other Person with respect to the Company or SCI.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
20
<PAGE>
OF PURCHASER
Purchaser represents and warrants to the Company that:
SECTION 3.1. CORPORATE EXISTENCE AND POWER. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio and has all corporate powers required to carry on its
business as now conducted. Purchaser is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not reasonably be expected to have,
individually or in the aggregate, an Purchaser Material Adverse Effect. For
purposes of this Agreement, an "Purchaser Material Adverse Effect" means a
material adverse effect, on the assets, liabilities, business, operations,
condition (financial or otherwise), or results of operations of Purchaser, or on
the ability of Purchaser to perform its obligations hereunder.
SECTION 3.2. CORPORATE AUTHORIZATION. The execution, delivery and
performance by Purchaser of this Agreement and the consummation by Purchaser of
the transactions contemplated hereby are within Purchaser's corporate powers
subject to the conditions set forth in this Agreement, and have been duly
authorized by the Board of Directors of Purchaser, and no other corporate
proceedings on the part of Purchaser are necessary to authorize this Agreement
and the transactions contemplated hereby. This Agreement constitutes a valid
and binding agreement of Purchaser, enforceable against Purchaser in accordance
with its terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting generally the enforcement of
creditors rights and by the availability of equitable remedies.
SECTION 3.3. GOVERNMENTAL AUTHORIZATION.
(a) The execution, delivery and performance by Purchaser of this
Agreement and the consummation of the transactions contemplated hereby by
Purchaser require no action by or in respect of, or filing with, any
Governmental Authority other than (a) compliance with any applicable
requirements of the HSR Act; (b) compliance with any applicable requirements
under the Communications Act and the rules, regulations and policies of the FCC;
(c) compliance with any applicable laws, rules, regulations, practices, and
orders of any PUCs or similar state regulatory bodies; (d) compliance with any
applicable federal securities laws, state securities or Blue Sky laws or state
takeover laws; and (e) such actions by or filings with Governmental Authorities,
the failure of which to obtain or make would not reasonably be expected to: (1)
have, individually or in the aggregate, a Purchaser Material Adverse Effect; (2)
impair the ability of Purchaser to perform its obligations under this Agreement;
or (3) prevent the consummation of the transactions contemplated by this
Agreement.
(b) Purchaser will be fully qualified under the Communications Act
and applicable rules, regulations, practices and policies of the FCC and any
comparable state law to be a licensee under the Company Licenses granted by the
FCC and the Company State Certificates, and to be approved as an assignee of the
Company Licenses and the Company State Certificates.
21
<PAGE>
Purchaser knows of no reason why the FCC or any State Authority will not
grant its consent to the transfer of control of the Company Licenses and the
Company State Certificates to Purchaser. Neither Purchaser, nor any "real
party in interest" (as defined by Section 22.13 of the FCC's rules) (i) has
had the FCC or any State Authority deny an application for an authorization
or revoke any authorization granted to it; or (ii) has been the subject of an
investigation by the FCC or any State Authority.
SECTION 3.4. NON-CONTRAVENTION. The execution, delivery and
performance by Purchaser of this Agreement and the consummation by Purchaser of
the transactions contemplated hereby do not and will not: (a) contravene or
conflict with the Articles of Incorporation or Bylaws of Purchaser; or (b)
except for any such matters that, individually or in the aggregate, have not had
and would not reasonably be expected to have, an Purchaser Material Adverse
Effect, (i) assuming compliance with the matters referred to in Section 3.3 and
the adoption of the Opt-Out Amendment by the Company and its stockholders,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or instrument binding upon or
applicable to Purchaser or any of its properties or assets; (ii) result in a
violation or breach of, or constitute a default under, or give rise to a right
of termination, cancellation or acceleration of any right or obligation of
Purchaser or to a loss of any benefit to which Purchaser is entitled under any
provision of any agreement, contract or other decree binding upon Purchaser or
to which Purchaser is a party or by which it is affected or any license,
franchise, permit or other similar authorization held by Purchaser an or to
which Purchaser an is a party or by which it is affected; or (iii) result in the
creation or imposition of any Encumbrance on any asset of Purchaser.
SECTION 3.5. FINANCIAL STATEMENTS. Purchaser has delivered to the
Company audited consolidated financial statements for the fiscal year ended
December 31, 1997, of Purchaser's indirect parent, Dobson Communications
Corporation ("DCC"), and unaudited consolidated interim financial statements of
DCC for its fiscal quarter ended June 30, 1998 (the "Purchaser Financial
Statements").
SECTION 3.6. FINDERS' FEES. Morgan Stanley Dean Witter & Co. is
entitled to fees from Purchaser by virtue of the transactions contemplated
hereby. Except for Morgan Stanley Dean Witter & Co., there is no investment
banker, broker, finder or other intermediary which has been retained by or is
authorized to act on behalf of Purchaser who might be entitled to any fee or
commission upon consummation of the transactions contemplated by this
Agreement.
SECTION 3.7. FINANCING. Purchaser has delivered to the Company
true and complete copies of all commitment letters (the "Commitment Letters")
entered into by Purchaser in order for Purchaser to perform its obligations
under this Agreement. Between the date hereof and the Effective Time,
Purchaser shall keep the Company reasonably informed of the status of the
financings contemplated by the Commitment Letters.
SECTION 3.8. DUE DILIGENCE INVESTIGATION. Purchaser has had an
opportunity to discuss the business, management, operations and finances of the
Company and SCI with officers and employees of the Company and has had an
opportunity to inspect the facilities of the
22
<PAGE>
Company and SCI. Purchaser has made its own independent investigation of the
Company. In executing this Agreement and consummating the transactions
contemplated hereby, Purchaser has relied solely on the written
representations and warranties of the Company set forth in Article 2, and has
not relied on any other information provided by or on behalf of the Company.
ARTICLE 4
COVENANTS OF THE COMPANY
SECTION 4.1. CONFIDENTIALITY. Prior to the Effective Time and after
any termination of this Agreement, the Company will, and the Company will cause
SCI to, hold, and will use their reasonable best efforts to cause their
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all non-public documents
and information concerning Purchaser furnished to the Company and identified as
confidential in connection with the transactions contemplated by this Agreement,
except to the extent that such information can be shown to have been (a)
previously known on a nonconfidential basis by the Company, (b) in the public
domain through no fault of the Company or (c) later lawfully acquired by the
Company from sources other than Purchaser (not owing a duty of confidentiality
to Purchaser); provided that the Company may disclose such information to its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents, in connection with the transactions contemplated by this Agreement so
long as such Persons are informed by the Company of the confidential nature of
such information and are directed by the Company to treat such information
confidentially. The Company's obligation to hold any such information in
confidence shall be satisfied if it exercises the same care with respect to such
information as it would take to preserve the confidentiality of its own similar
information. If this Agreement is terminated, the Company will cause its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to, destroy or deliver to Purchaser, upon request, all documents and
other materials, and all copies thereof, obtained by the Company or on its
behalf from Purchaser in connection with this Agreement that are subject to such
confidence. The Company shall be responsible for the breach by any of its
officers, directors, employees, accountants, counsel, consultants, advisors or
agents of any confidentiality obligation. Notwithstanding the foregoing, the
Company shall have the right to disclose any information regarding the Purchaser
in the Company Proxy Statement to the extent required by applicable law.
SECTION 4.2. CONDUCT OF THE COMPANY. During the period from the date
of this Agreement and continuing until the Effective Time, the Company agrees
(except as expressly contemplated or permitted by this Agreement, or to the
extent that Purchaser shall otherwise consent in writing) as follows:
(a) The Company shall and shall cause SCI to carry on their
respective businesses in the ordinary course and use all reasonable efforts to
preserve intact their present business organizations, keep available the
services of their present officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
them to the end that their goodwill and ongoing business shall not be impaired
in any material respect at the Effective Time;
23
<PAGE>
(b) The Company shall not (i) declare or pay any dividends on or make
other distributions in respect of any of its capital stock; (ii) split, combine
or reclassify its capital stock or issue or authorize or propose the issuance of
any other securities in respect of, in lieu of or in substitution for shares of
its capital stock; (iii) repurchase, redeem or otherwise acquire, any shares of
capital stock of the Company or SCI; or (iv) commit to any of the actions
described in clauses (i)-(iii) of this subsection (b). It is understood that
the foregoing shall not prevent the Company from taking any action required by
the terms of the Company Options;
(c) The Company shall not, nor shall it permit SCI to, issue, deliver
or sell, or authorize or propose the issuance, delivery or sale of, any shares
of its capital stock of any class or any securities convertible into, or any
rights, warrants, calls, subscriptions or options to acquire, any such shares or
convertible securities, other than (i) the issuance of shares of Company Common
Stock in connection with the transfer of outstanding Class B Shares or upon the
exercise of Company Options, and (ii) issuance by SCI of its capital stock to
the Company;
(d) The Company shall not amend or propose to amend its Articles of
Incorporation or Code of Regulations except the Opt-Out Amendment and as may be
necessary to accomplish the transactions contemplated by this Agreement on the
terms and conditions of this Agreement;
(e) The Company shall promptly provide Purchaser copies of all
filings made by the Company or SCI with any Governmental Authority whether or
not related to this Agreement or the transactions contemplated hereby, other
than the portions of such filings that include confidential information not
directly related to the transactions contemplated by this Agreement;
(f) The Company shall not and shall cause SCI not to enter into,
adopt, amend in any material respect (except as may be required by law) or
terminate any Company Benefit Plan or other employee benefit plan or any
agreement, arrangement, plan or policy between the Company or SCI and one or
more of its directors or officers, except in the ordinary course of business
consistent with past practice that, in the aggregate, does not result in a
material increase in benefits or compensation expense to the Company or SCI;
(g) The Company shall not, and shall cause SCI not to (i) increase
the periodic compensation payable to or to become payable to any of its
directors, officers or employees, except for increases in salary, wages or
bonuses payable or to become payable in the ordinary course of business and
consistent with past practice; (ii) grant any severance or termination pay
(other than pursuant to existing severance arrangements or policies as in effect
on the date of this Agreement and disclosed in SCHEDULE 2.12 or SCHEDULE 2.18)
to, or enter into any employment or severance agreement with, any of its
directors, officers or employees; or (iii) adopt any employee benefit plan or
arrangement, except as may be required by applicable law;
(h) Except for the acquisition of the license and any related assets
for the Pennsylvania 2 market, the Company shall not, and shall cause SCI not
to, acquire or agree to acquire, by merging or consolidation with, by purchasing
an equity interest in or a portion of the assets of, or by any other manner, any
business or any corporation, partnership, limited liability
24
<PAGE>
company, association or other business organization or division thereof, or
otherwise acquire or agree to acquire any assets of any other person (other
than the purchase of inventory, supplies, equipment and other similar assets
in the ordinary course of business and consistent with past practice) in the
case of asset purchases which are material in the aggregate to the Company
and SCI, taken as a whole, or make or commit to make any capital expenditures
other than capital expenditures in the ordinary course of business consistent
with past practice and in amounts which are set forth and described in
budgets made available to Purchaser;
(i) The Company shall not, and shall cause SCI not to, sell, lease,
exchange, mortgage, pledge, transfer or otherwise dispose of, or agree to sell,
lease, exchange, mortgage, pledge, transfer, or otherwise dispose of or permit
any Encumbrance to be placed or come into existence upon, any of its material
assets except for (i) Permitted Encumbrances, (ii) the grant of purchase money
security interests, (iii) dispositions of inventory in the ordinary course of
business and consistent with past practice and (iv) dispositions of equipment
which is replaced with other equipment with greater or equal value and utility;
(j) The Company shall not, and shall cause SCI not to, (i) change any
of its methods of accounting in effect on the Company Balance Sheet Date, or
(ii) make or rescind any express or deemed election relating to Taxes, settle or
compromise any claim, action, suit, litigation, proceeding, arbitration,
investigation, audit or controversy relating to Taxes (except where the amount
of such settlements or controversies, individually or in the aggregate, does not
exceed Five Hundred Thousand Dollars ($500,000), or change any of its methods of
reporting income or deductions for federal income tax purposes from those
employed in the preparation of the federal income tax returns for the taxable
year ending December 31, 1997, except, in the case of clause (i) or clause (ii),
as may be required by applicable law or GAAP;
(k) The Company shall not, and shall cause SCI not to, incur any
obligation for borrowed money other than purchase money indebtedness, whether or
not evidenced by a note, bond, debenture or similar instrument, except in the
ordinary course of business under existing loan agreements or capitalized
leases, or prepay, before the scheduled maturity thereof, any of its long-term
debt;
(l) Except for the acquisition of the license and any related assets
for the Pennsylvania-2 market, the Company shall not, and shall cause SCI not
to, acquire any ownership interest in or make any other investment in any other
Person (other than a wholly-owned Subsidiary) or enter into or establish any
joint venture;
(m) The Company shall not, and shall cause SCI not to, enter into any
transaction with any Related Party or beneficiary of any Related Party, or any
Person known by the Company to be an affiliate of any of them;
(n) The Company shall, and the Company shall cause SCI to, obtain and
maintain in full force and effect all approvals, consents, permits, licenses and
other authorizations, and any renewals thereof, from the FCC and any appropriate
PUCs reasonably necessary or required for the continued operation of the
Company's and SCI's businesses, and when such approvals, consents, licenses or
other authorizations are necessary or required; and
25
<PAGE>
(o) The Company shall not, and shall cause SCI not to, agree in
writing or otherwise to do any of the foregoing.
SECTION 4.3. ACCESS TO INFORMATION. From the date of this Agreement
until the Effective Time, the Company will provide Purchaser, its counsel,
financial advisors, auditors and other authorized representatives reasonable
supervised access during normal business hours to the offices, properties, books
and records of the Company and of SCI and will furnish to Purchaser, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such Persons may
reasonably request and will instruct the Company's and SCI's employees, counsel
and financial advisors to cooperate with Purchaser in its investigation of the
business of the Company and of SCI.
SECTION 4.4. NOTICES OF CERTAIN EVENTS. The Company shall promptly
notify Purchaser of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental Authority
in connection with the transactions contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting the Company that, if pending on the date of
this Agreement, would have been required to have been disclosed pursuant to
Section 2.11 or that relate to the consummation of the transactions contemplated
by this Agreement.
SECTION 4.5. HSR ACT FILING. As soon as practicable after the date
of this Agreement, the Company shall file with the Federal Trade Commission
("FTC") and the Department of Justice ("DOJ") any applicable notification and
report or similar required form and shall file any supplemental information that
may be requested in connection therewith pursuant to the HSR Act, which report
and notification form and supplemental information has complied or will comply
in all material respects with the requirements of the HSR Act.
SECTION 4.6. FEDERAL AND STATE REGULATORY FILINGS. As soon as
practicable after the date of this Agreement, the Company shall file with any
other Governmental Authority, any and all required filings regarding the
transactions contemplated by this Agreement, and shall file any supplemental
information that may be requested in connection therewith, which filings and
supplemental information has complied or will comply in all material respects
with statutory or regulatory requirements relating thereto.
SECTION 4.7. NEGOTIATIONS WITH OTHERS. The Company shall not (and
shall cause each affiliate, employee, officer, director, shareholder, agent or
other Person acting on or purporting to act on its behalf not to) solicit any
other Person (other than Purchaser and its officers, directors, affiliates and
representatives) regarding a possible sale of all or substantially all
26
<PAGE>
of the Company's stock, assets or business, whether such transaction takes
the form of a sale of stock, merger, liquidation, dissolution,
reorganization, recapitalization, consolidation, sale of assets outside the
ordinary course of business, or otherwise, (an "Acquisition Proposal"). None
of the Company or any affiliate, employee, officer, director, shareholder,
agent or other person acting on its behalf has any agreement, arrangement or
understanding with respect to any Acquisition Proposal, and each of them
shall (a) cease and cause to be terminated any and all current discussions
regarding any Acquisition Proposal and (b) notify Purchaser if any
Acquisition Proposal, or any inquiry or contact with any person with respect
thereto, is made, and disclose to Purchaser the substance thereof.
SECTION 4.8. STOCKHOLDER MEETINGS; PROXY MATERIAL.
(a) The directors of the Company shall submit this Agreement, the
Merger, and the transactions contemplated hereby for approval ("Merger
Approval") by the Company's stockholders and the Company shall cause (i) a
meeting of its stockholders (the "Opt-Out Meeting") to be duly called and held
as soon as reasonably practicable for the purpose of voting on an amendment to
the Company's Code of Regulations to provide that Section 1701.831 of the Ohio
Law (pertaining to control share acquisitions) shall not apply (the "Opt-Out
Amendment"), and (ii) a meeting of its stockholders (the "Company Merger
Meeting" and, together with the Opt-Out Meeting, the "Company Stockholder
Meetings") to be duly called and held as soon as reasonably practicable for the
purpose of voting on the Merger Approval.
(b) In connection with the Company Stockholder Meetings, the Company
(i) as soon as reasonably practicable, will take steps to prepare and mail to
its stockholders a proxy or information statement of the Company (the "Company
Proxy Statement") and all other proxy materials for such meeting; (ii) subject
to Section 4.8(c), will use its reasonable best efforts to obtain the requisite
vote of stockholders in favor of the Opt-Out Amendment and the Merger Approval,
and (iii) otherwise will comply with all legal requirements applicable to such
meeting. Purchaser shall have the right to review the Company Proxy Statement
and other proxy materials before the mailing thereof to the Company's
stockholders. Without limiting the generality of the foregoing, the Company and
Purchaser shall each notify the other as promptly as practicable upon becoming
aware of any event or circumstance that should be described in an amendment of,
or supplement to, the Company Proxy Statement.
(c) The Board of Directors of the Company may withdraw or modify, or
propose to withdraw or modify, its approval or recommendation of this Agreement
or the Merger if it determines in good faith, after consultation with counsel,
that it is necessary or advisable to do so in order to comply with its fiduciary
duties to the Company's stockholders.
(d) Nothing contained in this Agreement shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure
to the Company's stockholders if, in the opinion of the Board of Directors of
the Company, after consultation with counsel, failure so to disclose would be
inconsistent with its fiduciary duties to the Company's stockholders.
ARTICLE 5
27
<PAGE>
COVENANTS OF PURCHASER
SECTION 5.1. CONFIDENTIALITY. Prior to the Effective Time and after
any termination of this Agreement, Purchaser will hold, and will use its
reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all non-public documents and information concerning the
Company and SCI furnished to Purchaser in connection with the transactions
contemplated by this Agreement, except to the extent that such information can
be shown to have been (a) previously known on a nonconfidential basis by
Purchaser, (b) in the public domain through no fault of Purchaser or (c) later
lawfully acquired by Purchaser from sources other than the Company; provided
that Purchaser may disclose such information to its officers, directors,
employees, accountants, counsel, consultants, advisors and agents in connection
with the transactions contemplated by this Agreement so long as such Persons are
informed by Purchaser of the confidential nature of such information and are
directed by Purchaser to treat such information confidentially. Purchaser's
obligation to hold any such information in confidence shall be satisfied if it
exercises the same care with respect to such information as it would take to
preserve the confidentiality of its own similar information. If this Agreement
is terminated, Purchaser will, and will use its reasonable best efforts to cause
its officers, directors, employees, accountants, counsel, consultants, advisors
and agents to, destroy or deliver to the Company, upon request, all documents
and other materials, and all copies thereof, obtained by Purchaser or on its
behalf from the Company in connection with this Agreement that are subject to
such confidence. The Purchaser shall be responsible for the breach of any of
its officers, directors, employees, accountants, counsel, consultants, advisors
or agents of any confidentiality obligation. Notwithstanding the foregoing,
Purchaser and its affiliates shall have the right to disclose any and all such
information regarding the Company and SCI in connection with Purchaser's
financing requirements, including, without limitation, customary disclosures
made in connection with public high yield debt financings, and the Company will
provide, and cause its employees, auditors and agents to provide, reasonable
cooperation in connection with such financings, including any necessary consents
of the Company's auditors to include their report on the Company's audited
financial statements in such customary disclosures.
SECTION 5.2. FILINGS. Purchaser shall promptly provide the Company
copies of all filings made by Purchaser with any Governmental Authority in
connection with this Agreement and the transactions contemplated hereby, other
than the portions of such filings that include confidential information not
directly related to the transactions contemplated by this Agreement.
SECTION 5.3. NOTICES OF CERTAIN EVENTS. Purchaser shall promptly
notify the Company of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental Authority
in connection with the transactions contemplated by this Agreement;
28
<PAGE>
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting Purchaser that would materially delay or
impair the consummation of the transactions contemplated by this Agreement;
and
(d) any breach of any representation, warranty or covenant of the
Company that Purchaser determines may exist based upon information provided
to Purchaser or through its own investigation.
SECTION 5.4. EMPLOYEE BENEFITS. For one year after the Effective
Time, Purchaser shall provide the eligible employees of the Company and its
Subsidiaries with employment benefits, including but not limited to, health
benefits, dental benefits, life insurance and disability benefits, medical
reimbursement benefits, 401(k) plan benefits, deferred compensation and
similar benefits, vacation benefits, severance benefits and the like that are
materially no less favorable, in the aggregate, than the benefits provided to
eligible employees by the Company on the date of this Agreement. Purchaser
shall pay any severance, change of control or similar payments contemplated
herein to employees and directors of the Company and SCI, if any, who are
entitled thereto pursuant to agreements or plans of the Company or SCI
existing as of the date of this Agreement and disclosed to Purchaser in
SCHEDULE 2.12 or in SCHEDULE 2.18.
SECTION 5.5. INDEMNIFICATION.
(a) The Company shall, and Purchaser shall cause the Company to,
honor any obligation of the Company immediately prior to the Effective Time
to indemnify and hold harmless the present and former officers and directors
of the Company and of SCI (the "Indemnitees") to the full extent allowed by
the Company's Articles of Incorporation and Code of Regulations or the Ohio
Law in effect immediately prior to the Effective Time.
(b) The Company shall, and Purchaser shall cause the Company to,
indemnify and hold harmless any Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit, or proceeding, whether civil, criminal, administrative or
investigative, including without limitation derivative actions, against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement to the full extent allowed by law.
(c) To the full extent allowed by the Company's Articles of
Incorporation and Code of Regulations or the Ohio Law in effect immediately
prior to the Effective Time, the Company shall, and Purchaser shall cause the
Company to, pay expenses as incurred by an Indemnitee in defending a civil or
criminal action, suit or proceeding in advance of the final disposition of
the action, suit, or proceeding upon receipt of an undertaking by or on
behalf of the Indemnitee to repay such amount if it shall be determined that
such Indemnitee was not entitled to indemnification as provided in this
Section 5.5.
(d) The Company shall, and Purchaser shall cause the Company to,
reimburse all expenses, including reasonable attorneys' fees, incurred by any
person required to enforce the indemnity and other obligations of the Company
and Purchaser under this Section 5.5.
29
<PAGE>
(e) For three years after the Effective Time, the Company shall,
and Purchaser will cause the Company to, maintain in effect officers' and
directors' liability insurance in respect of acts or omissions occurring
prior to the Effective Time covering each such Indemnitee on terms with
respect to coverage and amounts roughly comparable to the coverage and
amounts currently provided by the Company's policy as of the date of this
Agreement.
(f) The rights under this Section 5.5 shall be in addition to any
other rights under applicable law or otherwise. This Section 5.5 shall
survive the consummation of the transactions contemplated hereby.
SECTION 5.6. HSR ACT FILING. As soon as practicable after the
date of this Agreement, Purchaser shall file with the FTC and DOJ any
applicable notification and report or similar required form, has paid or
shall pay any required filing fee in connection therewith (as its sole and
separate expense), and shall file any supplemental information which may be
requested in connection therewith pursuant to the HSR Act, which report and
notification form and supplemental information has complied or will comply in
all material respects with the requirements of the HSR Act.
SECTION 5.7. FEDERAL AND STATE REGULATORY FILINGS. As soon as
practicable after the date of this Agreement, Purchaser shall file with any
other Governmental Authority, any and all required filings regarding the
transactions contemplated hereby and shall file any supplemental information
that may be requested in connection therewith, which filings and supplemental
information has complied or will comply in all material respects with
statutory or regulatory requirements relating thereto.
SECTION 5.8. COMPANY INDENTURE. Prior to or at the Effective
Time, Purchaser shall have purchased the Company's outstanding 11 1/2% Senior
Notes due October 1, 2006 (the "Senior Notes"), obtained waivers from the
holders thereof or otherwise assured that the terms and conditions of the
Indenture permit the consummation of the Merger.
ARTICLE 6
COVENANTS OF THE COMPANY AND PURCHASER
The parties hereto agree that:
SECTION 6.1. REASONABLE BEST EFFORTS. Subject to the terms and
conditions of this Agreement, each of the Company and Purchaser will use its
reasonable best efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary, proper or advisable to consummate
the transactions contemplated by this Agreement.
SECTION 6.2. COOPERATION; CERTAIN FILINGS.
(a) The Company and Purchaser shall cooperate with each other (a)
in determining whether any action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts,
in connection with the consummation of the transactions contemplated by this
Agreement; and (b) in seeking any such actions, consents, approvals or
waivers or making
30
<PAGE>
any such filings, furnishing information required in connection therewith and
seeking timely to obtain any such actions, consents, approvals or waivers.
(b) As soon as practicable after the date of this Agreement, the
Company and Purchaser shall prepare and make all filings (the "Regulatory
Filings") required to be made with the FCC pursuant to the Communications Act
and with any State Authority as are required to permit the consummation of
the transactions contemplated by this Agreement and shall thereafter promptly
make any additional or supplemental submissions required or requested by the
FCC and any such State Authority. With respect to Regulatory Filings,
counsel to the Company shall be responsible for preparing, with the advice
and consent of counsel to Purchaser, the transferor's portion of the
submissions with respect to the Company Licenses, and counsel to Purchaser
shall be responsible for preparing, with the advice and consent of counsel to
the Company, the transferee's portion of such submissions. All filing fees
associated with the filing of Regulatory Filings pursuant to this Section
6.2(b) shall be shared equally by the Company and Purchaser. Each party
shall bear its own counsel fees in connection with the Regulatory Filings.
(c) Purchaser shall not assume, either directly or indirectly, DE
JURE or DE FACTO control of the Company without the prior consent of the FCC
and any State Authority of competent jurisdiction.
SECTION 6.3. PUBLIC ANNOUNCEMENTS. Neither the Company nor
Purchaser will issue any press release or make any public statement with
respect to this Agreement and the transactions contemplated hereby without
the prior approval of the other party, except as may be required by
applicable law (including, without limitation, to the extent required in the
Company Proxy Statement), any listing agreement with any national securities
exchange or in connection with Purchaser's financing requirements, including,
without limitation, customary disclosures made in connection with public high
yield debt financings. Purchaser and the Company shall consult with each
other concerning, and endeavor in good faith to agree on, the content of any
such required announcement or disclosure.
ARTICLE 7
CONDITIONS TO THE CLOSING
SECTION 7.1. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND
PURCHASER. The obligations of the Company and Purchaser to consummate the
transactions contemplated hereby are subject to the satisfaction or waiver at
or prior to the Closing of the following conditions:
(a) any applicable waiting period under the HSR Act shall have
expired or terminated;
(b) the transactions contemplated by this Agreement shall have
been approved by any Governmental Authority or self-regulatory body the
approval of which is required to permit the consummation thereof without the
imposition of any condition, requirement or commitment that would reasonably
be expected to have a Company Material Adverse Effect;
31
<PAGE>
(c) The FCC shall have issued a Final Order (as defined below)
granting the FCC's consent to the transfer of control of the Company Licenses
granted by the FCC to Purchaser. For the purposes of this Agreement, the
term "Final Order" shall mean action by the FCC as to which (i) no request
for stay by the FCC, as applicable, of the action is pending, no such stay is
in effect, and, if any deadline for filing any such request is designated by
statute or regulation, such deadline has passed; (ii) no petition for
rehearing or reconsideration of the action is pending before the FCC, and the
time for filing any such petition has passed; (iii) the FCC does not have the
action under reconsideration on its own motion and the time for such
reconsideration has passed; and (iv) no appeal to a court, or request for
stay by a court, of the FCC's action is pending or in effect, and if any
deadline for filing any such appeal or request is designated by statute or
rule, it has passed.
(d) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of the
transactions contemplated hereby;
(e) no court, arbitrator or Governmental Authority shall have
issued any order, and there shall not be any statute, rule or regulation,
restraining or prohibiting the consummation of the transactions contemplated
hereby or the effective operation of the business of the Company or SCI,
after the Effective Time;
(f) all actions by or in respect of or filings with any
Governmental Authority required to permit the consummation of the
transactions contemplated hereby, including but not limited to the FCC and
any other federal regulatory agency or regulatory agency in any state in
which the Company, SCI or Purchaser do business, shall have been completed;
and
(g) this Agreement, the Merger and the transactions contemplated
by this Agreement shall have been approved and adopted by the requisite vote
of the stockholders of the Company.
SECTION 7.2. CONDITIONS TO OBLIGATIONS OF PURCHASER. The
obligation of Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing of the following additional conditions:
(a) The representations and warranties of the Company set forth in
Article 2 shall be true and correct in all respects (except that those
representations and warranties that do not contain materiality qualifiers
shall be true and correct in all material respects) as of the Closing with
the same effect as though made on and as of the date of the Closing;
(b) The Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Effective Time;
(c) Purchaser shall have received a certificate dated as of the
date of the Closing and signed on behalf of Company by the Chief Executive
Officer and Chief Financial Officer of the Company to the effect that the
conditions to Purchaser's obligations set forth in Sections 7.2(a) and (b)
have been satisfied;
32
<PAGE>
(d) Purchaser shall have received from Harrington, Hoppe &
Mitchell, Ltd., special counsel to the Company, and Bryan Cave LLP, special
FCC counsel to the Company, written opinions, dated as of the Effective Time
and substantially in the respective forms contained in Exhibits A and B
attached hereto or otherwise in form and substance reasonably satisfactory to
Purchaser;
(e) There shall not have occurred any Company Material Adverse
Effect from the Company Balance Sheet Date to the Effective Time;
(f) All consents required of third parties in respect of Company
Material Contracts shall have been obtained except for such consents, the
failure of which to obtain would not reasonably be expected to have a Company
Material Adverse Effect;
(g) The shares owned by stockholders of the Company who have
exercised their dissenters rights under Ohio Law shall constitute not greater
than five percent (5%) of the outstanding shares of the Company Common Stock
on the Closing Date;
(h) Holders of at least two-thirds of the outstanding Company
Options shall have consented to receive cash for such Company Options in
accordance with the provisions of Section 1.5; and
(i) The Stockholders' Agreement and Registration Rights Agreement,
each dated June 20, 1997 among the Company, J. D. Williamson, II, W. P.
Williamson, III and Boston Ventures Limited Partnership V, as amended, the
Employment Agreements referenced in SCHEDULE 2.12(d) (other than Jeff Hill's
Employment Agreement) and any agreement between the Company or SCI and Boston
Ventures Limited Partnership V or any of its affiliates shall have been
terminated without cost or obligation to the Company other than as set forth
in this Agreement, and Purchaser shall have received written confirmation
thereof.
SECTION 7.3. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction or waiver at or prior to the
Closing of the following additional conditions:
(a) The representations and warranties of Purchaser set forth in
Article 3 shall be true and correct in all respects (except that those
representations and warranties that do not contain materiality qualifiers
shall be true and correct in all material respects) as of the date of the
Closing;
(b) Purchaser shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Effective Time;
(c) The Company shall have received a certificate dated as of the
date of the Closing and signed on behalf of Purchaser by the Chief Executive
Officer and Chief Financial Officer of Purchaser to the effect that the
conditions to the Company's obligations set forth in Sections 7.3(a) and (b)
have been satisfied;
33
<PAGE>
(d) The Company shall have received from Jones, Day, Reavis &
Pogue, special counsel for Purchaser, and Pate, Kempf & Knarr, corporate
counsel for Purchaser, written opinions dated as of the Effective Time and
substantially in the forms contained in Exhibits C and D attached hereto or
otherwise in form and substance reasonably satisfactory to the Company; and
(e) All conditions of the Indenture to permit the consummation of
the Merger shall have been satisfied or waived by the holders of the Senior
Notes, and all actions required by or in respect of the Indenture to be taken
prior to or at the Effective Time in connection with the Merger shall have
been taken.
ARTICLE 8
TERMINATION
SECTION 8.1. TERMINATION. This Agreement may be terminated and
the transactions contemplated hereby may be abandoned at any time prior to
the filing of the certificate of merger:
(a) by mutual written consent of the Company and Purchaser;
(b) by the Company or Purchaser, if there shall be any law or
regulation that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited or if any judgment, injunction, order or
decree enjoining the Company or Purchaser from consummating the transactions
contemplated hereby is entered and such judgment, injunction, order or decree
shall become final and nonappealable;
(c) by the Company or Purchaser if the Effective Time shall not
have occurred on or before March 31, 1999; provided, that, no party may
terminate this Agreement under this Section 8.1(c) if such party's breach of
this Agreement has caused or resulted in the failure of the Effective Time to
occur on or before such date;
(d) by the Company if (i) the condition specified in Section
7.3(a) has not been satisfied or waived, or (ii) Purchaser has breached or
failed to perform, in any material respect, notwithstanding satisfaction or
due waiver of all conditions thereto, any of its material covenants or
agreements contained herein as to which notice specifying such breach or
failure has been given to Purchaser and Purchaser has failed to cure or
otherwise resolve the same to the reasonable satisfaction of the Company
within 30 days after receipt of such notice; PROVIDED, HOWEVER, that the
right to terminate this Agreement under this Section 8.1(d) shall not be
available to the Company if the Company is in breach of this Agreement in any
material respect;
(e) by Purchaser if (i) the condition specified in Section 7.2(a)
has not been satisfied or waived, or (ii) the Company has breached or failed
to perform, in any material respect, notwithstanding satisfaction or due
waiver of all conditions thereto, any of its material covenants or agreements
contained herein as to which notice specifying such breach or failure has
been given to the Company and the Company has failed to cure or otherwise
resolve the same to the reasonable satisfaction of Purchaser within 30 days
after receipt of such notice; PROVIDED,
34
<PAGE>
HOWEVER, that the right to terminate this Agreement under this Section 8.1(e)
shall not be available to Purchaser if (x) Purchaser is in breach of this
Agreement in any material respect or (y) the financing under any of the
commitment letters referred to in Section 3.7 (or comparable commitments in
an amount adequate to consummate the Merger) is no longer available to
Purchaser otherwise than as the result of the Company's breach or failure
referred to in clause (i) or (ii) or the fact that the requisite vote of the
stockholders of the Company under the Ohio Law for the approval of this
Agreement, the Merger and the transactions contemplated by this Agreement
shall not have been obtained at the meeting (or any adjournment thereof)
called for such purpose; and
(f) by Purchaser if the requisite vote of the stockholders of the
Company under the Ohio Law for the approval of this Agreement, the Merger and
the transactions contemplated by this Agreement shall not have been obtained
at the meeting (or any adjournment thereof) called for such purpose.
Any action under this Section 8.1 may be taken by Purchaser or the
Company by the Company's Board of Directors. The party desiring to terminate
this Agreement pursuant to clauses (b), (c), (d), (e) or (f) shall give
written notice of such termination to the other party in accordance with
Section 9.1.
SECTION 8.2. TERMINATION FEES. In recognition of the considerable
time and expense that the parties have expended and will expend in entering
into this Agreement, and pursuing the transactions contemplated hereby, the
following fees shall be payable and shall accrue in the event of termination
of this Agreement:
(a) To the extent this Agreement is terminated solely pursuant to
Sections 8.1(a), (b) or (c), no termination fees shall be payable to any
party, and this Agreement shall become void and of no effect with no
liability on the part of any party hereto (or any of its directors, officers,
employees, agents, or representatives); provided, that no such termination
shall relieve any party hereto from any liability under Sections 4.1, 5.1 or
9.4.
(b) In the event that this Agreement is terminated by the Company
pursuant to Section 8.1(d), the Escrow Agent shall deliver the Liquidated
Damages Amount to the Company in accordance with the provisions of the Escrow
Agreement and Section 1.9, which Liquidated Damages Amount shall be the
Company's sole and exclusive recourse upon termination of this Agreement
pursuant to Section 8.1(d).
(c) In the event that this Agreement is terminated by Purchaser
pursuant to Section 8.1(e), Purchaser shall have the right to seek money
damages from the Company not to exceed $25,000,000.
(d) In the event that this Agreement is terminated by Purchaser
solely pursuant to Section 8.1(f), the Company shall promptly pay to
Purchaser as liquidated damages and not as a penalty an amount equal to
$12,500,000. The liquidated damages provided for in this Section 8.2(d)
shall be Purchaser's sole and exclusive remedy against the Company (Purchaser
being free
35
<PAGE>
to pursue any rights it may have under the Voting Agreement against the
stockholder parties thereto) upon termination of this Agreement pursuant to
Section 8.1(f).
SECTION 8.3. PROCEDURE UPON TERMINATION. In the event of
termination and abandonment pursuant to this Article 8, this Agreement shall
terminate and the transactions contemplated hereby shall be abandoned without
further action by the parties hereto, provided that the agreements contained
in Sections 4.1 (Confidentiality (by the Company)), 5.1 (Confidentiality (by
Purchaser)), 6.3 (Public Announcements) and 9.4 (Expenses) shall remain in
full force and effect. If this Agreement is terminated as provided herein,
each party shall use its reasonable best efforts to redeliver all documents,
work papers and other material (including any copies thereof) of any other
party relating to the transactions contemplated hereby, whether so obtained
before or after the execution of this Agreement, to the party furnishing the
same.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
If to Purchaser, to: Dobson Communications Corporation
13439 N. Broadway Extension
Suite 200
Oklahoma City, OK 73114
Attention: Everett Dobson, President
Telecopy: (405) 391-8515
Phone: (405) 391-8500
WITH A COPY TO: Edwards & Angell, LLP
One Bank Boston Plaza
Providence, RI 02903-2499
Attention: David K. Duffell, Esq.
Telecopy: (401) 276-6611
Phone: (401) 276-6586
If to the Company, to: Sygnet Communications, Inc.
6550 Seville Drive, Suite B
Canfield, OH 44406
Attention: Albert H. Pharis, Jr., President
Telecopy: (330) 565-5379
Phone: (330) 565-9500
36
<PAGE>
WITH A COPY TO: Bryan Cave LLP
700 13th Street, N.W.
Washington, D.C. 20005
Attention: William F. Bavinger, Esq.
Telecopy: (202) 508-6037
Phone: (202) 508-6037
or such other address or telecopy number as such party may hereafter specify
by notice to the other parties hereto. Each such notice, request or other
communication shall be effective (a) if given by telecopy, when such telecopy
is transmitted to the telecopy number specified in this Section 9.1 and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section 9.1.
SECTION 9.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. If this
Agreement is not terminated pursuant to Section 8.1, the representations and
warranties and agreements of the Company contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time, provided that covenants that by their nature are to be
performed after the Effective Time shall in any such case survive.
SECTION 9.3. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived prior
to the filing of the certificate of merger if, and only if, such amendment or
waiver is in writing and signed by the directors of the Company and Purchaser
or in the case of a waiver, by the party against whom the waiver is to be
effective.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 9.4. EXPENSES. Whether or not the transactions
contemplated hereby are consummated, except as otherwise provided in this
Agreement, each party hereto shall pay its own legal, accounting and
investment banking fees, costs and expenses in connection with the
negotiation and execution of this Agreement and the transactions contemplated
hereby.
SECTION 9.5. ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. Except
for that certain confidentiality agreement between the Company and Dobson
Communications Corporation dated May 8, 1998, all prior negotiations and
agreements between the parties hereto relating to the subject matter of this
Agreement are superseded by this Agreement and as of the date of this
Agreement there are no representations, warranties, understandings or
agreements, whether written or oral, expressed or implied, other than those
specifically set forth herein. Nothing in this Agreement, expressed or
implied, is intended to or shall confer on any person other than the parties
hereto any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
37
<PAGE>
SECTION 9.6. WAIVERS. Any failure by any of the parties hereto to
comply with any of the obligations, agreements or conditions set forth herein
may be waived by the other party or parties, provided, however, that any such
waiver shall not be deemed a waiver of any other obligation, agreement or
condition.
SECTION 9.7. FURTHER ACTIONS. Each of the parties agrees to
cooperate fully in the effectuation of the transactions contemplated hereby
and to execute any and all additional documents or take such additional
actions as shall be reasonably necessary or appropriate for such purpose.
SECTION 9.8. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of the other parties
hereto.
SECTION 9.9. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the internal laws and not the conflicts of
laws provisions of the State of Ohio.
SECTION 9.10. EXCLUSIVE JURISDICTION. The Company and Purchaser
agree that any legal action, suit or proceeding arising out of or relating to
this Agreement or the agreements and transactions contemplated hereby shall
be instituted in the Federal District Court for the Northern District of
Ohio, Eastern Division, or an Ohio state court located in Mahoning County,
Ohio, which shall be the exclusive jurisdiction and venue of said legal
proceedings, and each of the Company and Purchaser consents to the personal
jurisdiction of such courts and waives any objection that such party may now
or hereafter have to the personal jurisdiction of such courts or the laying
of venue of any such action, suit or proceeding.
SECTION 9.11. DISCLOSURE SCHEDULES. Notwithstanding anything
herein to the contrary, any matter disclosed in any Schedule shall be deemed
to be disclosed in all Schedules regardless of whether such matter is
specifically cross-referenced. The disclosure of any matter in a Schedule is
not to be deemed determinative of or an indication that such matter is
material to the operations of the Company or Purchaser, as the case may be.
SECTION 9.12. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective with respect to the
Company and Purchaser when each shall have received counterparts of this
Agreement signed by the other.
SECTION 9.13. SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal, or incapable of being enforced by any
rule or law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated by this
Agreement are not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall
38
<PAGE>
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated as
originally contemplated to the fullest extent possible.
SECTION 9.14. INCORPORATION OF SCHEDULES AND EXHIBITS. All
Schedules and all Exhibits attached hereto and referred to herein are hereby
incorporated herein and made a part of this Agreement for all purposes as if
fully set forth herein.
SECTION 9.15. HEADINGS. The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 9.16. SPECIFIC PERFORMANCE. The parties recognize and
acknowledge that in the event the Company shall fail to perform its
obligations under the terms of this Agreement, money damages alone will not
be adequate to compensate the Purchaser. The parties, therefore, agree and
acknowledge that in the event the Company fails to perform its obligations
under this Agreement prior to Closing, Purchaser shall be entitled to
specific performance of the terms of this Agreement and of the covenants and
obligations hereunder, provided that Purchaser shall not be entitled to
terminate this Agreement pursuant to Section 8.2(c) based upon any breach or
failure with respect to which specific performance is granted, and not
subsequently reversed, by a court of competent jurisdiction.
[SIGNATURES ARE ON THE FOLLOWING PAGE.]
39
<PAGE>
IN WITNESS WHEREOF, the Company and Purchaser have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
SYGNET WIRELESS, INC.
By: /s/ Albert H. Pharis, Jr.
------------------------------------
Name: Albert H. Pharis, Jr.
Title: President
FRONT NINE OPERATING COMPANY
By: /s/ Everett R. Dobson
------------------------------------
Name: Everett R. Dobson
Title: Chairman and Chief
Executive Officer
40
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
DOBSON COMMUNICATIONS CORPORATION
The undersigned, Everett R. Dobson and Stephen T. Dobson, certify that
they are the President and Secretary, respectively, of DOBSON COMMUNICATIONS
CORPORATION, a corporation organized and existing under the laws of the State
of Oklahoma (the "Corporation"), and do hereby further certify as follows:
1. The name of this Corporation is DOBSON COMMUNICATIONS CORPORATION.
2. The name under which the Corporation was originally incorporated was
Dobson Holdings, Inc. and the original Certificate of Incorporation of the
Corporation was filed with the Secretary of State of Oklahoma on February 3,
1997.
3. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with the provisions of Sections 1077 and 1080 of the
General Corporation Act of Oklahoma (the "Act") by the written consent of the
holders of not less than a majority of the outstanding stock of the
Corporation entitled to vote thereon, and written notice of the corporate
action has been given to the shareholders of the Corporation who have not so
consented in writing, all in accordance with the provisions of Section 1080
of the Act.
4. The text of the Certificate of Incorporation of the Corporation is
amended and restated to read in its entirety as follows:
ARTICLE I
NAME
The name of the Corporation is:
DOBSON COMMUNICATIONS CORPORATION
ARTICLE II
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the State of
Oklahoma is 13439 North Broadway Extension, Oklahoma City, Oklahoma County,
Oklahoma 73114. The registered agent is Everett R. Dobson.
<PAGE>
ARTICLE III
PURPOSES
The nature of the business and the purpose of the Corporation shall be
to engage in any lawful act or activity and to pursue any lawful purpose for
which a corporation may be formed under the Act. The Corporation is
authorized to exercise and enjoy all powers, rights and privileges which
corporations organized under the Act may have as in force from time to time,
including, without limitation, all powers, rights and privileges necessary or
convenient to carry out the purposes of the Corporation.
ARTICLE IV
CAPITAL STOCK
4.1. AUTHORIZED CAPITAL STOCK
The total number of shares of all classes of capital stock which the
Corporation shall be authorized to issue is Four Million (4,000,000) shares,
consisting of:
4.1.1. 1,500,000 shares of common stock, par value $.001 per share
("Common Stock"), consisting of:
(i) 1,438,000 shares of Class A Common Stock ("Class A
Common Stock");
(ii) 31,000 shares of Class B Common Stock ("Class B
Common Stock");
(iii) 31,000 shares of Class C Common Stock ("Class C
Common Stock"); and
4.1.2. 2,500,000 shares of preferred stock, par value $1.00 per
share.
4.2. DESCRIPTION OF COMMON STOCK
A description of the Class A Common Stock, Class B Common Stock and the
Class C Common Stock and a statement of their respective preferences, voting
powers, qualifications and special or relative rights or privileges are as
follows:
4.2.1. DIVIDENDS AND DISTRIBUTIONS. Subject to the express terms
of any outstanding series of Preferred Stock, dividends may be declared and
paid upon the Common Stock upon the terms provided for below with respect to
each such class, in such amounts and at such times as the Board of Directors
may determine.
-2-
<PAGE>
A. DIVIDENDS ON CLASS A COMMON STOCK AND CLASS B COMMON STOCK.
Dividends on Class A Common Stock and Class B Common Stock may be declared
and paid out of funds of the Corporation legally available therefor.
B. DIVIDENDS ON CLASS C COMMON STOCK. Dividends on Class C
Common Stock may be declared and paid only out of the lesser of (a) funds of
the Corporation legally available therefor and (b) the Available Class C
Dividend Amount.
C. DISCRIMINATION BETWEEN CLASS A COMMON STOCK AND CLASS C
COMMON STOCK. Subject to the provisions of paragraphs 4.2.1.A. and 4.2.1.B.,
the Board of Directors may, in its sole discretion, declare and pay dividends
exclusively on either Class A Common Stock, Class B Common Stock or Class C
Common Stock, or on any one or more of Class A Common Stock, Class B Common
Stock and Class C Common Stock, in equal or unequal amounts, notwithstanding
the amounts available for the payment of dividends on each such class, the
respective voting and liquidation rights of each class, the amounts of prior
dividends declared on each class or any other factor.
4.2.2. EXCHANGE OF CLASS C COMMON STOCK. Shares of Class C Common
Stock are subject to exchange upon the terms and conditions set forth below:
A. MANDATORY EXCHANGE OF CLASS C COMMON STOCK. In the event of
(i) the Wireline Disposition to any person, entity or group (other than to
(a) any entity in which the Corporation, directly or indirectly, owns all of
the equity interest or (b) any entity formed at the direction of the
Corporation in connection with obtaining financing for the programs or
products of the Wireline Group under an arrangement which provides the
Corporation with an option to reacquire such properties and assets or retain
or obtain substantial rights with respect to any business to be conducted by
the Wireline Group, in each case for the benefit of the Wireline Group), or
(ii) an initial public offering by the Corporation of any class or series of
its Common Stock other than Class C Common Stock (an "IPO"), or (iii) the
Corporation Disposition, the Corporation shall (x) as of the first Business
Day after the 90th day next following (i) the consummation of the Wireline
Disposition or (ii) the date of consummation of the IPO or the consummation
of the Corporation Disposition, as the case may be, or (y) as of the close of
business on the day next preceding the consummation of the Corporation
Disposition (in any such event, the "Mandatory Exchange Date"), exchange each
outstanding share of Class C Common Stock for one fully paid and
nonassessable share of Class A Common Stock, subject to adjustment as
provided below. The stock certificate formerly representing shares of Class
C Common Stock shall, on and after the Mandatory Exchange Date, be deemed to
represent the shares of Class A Common Stock determined in accordance with
this paragraph 4.2.2.A.
-3-
<PAGE>
B. ADJUSTMENTS TO EXCHANGE RATIO.
(i) The number of shares of Class A Common Stock to
be issued shall be adjusted from time to time as follows:
(a) In case the Corporation shall (i) pay a
dividend or make a distribution on its Class A Common Stock in shares of
its Class A Common Stock, (ii) subdivide its outstanding Class A Common
Stock into a greater number of shares, or (iii) combine its outstanding
Class A Common Stock into a smaller number of shares, the number of
shares of Class A Common Stock to be issued in exchange for Class C
Common Stock shall be adjusted so that the holder of any share of Class C
Common Stock thereafter surrendered for exchange shall be entitled to
receive the number of shares of Class A Common Stock of the Corporation
which he would have owned or have been entitled to receive after the
happening of any of the events described above had such share been
exchanged immediately prior to the happening of such event. An
adjustment made pursuant to this subparagraph (a) shall become effective
immediately after the effective date in the case of subdivision or
combination.
(b) In case the Corporation shall distribute to
all holders of its Class A Common Stock any shares of capital stock of
the Corporation (other than Class A Common Stock) or evidences of its
indebtedness or assets (excluding cash dividends or distributions paid
from retained earnings of the Corporation) or rights or warrants to
subscribe for or purchase any of its securities (any of the foregoing
being hereinafter in this subparagraph (b) called the "Securities"), then
in each such case, unless the Corporation elects to reserve shares or
other units of such Securities for distribution to the holders of the
Class C Common Stock upon the exchange of the shares of Class C Common
Stock so that any such holder exchanging shares of Class C Common Stock
will receive upon such exchange, in addition to the shares of the Class A
Common Stock to which such holder is entitled, the amount and kind of
such Securities which such holder would have received if such holder had,
immediately prior to the record date for the distribution of the
Securities, exchanged his shares of Class C Common Stock into Class A
Common Stock. Such adjustment shall become effective immediately, except
as provided in subparagraph (c) below, after the record date for the
determination of shareholders entitled to receive such distribution.
(c) In any case in which this subparagraph (i)
provides that an adjustment shall become effective immediately after a
record date for an event, the
-4-
<PAGE>
Corporation may defer until the occurrence of such event (i) issuing to
the holder of any share of Class C Common Stock exchanged after such
record date and before the occurrence of such event the additional shares
of Class A Common Stock issuable upon such exchange by reason of the
adjustment required by such event over and above the Class A Common Stock
issuable upon such exchange before giving effect to such adjustment and
(ii) issuing to such holder an additional share of Class A Common Stock in
lieu of any fraction pursuant to subparagraph 4.2.2.C.
(ii) If:
(a) the Corporation shall declare a dividend (or
any other distribution) on the Class A Common Stock (other than in cash
out of retained earnings); or
(b) the Corporation shall authorize the granting
to the holders of the Class A Common Stock of rights or warrants to
subscribe for or purchase any shares of any class of stock or any other
rights or warrants; or
(c) there shall be any reclassification of the
Class A Common Stock (other than a subdivision or combination of the
outstanding Class A Common Stock and other than a change in the par
value, or from par value to no par value, or from no par value to par
value), or any consolidation, merger, or statutory share exchange to
which the Corporation is a party and for which approval of any
stockholders of the Corporation is required, or any sale or transfer of
all or substantially all the assets of the Corporation as an entirety or
any corporate event; or
(d) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
then the Corporation shall cause to be mailed to the holders of shares of the
Class C Common Stock at their addresses as shown on the stock books of the
Corporation, at least 15 days prior to the applicable date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Class A Common
Stock of record to be entitled to such dividend, distribution or rights or
warrants are to be determined or (ii) the date on which such
reclassification, consolidation, merger, statutory share exchange, sale,
transfer, corporate event, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
Class A Common Stock of record shall be entitled to exchange their shares of
Class A Common Stock for securities or other property deliverable upon such
reclassifi-
-5-
<PAGE>
cation, consolidation, merger, statutory share exchange, sale, transfer,
corporate event, dissolution, liquidation or winding up. Failure to give
such notice or any defect therein shall not affect the legality or validity
of the proceedings described in subparagraph (i) of this paragraph 4.2.2.B or
in subparagraph ii(a), ii(b), ii(c) or ii(d) of this paragraph 4.2.2.B.
(iii) The Corporation covenants that it will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Class A Common Stock or
its issued shares of Class A Common Stock held in its treasury, or both, for
the purpose of effecting exchanges of the Class C Common Stock, the full
number of shares of Class A Common Stock deliverable upon the exchange of all
outstanding shares of Class C Common Stock not theretofore exchanged. For
purposes of this subparagraph (iii), the number of shares of Class A Common
Stock which shall be deliverable upon the exchange of all outstanding shares
of Class C Common Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
(iv) Prior to the delivery of any securities which
the Corporation shall be obligated to deliver upon exchange of the Class C
Common Stock, the Corporation will endeavor to comply with all federal and
state laws and regulations thereunder requiring the registration of such
securities with, or any approval of or consent to the delivery thereof by,
any governmental authority.
(v) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of
the issue or delivery of shares of Class A Common Stock on exchanges of the
Class C Common Stock pursuant hereto; PROVIDED, HOWEVER, that the Corporation
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of Class A Common Stock
in a name other than that of the holder of the Class C Common Stock to be
exchanged and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Corporation the
amount of any such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid.
C. GENERAL EXCHANGE PROVISIONS. In the event of any exchange
of Class C Common Stock for shares of Class A Common Stock pursuant to
paragraph 4.2.2.A., the following provisions shall apply:
(i) The Corporation shall cause to be given to each
record holder of shares of the Class C Common Stock a notice stating (a) that
shares of Class C Common Stock shall be exchanged for shares of Class A
Common Stock or for cash or a combination thereof, (b) the date on which the
exchange shall
-6-
<PAGE>
become effective (the "Exchange Date"), (c) the number of shares of Class A
Common Stock or cash or combination thereof to be received by such holder
with respect to each share of the Class C Common Stock held by such holder,
including details as to the calculation thereof and (d) the place or places
where certificates for shares of Class C Common Stock, properly endorsed or
assigned for transfer are to be surrendered for delivery of certificates for
shares of Class A Common Stock (unless the Corporation shall waive such
requirement). Such notice shall be sent by first-class mail, postage prepaid,
not less than 30 nor more than 60 days prior to the Exchange Date to each
holder of shares of Class C Common Stock at such holder's address as the same
appears on the stock transfer books of the Corporation. Neither the failure
to mail such notice to any particular holder of shares of Class C Common
Stock nor any defect therein shall affect the sufficiency thereof with
respect to any other holder of shares of Class C Common Stock.
(ii) The Corporation shall not be required to issue
or deliver fractional shares of Class A Common Stock to any holder of shares
of Class C Common Stock upon any such exchange. If more than one share of
Class C Common Stock shall be held by the same holder of record, the
Corporation shall aggregate the number of shares of Class A Common Stock that
shall be issuable to such holder upon any such exchange. If the total number
of shares of Class A Common Stock to be so issued to any holder of record of
shares of Class C Common Stock includes a fraction, the Corporation shall
round the fractional share up or down to the nearest whole share of Class A
Common Stock.
(iii) The holders of shares of Class C Common Stock
at the close of business on a dividend payment record date shall be entitled
to receive the dividend payable on such shares on the corresponding dividend
payment date notwithstanding the exchange thereof or the Corporation's
default in payment of the dividend due on such dividend payment date.
However, shares of Class C Common Stock surrendered for exchange during the
period between the close of business on any dividend payment record date and
the opening of business on the corresponding dividend payment date must be
accompanied by payment of an amount equal to the dividend payable on such
shares on such dividend payment date. A holder of shares of Class C Common
Stock on a dividend payment record date who (or whose transferee) tenders any
of such shares for exchange into shares of Class A Common Stock on a dividend
payment date will receive the dividend payable by the Corporation on such
shares of Class C Common Stock on such date, and the exchanging holder need
not include payment in the amount of such dividend upon surrender of shares
of Class C Common Stock for exchange. Except as provided above, the
Corporation shall make no payment or allowance for unpaid dividends whether
or not in arrears, on exchanged shares or for dividends on the shares of
Class A Common Stock issued upon such exchange.
-7-
<PAGE>
(iv) Before any holder of shares of Class C Common
Stock shall be entitled to receive certificates representing shares of Class
A Common Stock or cash or a combination thereof to be received by such holder
with respect to the exchange of such shares of Class C Common Stock, such
holder shall surrender at such place as the Corporation shall specify
certificates for such shares of Class C Common Stock, properly endorsed or
assigned for transfer (unless the Corporation shall waive such requirement).
The Corporation shall, as soon as practicable after such surrender of
certificates representing such shares of Class C Common Stock, deliver to the
person for whose account such shares of Class C Common Stock were so
surrendered, or to the transferee or transferees of such person, certificates
representing the number of whole shares of Class A Common Stock to which such
person shall be entitled as aforesaid.
(v) From and after the Exchange Date, all rights of
a holder of shares of Class C Common Stock shall cease except for the right,
upon surrender of the certificates representing such shares of Class C Common
Stock, to receive certificates representing whole shares of Class A Common
Stock, and rights to dividends as provided in paragraph 4.2.2.C.(iii). No
holder of a certificate that immediately prior to the Exchange Date
represented shares of Class C Common Stock shall be entitled to receive any
dividend or other distribution with respect to the Class A Common Stock to be
issued in exchange until surrender of such holder's certificate or
certificates representing shares of Class C Common Stock (unless the
Corporation shall waive such requirement). Upon such surrender, there shall
be paid to the holder the amount of any dividends or other distributions
(without interest) which theretofore became payable with respect to Class A
Common Stock based on a record date after the Exchange Date, but that were
not paid by reason of the foregoing, with respect to the number of whole
shares of Class A Common Stock represented by the certificate or certificates
issued upon such surrender. From and after the Exchange Date, the Corporation
shall, however, be entitled to treat any certificate for Class C Common Stock
that has not yet been surrendered for exchange as evidencing the ownership of
the number of shares of Class A Common Stock for which the shares of Class C
Common Stock represented by such certificate shall have been exchanged,
notwithstanding the failure to surrender such certificate.
(vi) The Corporation shall pay any and all
documentary, stamp or similar issue or transfer taxes that may be payable in
respect of the issue or delivery of any shares of Common Stock in exchange
for shares of Class C Common Stock pursuant hereto. The Corporation shall
not, however, be required to pay any tax that may be payable in respect of
any transfer involved in the issue and delivery of any shares of Common Stock
issued in exchange in a name other than that in which the shares of Class C
Common Stock so exchanged were registered and no such issue or delivery
-8-
<PAGE>
shall be made unless and until the person requesting such issue has paid to
the Corporation the amount of any such tax, or has established to the
satisfaction of the Corporation that such tax has been paid.
(vii) After the Exchange Date, any share of Class C
Common Stock issued upon conversion or exercise of any Convertible Security
shall, immediately upon issuance pursuant to such conversion or exercise and
without any notice or any other action on the part of the Corporation or the
holder of such share of Class C Common Stock, be exchanged for the number of
whole shares of Class A Common Stock that a holder of such Convertible
Security would have been entitled to receive pursuant to the terms of such
Convertible Security had such terms provided that the conversion privilege in
effect immediately prior to any exchange by the Corporation of any shares of
Class C Common Stock for shares of any other capital stock of the Corporation
would be adjusted so that the holder of any such Convertible Security
thereafter surrendered for conversion would be entitled to receive the number
of shares of Class A Common Stock he or she would have owned immediately
following such action had such Convertible Security been converted
immediately prior to the Exchange Date.
4.2.3. VOTING RIGHTS
A. CLASS A COMMON STOCK. The holders of Class A Common Stock
shall have the exclusive right to vote for the election of directors and on
all other matters requiring action by the stockholders or submitted to the
stockholders for action, except as may otherwise be required (i) by the terms
of any outstanding class or series of Preferred Stock, (ii) by this Amended
and Restated Certificate of Incorporation as the same may from time to time
be amended, or (iii) by law. Each share of the Class A Common Stock shall
entitle the holder thereof to one vote.
B. CLASS B COMMON STOCK. Except as otherwise required by the
Oklahoma General Corporation Act, the holders of Class B Common Stock will
have no voting powers whatsoever, and no holder of Class B Common Stock shall
vote on or otherwise participate in any proceedings in which action shall be
taken by the Corporation or the shareholders thereof. The holders of Class B
Common Stock shall not be entitled to notification as to any meeting of the
Board of Directors or of the shareholders.
C. CLASS C COMMON STOCK. Except as otherwise provided below
and required by the Oklahoma General Corporation Act, the holders of Class C
Common Stock will have no voting powers whatsoever, and no holder of Class C
Common Stock shall vote on or otherwise participate in any proceedings in
which action shall be taken by the Corporation or the shareholders thereof.
The holders of Class C Common Stock shall not be entitled to notification as
to any meeting of the Board of Directors or of the shareholders.
-9-
<PAGE>
D. SPECIAL VOTING RIGHTS. The Corporation shall not, without
approval by the holders of the Class C Common Stock at a meeting at which a
quorum of Class C Common Stock is present and the votes of Class C Common
Stock cast in favor of the proposal represent more than fifty percent (50%)
of the outstanding shares of Class C Common Stock entitled to notice of and
to vote at such meeting exceed those cast against:
(i) allow any proceeds from the Disposition of the
properties or assets allocated to the Wireless Group to be used other than in
the business of the Wireless Group without fair compensation being allocated
to the Wireless Group as determined by the Board of Directors;
(ii) allow any properties or assets allocated to the
Wireless Group to be used other than in the business of the Wireless Group
without fair compensation being allocated to the Wireless Group as determined
by the Board of Directors;
(iii) issue, sell or otherwise distribute shares of
Class C Common Stock without allocating the proceeds or other benefits of
such issuance, sale or distribution to the Class C Common Group;
(iv) change the powers, preferences or special
rights of Class C Common Stock so as to affect the Class C Common Stock
adversely;
(v) increase the authorized number of shares of
Class C Common Stock; and
(vi) effect any merger or business combination
involving the Corporation as a result of which (a) the holders of all classes
of common stock of the Corporation shall no longer own, directly or
indirectly, at least fifty percent (50%) of the voting power of the surviving
corporation and (b) the holders of Class A Common Stock and Class C Common
Stock do not receive the same form of consideration, distributed among such
holders in proportion to the Fair Value of such class as of the date of the
close of business on the day net preceding the first public announcement of
such merger or business combination.
4.2.4. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, the
rights of the holders of Class A Common Stock, the Class B Common Stock and
Class C Common Stock shall be as follows:
A. After payment or provision for the payment of the debts and
other liabilities of the Corporation and the full preferential amounts
(including any accumulated and unpaid
-10-
<PAGE>
dividends) to which the holders of Preferred Stock are entitled regardless
unless otherwise provided in respect of a series of Preferred Stock by the
resolution of the Board of Directors fixing the liquidation rights and
preferences of such series of Preferred Stock, the holders of the outstanding
shares of Class A Common Stock, the Class B Common Stock and Class C Common
Stock shall be entitled to receive the remaining assets of the Corporation,
regardless of the Group to which such assets are attributed, divided among
the holders of the Class A Common Stock, the Class B Common Stock and Class C
Common Stock in accordance with the per share "Liquidation Units"
attributable to each such class. Each share of Class A Common Stock, Class B
Common Stock and Class C Common Stock is hereby attributed one "Liquidation
Unit", in the case of the Class C Common Stock subject to adjustment as
determined by the Board of Directors to be appropriate, to reflect equitably
any subdivision (by stock split or otherwise) or combination (by reverse
stock split or otherwise) of Class C Common Stock or any dividend or other
distribution of shares of Class C Common Stock to the holders of shares of
Class C Common Stock.
B. For the purposes of paragraph 4.2.4.A., neither the merger
nor consolidation of the Corporation into or with any other company, nor the
merger or consolidation of any other company into or with the Corporation,
nor a sale, transfer or lease of all or any part of the assets of the
Corporation, shall, alone, be deemed a liquidation or winding up of the
Corporation, or the cause for dissolution of the Corporation, for the
purposes of this subsection 4.2.4.
4.2.5. ADJUSTMENTS RELATIVE TO VOTING RIGHTS AND LIQUIDATION. If,
after the Effective Date, the Corporation shall in any manner subdivide (by
stock split, reclassification or otherwise) or combine (by reverse stock
split, reclassification or otherwise) the outstanding shares of Class A
Common Stock, Class B Common Stock or Class C Common Stock, or pay a dividend
or make a distribution in shares of any class of common stock to holders of
such class, the per share voting rights, if applicable, and the Liquidation
Units of the Class A Common Stock, Class B Common Stock and the Class C
Common Stock shall be appropriately adjusted so as to avoid dilution in the
aggregate voting and liquidation rights of Class A Common Stock, Class B
Common Stock and Class C Common Stock. The issuance by the Corporation of
shares of any class of common stock (whether by a dividend or otherwise) to
the holders of any other class of common stock shall not require adjustment
pursuant to this paragraph.
4.2.6. RANK. The Class A Common Stock, Class B Common Stock and
Class C Common Stock shall rank junior with respect to the payment of
dividends and the distribution of assets to all series of the Corporation's
Preferred Stock that specifically provide that they shall rank prior to the
Class A Common Stock, Class B Common Stock and Class C Common Stock. Nothing
herein shall
-11-
<PAGE>
preclude the Board of Directors from creating any series of Preferred Stock
ranking on a parity with or prior to the Class A Common Stock, Class B Common
Stock and Class C Common Stock as to the payment of dividends or the
distribution of assets upon liquidation.
4.2.7. DEFINITIONS. As used in this Section 4.2 of Article Fourth,
the following terms shall have the following meanings (with terms defined in
the singular having comparable meaning when used in the plural and vice
versa), unless another definition is provided or the context otherwise
requires:
A. "Available Class C Dividend Amount," on any date, shall mean
the greater of:
(i) the excess of
(a) the greater of the Fair Value on such date of
the net assets of the Wireless Group, over
(b) the sum of (1) the aggregate par value of all
outstanding shares of Class C Common Stock and any other class of capital
stock attributed to the Wireless Group and (2) the aggregate amount that
would be needed to satisfy any preferential rights to which holders of
all outstanding shares of Preferred Stock are entitled upon dissolution
of the Corporation in excess of the aggregate par value of such Preferred
Stock; provided, that such excess shall be reduced by any amount
necessary to enable the Wireless Group to pay its debts as they become
due, and
(ii) the amount legally available for the payment of
dividends determined in accordance with Oklahoma law applied as if the
Wireless Group were a separate corporation.
B. "Business Day" shall mean any day not a Saturday, Sunday or
a day on which banks are required or authorized by law to be closed in
Oklahoma City, Oklahoma.
C. "Convertible Securities" shall mean any securities
(including employee stock options) of the Corporation that are convertible
into or evidence the right to purchase any shares of any class of common
stock.
D. "Corporation Disposition" shall mean the Disposition by the
Corporation of all of substantially all of the properties and assets of the
Corporation, but shall not include any merger or other business combination
involving the Corporation if, immediately following the consummation of such
merger or other business combinations, the holders of the Common Stock, as a
group, would own more than fifty percent (50%) of the shares of capital
-12-
<PAGE>
stock of the surviving entity which are entitled to vote in the election of
directors of the surviving entity.
E. "Disposition" shall mean the sale, transfer, assignment or
other disposition (whether by merger, consolidation, sale or contribution of
assets or stock or otherwise), in one transaction or in a series of related
transactions, of any capital stock, properties or assets, other than by
pledge, hypothecation or grant of any security interest in such capital
stock, properties or assets. The term "Disposition" shall include, without
limitation, the Wireline Disposition.
F. "EBITDA Attributable" to the Wireless Group, for any period,
shall mean the net income or loss of the Wireless Group for such period (or
for the fiscal periods of the Corporation commencing prior to the Effective
Date, the pro forma net income or loss of the Wireless Group as if the
Effective Date had been the first day of such period) determined in
accordance with generally accepted accounting principles but determined
before interest expense, income taxes, depreciation, amortization,
extraordinary items and changes in accounting principles, with all income and
expenses of the Corporation being allocated between the Corporation or the
Wireless Group, as the case may be, in a reasonable and consistent manner in
accordance with policies adopted by the Board of Directors; PROVIDED,
HOWEVER, that as of the end of any fiscal quarter of the Corporation, any
projected annual tax benefit attributable to the Wireless Group that cannot
be utilized by the Wireless Group to offset or reduce its allocated tax
liability may be allocated to the Corporation, as the case may be, without
any compensating payment or allocation.
G. "Effective Date" shall mean the date on which this Amended
Certificate shall become effective.
H. "Exchange Date" shall mean the date, if any, fixed for the
exchange of shares of Class C Common Stock, as set forth in a notice to
holders of Class C Common Stock pursuant to paragraph (4.2.2.C.(i).
I. "Fair Value" as to shares of any class of stock shall as of
any date mean the average of the daily closing prices for the 20 consecutive
trading days commencing on the 30th trading day prior to such date. The
closing price for each day shall be (a) if the shares of such class of stock
are listed or admitted to trading on a national securities exchange, the
closing price on the New York Stock Exchange Composite Tape (or any successor
composite tape reporting transactions on national securities exchanges) or,
if such composite tape shall not be in use or shall not report transactions
in such shares, the last reported sales price regular way on the principal
national securities exchange on which such shares are listed or admitted to
trading (which shall be the national securities exchange on which the
greatest number of shares
-13-
<PAGE>
of such class of stock has been traded during such consecutive trading days),
or, if there is no such sale on any such day, the mean of the bid and asked
prices on such day, or (b) if such shares are not listed or admitted to
trading on any such exchange, the closing price, if reported, or, if the
closing price is not reported, the mean of the closing bid and asked prices
as reported by the National Association of Securities Dealers Automated
Quotations National Market System or a similar source selected from time to
time by the Corporation for the purpose. In the event such closing prices are
unavailable, Fair Value shall be determined in good faith by the Board of
Directors.
J. "Initial Public Offering" shall mean the issuance and sale
by the Corporation of one or more classes of its Common Stock pursuant to an
effective registration statement under the Securities Act of 1933, as
amended, pursuant to which the Corporation will receive gross proceeds for
its own account of not less than $50 million.
K. "substantially all of the properties and assets of the
Corporation" shall mean that portion of Corporation's assets and properties
(a) that represents at least 80% of the then current Fair Value of or (b) to
which is attributable at least 80% of the aggregate revenues for the twelve
(12) fiscal quarter periods immediately preceding the Announcement Date.
L. "substantially all of the properties and assets allocated to
the Wireline Group" shall mean a portion of the properties and assets
allocated to the Wireline Group (a) that represents at least 80% of the then
current Fair Value of or (b) to which is attributable at least 80% of the
aggregate revenues immediately preceding the Announcement Date of the
Corporation derived from the properties and assets allocated to the Wireline
Group for the twelve (12) fiscal quarterly periods immediately preceding the
Announcement Date.
M. "Wireline Disposition" shall mean the Disposition by the
Corporation of all of substantially all of the properties and assets
allocated to the Wireline Group or of the capital stock of the Corporation's
subsidiary or subsidiaries which own all or substantially all of the
properties and assets allocated to the Wireline Group which conduct the
business of the Wireline Group, or any combination thereof including, without
limitation, a distribution by the Corporation to the holders of one or more
classes of the Common Stock of all or substantially all of such properties
and assets or such capital stock, or any combination thereof.
N. "Wireless Group" shall mean, at any time, the Corporation's
interest in (i) any subsidiary of the Company which is not a member of the
Wireline Group; (ii) any business which provides wireless and cellular
telephone sales and services; (iii)
-14-
<PAGE>
all assets and liabilities of the Corporation to the extent allocated to any
such businesses in accordance with generally accepted accounting principles
consistently applied for all of the Corporation's business segments; and (iv)
such businesses developed in, or acquired by the Corporation for, the
Wireless Group after the Effective Date as determined by the Board of
Directors; PROVIDED, HOWEVER, that, from and after any Disposition or
transfer of any business, product, development program, project, assets or
properties out of the Wireless Group, the Wireless Group shall no longer
include the business, product, development program, project, assets or
properties so disposed of or transferred. The Wireless Group shall be
represented by the Class C Common Stock.
O. "Wireline Group" shall mean, at any time, the Corporation's
interest in (i) Logix Communications Enterprises, Inc., an Oklahoma
corporation, and its subsidiaries, (ii) any business which provides
integrated local, long distance, data and other telecommunication services as
an incumbent local exchange carrier, as an integrated communications
provider, owning long-haul fiberoptic facilities and providing long-haul
fiberoptic services and switch based competitive local exchange carrier
services; (iii) all assets and liabilities of the Corporation to the extent
allocated to any such business in accordance with general accepted accounting
principles consistently applied for all of the Corporation's business
segments; and (iv) such businesses developed and/or acquired by the
Corporation for, the Wireline Group after the Effective Date as determined by
the Board of Directors; PROVIDED, HOWEVER, that, from and after any
Disposition of any business, product, development program, project, assets or
properties out of the Wireline Group, the Wireline Group shall no longer
include the business, product, development program, project, assets or
properties so disposed of or transferred.
4.2.8. DETERMINATIONS BY THE BOARD OF DIRECTORS
Any determinations with respect to the Corporation generally and
the Wireless Group or the rights of holders of any class or series of Common
Stock made by the Board of Directors of the Corporation in good faith
pursuant to or in furtherance of any provision of this Section 4.2 shall be
final and binding on all stockholders of the Corporation.
4.3. DESCRIPTION OF PREFERRED STOCK. The Preferred Stock may be issued from
time to time in one or more series. All shares of Preferred Stock shall be
of equal rank and shall be identical, except in respect of the matters that
may be fixed and determined by the Board of Directors as hereinafter
provided, and each share of each series shall be identical with all other
shares of such series, except as to the date from which dividends are
cumulative. The Board of Directors hereby is authorized to cause such shares
to be issued in one or more series and with respect to each such series prior
to the issuance thereof to fix and determine the
-15-
<PAGE>
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the board with respect to each series shall include but
not be limited to, determination of the following:
A. The number of shares constituting a series, the distinctive
designation of a series and the stated value of the series, if different from
the par value;
B. Whether the shares of a series are entitled to any fixed or
determinable dividends, the dividend rate (if any) on the shares, whether the
dividends are cumulative and the relative rights of priority of dividends on
shares of that series;
C. Whether a series has voting rights in addition to the voting
rights provided by law and the terms and conditions of such voting rights;
D. Whether a series will have or receive conversion or exchange
privileges and the terms and conditions of such conversion or exchange
privileges;
E. Whether or not the shares of a series are redeemable and the
terms and conditions of such redemption, including, without limitation, the
manner of selecting shares for redemption if less than all shares are to be
redeemed, the date or dates on or after which the shares in the series will
be redeemable and the amount payable in case of redemption;
F. Whether a series will have a sinking fund for the redemption
or purchase of the shares in the series and the terms and the amount of such
sinking fund;
G. The right of a series to the benefit of conditions and
restrictions on the creation of indebtedness of the Corporation or any
subsidiary, on the issuance of any additional capital stock (including
additional shares of such series or any other series), on the payment of
dividends or the making of other distributions on any outstanding stock of
the Corporation and the purchase, redemption or other acquisition by the
Corporation, or any subsidiary, of any outstanding stock of the Corporation;
H. The rights of a series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation and the
relative rights of priority of payment of a series; and
I. Any other relative, participating, optional or other special
rights, qualifications, limitations or restrictions of such series.
-16-
<PAGE>
Dividends on outstanding shares of Preferred Stock shall be paid or set
apart for payment before any dividends shall be paid or declared or set apart
for payment on shares of the Common Stock with respect to the same dividend
period.
If upon any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation the assets available for distribution to holders of
shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series in
accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
ARTICLE V
LIMITATION OF DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for damages for breach of fiduciary duty as a
director, except for personal liability for (i) acts or omissions by such
director not in good faith or which involve intentional misconduct or a
knowing violation of law; (ii) the payment of dividends or the redemption or
purchase of stock in violation of Section 1041 or Section 1052 of the Act;
(iii) any breach of such director's duty of loyalty to the Corporation or its
shareholders; or (iv) any transaction from which such director derived an
improper personal benefit.
ARTICLE VI
BOARD OF DIRECTORS
6.1. MANAGEMENT BY BOARD OF DIRECTORS. The business and affairs of the
Corporation shall be under the direction of the Board of Directors.
6.2. NUMBERS OF DIRECTORS. The number of directors which shall constitute
the whole board shall be not less than three nor more than fifteen, and shall
be determined by resolution adopted by a vote of a majority of the entire
board, or at an annual or special meeting of shareholders by the affirmative
vote of the holders of a majority of each class of the outstanding stock
entitled to vote for the election of directors. No reduction in number shall
have the effect of removing any director prior to the expiration of his term.
The number of directors of the Corporation may, from time to time, be
increased or decreased in such manner as may be provided in the Bylaws of the
Corporation.
6.3. ELECTION OF DIRECTORS. Election of directors need not be by written
ballot unless otherwise provided in the Bylaws.
-17-
<PAGE>
6.4. EXPRESS AUTHORIZATION. In furtherance and not in limitation of the
powers conferred by statute, the Board of Directors is expressly authorized:
6.4.1. To adopt, amend or repeal the Bylaws of the Corporation; but
the powers of such directors in this regard shall at all times be subject to
the rights of the shareholders to alter or repeal such Bylaws at any meeting
of shareholders;
6.4.2. To authorize and cause to be executed or granted mortgages,
security interests and liens upon the real and personal property of the
Corporation;
6.4.3. To set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created;
6.4.4. By a majority of the whole Board of Directors, to designate
one or more committees, each committee to consist of one (1) or more of the
directors of the Corporation. The board may designate one (1) or more
directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. Any such committee,
to the extent provided in the resolution or in the Bylaws of the Corporation,
shall have and may exercise the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers which may require it;
provided, however, the Bylaws may provide that in the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member; and
6.4.5. When and as authorized by the affirmative vote of the
holders of a majority of the stock issued and outstanding having voting power
given at a shareholders' meeting duly called upon such notice as is required
by law, or when authorized by the written consent of the holders of a
majority of the voting stock issued and outstanding, to sell, lease or
exchange all or substantially all of the property and assets of the
Corporation, including its goodwill and its corporate franchises, upon such
terms and conditions and for such consideration, which may consist in whole
or in part of other securities of, any other corporation or corporations, as
its Board of Directors shall deem expedient and for the best interests of the
Corporation.
-18-
<PAGE>
ARTICLE VII
INDEMNITY
7.1. THIRD PARTY CLAIMS. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the Corporation) by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, or other enterprise, against
expenses (including attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
Corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent shall not of itself create a
presumption that the person did not act in good faith and in a manner which
he reasonably believed to be in, or not opposed to, the best interests of the
Corporation and with respect to any criminal action or proceeding had
reasonable cause to believe that his conduct was unlawful.
7.2. DERIVATIVE CLAIMS. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Corporation to procure
a judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another Corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorney's fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit,
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interest of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the court in which such action or suit was
brought shall determine, upon application, that despite the adjudication of
liability, but in the view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses which the
court shall deem proper.
7.3. EXPENSES. Expenses, including fees and expenses of counsel, incurred in
defending a civil, criminal, administrative or
-19-
<PAGE>
investigative action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of the director, officer, employee
or agent to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Corporation as authorized herein.
7.4. INSURANCE. The Corporation may purchase (upon resolution duly adopted
by the Board of Directors) and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the Corporation, or is or
was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him against such
liability.
7.5. REIMBURSEMENT. To the extent that a director, officer, employee or
agent of, or any other person entitled to indemnity hereunder by, the
Corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to herein or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
7.6. ENFORCEMENT. Every such person shall be entitled, without demand by him
upon the Corporation or any action by the Corporation, to enforce his right
to such indemnity in an action at law against the Corporation. The right of
indemnification and advancement of expenses hereinabove provided shall not be
deemed exclusive of any rights to which any such person may now or hereafter
be otherwise entitled and specifically, without limiting the generality of
the foregoing, shall not be deemed exclusive of any rights pursuant to
statute or otherwise, of any such person in any such action, suit or
proceeding to have assessed or allowed in his favor against the Corporation
or otherwise, his costs and expenses incurred therein or in connection
therewith or any part thereof.
ARTICLE VIII
COMPROMISE OR ARRANGEMENT
Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between the
Corporation and its shareholders or any class of them, any court of equitable
jurisdiction within the State of Oklahoma may, on the application in a
summary way of this Corporation or of any creditor or shareholder thereof or
on the application of any receiver or receivers appointed
-20-
<PAGE>
for this Corporation under the provisions of Section 1106 of the Act or on
the application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 1100 of the
Act, order a meeting of the creditors or class of creditors, and/or of the
shareholders or class of shareholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority
in number representing three-fourths in value of the creditors or class of
creditors, and/or of the shareholders or class of shareholders of this
Corporation, as the case may be, agree to any compromise or arrangement and
to any reorganization of this Corporation as consequence of such compromise
or arrangement, the compromise or arrangement and the reorganization, if
sanctioned by the court to which the application has been made, shall be
binding on all the creditors or class of creditors, and/or on all the
shareholders or class of shareholders, of this Corporation, as the case may
be, and also on this Corporation.
ARTICLE IX
AMENDMENTS; BYLAWS
9.1. AMENDMENTS TO CERTIFICATE OF INCORPORATION. The Corporation reserves,
subject to the provisions of the Act or other applicable statute, 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.
9.2. BYLAWS. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, repeal,
alter, amend or rescind the Bylaws of the Corporation. In addition, the
Bylaws of the Corporation may be adopted, repealed, altered, amended, or
rescinded by the affirmative vote of the holders of a majority of each class
of the outstanding capital stock of the Corporation entitled to vote thereon.
IN WITNESS WHEREOF, Dobson Communications Corporation has caused its
corporate seal to be hereunto affixed and this Amended and Restated
Certificate of Incorporation to be signed by Everett R. Dobson, its President
and attested by Stephen T. Dobson, its Secretary, this 21st day of December,
1998.
DOBSON COMMUNICATIONS CORPORATION
/s/ Everett R. Dobson
----------------------------------------
Everett R. Dobson, President
Attest:
/s/ Stephen T. Dobson
- --------------------------------
Stephen T. Dobson, Secretary
-21-
<PAGE>
AMENDED AND RESTATED
BYLAWS
OF
DOBSON COMMUNICATIONS CORPORATION
(As adopted December 23, 1998)
ARTICLE I.
OFFICES
Section 1. The registered office shall be in the City of Oklahoma City,
County of Oklahoma, State of Oklahoma.
Section 2. The corporation may also have offices at such other places
both within and out of the State of Oklahoma as the Board of Directors may from
time to time determine or the business of the corporation may require.
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 1. With respect to voting powers, except as otherwise required
by the Oklahoma General Corporation Act, the voting rights of all shares are as
set forth in the Certificate of Incorporation, as may be amended, on file with
the Oklahoma Secretary of State.
Section 2. Meetings of shareholders for any purpose may be held at such
time and place, within or without the State of Oklahoma, as shall be stated in
the notice of the meeting or in a duly executed waiver of notice thereof.
Section 3. Annual meetings of shareholders, commencing with the year
1997, shall be held on the second Tuesday of April, if not a legal holiday, and
if a legal holiday, then on the next secular day following, at 9:00 a.m., or at
such time or date as shall be determined by the Board of Directors. At the
annual meeting, shareholders shall elect a board of directors, and transact such
other business as may be properly brought before the meeting.
Section 4. Written notice of the annual meeting, stating the place,
date and hour of such meeting, shall be given to each shareholder entitled to
vote thereat not less than ten (10) days nor more than sixty (60) days before
the date of the meeting unless otherwise required by law.
Section 5. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten (10) days
<PAGE>
before every meeting of shareholders, a complete list of the shareholders
entitled to vote at the meeting, arranged in alphabetical order, showing the
address of and the number of shares registered in the name of each
shareholder. Such list shall be open to the examination of any shareholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the election, either at a place
within the city where the meeting is to be held or at the place where the
meeting is to be held, and the list shall be produced and kept at the time
and place of the meeting during the whole time thereof, and subject to the
inspection of any shareholder who may be present.
Section 6. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by law or by the Certificate of
Incorporation, may be called by the Chairman of the Board of Directors or the
President and shall be called by the President or Secretary at the request in
writing of a majority of the Board of Directors, or at the request in writing of
shareholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting.
Section 7. Written notice of a special meeting of shareholders, stating
the place, date, hour and the purpose or purposes thereof, shall be given to
each shareholder entitled to vote thereat, not less than ten (10) days nor more
than sixty (60) days before the date fixed for the meeting unless otherwise
required by law. Business transacted at any special meeting of the shareholders
shall be limited to the purposes stated in the notice.
Section 8. The chairman of any meeting of shareholders or the holders
of a majority of the outstanding shares entitled to vote thereat, present in
person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date of which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date and
hour of the adjourned meeting shall be given in conformity herewith. At such
adjourned meeting at which a quorum shall be present or represented, any
business may be transacted at the meeting as originally noticed.
Section 9. The holders of a majority of the shares of stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the shareholders for the
transaction of business except as otherwise provided by law or by the
Certificate of Incorporation. Where a separate vote by a class or classes is
required, a majority of the outstanding shares of such class or
-2-
<PAGE>
classes, present in person or represented by proxy, shall constitute a quorum
entitled to take action with respect to the vote on that matter.
Section 10. When a quorum is present at any meeting, the affirmative
vote of the holders of a majority of the shares of stock having voting power
present in person or represented by proxy shall decide any question brought
before such meeting other than elections of directors, unless the question is
one upon which, by express provision of law or of the Certificate of
Incorporation, a different vote is required, in which case such express
provision shall govern and control the decision of such question. Unless
otherwise required by the Certificate of Incorporation, all elections of
directors shall be decided by a plurality vote, and, where a separate vote by a
class or classes is required, the affirmative vote of the majority of shares of
such class or classes present in person or represented by proxy at the meeting
shall be the act of such class.
Section 11. Each shareholder entitled to vote shall at every meeting of
the shareholders be entitled to vote in person or by proxy, but no proxy shall
be voted or acted upon after three (3) years from its date unless the proxy
provides for a longer period.
Section 12. Any action required to or which may be taken at any annual
or special meeting of the shareholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than a minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate action by the
shareholders without a meeting by less than unanimous written consent shall be
given to those shareholders who have not consented in writing.
ARTICLE III.
DIRECTORS
Section 1. The number of directors which shall constitute the whole
Board shall be at least one (1) and not more than twelve (12). The number of
directors shall be increased (i) by two (2) upon a "Voting Rights Triggering
Event," as defined in the Corporation's Certificate of Designation for its
Senior Exchangeable Preferred Stock filed with the Oklahoma Secretary of State
on January 21, 1998, such two (2) directors to be elected by the holders of
Senior Exchangeable Preferred Stock issued pursuant to and as provided in such
Certificate of Designation therefor; (ii) by two (2) upon a "Voting Rights
Triggering Event," as defined in the Certificate of Designation for its Senior
Exchangeable
-3-
<PAGE>
Preferred Stock to be filed with the Oklahoma Secretary of State on or about
December 23, 1998, such two (2) directors to be elected by the holders of
Senior Exchangeable Preferred Stock issued pursuant to and as provided in
such Certificate of Designation therefor; and (iii) by one (1) upon a "Voting
Rights Triggering Event," as defined in the Certificate of Designation for
its Class F Preferred Stock, to be filed with the Oklahoma Secretary of State
on or about December 23, 1998, such one (1) director to be elected by the
holders of Class F Preferred Stock, issued pursuant to and as provided in
such Certificate of Designation therefor. Within the limits above specified,
the number of directors shall be determined from time to time by resolution
of the Board of Directors or by the shareholders. Except for the election
held by the incorporator and except as provided in Section 2 and in Section
14 of this Article III and in aforementioned the Certificates of Designation,
the directors shall be elected at the annual meeting of shareholders. Each
director elected shall hold office until such director's successor is elected
and qualified, or until such director's earlier resignation or removal.
Directors need not be shareholders.
Section 2. Except as provided in Section 14 of this Article III,
vacancies and newly created directorships resulting from any increase in the
authorized number of directors elected by all the shareholders having the right
to vote as a single class may be filled by a majority of the directors then in
office, though less than a quorum, or by a sole remaining director, and any
director so chosen shall hold office until the next annual election and until
such director's successor is duly elected and shall qualify, unless such
director resigns or is removed. Whenever the holders of any class or classes of
stock or series thereof are entitled to elect one (1) or more directors by the
provisions of the Certificate of Incorporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority of
the directors elected by such class or classes or series thereof then in office,
or by a sole remaining director so elected.
Section 3. The business of the corporation shall be managed by its
Board of Directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by law or by the Certificate of
Incorporation or by these Bylaws directed or required to be exercised or done by
the shareholders.
Section 4. The Board of Directors of the corporation may hold meetings,
both regular and special, either within or without the State of Oklahoma.
Section 5. Regular meetings of the Board of Directors may be held at
such time and at such place as shall from time to time be determined by the
Board. Five (5) days' notice of all regular
-4-
<PAGE>
meetings shall be given, and such notice shall state the place, date, hour
and the business to be transacted at and purpose of such meeting.
Section 6. Special meetings of the Board may be called by the President
on three (3) days' notice to each director either personally, by mail, by
telegram or by facsimile transmission. Special meetings shall be called by the
President or Secretary in like manner and on like notice on the written request
of two (2) directors unless the corporation has at that time less than three (3)
directors, in which latter event the request of only one (1) director shall be
required. Notice of any special meeting shall state the place, date, hour and
the business to be transacted at and the purpose of such meeting.
Section 7. At all meetings of the Board, a majority of the directors
shall constitute a quorum for the transaction of business, and the act of a
majority of the directors present at any meetings at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by law or by the Certificate of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 8. The Board of Directors may, by resolution, passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one (1) or more of the directors of the corporation, which, to the
extent provided in the resolution and permitted by the Oklahoma General
Corporation Act, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the corporation and
may authorize the seal of the corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may
be determined from time to time by resolution adopted by the Board of Directors.
Section 9. Each committee shall keep regular minutes of its meetings
and report the same to the Board of Directors when required.
Section 10. Members of the Board of Directors, or of any committee
thereof, may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment that enables all
persons participating in the meeting to hear each other. Such participation
shall constitute presence in person at such meeting.
Section 11. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any
-5-
<PAGE>
committee thereof may be taken without a meeting, if a written consent of
such action is signed by all members of the Board or of such committee as the
case may be, and such written consent is filed with the minutes of
proceedings of the Board or committee.
Section 12. The directors may be paid their expenses, if any, of
attendance of such meeting of the Board of Directors and may be paid a fixed sum
for attendance at such meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
Section 13. The Board of Directors at any time may, by affirmative vote
of a majority of the members of the Board then in office, remove any officer
elected or appointed by the Board of Directors for cause or without cause.
Section 14. Any director may be removed, for cause or without cause, by
a majority vote of the shareholders entitled to vote for the election of such
director at any annual or special meeting of the shareholders. Whenever the
holders of any class or series are entitled to elect one or more directors by
the provisions of the Certificate of Incorporation, any director so elected may
be removed without cause only upon the vote of the holders of the outstanding
shares of that class or series and not the vote of the outstanding shares as a
whole. Upon such removal of a director, the shareholders (and not the remaining
directors) shall elect a director to replace such removed director at the same
shareholders' meeting at which such removal took place or at a subsequent
shareholders' meeting.
ARTICLE IV.
NOTICES
Section 1. Notices of directors and shareholders shall be in writing
and delivered personally or mailed to the directors or shareholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be deposited in the United
States mail, postage prepaid. Notice to directors may also be given by telegram
or facsimile transmission. Notice by telegram shall be deemed to be given when
delivered to the sending telegraph office. Notice by facsimile transmission
shall be deemed to be given when received.
Section 2. Whenever any notice is required to be given under the
provisions of law or of the Certificate of Incorporation or by these Bylaws, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice.
-6-
<PAGE>
ARTICLE V.
OFFICERS
Section 1. The officers of the corporation shall be chosen by the Board
of Directors and shall, at a minimum, consist of a President and a Secretary.
The Board of Directors may also choose additional officers, including a
Chairman, Vice-Chairman of the Board of Directors, one or more Vice-Presidents
who may be classified by their specific function, a Secretary, a Treasurer and
one or more Assistant Secretaries and Assistant Treasurers. Two or more offices
may be held by the same person, except the offices of President and Secretary.
Section 2. The Board of Directors at its first meeting and after each
annual meeting of shareholders shall choose a Chairman of the Board of
Directors, a President and a Secretary, and may choose such other officers and
agents as it shall deem necessary.
Section 3. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
Section 4. The officers of the corporation shall hold office until
their successors are chosen and qualify, until their earlier resignation or
removal. Any vacancy occurring in any office of the corporation shall be filled
by the Board of Directors.
Section 5. The Chairman, or, in the absence of the Chairman, a
Vice-Chairman of the Board of Directors, if chosen, shall preside at all
meetings of the Board of Directors, and shall perform such other duties and
have such other powers as the Board of Directors may from time to time
prescribe. If the Board of Directors designates the Chairman of the Board
to act as Chief Executive Officer, such duties shall be performed by such
person.
Section 6. The President, shall be the chief executive officer of the
corporation, shall preside at all meetings of the shareholders and, unless a
Chairman or Vice-Chairman of the Board has been chosen, be at all meetings of
the Board of Directors, and shall have general and active management of the
business of the corporation and shall see that all orders and resolutions of the
Board of Directors, are carried into effect. If the Board of Directors
designates the Chairman of the Board to act as Chief Executive Officer, the
President shall serve as Chief Operating Officer of the corporation.
Section 7. The President shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and
-7-
<PAGE>
execution thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the corporation.
Section 8. The Vice-President, or if there shall be more than one, the
Vice-Presidents in the order determined by the Board of Directors, shall, in the
absence or disability of the President, perform the duties and exercise the
powers of the President and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 9. The Secretary shall attend the meetings of the Board of
Directors and all meetings of the shareholders and record all the proceedings of
the meetings of the corporation and the Board of Directors in a book to be kept
for that purpose and shall perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the shareholders and regular and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President, under whose supervision the Secretary shall be.
Additionally, the Secretary shall have custody of the corporate seal of the
corporation, and the Secretary or an Assistant Secretary, shall have the
authority to affix the same on any instrument requiring it, and when so affixed,
it may be attested by the Secretary's signature or by the signature of such
Assistant Secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
the Secretary's signature.
Section 10. The Board of Directors may select a Chief Financial Officer,
who will be an officer of the corporation. The Chief Financial Officer, if one
is selected, need not hold any other officer title. The Chief Financial
Officer, if one is chosen, shall have the duties and powers as the Board of
Directors prescribes.
Section 11. The Assistant Secretary, or if there be more than one, the
Assistant Secretaries in the order determined by the Board of Directors, shall,
in the absence or disability of the Secretary, perform the duties and exercise
the powers of the Secretary and shall perform such other duties and have such
other powers as the Board of Directors from time to time prescribe.
Section 12. The Treasurer, if one is chosen, or if not, the Secretary,
shall have the custody of the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the corporation in such depositories as may be designated
by the Board of Directors.
-8-
<PAGE>
Section 13. The Treasurer, if one is chosen, or if not, the Secretary,
shall disburse the funds of the corporation as may be ordered by the Board of
Directors' taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors, at its regular meetings, or when the
Board of Directors so requires, an account of all transactions performed by the
Treasurer (or Secretary, as the case may be) and of the financial condition of
the corporation.
Section 14. If required by the Board of Directors, the Treasurer, if one
is chosen or, if not, the Secretary, shall give the corporation a bond (which
shall be renewed every six (6) years) in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of the office of a treasurer and for the restoration
to the corporation, in case of the Treasurer's (or Secretary's, as the case may
be) death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in the possession or under
the control of the Treasurer (or Secretary, as the case may be) belonging to the
corporation.
Section 15. The Assistant Treasurer, or if there shall be more than one,
the Assistant Treasurers in the order determined by the Board of Directors,
shall, in the absence or disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer and shall perform such other duties and
have such other powers as the Board of Directors may from time to time
prescribe.
ARTICLE VI.
CERTIFICATES OF STOCK, TRANSFERS OF STOCK
CLOSING OF TRANSFER BOOKS AND
REGISTERED SHAREHOLDERS
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of, the corporation by the
Chairman or Vice-Chairman of the Board of Directors, or the President or a
Vice-President, and by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the corporation, certifying the number
of shares owned by the shareholder in the corporation.
Section 2. Any or all of the signatures on the certificate may be a
facsimile. In case an officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if the
person who signed the certificate was such officer, transfer agent or registrar
at the date of issue.
-9-
<PAGE>
Section 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or such
owner's legal representative, advertise the same in such manner as the
corporation shall require and/or to give the corporation a bond in such sum as
the corporation may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 4. Subject to transfer restrictions permitted by Section 1055
of title 18 of the Oklahoma Statutes and to stop transfer orders directed in
good faith by the corporation to any transfer agent to prevent possible
violations of federal or state securities laws, rules or regulations, upon
surrender to the corporation or the transfer agent of corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
Section 5. The Board of Directors may fix a record date, which shall
not be more than sixty (60) nor less than ten (10) days before the date of any
meeting of shareholders, nor more than sixty (60) days prior to the time for the
other action hereinafter described, as of which there shall be determined the
shareholders who are entitled: to notice of or to vote at any meeting of
shareholders or any adjournment thereof; to express consent to corporate action
in writing without a meeting; to receive payment of any dividend or other
distribution or allotment of any rights; or to exercise any rights with respect
to any other lawful action.
Section 6. The corporation shall be entitled to treat the person in
whose name any share of stock is registered on the books of the corporation as
the owner thereof for all purposes and shall not be bound to recognize any
equitable or other claim or other interest in such shares in the part of any
other person, whether or not the corporation shall have express or other notice
thereof.
ARTICLE VII.
GENERAL PROVISIONS
Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the Certificate of
-10-
<PAGE>
Incorporation, if any, may be declared by the Board of Directors at any
regular or special meeting, pursuant to law.
Section 2. There may be set apart out of any of the funds of the
corporation available for dividends such amounts as the Board of Directors deems
proper as a reserve or reserves for working capital, depreciation, losses in
value, or for any other proper corporate purpose, and the Board of Directors may
increase, decrease or abolish any such reserve in the manner in which it was
created.
Section 3. The Board of Directors shall present at each annual meeting
and at any special meeting of the shareholders, when called for by vote of the
shareholders, a full and clear statement of the business and condition of the
corporation.
Section 4. All checks and demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 5. The fiscal year of the corporation shall be as fixed by the
Board of Directors.
Section 6. The Board of Directors may provide a suitable seal,
containing the name of the corporation, which seal shall be in the charge of the
Secretary. If and when so directed by the Board of Directors or a committee
thereof, duplicates of the seal may be kept and used by the Treasurer or by the
Assistant Secretary or Assistant Treasurer. The seal may be used by causing it,
or a facsimile thereof, to be impressed or affixed or in any other manner
reproduced.
Section 7. The books of account and other records of the corporation
may be kept (subject to any provisions of Oklahoma law) at the principal place
of business and chief executive office of the corporation.
ARTICLE VIII.
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS
To the extent and in the manner permitted by the laws of the State of
Oklahoma and specifically as is permitted under Section 1031 of Title 18 of the
Oklahoma Statutes, the corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the corporation, by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or
-11-
<PAGE>
was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement.
ARTICLE IX.
AMENDMENTS
The Bylaws may be amended and repealed, or new bylaws may be adopted, by
the shareholders or by the Board of Directors at any annual or special meeting
of the shareholders or of the Board of Directors if notice of such amendment,
repeal, or adoption of new bylaws be contained in the notice of such meeting.
-12-
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RELATIVE AND OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF CLASS A PREFERRED STOCK
DOBSON COMMUNICATIONS CORPORATION, an Oklahoma corporation (the
"Corporation") does hereby certify that:
FIRST: That the Corporation's Board of Directors, by the unanimous written
consent of its members, filed with the minutes of the Board, duly adopted
resolutions setting forth a proposed amendment to the Certificate of
Designation, Preferences and Relative and Other Special Rights, and
Qualifications, Limitations and Restrictions of Class A Preferred Stock of the
Corporation, declaring such amendment to be advisable and calling a meeting of
the shareholders of the Corporation for consideration thereof.
Section 1 of the Certificate of Designation is proposed to be amended as
follows:
"1. DESIGNATION. The designation of such class is "Class A 5%
Non-Cumulative, Non-Voting, Non-Convertible Preferred Stock"
(hereinafter in this Certificate of Designation called the "Class A
Preferred Stock"), and the number of shares constituting such class
shall be 150,000, which number may not be decreased or increased by the
Board of Directors without a vote of stockholders. All capitalized
terms used in this Certificate of Designation and not otherwise defined
shall have the meaning given to such terms in Section 10 hereof."
Section 3 of the Certificate of Designation is proposed to be amended
as follows:
"3. LIQUIDATION PREFERENCE. (a) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, either
voluntarily or involuntarily, each holder of Class A Preferred Stock shall
be entitled, after provision for the payment of the Corporation's debts and
other liabilities and all liquidation preference amounts payable with
respect to Senior Securities, to be paid in cash, together with holders of
Parity Securities before any distribution is made on any Junior Securities,
the aggregate Liquidation Value of all shares of Class A Preferred Stock
and Parity Securities held by such holders. If, upon any such liquidation,
dissolution or other winding up of the affairs of the Corporation, the net
assets of the corporation distributable among the holders of all
outstanding shares of the Class A Preferred Stock shall be insufficient to
permit the payment in full to such holders of the preferential amounts to
which they are entitled under the Certificate of Incorporation, then the
entire net assets of the Corporation remaining after the pro-
<PAGE>
vision for the payment of the Corporation's debts and other liabilities
shall be distributed among the holders of the Class A Preferred Stock
and Parity Securities ratably in proportion to the full amounts to which
they would otherwise be respectively entitled.
(b) Holders of Class A Preferred Stock shall not be entitled to
any additional distribution in the event of any liquidation, dissolution or
winding up of the affairs of the Corporation in excess of the preferential
amount referred to in Section 3(a) above.
(c) The assets available for distribution pursuant to the
Section 3 shall be determined by applicable law."
Section 10 of the Certificate of Designation is proposed to be amended
by adding the following definitions:
"Parity Securities" means the Corporation's Class D Preferred
Stock, Class E Preferred Stock and, except with respect to Section 3, the
Corporation's Class G Preferred Stock and Class H Preferred Stock.
"Senior Securities" means the Corporation's 12 1/4% Senior
Exchangeable Preferred Stock due 2008 and the Corporation's Class F
Preferred Stock."
SECOND: That, thereafter, the shareholders, including all holders of
the issued and outstanding shares of the Corporation's Class A Preferred Stock,
unanimously voted in favor of the Amendment pursuant to written consent given in
accordance with the provisions of Section 73 of the Oklahoma General Corporation
Act.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 77 of the Oklahoma General Corporation Act.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its Vice President and attested by its Assistant Secretary this 23rd
day of December, 1998.
DOBSON COMMUNICATIONS CORPORATION
By /s/ Ronald L. Ripley
-------------------------------------
Attest: Ronald L. Ripley, Vice President
/s/ Trent LeForce
- ----------------------------------
Trent LeForce, Assistant Secretary
[Seal]
-2-
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RELATIVE AND OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF CLASS D PREFERRED STOCK
DOBSON COMMUNICATIONS CORPORATION, an Oklahoma corporation (the
"Corporation") does hereby certify that:
FIRST: That the Corporation's Board of Directors, by the unanimous
written consent of its members, filed with the minutes of the Board, duly
adopted resolutions setting forth proposed amendments to the Certificate of
Designation, Preferences and Relative and Other Special Rights, and
Qualifications, Limitations and Restrictions of Class D Preferred Stock (the
"Class D Certificate of Designation") of the Corporation, declaring such
amendments to be advisable and calling a meeting of the shareholders of the
Corporation for consideration thereof.
The Class D Certificate of Designation is proposed to be amended to
provide, in its entirety, as follows:
"1. DESIGNATION. The designation of such class is 'Class D Preferred
Stock' (hereinafter in this Certificate of Designation called the 'Class D
Preferred Stock'), and the number of shares constituting such class shall be
90,000, which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; PROVIDED, HOWEVER, that such number
may not be decreased below the number of then currently outstanding shares of
Class D Preferred Stock subject to outstanding rights and options, if any. All
capitalized terms used in this Certificate of Designation and not otherwise
defined shall have the meaning given to such terms in Section 10 hereof.
2. DIVIDENDS. (a) The holders of shares of Class D Preferred Stock,
in preference to the holders of the Junior Securities, shall be entitled to
receive, out of funds legally available for the purpose, cumulative dividends in
an amount equal to (as determined on a per annum basis and on an as-if-converted
basis) (i) the sum of (A) the product of the Applicable Rate multiplied by the
Liquidation Value and (B) the product of the Applicable Rate multiplied by all
accrued and unpaid dividends thereon from the date of issuance to the end of the
immediately preceding calendar year PLUS (ii) all accrued and unpaid dividends
compounded through December 31 of the prior calendar year PLUS (iii) any
dividends paid with respect to the Class A Common Stock from the date of
issuance, and shall accrue on a daily basis and be payable as provided in
subparagraph (c) of this Section 2. All accrued but unpaid dividends will
compound annually on December 31 of each year (each, a 'dividend date') (the
initial such calculation to be made at the Applicable Rate for the number of
days elapsed from the date of issue of the Class D Preferred Stock to and
including the 31st day of December, 1998). Such dividends
<PAGE>
shall commence to accrue on each share of Class D Preferred Stock from the
date of issuance thereof whether or not declared by the Board of Directors
and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of such dividends, and shall
continue to accrue thereon until the date the Liquidation Preference of such
share is paid. For purposes of determining the amount of dividends accrued
on the Class D Preferred Stock pursuant to this Section 2 at any time prior
to December 31 of any year, the Applicable Rate for such period shall be
multiplied by a fraction, the numerator of which is the actual number of days
elapsed in the then current year and the denominator of which is 360.
(b) In the event of any dividend or distribution payable by the
Corporation in connection with the Logix Communications Spin-Off, in addition
to any dividends payable pursuant to paragraph (a) of this Section 2, each
holder of shares of Class D Preferred Stock shall be entitled to receive an
amount equal to such holder's PRO RATA share, calculated on a Fully-Diluted
Basis (which, for purposes hereof, assumes the exercise of all options issued
and committed as of the date of execution of the Investment and Transaction
Agreement pursuant to the Corporation Stock Option Plan and up to 5% of
capital stock issued under the Logix Communications Enterprises, Inc. 1998
Stock Option Plan) and on an as-if converted basis (subject to any applicable
adjustment pursuant to Section 5(b) hereof).
(c) Subject to the terms of the Stockholder and Investor Rights
Agreement and any applicable prohibition on the payment of dividends in any
Financing Agreement, accrued dividends shall be paid in cash only upon any
liquidation, dissolution or winding up of the Corporation, or upon any
redemption of Class D Preferred Stock pursuant to Section 6 hereof or the
exercise of any put or call rights pursuant to the Stockholder and Investor
Rights Agreement; PROVIDED, HOWEVER, that upon the exercise by any holder of
Class D Preferred Stock of its conversion rights pursuant to Section 5(a)
hereof, accrued dividends shall be paid through the issuance to such
converting holder of Class D Preferred Stock of an amount of shares of Class
E Preferred Stock equivalent to the value of such accrued dividends (the 'PIK
Dividend') such Class E Preferred Stock to have an aggregate initial
liquidation value equal to the value in cash of such accrued dividends upon
the conversion date (the 'PIK Dividend Amount').
(d) Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then accrued with
respect to the Class D Preferred Stock, such payment shall be distributed
ratably among the holders thereof based upon the aggregate accrued but unpaid
dividends on the Class D Preferred Stock held by each holder.
-2-
<PAGE>
(e) Except as otherwise may be specifically provided in this
Certificate of Designation and in accordance with Section 4(b), the
Investment and Transaction Agreement or the Stockholder and Investor Rights
Agreement, so long as any shares of Class D Preferred Stock are outstanding,
the Corporation will not declare, pay or set apart for payment any dividends
or make any other distribution on or redeem any Junior Securities (other than
any payments to holders of Class B Common Stock or Class C Common Stock
pursuant to the Corporation Stock Option Plan and the redemption by the
Dobson Partnership, in one or more transactions, of up to $25.0 million in
the aggregate of securities of the Corporation, together with any accrued and
unpaid dividends thereon, in accordance with the Stockholder and Investor
Rights Agreement) and will not permit any Subsidiary or other Affiliate to
redeem, purchase or otherwise acquire for value, or set apart for any sinking
or other analogous fund for the redemption or purchase of, any Junior
Securities or securities of such Subsidiary or Affiliate.
3. LIQUIDATION PREFERENCE. (a) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, either voluntarily
or involuntarily, each holder of Class D Preferred Stock shall be entitled to be
paid in cash, after provision for the payment of the Corporation's debts and
other liabilities, before any distribution is made on any Junior Securities and
concurrently with any distribution to the holders of Parity Securities, but
after any distribution to the holders of Senior Securities, the Liquidation
Preference. If, upon any such liquidation, dissolution or other winding up of
the affairs of the Corporation, the net assets of the Corporation distributable
among the holders of all outstanding shares of the Class D Preferred Stock shall
be insufficient to permit the payment in full to such holders of the
preferential amounts to which they are entitled under this Certificate of
Designation, then the entire net assets of the Corporation remaining after the
provision for the payment of the Corporation's debts and other liabilities and
required distributions to the holders of Senior Securities, shall be distributed
among the holders of the Class D Preferred Stock and of the Parity Securities,
ratably in proportion to the full amounts to which they would otherwise be
respectively entitled.
(b) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, either voluntarily or involuntarily, after the
payment of all preferential amounts required to be paid to the holders of Senior
Securities, the Parity Securities and Class D Preferred Stock, the remaining
assets and funds of the Corporation available for distribution to its
stockholders shall be distributed on a pro rata and as-if-converted basis among
the holders of Junior Securities and any other class or series of stock entitled
to participate in liquidation distributions with the holders of the Junior
Securities.
-3-
<PAGE>
(c) The assets available for distribution pursuant to this Section 3
shall be determined by applicable law and, prior to payment of any Liquidation
Preference, the Corporation shall first satisfy its outstanding obligations
concerning rights, if any, of holders of Class D Preferred Stock which have been
exercised.
(d) The merger or consolidation of the Corporation into or with
another corporation in which Everett Dobson and his Affiliates, directly or
indirectly, cease to control 50.1% of the voting securities of the surviving
corporation or its parent or the sale, transfer or lease (but not including a
transfer or lease by pledge or mortgage to a bona fide lender) of all or
substantially all of the assets of the Corporation may be deemed by the holders
of the Class D Preferred Stock to be a liquidation, dissolution or winding up of
the Corporation as those terms are used in this Section 3. In the event of such
merger, consolidation, sale, transfer or lease of substantially all of the
Corporation's assets, each holder of shares of Class D Preferred Stock shall
have the right to acquire and receive such shares of stock, securities or assets
as such holder would have received in connection with such event as if such
holder had converted his shares of Class D Preferred Stock into shares of Class
A Common Stock and Class E Preferred Stock immediately prior to the merger,
consolidation, sale, transfer or lease or, alternatively, at such holder's
election, shall have the right to convert any or all of its shares of Class D
Preferred Stock into shares of Class A Common Stock and Class E Preferred Stock
in accordance with the provisions of Section 5 hereof and receive any such
distribution of assets as holders of Class A Common Stock and Class E Preferred
Stock in accordance with this Section 3.
(e) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Corporation's
assets to another person or other transaction which is effected in such a
manner that holders of Common Stock are entitled to receive (either directly
or upon subsequent liquidation) stock, securities or assets (other than
solely cash and/or publicly traded securities) with respect to or in exchange
for Common Stock is referred to herein as an 'Organic Change.' Prior to the
consummation of any Organic Change, the Corporation shall make appropriate
provisions (in form and substance reasonably satisfactory to the holders of a
majority of the Class D Preferred Stock then outstanding voting separately as
a single class) to ensure that each of the holders of Class D Preferred Stock
shall thereafter have the right to acquire and receive, in lieu of or in
addition to (as the case may be) the shares of Class A Common Stock and Class
E Preferred Stock immediately theretofore acquirable and receivable upon the
conversion of such holder's Class D Preferred Stock, such shares of stock,
securities or assets as such holder would have received in connection with
such Organic Change if such holder had converted its Class D Preferred Stock
into shares of Class A Common Stock and Class E Preferred Stock immediately
prior
-4-
<PAGE>
to the Organic Change or, if the Organic Change is to be deemed a liquidation
pursuant to subsection 3(d), the distribution and participation provided in
subsection 3(d). In each case, the Corporation shall also make appropriate
provisions (in form and substance reasonably satisfactory to the holders of a
majority of the Class D Preferred Stock then outstanding voting separately as
a single class) to ensure that the provisions of Section 5 hereof shall
thereafter be applicable to the Class D Preferred Stock and to the shares of
stock, securities or assets received by each holder upon such Organic Change
(including, in the case of any such consolidation, merger or sale in which
the successor entity or purchasing entity is other than the Corporation, an
immediate adjustment of the Conversion Price to the value attributed to the
Class A Common Stock and Class E Preferred Stock as reflected by the terms of
such consolidation, merger or sale, and a corresponding immediate adjustment
to the number of shares of Class A Common Stock and Class E Preferred Stock
acquirable and receivable upon conversion of Class D Preferred Stock, if the
value so reflected is less than the Conversion Price in effect immediately
prior to such consolidation, merger or sale). The Corporation shall not
effect any such Organic Change unless, prior to the consummation thereof, the
successor corporation (if other than the Corporation) resulting from such
consolidation or merger or the corporation purchasing such assets assumes by
written instrument (in form and substance reasonably satisfactory to the
holders of a majority of the Class D Preferred Stock then outstanding voting
separately as a single class), the obligation to deliver to each such holder
such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire.
(f) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall immediately
after the date the Board of Directors approves such action, or in the case of a
voluntary liquidation, twenty (20) days prior to any shareholders' meeting
called to approve such action, or immediately after the commencement of an
involuntary proceeding, whichever is earliest, give each holder of shares of
Class D Preferred Stock initial written notice of the proposed action. Such
initial written notice shall describe the material terms and conditions of such
proposed action, including a description of the stock, cash and property to be
received by the holders of shares of Class D Preferred Stock upon consummation
of the proposed action and the date of delivery thereof. If there shall occur
any material change in the facts set forth in the initial notice following its
delivery, the Corporation shall promptly give written notice to each holder of
shares of Class D Preferred Stock of such material change.
(g) The Corporation shall not consummate any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation before the expiration
of thirty (30) days after the
-5-
<PAGE>
mailing of the initial notice referred to in subparagraph (f) above or ten
(10) days after the mailing of any subsequent written notice, whichever is
later; PROVIDED that any such 30-day or 10-day period may be shortened upon
the written consent of the holders of a majority of the outstanding shares of
the Class D Preferred Stock voting as a single class.
(h) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation which will involve the distribution
of assets other than cash, the Corporation shall promptly engage independent
appraisers to determine the value of the assets to be distributed to the holders
of shares of Class D Preferred Stock and the holders of shares of Common Stock
(it being understood that with respect to such valuation, the Corporation shall
engage such appraiser as shall be approved by the holders of a majority of
shares of the Corporation's outstanding Common Stock and Class D Preferred
Stock, each voting separately as a single class). The Corporation shall, upon
receipt of such appraiser's valuation, give prompt written notice to each holder
of shares of Common Stock and Class D Preferred Stock of the appraiser's
valuation.
4. VOTING. (a) Except as otherwise required by law or as set forth
herein, the shares of the Class D Preferred Stock shall vote together with the
shares of the Corporation's Class A Common Stock and any other securities of the
Corporation entitled to vote together with the shares of the Class A Common
Stock at any annual or special meeting of shareholders of the Corporation, or
may act by written consent in the same manner as the Corporation's Class A
Common Stock, upon the following basis: each holder of shares of Class D
Preferred Stock shall be entitled to such number of votes in respect of the
Class D Preferred Stock held by him on the record date fixed for such meeting,
or on the effective date of such written consent, as shall be equal to the whole
number of shares of the Corporation's Class A Common Stock into which his shares
of Class D Preferred Stock are convertible, in accordance with the terms of
Section 5 hereof, immediately after the close of business on the record date
fixed for such meeting or the effective date of such written consent.
(b) In addition, the holders of shares of Class D Preferred Stock
also shall have the following voting rights:
i) The affirmative vote of the holders of a majority of the
outstanding shares of Class D Preferred Stock, voting separately as a
single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to (A) amend,
repeal or change, directly or indirectly, any of the provisions of the
Certificate of Incorporation or Bylaws of the Corporation, in any manner
which would alter or change the powers, preferences or special rights of
the shares of Class D Preferred Stock so
-6-
<PAGE>
as to affect them adversely, or (B) redeem, repurchase or pay any dividends
on any Junior Securities or Parity Securities, except with respect to
the Logix Communications Spin-Off and repurchases of management,
employee or consultant stock pursuant to contractual rights PROVIDED,
that no such repurchases shall exceed $500,000 in any fiscal year or in
any event $1,500,000 in the aggregate, or (C) authorize or effect the
sale of all or substantially all of the assets of the Corporation, or
(D) authorize or effect the merger or consolidation of the Corporation
with any other Person, the result of which Everett Dobson and his
Affiliates, directly or indirectly, cease to control 50.1% of the voting
securities of the surviving corporation or its parent, or (E) authorize
or effect the liquidation (whether complete or partial), dissolution or
winding up of the Corporation, or (F) amend the Certificate of
Incorporation or Bylaws of the Corporation to change the authorized
number of directors, or (G) amend or waive any part of this Certificate
of Designation or (H) issue or authorize any shares of Senior Securities
or Parity Securities, including, without limitation, any additional
shares of Class D Preferred Stock, Class E Preferred Stock, other than
shares of Class E Preferred Stock issued as the PIK Dividend or shares
of Class H Preferred Stock issued as a dividend payment; PROVIDED,
HOWEVER, that the Corporation may issue and authorize shares of capital
stock in connection with (x) public or private (which provides for
registration within one year of issuance) 144A preferred stock financing
related to acquisitions after the date hereof and capital projects, and
(y) the Logix Communications Spin-Off. Except for the provisions set
forth in clauses (A), (B), (G) or (H), the foregoing voting rights and
provisions will terminate and no longer be applicable once the total
amount of outstanding shares of Class D Preferred Stock represents less
than 35% of the shares of Class D Preferred Stock issued under the
Investment and Transaction Agreement.
ii) The rights of holders of shares of Class D Preferred Stock
to vote or take any other actions as provided in this Section 4 may be
exercised at any annual meeting of stockholders, at a special meeting of
stockholders held for such purpose or through any written action in lieu
of a meeting. At each meeting of stockholders at which the holders of
shares of Class D Preferred Stock shall have the right, voting
separately as a single class, to take any action as provided in this
Section 4, the presence in person or by proxy of the holders of record
of a majority of the total number of shares of Class D Preferred Stock
then outstanding and entitled to vote on the matter shall be necessary
and sufficient to constitute a quorum. At any such meeting or at any
adjournment thereof, in the absence of a quorum of the holders of shares
of Class D Preferred Stock, a majority of the holders of such shares
present in person or by proxy shall
-7-
<PAGE>
have the power to adjourn the meeting as to the actions to be taken by
the holders of shares of Class D Preferred Stock from time to time and
place to place without notice other than announcement at the meeting
until a quorum shall be present.
5. CONVERSION RIGHTS.
(a) CONVERSION PROCEDURE.
i) At any time and from time to time, any holder of Class D
Preferred Stock may convert all or any portion of the Class D Preferred
Stock (including any fraction of a share) held by such holder into shares
of each of the Class A Common Stock and Class E Preferred Stock of the
Corporation. Each share of Class D Preferred Stock shall be convertible
into (i) one share of Class E Preferred Stock plus such number of
additional shares of Class E Preferred stock payable as the PIK Dividend
with respect to such shares of Class D Preferred Stock, and (ii) such
number of shares of Class A Common Stock determined by dividing $1,131.92
by the Conversion Price (as hereinafter defined) in effect on the date of
conversion (calculated to the nearest 1/100 of a dollar).
ii) Each conversion of Class D Preferred Stock shall be deemed
to have been effected as of the close of business on the date on which
the certificate or certificates representing the Class D Preferred Stock
to be converted have been surrendered at the principal office of the
Corporation or at such other place as may be designated by the
Corporation. At such time as such conversion has been effected, the
rights of the holder of such Class D Preferred Stock as to such Class D
Preferred Stock shall cease and the Person or Persons in whose name or
names any certificate or certificates for shares of Class A Common Stock
and Class E Preferred Stock are to be issued upon such conversion shall
be deemed to have become the holder or holders of record of the shares
of Class A Common Stock and Class E Preferred Stock represented thereby.
iii) The conversion rights of any share of Class D Preferred
Stock redeemed by the Corporation pursuant to Section 6 shall terminate on
the date the Liquidation Preference for such share is paid in full.
iv) Notwithstanding any other provision hereof, if a conversion
of shares is to be made in connection with a Qualified Public Offering, the
conversion of such shares may, at the election of the holder thereof, be
conditioned upon the consummation of the Qualified Public Offering, in
which case such conversion shall not be deemed to be effective until the
consummation of the Qualified Public Offering.
-8-
<PAGE>
v) As soon as possible after a conversion has been effected
(but in any event within five (5) business days), the Corporation shall
deliver to the converting holder:
(y) a certificate or certificates representing, in the
aggregate, the number of shares of Class A Common Stock and Class E
Preferred Stock issuable by reason of such conversion, in the same
name or names as the certificates representing the converted shares
and in such denomination or denominations as the converting holder has
specified; and
(z) a certificate representing any shares of Class D
Preferred Stock which were represented by the certificate or
certificates delivered to the Corporation in connection with such
conversion but which were not converted.
vi) The issuance of certificates of shares of Class A Common
Stock and Class E Preferred Stock upon conversion of Class D Preferred
Stock shall be made without charge to the holders of such Class D Preferred
Stock for any issuance tax in respect thereof or other cost incurred by the
Corporation in connection with such conversion and the related issuance of
shares of Class A Common Stock and Class E Preferred Stock. Upon
conversion of any shares of Class D Preferred Stock, the Corporation shall
take all such actions as are necessary in order to ensure that the shares
of Class A Common Stock and Class E Preferred stock issuable with respect
to such conversion shall be validly issued, fully paid and nonassessable.
vii) The Corporation shall not close its books against the
transfer of Class D Preferred Stock or of Class A Common Stock or Class E
Preferred Stock issued or issuable upon conversion of Class D Preferred
Stock in any manner which interferes with the timely conversion of Class D
Preferred Stock. The Corporation shall assist and cooperate with any
holder of shares of Class D Preferred Stock required to make any
governmental filings or obtain any governmental approval prior to or in
connection with any conversion of shares of Class D Preferred Stock
hereunder (including, without limitation, making any filings required to be
made by the Corporation).
viii) The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Class A Common Stock
and Class E Preferred Stock, solely for the purpose of issuance upon the
conversion of the Class D Preferred Stock, such number of shares of Class A
Common Stock and Class E Preferred Stock as are issuable upon the
conversion of all outstanding Class D Preferred Stock. All
-9-
<PAGE>
shares of Class A Common Stock and Class E Preferred Stock which are so
issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, liens and charges. The
Corporation shall take all such actions as may be necessary to assure
that all such shares of Class A Common Stock and Class E Preferred Stock
may be so issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange upon
which shares of Class A Common Stock or Class E Preferred Stock may be
listed (except for official notice of issuance which shall he
immediately delivered by the Corporation upon each such issuance).
(b) CONVERSION PRICE.
i) The initial conversion price of shares of Class D Preferred
Stock into shares of Class A Common Stock shall initially be $1,131.92 per
share, which may be adjusted from time to time in accordance with the
provisions hereof (the 'Conversion Price'). If and whenever on or after
the original date of issuance of the Class D Preferred Stock the
Corporation issues or sells, or in accordance with Section 5(c) is deemed
to have issued or sold, any shares of its Common Stock or other capital
stock convertible into Common Stock (other than Permitted Issuances) for a
consideration per share less than the Conversion Price in effect
immediately prior to the time of such issue or sale, then forthwith upon
such issue or sale the Conversion Price shall be reduced to the Conversion
Price determined by dividing (a) the sum of (1) the product derived by
multiplying the Conversion Price in effect immediately prior to such issue
or sale times the number of shares of Common Stock Deemed Outstanding
immediately prior to such issue or sale, plus (2) the consideration, if
any, received (or deemed received pursuant to Section 5(c) below) by the
Corporation upon such issue or sale, by (b) the number of shares of Common
Stock Deemed Outstanding immediately after such issue or sale.
ii) No anti-dilution adjustments shall be made and no
adjustments shall be made to the Conversion Price in connection with (x)
the issuance or deemed issuance by the Corporation of Common Stock in
connection with acquisitions or capital projects consummated after the date
hereof and the financing thereof, (y) the Logix Communications Spin-off,
and (z) any broadly distributed public offering including a Qualified
Public Offering.
(c) EFFECT ON CONVERSION PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Conversion Price under Section 5(b), the following
shall be applicable:
-10-
<PAGE>
i) ISSUANCE OF RIGHTS OR OPTIONS. If the Corporation in any
manner grants any rights or options, (other than Permitted Issuances), to
subscribe for or to purchase Common Stock or any stock or other securities
convertible into or exchangeable for Common Stock (such rights or options
being herein called 'Options' and such convertible or exchangeable stock or
securities being herein called 'Convertible Securities') and the price per
share for which Common Stock is issuable upon the exercise of such Options
or upon conversion or exchange of such Convertible Securities is less than
the Conversion Price in effect immediately prior to the time of the
granting of such Options, then the total maximum number of shares of Common
Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total maximum amount of such Convertible Securities shall
be deemed to be outstanding and to have been issued and sold by the
Corporation at the time of the granting of such Options for such price per
share. For purposes of this paragraph, the 'price per share for which
common stock is issuable' shall be determined by dividing (a) the total
amount, if any, received or receivable by the Corporation as consideration
for the granting of such Options, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon exercise of all
such Options, plus in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if
any, payable to the Corporation upon the issuance or sale of such
Convertible Securities and the conversion or exchange thereof (such amount
is the consideration 'deemed received' for purposes of Section 5(b) above),
by (b) the total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options. No
further adjustment of the Conversion Price shall be made when Convertible
Securities are actually issued upon the exercise of such Options or when
Common Stock is actually issued upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Corporation in
any manner issues or sells any Convertible Securities and the price per
share for which Common Stock is issuable upon such conversion or exchange
is less than the Conversion Price in effect immediately prior to the time
of such issue or sale, then the maximum number of shares of Common Stock
issuable upon conversion or exchange of such Convertible Securities shall
be deemed to be outstanding and to have been issued and sold by the
Corporation at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this paragraph,
the 'price per share for which common stock is issuable' shall be
determined by dividing (a) the total amount received or
-11-
<PAGE>
receivable by the Corporation as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of
additional consideration, if any, payable to the Corporation upon the
conversion or exchange thereof (such amount is the consideration 'deemed
received' for purposes of Section 5(b) above), by (b) the total maximum
number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities. No further adjustment of
the Conversion Price shall be made when Common Stock is actually issued
upon the conversion or exchange of such Convertible Securities, and if
any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Conversion Price
had been or are to be made pursuant to other provisions of this Section
5, no further adjustment of the Conversion Price shall be made by reason
of such issue or sale.
iii) CHANGE IN OPTION PRICE OR CONVERSION PRICE. If the purchase
price provided for in any Options, the additional consideration, if any,
payable upon the conversion or exchange of any Convertible Securities, or
the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock change at any time, the Conversion Price in
effect at the time of such change shall be readjusted to the Conversion
Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed purchase
price, additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold; provided that if such
adjustment would result in an increase of the Conversion Price then in
effect, such adjustment shall not be effective until 30 days after written
notice thereof has been given by the Corporation to all holders of the
Class D Preferred Stock.
(d) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Corporation
at any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise), one or more classes of its outstanding shares of Common Stock into a
greater number of shares, or if the Corporation at any time combines (by reverse
stock split or otherwise), one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such subdivision or combination shall be proportionately
adjusted.
(e) CERTAIN EVENTS. The Corporation's Board of Directors shall make
an appropriate adjustment in the Conversion Price so as to protect the rights of
the holders of Class D Preferred Stock against any dilution in connection with
(i) the exercise of warrants issued in connection with the financing of the
Sygnet Acquisition, (ii) the exercise of options issued or committed as of the
original date of execution of the Investment
-12-
<PAGE>
and Transaction Agreement under the Corporation Stock Option Plan, and (iii)
the conversion of Class G Convertible PIK Preferred Stock; PROVIDED, HOWEVER,
that no such adjustment shall increase the Conversion Price as otherwise
determined pursuant to this Section 5 or decrease the number of shares of
Class A Common Stock and Class E Preferred Stock issuable upon conversion of
each share of Class D Preferred Stock. If an event not specifically
enumerated in this Section 5 occurs which has substantially the same economic
effect on the Class D Preferred Stock as those specifically enumerated in
this Section 5, then this Section 5 shall be construed liberally, MUTATIS
MUTANDIS, in order to give the Class D Preferred Stock the benefit of the
protections provided under this Section.
(f) NOTICES.
i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Class D
Preferred Stock, setting forth in reasonable detail and certifying the
calculation of such adjustment.
ii) The Corporation shall give written notice to all holders of
Class D Preferred Stock at least 20 days prior to the date on which the
Corporation closes its books or takes a record (a) with respect to any
dividend or distribution upon Common Stock, (b) with respect to any pro
rata subscription offer to holders of Common Stock or (c) for determining
rights to vote with respect to any Organic Change, dissolution or
liquidation.
iii) The Corporation shall also give written notice to the
holders of Class D Preferred Stock at least 20 days prior to the date on
which any Organic Change shall take place.
6. REDEMPTIONS.
(a) REDEMPTION PRICE. For each share which is to be redeemed
pursuant to this Section 6, the Corporation will, subject to the limitations and
restrictions contained in the Financing Agreements, be obligated on the
Redemption Date (as defined in Section 6(e)) to pay to the holder thereof (upon
surrender by such holder at the Corporation's principal office of the
certificate representing such share) an amount in cash (the 'Redemption Price')
equal to the Liquidation Preference thereof as at the Redemption Date plus a
number of shares of Class A Common Stock such holder would have received upon
conversion of the Class D Preferred Stock into shares of Class E Preferred Stock
and Class A Common Stock had such conversion occurred immediately prior to
redemption. If the funds of the Corporation legally available for redemption of
shares of Class D Preferred Stock on any Redemption Date are insufficient
-13-
<PAGE>
to redeem the total number of shares of Class D Preferred Stock to be redeemed
on such date, those funds which are legally available will be used to redeem the
maximum possible number of shares of Class D Preferred Stock ratably among the
holders of the shares of Class D Preferred Stock to be redeemed based upon the
aggregate Liquidation Preference of such shares of Class D Preferred Stock held
by each such holder. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of shares, such funds will
immediately be used to redeem the balance of the shares of Class D Preferred
Stock which the Corporation has become obligated to redeem on any Redemption
Date but which it has not redeemed.
(b) NOTICE OF REDEMPTION. The Corporation will send by registered
mail written notice of each redemption of Class D Preferred Stock to each record
holder of such class not more than 30 nor less than 10 business days prior to
the Redemption Date.
(c) DIVIDENDS AFTER REDEMPTION DATE. No shares of Class D Preferred
Stock will be entitled to any dividends accruing after the date on which the
Redemption Price of such shares of Class D Preferred Stock has been paid. On
such date all rights of the holders of such shares of Class D Preferred Stock
will cease, and such shares of Class D Preferred Stock will not be deemed to be
outstanding.
(d) ACCRUED DIVIDENDS MUST BE PAID PRIOR TO ANY REDEMPTION. The
Corporation may not redeem any shares of Class D Preferred Stock, unless all
dividends accrued and unpaid on the outstanding Class D Preferred Stock through
the Redemption Date have been paid in full.
(e) OPTIONAL REDEMPTION. The Corporation will redeem all of the then
issued and outstanding shares of Class D Preferred Stock within 90 days of the
affirmative vote of the holders of a majority of the issued and outstanding
shares of Class D Preferred Stock at any time after December 23, 2010 (the
'Redemption Date'); PROVIDED, HOWEVER, that the exercise of such redemption
rights shall be subject to the restrictions and shall not give rise to either a
default or event of default in the Financing Agreements. Upon the exercise of
such redemption option by the holders of the Class D Preferred Stock, the
holders of the Class D Preferred Stock shall be entitled to receive payment of
the Redemption Price.
(f) OTHER REDEMPTIONS OR ACQUISITIONS. Neither the Corporation nor
any Subsidiary will redeem or otherwise acquire any Class D Preferred Stock,
except as expressly authorized herein or pursuant to a purchase offer made pro
rata to all holders of Class D Preferred Stock on the basis of the number of
shares of Class D Preferred Stock owned by each such holder.
-14-
<PAGE>
7. STATUS OF REACQUIRED SHARES. Shares of Class D Preferred Stock which
have been issued and reacquired in any manner shall have the status of
authorized and unissued shares of Class D Preferred Stock.
8. RANK. The Class D Preferred Stock shall rank (i) senior as to
dividends and upon liquidation, dissolution or winding up to all Junior
Securities, whenever issued, (ii) junior as to dividends and upon liquidation,
dissolution or winding up, to all Senior Securities, whenever issued, and (iii)
PARI PASSU as to dividends and upon liquidation, dissolution or winding up, to
all Parity Securities, whenever issued.
9. CERTIFICATES. So long as any shares of the Class D Preferred Stock
are outstanding, there shall be set forth on the face or back of each stock
certificate issued by the Corporation a statement that the Corporation shall
furnish without charge to each shareholder who so requests, a full statement of
the designation and relative rights, preferences and limitations of each class
of stock or series thereof that the Corporation is authorized to issue and of
the authority of the Board of Directors to designate and fix the relative
rights, preferences and limitations of each series.
10. DEFINITIONS.
'Affiliate' shall have the meaning given such term in Rule 501(b) under the
Securities Act of 1933.
'Applicable Rate' means 15% per annum.
'Certificate of Designation' means this Certificate of Designation of the
Powers, Preferences and Relative, Participating, Optional and Other Special
Rights of the Class D Convertible Preferred Stock and Qualifications,
Limitations and Restrictions Thereof.
'Certificate of Incorporation' means the Certificate of Incorporation of
the Corporation, as restated.
'Class A Common Stock' means the Corporation's Class A Common Stock, $0.001
par value per share.
'Class A Preferred Stock' means the Corporation's Class A Preferred Stock,
$1.00 par value per share.
'Class B Common Stock' means the Corporation's Class B Common Stock, $0.001
par value per share.
'Class C Common Stock' means the Corporation's Class C Common Stock, $0.001
par value per share.
'Class D Preferred Stock' means the Corporation's Class D Preferred Stock,
$1.00 par value per share.
-15-
<PAGE>
'Class E Preferred Stock' means the Corporation's Class E Preferred Stock,
$1.00 par value per share.
'Class F Preferred Stock' means the Corporation's Class F Preferred Stock,
par value $1.00 per share.
'Class F Preferred Stock Documents' means the Class F Preferred Stock
Investors Agreement, the Class F Preferred Stock Warrants, and the Class F
Preferred Stock (and the Certificate of Designation relating thereto).
'Class F Preferred Stock Investors Agreement' means the Investors
Agreement, entered into by the Corporation in respect of the Class F Preferred
Stock Warrants.
'Class F Preferred Stock Warrants' means any warrant certificate evidencing
warrants to purchase Class A Common Stock issued by the Corporation in
conjunction with the Class F Preferred Stock.
'Class G Preferred Stock' means the Corporation's Class G Preferred Stock,
$1.00 par value per share.
'Class H Preferred Stock' means the Corporation's Class H Preferred Stock,
$1.00 par value per share.
'Common Stock' means, collectively, the Corporation's Class A Common Stock,
Class B Common Stock and Class C Common Stock and any other classes of common
stock issued from time to time by the Corporation.
'Common Stock Deemed Outstanding' means, at any given time, the number of
shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock issuable upon conversion of the Class D Preferred Stock,
plus the number of shares of Common Stock deemed to be outstanding with respect
to Options or Convertible Securities whether or not the Options are actually
exercisable at such time.
'Conversion Price' shall have the meaning set forth in Section 5(b) hereof.
'Corporation Stock Option Plan' means the Dobson Communications Corporation
1996 Stock Option Plan, as adopted on February 6, 1997 and as amended by
Amendment No. 1 thereto, as the same may be amended, supplemented or otherwise
modified from time to time.
'Credit Agreements' means (i) the Credit Agreement, dated as of March 25,
1998, among First Union National Bank (as successor by merger to CoreStates
Bank, N.A.) as Administrative Agent, Dobson Operating Company, as Borrower, the
Corporation, as Guarantor, and
-16-
<PAGE>
the Corporation Subsidiaries party thereto, (ii) the Revolving Credit
Agreement, dated as of March 25, 1998, between Dobson Cellular Operations
Company, as Borrower, and NationsBank, N.A. (as successor by merger to
NationsBank of Texas, N.A.), as Administrative Agent, (iii) the 364-Day
Revolving Credit and Term Loan Agreement, dated as of March 25, 1998, between
Dobson Cellular Operations Company, as Borrower, and NationsBank, N.A. (as
successor by merger to NationsBank of Texas, N.A.), as Administrative Agent,
(iv) the Credit Agreement, dated the date hereof, between Dobson/Sygnet
Operating Company, as Borrower, and NationsBank N.A., as Administrative Agent
and (v) the Term Loan Agreement, dated as of the date hereof, between Dobson
Tower Company and NationsBank, N.A.
'Credit Documents' means, collectively, the Credit Agreements and all
documents and instruments evidencing or securing or guaranteeing indebtedness
thereunder.
'Dobson Partnership' means Dobson CC Limited Partnership, an Oklahoma
limited partnership.
'Dobson/Sygnet' means Dobson/Sygnet Communications Company, an Oklahoma
corporation.
'Dobson/Sygnet Note Documents' means, collectively, the Dobson/Sygnet Note
Indenture, the Dobson/Sygnet Note Purchase Agreement, the Dobson/Sygnet Notes
and the Dobson/Sygnet Notes Registration Rights Agreement.
'Dobson/Sygnet Note Indenture' means the Indenture, dated the date hereof,
among Dobson/Sygnet and United States Trust Company of New York, as trustee
thereunder in respect of the Dobson/Sygnet Notes.
'Dobson/Sygnet Note Purchase Agreement' means the Purchase Agreement, dated
as of December 16, 1998, among Dobson/Sygnet, the Corporation and NationsBanc
Montgomery Securities LLC.
'Dobson/Sygnet Notes' means the $200 million in aggregate principal amount
of 12 1/4% Senior Notes Due 2008 issued by Dobson/Sygnet pursuant to the
Dobson/Sygnet Note Indenture.
'Dobson/Sygnet Registration Rights Agreement' means the Registration Rights
Agreement, dated the date hereof, between Dobson/Sygnet and NationsBanc
Montgomery Securities LLC.
'Financing Agreements' means, collectively, the Senior Note Documents, the
Dobson/Sygnet Notes Documents, the Credit Documents, the Senior PIK Preferred
Stock Certificate of Designation, the Sygnet PIK Preferred Stock Documents and
the Class F Preferred Stock Documents, the Investment and Transaction Agreement
and, as appropriate, all documents, instruments and agreements evidencing,
-17-
<PAGE>
or securing the foregoing and any refinancings or amendments thereto
permitted by Section 12.5 of the Stockholder and Investor Rights Agreement.
'Fully Diluted Basis' means with respect to any equity securities issued by
any Person, without duplication, (a) all shares or units of, or interests in,
such equity securities outstanding at the time of determination, and (b) all
convertible securities, warrants or options with respect to such equity
securities, whether or not exercisable or convertible at the time of such
determination.
'Investment and Transaction Agreement' means that certain Investment and
Transaction Agreement, dated as of December 23, 1998, among the purchasers named
therein and the Corporation, as it may be amended, modified or otherwise
supplemented from time to time.
'Junior Securities' means any of (i) the Corporation's Common Stock,
(ii) all other equity securities of the Corporation other than Parity Securities
and Senior Securities, and (iii) only as to Section 3, Section 6 and the
redemption and put rights of the Class D Preferred Stock and Class E Preferred
Stock in accordance with the Stockholder and Investor Rights Agreement, the
Class G Preferred Stock and the Class H Preferred Stock.
'Liquidation Preference' means the aggregate Liquidation Value of all
shares of Class D Preferred Stock held by a holder of Class D Preferred Stock
plus an amount equal to the sum of all accrued and unpaid dividends thereon,
whether or not declared to the date of payment.
'Liquidation Value' of any share of Class D Preferred Stock shall be One
Thousand One Hundred Thirty One Dollars and Ninety-Two Cents ($1,131.92).
'Logix Communications Enterprises, Inc. 1998 Stock Option Plan' means that
certain Logix Communications Enterprises, Inc. 1998 Stock Option Plan, effective
as of August 1, 1998, as the same may be amended, supplemented or otherwise
modified from time to time.
'Logix Communications Spin-Off' means the disposition by the Corporation
of the business of Logix Communications.
'Organic Change' shall have the meaning set forth in Section 3(e) hereof.
'Parity Securities' means the Corporation's Class A Preferred Stock and
Class E Preferred Stock and except with respect to Section 3, Section 6 and the
redemption and put rights of the Class D Preferred Stock and the Class E
Preferred Stock in accordance
-18-
<PAGE>
with the Stockholder and Investor Rights Agreement, the Class G Preferred
Stock and the Class H Preferred Stock.
'Permitted Issuances' means (i) any securities issued by the Corporation in
connection with the Logix Communications Spin-Off, (ii) Class A Common Stock and
Class E Preferred Stock issuable upon the conversion of Class D Preferred Stock,
(iii) Common Stock issued in connection with a broadly distributed public
offering, including a Qualified Public Offering, (iv) Class A Common Stock
issued upon exercise of warrants evidenced by a Class F Preferred Stock Warrant
Certificate, (v) any stock issuable under the Corporation Stock Option Plan or
the Logix Communications Enterprises, Inc. 1998 Stock Option Plan, and
(vi) Class A Common Stock issued in connection with acquisitions or capital
projects and the financing thereof; PROVIDED that in each of clauses (i) through
(vi) hereof such securities shall be permitted by the terms of the Investment
and Transaction Agreement.
'Person' means an individual, partnership, corporation, association, trust,
joint venture, unincorporated organization or other entity and any government,
governmental department or agency or political subdivision thereof.
'Qualified Public Offering' means any offering by the Corporation of its
Class A Common Stock to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or any comparable
registration statement under any similar federal statute then in force (other
than an offering of shares being issued as consideration in a business
acquisition or combination or an offering in connection with an employee benefit
plan), and the aggregate gross proceeds in connection with such registration
statement equals or exceeds $50.0 million.
'Senior Note Documents' means, collectively, the Senior Note Indenture,
the Senior Notes, and the Senior Notes Escrow and Security Agreement.
'Senior Note Indenture' means the Indenture, dated as of February 28, 1997,
among the Corporation and United States Trust Company of New York, as trustee
thereunder in respect of the Senior Notes.
'Senior Notes Escrow and Security Agreement' means the Escrow and Security
Agreement, dated February 28, 1997, among the Corporation, the placement agents,
party thereto, and United States Trust Company of New York, as Trustee
thereunder.
'Senior PIK Preferred Stock' means the Corporation's 12 1/4% Senior
Exchangeable Preferred Stock issued on January 22, 1998 and mandatorily
redeemable 2008.
-19-
<PAGE>
'Senior PIK Preferred Stock Certificate of Designation' means the
Certificate of Designation in respect of the Senior PIK Preferred Stock.
'Senior Securities' means the Senior PIK Preferred Stock, the Sygnet PIK
Preferred Stock, the Class F Preferred Stock and each class or series of
preferred stock of the Corporation which is established by the Board of
Directors after the date this Certificate of Designation is filed with the
Secretary of State of the State of Oklahoma, the terms of which expressly
provide that such class or series shall rank senior to the Class D Preferred
Stock as to dividend distributions and distributions upon liquidation,
dissolution or winding up of the Corporation.
'Stockholder and Investor Rights Agreement' means that certain Stockholder
and Investor Rights Agreement dated the date hereof among this Corporation and
the stockholders of this Corporation, as it may be amended from time to time.
'Subsidiary' means, with respect to any Person, any corporation,
partnership, 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 of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed
to have a majority ownership interest in a partnership, association, or other
business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or
control the managing general partner of such partnership, association or other
business entity.
'Sygnet Acquisition' means the acquisition by Dobson/Sygnet
Communications Company of all of the outstanding capital stock of Sygnet
Wireless pursuant to the Agreement and Plan of Merger, dated as of July 28,
1998, as amended, between Dobson/Sygnet Operating Company and Sygnet Wireless.
'Sygnet PIK Preferred Stock' means the Corporation's Sygnet PIK Preferred
Stock, issued on December 23, 1998, and mandatorily redeemable 2008.
'Sygnet PIK Preferred Stock Certificate of Designation' means the
Certificate of Designation for the Sygnet PIK Preferred Stock.
-20-
<PAGE>
'Sygnet PIK Preferred Stock Documents' means, collectively, the Sygnet PIK
Preferred Stock Purchase Agreement, the Sygnet PIK Preferred Stock Certificate
of Designation and the Sygnet PIK Preferred Stock Registration Rights Agreement.
'Sygnet PIK Preferred Stock Purchase Agreement' means the Purchase
Agreement, dated December 16, 1998, between the Corporation and NationsBanc
Montgomery Securities LLC, in respect of the Sygnet PIK Preferred Stock.
'Sygnet PIK Preferred Stock Registration Rights Agreement' means the
Registration Rights Agreement, dated the date hereof, between the Corporation
and NationsBanc Montgomery Securities LLC.
'Sygnet Wireless' means Sygnet Wireless, Inc., an Ohio Corporation.
11. SEVERABILITY OF PROVISIONS. If any right, preference or limitation of
the Class D Preferred Stock set forth in this Resolution (as such Resolution may
be amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule, law or public policy, all other rights,
preferences and limitations set forth in this Resolution (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other right, preference or limitation unless so expressed
herein."
SECOND: That, thereafter, the shareholders, including all holders of
the issued and outstanding shares of the Corporation's Class D Preferred Stock,
unanimously voted in favor of the Amendment pursuant to written consent given in
accordance with the provisions of Section 73 of the Oklahoma General Corporation
Act.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 77 of the Oklahoma General Corporation Act.
-21-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Everett R. Dobson, its President, and attested to by Stephen T.
Dobson, its Secretary, this 23rd day of December, 1998.
EVERETT R. DOBSON
By: /s/ Everett R. Dobson
---------------------
Title: President
ATTEST:
STEPHEN T. DOBSON
/s/ Stephen T. Dobson
- ---------------------
Title: Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RELATIVE AND OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF CLASS E PREFERRED STOCK
DOBSON COMMUNICATIONS CORPORATION, an Oklahoma corporation (the
"Corporation") does hereby certify that:
FIRST: That the Corporation's Board of Directors, by the unanimous
written consent of its members, filed with the minutes of the Board, duly
adopted resolutions setting forth proposed amendments to the Certificate of
Designation, Preferences and Relative and Other Special Rights, and
Qualifications, Limitations and Restrictions of Class E Preferred Stock (the
"Class E Certificate of Designation") of the Corporation, declaring such
amendments to be advisable and calling a meeting of the shareholders of the
Corporation for consideration thereof.
The Class E Certificate of Designation is proposed to be amended to
provide, in its entirety, as follows:
"1. DESIGNATION. The designation of such class is 'Class E Preferred
Stock' (hereinafter in this Certificate of Designation called the 'Class E
Preferred Stock'), and the number of shares constituting such class shall be
405,000, which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; PROVIDED, HOWEVER, that such number
may not be decreased below the number of then currently outstanding shares of
Class E Preferred Stock subject to outstanding rights and options, if any. All
capitalized terms used in this Certificate of Designation and not otherwise
defined shall have the meaning given to such terms in Section 9 hereof.
2. DIVIDENDS. (a) The holders of shares of Class E Preferred Stock, in
preference to the holders of the Junior Securities, shall be entitled to
receive, out of funds legally available for the purpose, cumulative dividends in
an amount equal to (as determined on a per annum basis) (i) the sum of (A)
product of the Applicable Rate multiplied by the Liquidation Value and (B) the
product of the Applicable Rate multiplied by all accrued and unpaid dividends
thereon from the date of issuance to the end of the immediately preceding
calendar year plus (ii) all accrued and unpaid dividends compounded through
December 31 of the prior calendar year, and shall accrue on a daily basis and be
payable as provided in subparagraph (c) of this Section 2. All accrued but
unpaid dividends will compound annually on December 31 of each year (each a
'dividend date') (the initial such calculation to be made at the Applicable Rate
for the number of days elapsed from the date of issue of the Class E Preferred
Stock to and including the 31st day of December, 1998). Such dividends shall
commence to accrue on each share of Class E Preferred Stock from the date of
issuance thereof whether or not declared by the Board of Directors and
<PAGE>
whether or not there are profits, surplus or other funds of the Corporation
legally available for the payment of such dividends, and shall continue to
accrue thereon until the date the Liquidation Preference of such share is
paid. For purposes of determining the amount of dividends accrued on the
Class E Preferred Stock pursuant to this Section 2 at any time prior to
December 31 of any year, the Applicable Rate for such period shall be
multiplied by a fraction, the numerator of which is the actual number of days
elapsed in the then current year and the denominator of which is 360.
(b) In the event of any dividend or distribution payable by the
Corporation in connection with the Logix Communications Spin-Off, in addition
to any dividends payable pursuant to paragraph (a) of this Section 2, each
holder of shares of Class E Preferred Stock shall be entitled to receive an
amount equal to such holder's PRO RATA share, calculated on a Fully-Diluted
Basis (which, for purposes hereof, assumes the exercise of all options issued
and committed as of the date of execution of the Investment and Transaction
Agreement pursuant to the Corporation Stock Option Plan and up to 5% of
capital stock of the Logix Communications Enterprises, Inc. 1998 Stock Option
Plan).
(c) Subject to the terms of the Stockholder and Investor Rights
Agreement and any applicable prohibition on the payment of dividends in any
Financing Agreement, accrued dividends shall be paid in cash only upon any
liquidation, dissolution or winding up of the Corporation, or upon any
redemption of Class E Preferred Stock pursuant to Section 5 hereof or the
exercise of any put or call rights pursuant to the Stockholder and Investor
Rights Agreement.
(d) Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then accrued with
respect to the Class E Preferred Stock, such payment shall be distributed
ratably among the holders thereof based upon the aggregate accrued but unpaid
dividends on the Class E Preferred Stock held by each holder.
(e) Except as otherwise may be specifically provided in this
Certificate of Designation, the Investment and Transaction Agreement or the
Stockholder and Investor Rights Agreement, so long as any shares of Class E
Preferred Stock are outstanding, the Corporation will not declare, pay or set
apart for payment any dividends or make any other distribution on or redeem
any Junior Securities (other than any payments to holders of Class B Common
Stock or Class C Common Stock pursuant to the Corporation Stock Option Plan
and the redemption by the Dobson Partnership, in one or more transactions, of
up to $25.0 million in the aggregate of securities of the Corporation,
together with any accrued and unpaid dividends thereon, in accordance with
the Stockholder and Investor Rights Agreement) and will not permit any
Subsidiary or other Affiliate to redeem, purchase or otherwise acquire for
value, or
-2-
<PAGE>
set apart for any sinking or other analogous fund for the redemption or
purchase of, any Junior Securities or securities of such Subsidiary or
Affiliate.
3. LIQUIDATION PREFERENCE. (a) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, either
voluntarily or involuntarily, each holder of Class E Preferred Stock shall be
entitled to be paid in cash, after provision for the payment of the
Corporation's debts and other liabilities, before any distribution is made on
any Junior Securities and concurrently with any distribution to the holders
of Parity Securities but after any distribution to the holders of Senior
Securities, the Liquidation Preference. If, upon any such liquidation,
dissolution or other winding up of the affairs of the Corporation, the net
assets of the Corporation distributable among the holders of all outstanding
shares of the Class E Preferred Stock shall be insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled under this Certificate of Designation, then the entire net assets of
the Corporation remaining after the provision for the payment of the
Corporation's debts and other liabilities and required distributions to the
holders of Senior Securities shall be distributed among the holders of the
Class E Preferred Stock and of the Parity Securities ratably in proportion to
the full amounts to which they would otherwise be respectively entitled.
(b) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, either voluntarily or involuntarily, after
the payment of all preferential amounts required to be paid to the holders of
Senior Securities, the Parity Securities and Class E Preferred Stock, the
remaining assets and funds of the Corporation available for distribution to
its stockholders shall be distributed on a pro rata basis among the holders
of Junior Securities and any other class or series of stock entitled to
participate in liquidation distributions with the holders of the Junior
Securities.
(c) The assets available for distribution pursuant to this Section
3 shall be determined by applicable law and, prior to payment of any
Liquidation Preference, the Corporation shall first satisfy its outstanding
obligations concerning rights, if any, of holders of Class E Preferred Stock
which have been exercised.
(d) The merger or consolidation of the Corporation into or with
another corporation in which Everett Dobson and his Affiliates, directly or
indirectly, cease to control 50.1% of the voting securities of the surviving
corporation or its parent or the sale, transfer or lease (but not including a
transfer or lease by pledge or mortgage to a bona fide lender) of all or
substantially all of the assets of the Corporation may be deemed by the
holders of the Class E Preferred Stock to be a liquidation, dissolution or
winding up of the Corporation as those terms are used in this
-3-
<PAGE>
Section 3. In the event of such merger, consolidation, sale, transfer or
lease of substantially all of the Corporation's assets, each holder of shares
of Class E Preferred Stock shall have the right to preference in the merger
or consolidation or upon the distribution of assets as provided in this
Section 3.
(e) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall
immediately after the date the Board of Directors approves such action, or,
in the case of an involuntary liquidation, twenty (20) days prior to any
shareholders' meeting called to approve such action, or immediately after the
commencement of an involuntary proceeding, whichever is earliest, give each
holder of shares of Class E Preferred Stock initial written notice of the
proposed action. Such initial written notice shall describe the material
terms and conditions of such proposed action, including a description of the
stock, cash and property to be received by the holders of shares of Class E
Preferred Stock upon consummation of the proposed action and the date of
delivery thereof. If there shall occur any material change in the facts set
forth in the initial notice following its delivery, the Corporation shall
promptly give written notice to each holder of shares of Class E Preferred
Stock of such material change.
(f) The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation before
the expiration of thirty (30) days after the mailing of the initial notice
referred to in subparagraph (e) above or ten (10) days after the mailing of
any subsequent written notice, whichever is later; PROVIDED, that any such
30-day or 10-day period may be shortened upon the written consent of the
holders of a majority of the outstanding shares of the Class E Preferred
Stock voting as a single class.
(g) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation which will involve the
distribution of assets other than cash, the Corporation shall promptly engage
independent appraisers to determine the value of the assets to be distributed
to the holders of shares of Class E Preferred Stock and the holders of shares
of Common Stock (it being understood that with respect to such valuation, the
Corporation shall engage such appraiser as shall be approved by the holders
of a majority of shares of the Corporation's outstanding Common Stock and
Class E Preferred Stock each voting separately as a single class). The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice to each holder of shares of Common Stock and Class E Preferred
Stock of the appraiser's valuation.
4. VOTING. (a) Except as provided in Section 4(b)(i) and (ii), the
shares of the Class E Preferred Stock shall not be entitled or permitted to
vote, except as otherwise required by law.
-4-
<PAGE>
Whenever a holder of Class E Preferred Stock is entitled or permitted to
vote, each holder of shares of Class E Preferred Stock shall be entitled to
one vote in respect of each share of Class E Preferred Stock held by him on
the record date fixed for such vote.
(b) In addition, the holders of shares of Class E Preferred Stock
also shall have the following voting rights:
(i) The affirmative vote of the holders of a majority of the
outstanding shares of Class E Preferred Stock, voting separately as a
single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to (A) amend,
repeal or change, directly or indirectly, any of the provisions of the
Certificate of Incorporation or Bylaws of the Corporation, in any manner
which would alter or change the powers, preferences or special rights of
the shares of Class E Preferred Stock so as to affect them adversely, or
(B) redeem, repurchase or pay any dividends on any Junior Securities or
Parity Securities, except with respect to the Logix Communications Spin-Off
and repurchases of management, employee or consultant stock pursuant to
contractual rights PROVIDED, that no such repurchases shall exceed $500,000
in any fiscal year or in any event $1,500,000 in the aggregate, or (C)
authorize or effect the sale of all or substantially all of the assets of
the Corporation, or (D) authorize or effect the merger or consolidation of
the Corporation with any other Person, the result of which Everett Dobson
and his Affiliates, directly or indirectly, cease to control 50.1% of the
voting securities of the surviving corporation or its parent, or (E)
authorize or effect the liquidation (whether complete or partial),
dissolution or winding up of the Corporation, or (F) amend the Certificate
of Incorporation or Bylaws of the Corporation to change the authorized
number of directors, or (G) amend or waive any part of this Certificate of
Designation or (H) issue or authorize any shares of Senior Securities or
Parity Securities, including, without limitation, any additional shares of
Class E Preferred Stock, other than shares of Class E Preferred Stock
issued as the PIK Dividend or shares of Class H Preferred Stock issued as a
dividend payment; PROVIDED, HOWEVER, that the Corporation may issue and
authorize shares of capital stock in connection with (x) public or private
(which provides for registration within one year of issuance) 144A
preferred stock financing related to acquisitions after the date hereof and
capital projects, and (y) the Logix Communications Spin-Off. Except for
the provisions set forth in clauses (A), (B), (G) or (H), the foregoing
voting rights and provisions will terminate and no longer be applicable
once the total amount of outstanding shares of Class E Preferred Stock
represents less than 35% of the shares of Class E Preferred Stock issued
under the Investment and Transaction Agreement.
-5-
<PAGE>
(ii) The rights of holders of shares of Class E Preferred Stock
to vote or take any other actions as provided in this Section 4 may be
exercised at any annual meeting of stockholders, at a special meeting of
stockholders held for such purpose or through any written action in lieu of
a meeting. At each meeting of stockholders at which the holders of shares
of Class E Preferred Stock shall have the right, voting separately as a
single class, to take any action as provided in this Section 4, the
presence in person or by proxy of the holders of record of a majority of
the total number of shares of Class E Preferred Stock then outstanding and
entitled to vote on the matter shall be necessary and sufficient to
constitute a quorum. At any such meeting or at any adjournment thereof, in
the absence of a quorum of the holders of shares of Class E Preferred
Stock, a majority of the holders of such shares present in person or by
proxy shall have the power to adjourn the meeting as to the actions to be
taken by the holders of shares of Class E Preferred Stock from time to time
and place to place without notice other than announcement at the meeting
until a quorum shall be present.
5. REDEMPTIONS.
(a) REDEMPTION PRICE. For each share which is to be redeemed
pursuant to this Section 5, the Corporation will, subject to the limitations
and restrictions contained in the Financing Agreements, be obligated on the
Redemption Date, (as defined in Section 5(e)),to pay to the holder thereof
(upon surrender by such holder at the Corporation's principal office of the
certificate representing such share) an amount in cash (the 'Redemption
Price') equal to the Liquidation Preference thereof as at the Redemption
Date. If the funds of the Corporation legally available for redemption of
shares of Class E Preferred Stock on any Redemption Date are insufficient to
redeem the total number of shares of Class E Preferred Stock to be redeemed
on such date, those funds which are legally available will be used to redeem
the maximum possible number of shares of Class E Preferred Stock ratably
among the holders of the shares of Class E Preferred Stock to be redeemed
based upon the aggregate Liquidation Preference of such shares of Class E
Preferred Stock held by each such holder. At any time thereafter when
additional funds of the Corporation are legally available for the redemption
of shares, such funds will immediately be used to redeem the balance of the
shares of Class E Preferred Stock which the Corporation has become obligated
to redeem on any Redemption Date but which it has not redeemed.
(b) NOTICE OF REDEMPTION. The Corporation will send by registered
mail written notice of each redemption of Class E Preferred Stock to each record
holder of such class not more than 30 nor less than 10 business days prior to
the Redemption Date.
-6-
<PAGE>
(c) DIVIDENDS AFTER REDEMPTION DATE. No shares of Class E
Preferred Stock will be entitled to any dividends accruing after the date on
which the Redemption Price of such shares of Class E Preferred Stock has been
paid. On such date all rights of the holders of such shares of Class E
Preferred Stock will cease, and such shares of Class E Preferred Stock will
not be deemed to be outstanding.
(d) ACCRUED DIVIDENDS MUST BE PAID PRIOR TO ANY REDEMPTION. The
Corporation may not redeem any shares of Class E Preferred Stock, unless all
dividends accrued and unpaid on the outstanding Class E Preferred Stock
through the Redemption Date have been paid in full.
(e) OPTIONAL REDEMPTION. The Corporation will redeem all of the
then issued and outstanding shares of Class E Preferred Stock within 90 days
of the affirmative vote of the holders of a majority of the issued and
outstanding shares of Class E Preferred Stock at any time after December 23,
2010 (the 'Redemption Date'); PROVIDED, HOWEVER, that the exercise of such
redemption rights shall be subject to the restrictions and shall not give
rise to either a default or event of default in the Financing Agreements.
Upon the exercise of such redemption option by the holders of the Class E
Preferred Stock, the holders of the Class E Preferred Stock shall be entitled
to receive payment of the Redemption Price.
(f) OTHER REDEMPTIONS OR ACQUISITIONS. Neither the Corporation
nor any Subsidiary will redeem or otherwise acquire any Class E Preferred
Stock, except as expressly authorized herein or pursuant to a purchase offer
made pro rata to all holders of Class E Preferred Stock on the basis of the
number of shares of Class E Preferred Stock owned by each such holder.
6. STATUS OF REACQUIRED SHARES. Shares of Class E Preferred Stock which
have been issued and reacquired in any manner shall have the status of
authorized and unissued shares of Class E Preferred Stock.
7. RANK. The Class E Preferred Stock shall rank (i) senior as to
dividends and upon liquidation, dissolution or winding up to all Junior
Securities, whenever issued, (ii) junior as to dividends and upon liquidation,
dissolution or winding up, to all Senior Securities, whenever issued, and (iii)
PARI PASSU as to dividends and upon liquidation, dissolution or winding up, to
all Parity Securities, whenever issued.
8. CERTIFICATES. So long as any shares of the Class E Preferred Stock
are outstanding, there shall be set forth on the face or back of each stock
certificate issued by the Corporation a statement that the Corporation shall
furnish without charge to each shareholder who so requests, a full statement of
the designation and relative rights, preferences and limitations of each class
of
-7-
<PAGE>
stock or series thereof that the Corporation is authorized to issue and of
the authority of the Board of Directors to designate and fix the relative
rights, preferences and limitations of each series.
9. DEFINITIONS.
'Affiliate' shall have the meaning given such term in Rule 501(b) under the
Securities Act of 1933.
'Applicable Rate' means 15% per annum.
'Certificate of Designation' means this Certificate of Designation of the
Powers, Preferences and Relative, Participating, Optional and Other Special
Rights of the Class E Preferred Stock and Qualifications, Limitations and
Restrictions Thereof.
'Certificate of Incorporation' means the Certificate of Incorporation of
the Corporation, as restated.
'Class A Common Stock' means the Corporation's Class A Common Stock, $0.001
par value per share.
'Class A Preferred Stock' means the Corporation's Class A Preferred Stock,
$1.00 par value per share.
'Class B Common Stock' means the Corporation's Class B Common Stock, $0.001
par value per share.
'Class C Common Stock' means the Corporation's Class C Common Stock,
$0.001 par value per share.
'Class D Preferred Stock' means the Corporation's Class D Convertible
Preferred Stock, $1.00 par value per share.
'Class E Preferred Stock' means the Corporation's Class E Preferred Stock,
$1.00 par value per share.
'Class F Preferred Stock' means the Corporation's Class F Preferred Stock,
par value $1.00 per share.
'Class F Preferred Stock Documents' means the Class F Preferred Stock
Investors Agreement, the Class F Preferred Stock Warrants and the Class F.
Preferred Stock (and the Certificate of Designation relating thereto).
'Class F Preferred Stock Investors Agreement' means the Investors
Agreement, to be entered into between the Corporation and the Cash Equity, in
respect of the Class F Preferred Stock Warrants.
'Class F Preferred Stock Warrants' means any warrant certificate evidencing
warrants to purchase Class A Common Stock
-8-
<PAGE>
issued by the Corporation in conjunction with the Class F Preferred Stock.
'Class G Preferred Stock' means the Corporation's Class G Convertible PIK
Preferred Stock, $1.00 par value per share.
'Class H Preferred Stock' means the Corporation's Class H Preferred Stock,
$1.00 par value per share.
'Common Stock' means, collectively, the Corporation's Class A Common Stock,
Class B Common Stock and Class C Common Stock and any other classes of common
stock issued from time to time by the Corporation.
'Conversion Price' shall have the meaning set forth in Section 5(b) hereof.
'Corporation Stock Option Plan' means the Dobson Communications Corporation
1996 Stock Option Plan, adopted on February 6, 1997 and as amended by Amendment
No.1 thereto, as the same may be amended, supplemented or otherwise modified
from time to time.
'Credit Agreements' means (i) the Credit Agreement, dated as of March 25,
1998, among First Union National Bank (as successor by merger to CoreStates
Bank, N.A.) as Administrative Agent, Dobson Operating Company, as Borrower, the
Corporation, as Guarantor, and the Company Subsidiaries party thereto, (ii) the
Revolving Credit Agreement, dated as of March 25, 1998, between Dobson Cellular
Operations Company, as Borrower, and NationsBank, N.A. (as successor by merger
to NationsBank of Texas, N.A.), as Administrative Agent, (iii) the 364-Day
Revolving Credit and Term Loan Agreement, dated as of March 25, 1998, between
Dobson Cellular Operations Company, as Borrower, and NationsBank, N.A. (as
successor by merger to NationsBank of Texas, N.A.), as Administrative Agent,
(iv) the Credit Agreement, dated the date hereof, between Dobson/Sygnet
Operating Company, as Borrower, and NationsBank N.A., as Administrative Agent
and (v) the Term Loan Agreement, dated as of the date hereof, between Dobson
Tower Company and NationsBank, N.A.
'Credit Documents' means, collectively, the Credit Agreements and all
documents and instruments evidencing or securing or guaranteeing indebtedness
thereunder.
'Dobson Partnership' means Dobson CC Limited Partnership, an Oklahoma
limited partnership.
'Dobson/ Sygnet' means Dobson/ Sygnet Communications Company, an Oklahoma
corporation.
-9-
<PAGE>
'Dobson/Sygnet Note Documents' means, collectively, the Dobson/Sygnet Note
Indenture, the Dobson/Sygnet Note Purchase Agreement, the Dobson/Sygnet Notes,
and the Dobson/Sygnet Notes Registration Rights Agreement.
'Dobson/Sygnet Note Indenture' means the Indenture, dated the date hereof,
among Dobson/Sygnet and United States Trust Company of New York, as trustee
thereunder in respect of the Dobson/Sygnet Notes.
'Dobson/Sygnet Note Purchase Agreement' means the Purchase Agreement, dated
as of December 16, 1998, among Dobson/Sygnet, the Corporation, and NationsBanc
Montgomery Securities LLC.
'Dobson/Sygnet Registration Rights Agreement' means the Registration Rights
Agreement, dated the date hereof, between Dobson/Sygnet and NationsBanc
Montgomery Securities LLC.
'Financing Agreements' means, collectively, the Senior Note Documents, the
Dobson/Sygnet Notes Documents, the Credit Documents, the Senior PIK Preferred
Stock Certificate of Designation, the Sygnet PIK Preferred Stock Documents and
the Class F Preferred Stock Documents and, as appropriate, all documents,
instruments and agreements evidencing, securing the foregoing, as amended or
refinanced in accordance with the Investment and Transaction Agreement and the
Stockholder and Investor Rights Agreement.
'Fully Diluted Basis' means with respect to any equity securities issued
[or issuable] by any Person, without duplication, (a) all shares or units of, or
interests in, such equity securities outstanding at the time of determination,
and (b) all convertible securities, warrants or options with respect to such
Equity Securities, whether or not exercisable or convertible at the time of such
determination.
'Investment and Transaction Agreement' means that certain Investment and
Transaction Agreement, dated as of December 23, 1998, among the purchasers named
therein and the Corporation, as it may be amended, modified or otherwise
supplemented from time to time.
'Junior Securities' means any of (i) the Corporation's Common Stock, (ii)
all other equity securities of the Corporation other than Parity Securities and
Senior Securities and (iii) only as to Section 3, Section 6 and redemption and
put rights of the Class D Preferred Stock and Class E Preferred Stock in
accordance with the Stockholder and Investor Rights Agreement, the Class G
Preferred Stock and the Class H Preferred Stock.
'Liquidation Preference' means the aggregate Liquidation Value of all
shares of Class E Preferred Stock held by a holder of Class E Preferred Stock
plus an amount equal to the sum of all accrued
-10-
<PAGE>
and unpaid dividends thereon, whether or not declared to the date of payment.
'Liquidation Value' of any share of Class E Preferred Stock shall be One
Thousand, One Hundred and Thirty-One Dollars and Ninety-Two Cents ($1,131.92).
'Logix Communications Enterprises, Inc. 1998 Stock Option Plan' means that
certain Logix Communications 1998 Stock Option Plan, dated effective as of
August 1, 1998, as the same may be amended, supplemented or otherwise modified
from time to time.
'Logix Communications Spin-Off' means the disposition by the Corporation of
the business of Logix Communications.
'Parity Securities' means the Corporation's Class A Preferred Stock and
Class D Preferred Stock and except with respect to Section 3, Section 6 and the
redemption and put rights of the Class D Preferred Stock and the Class E
Preferred Stock in accordance with the Stockholder and Investor Rights
Agreement, the Class G Preferred Stock and the Class H Preferred Stock.
'Person' means an individual, partnership, corporation, association, trust,
joint venture, unincorporated organization or other entity and any government,
governmental department or agency or political subdivision thereof.
'Qualified Public Offering' means any offering by the Corporation of its
Class A Common Stock to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or any comparable
registration statement under any similar federal statute then in force, (other
than an offering of shares being issued as consideration in a business
acquisition or combination or an offering in connection with an employee benefit
plan) and the aggregate gross proceeds in connection with such registration
statement equals or exceeds $50.0 million.
'Senior Note Documents' means, collectively, the Senior Note Indenture, the
Senior Notes, and the Senior Notes Escrow and Security Agreement.
'Senior Note Escrow and Security Agreement' means the Escrow and Security
Agreement, dated February 28, 1997, among the Corporation, the placement agents,
party thereto, and United States Trust Company of New York, as Trustee
thereunder.
'Senior Note Indenture' means the Indenture, dated as of February 28,
1997, among the Corporation and United States Trust Company of New York, as
trustee thereunder in respect of the Senior Notes.
-11-
<PAGE>
'Senior PIK Preferred Stock' means the Corporation's 121/4% Senior
Exchangeable Preferred Stock, issued on January 22, 1998 and mandatorily
redeemable 2008.
'Senior PIK Preferred Stock Certificate of Designation' means the
Certificate of Designation in respect of the Senior PIK Preferred Stock.
'Senior Securities' means the Senior PIK Preferred Stock, the Sygnet PIK
Preferred Stock, the Class F Preferred Stock and each class or series of
preferred stock of the Corporation which is established by the Board of
Directors after the date this Certificate of Designation is filed with the
Secretary of State of the State of Oklahoma, the terms of which expressly
provide that such class or series shall rank senior to the Class E Preferred
Stock as to dividend distributions and distributions upon liquidation,
dissolution or winding up of the Corporation.
'Stockholder and Investor Rights Agreement' means that certain Stockholder
and Investor Rights Agreement dated the date hereof among this Corporation and
the stockholders of this Corporation, as it may be amended from time to time.
'Subsidiary' means, with respect to any Person, any corporation,
partnership, 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 of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership, association
or other business entity, a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed
to have a majority ownership interest in a partnership, association, or other
business entity if such Person or Persons shall be allocated a majority of
partnership, association or other business entity gains or losses or shall be or
control the managing general partner of such partnership, association or other
business entity.
'Sygnet Acquisition' means the acquisition by Dobson / Sygnet
Communications Company of all of the outstanding capital stock of Sygnet
Wireless pursuant to the Agreement and Plan of Merger, dated as of July 28,
1998, as amended, between Dobson/Sygnet Operating Company and Sygnet Wireless.
'Sygnet PIK Preferred Stock' means the Corporation's 12 1/4% Senior
Exchangeable Preferred Stock of the Corporation, issued on December 23, 1998;
mandatorily redeemable 2008.
-12-
<PAGE>
'Sygnet PIK Preferred Stock Certificate of Designation' means the
Certificate of Designation for the Sygnet PIK Preferred Stock.
'Sygnet PIK Preferred Stock Documents' means, collectively, the Sygnet PIK
Preferred Stock Purchase Agreement, the Sygnet PIK Preferred Stock Certificate
of Designation and the Sygnet PIK Preferred Stock Registration Rights Agreement.
'Sygnet PIK Preferred Stock Purchase Agreement' means the Purchase
Agreement, dated December 16, 1998, between the Corporation and NationsBanc
Montgomery Securities LLC, in respect of the Sygnet PIK Preferred Stock.
'Sygnet PIK Preferred Stock Registration Rights Agreement' means the
Registration Rights Agreement, dated the date hereof, between the Corporation
and NationsBanc Montgomery Securities LLC.
'Sygnet Wireless' means Sygnet Wireless, Inc., an Ohio Corporation.
10. SEVERABILITY OF PROVISIONS. If any right, preference or
limitation of the Class E Preferred Stock set forth in this Resolution (as such
Resolution may be amended from time to time) is invalid, unlawful or incapable
of being enforced by reason of any rule, law or public policy, all other rights,
preferences and limitations set forth in this Resolution (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless, remain in full force and effect,
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other right, preference or limitation unless so expressed
herein."
SECOND: That, thereafter, the shareholders, including all holders of
the issued and outstanding shares of the Corporation's Class E Preferred Stock,
unanimously voted in favor of the Amendment pursuant to written consent given in
accordance with the provisions of Section 73 of the Oklahoma General Corporation
Act.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 77 of the Oklahoma General Corporation Act.
-13-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Everett R. Dobson, its President, and attested to by Stephen T.
Dobson, its Secretary, this 23rd day of December, 1998.
EVERETT R. DOBSON
By: /s/ Everett R. Dobson
---------------------
Title: President
ATTEST:
STEPHEN T. DOBSON
/s/ Stephen T. Dobson
- ---------------------
Title: Secretary
<PAGE>
DOBSON COMMUNICATIONS CORPORATION
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS
OF CLASS F PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
_________________________________________
Pursuant to Title 18, Section 1032(G) of the
General Corporation Act of the State of Oklahoma
_________________________________________
Dobson Communications Corporation, a corporation organized and
existing under the General Corporation Act of the State of Oklahoma (the
"Company"), does hereby certify that, pursuant to authority conferred upon
the board of directors of the Company (or any committee of such board of
directors, the "Board of Directors") by its Amended and Restated Certificate
of Incorporation, as amended (hereinafter referred to as the "Certificate of
Incorporation"), and pursuant to the provisions of Title 18, Section 1032(G)
of the General Corporation Act of the State of Oklahoma, said Board of
Directors, acting by written consent dated December 21, 1998, duly approved
and adopted the following resolution (the "Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board of
Directors by its Certificate of Incorporation, the Board of Directors does
hereby create, authorize and provide for the issue of Class F Preferred
Stock, par value $1.00 per share, with a liquidation preference of $1,000 per
share, consisting of 205,000 shares, having the powers, designations,
preferences and relative, participating, optional and other special rights,
qualifications, limitations and restrictions that are set forth in this
Resolution as follows (the terms used herein, unless otherwise defined
herein, are used herein as defined in paragraph (n) hereof):
(a) DESIGNATION. There is hereby created out of the authorized
and unissued shares of preferred stock of the Company a series of preferred
stock designated as the "Class F Preferred Stock". The number of shares
constituting such series shall be 205,000 shares of Class F Preferred Stock,
consisting of an initial issuance of 30,000 shares of Class F Preferred Stock
plus additional shares of such Preferred Stock which may be issued to pay
dividends on such Preferred Stock if the Company elects to pay dividends in
additional shares of such Preferred Stock (collectively, the "Preferred
Stock"). The liquidation preference of the Preferred Stock shall be $1,000
per share.
Each share of Preferred Stock has been issued initially as a part of a
unit consisting of one share of Preferred Stock and
<PAGE>
one Warrant to purchase shares of Class A Common Stock of the Company
("Warrant Shares"). The Preferred Stock and the Warrants may be transferred
only as units and not separately.
(b) RANK. The Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank (i) senior to (A) all classes of Common
Stock of the Company, (B) the Class A Preferred Stock, the Class B Preferred
Stock, the Class C Preferred Stock, the Class D Preferred Stock, the Class E
Preferred Stock, the Class G Preferred Stock and the Class H Preferred Stock
and (C) each other class of capital stock or series of preferred stock
hereafter created by the Board of Directors, the terms of which do not
expressly provide that it ranks senior to or on a parity with the Preferred
Stock as to dividend distributions and distributions upon the liquidation,
winding-up and dissolution of the Company (collectively referred to herein,
together with all classes of common stock of the Company, as the "Junior
Securities"); (ii) on a parity with any class of capital stock or series of
preferred stock hereafter created by the Board of Directors, the terms of
which expressly provide that such class or series will rank on a parity with
the Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to as "Parity Securities"); (iii) junior to the 12 1/4% Senior Exchangeable
Preferred Stock issued in January 1998 and December 1998 and junior to each
class of capital stock or series of preferred stock hereafter created by the
Board of Directors, the terms of which have been approved by the Holders of
the Preferred Stock in accordance with subparagraph (f)(ii) hereof and which
expressly provide that such class or series will rank senior to the Preferred
Stock as to dividend distributions and distributions upon liquidation,
winding-up and dissolution of the Company (collectively referred to as
"Senior Securities"). No shares of Class A Preferred Stock, Class B
Preferred Stock, Class C Preferred Stock, Class D Preferred Stock, Class E
Preferred Stock, Class G Preferred Stock or Class H Preferred Stock shall be
redeemed or purchased by the Company or any subsidiary of the Company so long
as any shares of Class F Preferred Stock remain outstanding; provided
however, that holders of shares of Class D Preferred Stock or Class E
Preferred Stock may require the Company to redeem or purchase such shares
from and after December 23, 2005, whether or not any shares of Class F
Preferred Stock remain outstanding. The Company covenants with the holders
of Class F Preferred Stock that the authorized shares of Class D Preferred
Stock will not be increased above 90,000 shares without the prior consent of
holders of a majority of Class F Preferred Stock.
(c) DIVIDENDS. (i) Beginning on the Closing Date, the Holders of
the outstanding shares of Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available
therefor, dividends on
-2-
<PAGE>
each share of Preferred Stock at a rate per annum equal to 16% of the
liquidation preference per share, payable quarterly. All dividends shall be
cumulative, whether or not earned or declared, on a daily basis from the date
of issuance of the Preferred Stock and shall be payable quarterly in arrears
on each Dividend Payment Date, commencing on the first Dividend Payment Date
after the Closing Date. The Company may pay dividends, at its option, in
cash or in additional fully paid and nonassessable whole shares of Preferred
Stock having an aggregate liquidation preference equal to the amount of such
dividends. No fractional shares of Preferred Stock shall be issued. In lieu
of the issuance of a fraction of a share, the Company shall pay cash in an
amount equal to $1,000 multiplied by the fraction of a share otherwise
issuable. If any dividend (or portion thereof) payable on any Dividend
Payment Date is not declared or paid in full in cash or Preferred Stock on
such Dividend Payment Date, the amount of accrued and unpaid dividends will
bear interest at the dividend rate on the Preferred Stock, compounding
annually, until declared and paid in full. Each distribution in the form of
a dividend (whether in cash or in additional shares of Preferred Stock) shall
be payable to Holders of record as they appear on the stock books of the
Company on such record date, not less than 10 nor more than 60 days preceding
the relevant Dividend Payment Date, as shall be fixed by the Board of
Directors. Dividends shall cease to accumulate in respect of shares of the
Preferred Stock on the date of their redemption unless the Company shall have
failed to pay the relevant redemption price on the date fixed for redemption.
(ii) Notwithstanding anything else provided herein, if the
Company fails to cause a shelf registration statement with respect to resales of
the Preferred Stock to become effective in accordance with the Investors
Agreement dated the Closing Date on or prior to December 31, 2001, the dividend
rate on the Preferred Stock will increase 0.5% per annum to 16 1/2% per annum of
liquidation preference per share of Preferred Stock from December 31, 2001,
payable in cash or, at the Company's option, in additional shares of Preferred
Stock, quarterly in arrears on each Dividend Payment Date, commencing January
15, 2002 until such shelf registration statement with respect to resales of the
Preferred Stock is declared effective in accordance with such Investors
Agreement.
(iii) All dividends paid with respect to shares of the Preferred
Stock pursuant to paragraph (c)(i) hereof shall be paid pro rata to the Holders
entitled thereto.
(iv) Dividends that are in arrears and unpaid for any past
Dividend Period and dividends in connection with any optional redemption
pursuant to paragraph (e)(i) hereof may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to Holders of record on
such date, not more than 45 days prior to the payment thereof, as may be fixed
by the Board of Directors.
-3-
<PAGE>
(v) No full dividends shall be declared by the Board of
Directors or paid or funds set apart for payment of dividends by the Company
on any Parity Securities for any period unless full cumulative dividends
shall have been or contemporaneously shall be declared and paid in full or
declared and, if payable in cash, a sum in cash shall be set apart sufficient
for such payment on the Preferred Stock for all Dividend Periods terminating
on or prior to the date of payment of such full dividends on such Parity
Securities. If full dividends are not paid, as aforesaid, upon the shares of
the Preferred Stock, all dividends declared upon shares of the Preferred
Stock and any other Parity Securities shall be declared PRO RATA so that the
amount of dividends declared per share on the Preferred Stock and such Parity
Securities shall in all cases bear to each other the same ratio that accrued
dividends per share on the Preferred Stock and such Parity Securities bear to
each other.
(vi) (A) Holders of shares of Preferred Stock shall be
entitled to receive the dividends provided for in paragraph (c)(i) hereof in
preference to and in priority over any dividends upon any of the Junior
Securities.
(B) So long as any shares of Preferred Stock are
outstanding, the Company shall not declare, pay or set apart for payment any
dividend on any of the Junior Securities (other than distributions or
dividends in Junior Securities to the holders of Junior Securities) or make
any payment on account of, or set apart for payment money for a sinking or
other similar fund for, the repurchase, redemption or other retirement of any
of the Junior Securities or any warrants, rights, calls or options
exercisable for or convertible into any of the Junior Securities, and shall
not permit any corporation or other entity directly or indirectly controlled
by the Company to purchase or redeem any of the Junior Securities or any such
warrants, rights, calls or options, unless full cumulative dividends
determined in accordance herewith have been paid in full on the Preferred
Stock.
(C) So long as any shares of the Preferred Stock are
outstanding, the Company shall not make any payment on account of, or set
apart for payment money for a sinking or other similar fund for, the
repurchase, redemption or other retirement of any of the Parity Securities or
any warrants, rights, calls or options exercisable for or convertible into
any of the Parity Securities, and shall not permit any corporation or other
entity directly or indirectly controlled by the Company to purchase or redeem
any of the Parity Securities or any such warrants, rights, calls or options,
unless full cumulative dividends determined in accordance herewith on the
Preferred Stock have been paid in full.
(vii) Dividends payable on shares of the Preferred Stock for
any period less than a year shall be computed on the basis of a 360-day year
of twelve 30-day months and the actual
-4-
<PAGE>
number of days elapsed in the period for which dividends are payable. If any
Dividend Payment Date occurs on a day that is not a Business Day, any accrued
dividends otherwise payable on such Dividend Payment Date shall be paid on
the next succeeding Business Day.
(d) LIQUIDATION PREFERENCE. Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the Company, Holders
of Preferred Stock then outstanding shall be entitled to be paid, out of the
assets of the Company available for distribution to its stockholders, $1,000
per share of Preferred Stock, plus an amount in cash equal to accumulated and
unpaid dividends thereon to the date fixed for liquidation, dissolution or
winding-up (including an amount equal to a prorated dividend for the period
from the last Dividend Payment Date to the date fixed for liquidation,
dissolution or winding-up), before any payment shall be made on or any assets
distributed to the holders of any of the Junior Securities, including,
without limitation, the Class A Preferred Stock, the Class B Preferred Stock,
the Class C Preferred Stock, the Class D Preferred Stock, the Class E
Preferred Stock, the Class G Preferred Stock, the Class H Preferred Stock and
Common Stock of the Company. If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the amounts payable
with respect to the Preferred Stock and all other Parity Securities are not
paid in full, the holders of the Preferred Stock and the Parity Securities
shall share equally and ratably in any distribution of assets of the Company
in proportion to the full liquidation preference and accumulated and unpaid
dividends to which each is entitled. After payment of the full amount of the
liquidation preferences and accumulated and unpaid dividends to which they
are entitled, the Holders of Preferred Stock shall not be entitled to any
further participation in any distribution of assets of the Company.
(e) REDEMPTION. (i) OPTIONAL REDEMPTION. (A) The Preferred
Stock may be redeemed (subject to contractual and other restrictions with
respect thereto and the legal availability of funds therefor) at any time on
or after January 1, 1999, at the Company's option, in whole or in part, in
the manner provided in subparagraph (e)(iii), at the redemption prices
(expressed as a percentage of the liquidation preference thereof) set forth
below, plus an amount in cash equal to all accumulated and unpaid dividends
(including an amount in cash equal to a prorated dividend for the period from
the Dividend Payment Date immediately prior to the Redemption Date to the
Redemption Date, but subject to the right of Holders of Preferred Stock on a
record date to receive dividends on a Dividend Payment Date), and interest
thereon, if any, if redeemed during the 12-month period beginning January 1
of each of the years set forth below.
-5-
<PAGE>
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
1999 . . . . . . . . . . . . . . . . . . . 100.00%
2000 . . . . . . . . . . . . . . . . . . . 100.00%
2001 . . . . . . . . . . . . . . . . . . . 105.00%
2002 . . . . . . . . . . . . . . . . . . . 115.00%
2003 and thereafter . . . . . . . . . . . . 130.00%
</TABLE>
(B) In the event of a redemption pursuant to paragraph
(e)(i) hereof of only a portion of the then outstanding shares of the
Preferred Stock, the Company shall effect such redemption as it determines,
PRO RATA according to the number of shares held by each Holder of Preferred
Stock, PROVIDED that the Company may redeem such shares held by any Holder of
fewer than 100 shares of Preferred Stock without regard to such PRO RATA
redemption requirement, or by lot, in each case, as may be determined by the
Company in its sole discretion.
(ii) MANDATORY REDEMPTION. On December 31, 2010, the Company
shall redeem from any source of funds legally available therefor, in the
manner provided in paragraph (e)(iii) hereof, all of the shares of the
Preferred Stock then outstanding at a redemption price equal to 130% of the
liquidation preference per share, plus an amount in cash equal to all
accumulated and unpaid dividends per share (including an amount equal to a
prorated dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date) and interest thereon, if
any.
(iii) PROCEDURES FOR REDEMPTION. (A) At least 30 days and
not more than 60 days prior to the date fixed for any redemption of the
Preferred Stock, written notice (the "Redemption Notice") shall be given by
first-class mail, postage prepaid, to each Holder of record on the record
date fixed for such redemption of the Preferred Stock at such Holder's
address as the same appears on the stock register of the Company, PROVIDED
that no failure to give such notice nor any deficiency therein shall affect
the validity of the procedure for the redemption of any shares of Preferred
Stock to be redeemed except as to the Holder or Holders to whom the Company
has failed to give said notice or except as to the Holder or Holders whose
notice was defective. The Redemption Notice shall state:
(1) whether the redemption is pursuant to
subparagraph (e)(i)(A) or (e)(ii) hereof;
(2) the redemption price;
(3) whether all or less than all the outstanding
shares of the Preferred Stock are to be redeemed and the total number of
shares of the Preferred Stock being redeemed;
-6-
<PAGE>
(4) the number of shares of Preferred Stock held, as
of the appropriate record date, by the Holder that the Company intends to
redeem;
(5) the date fixed for redemption;
(6) that the Holder is to surrender to the Company, at
the place or places where certificates for shares of Preferred Stock are to
be surrendered for redemption, in the manner and at the price designated,
its certificate or certificates representing the shares of Preferred Stock
to be redeemed; and
(7) that dividends on the shares of the Preferred
Stock to be redeemed shall cease to accrue on such Redemption Date unless
the Company defaults in the payment of the redemption price.
(B) Each Holder of Preferred Stock shall surrender the
certificate or certificates representing such shares of Preferred Stock to
the Company, duly endorsed, in the manner and at the place designated in the
Redemption Notice and on the Redemption Date. The full redemption price for
such shares of Preferred Stock shall be payable in cash to the Person whose
name appears on such certificate or certificates as the owner thereof, and
each surrendered certificate shall be canceled and retired. In the event
that less than all of the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the unredeemed
shares.
(C) Unless the Company defaults in the payment in full
of the applicable redemption price, dividends on the Preferred Stock called
for redemption shall cease to accumulate on the Redemption Date, and the
Holders of such redeemed shares shall cease to have any further rights with
respect thereto from and after the Redemption Date, other than the right to
receive the redemption price, without interest.
(f) VOTING RIGHTS. (i) The Holders of shares of the Preferred
Stock, except as otherwise required under Oklahoma law or as set forth in
paragraphs (f)(ii), (f)(iii) and (f)(iv) hereof, shall not be entitled or
permitted to vote on any general corporate matters.
(ii) (A) So long as any shares of the Preferred Stock are
outstanding, the Company shall not authorize any class of Senior Securities
without the affirmative vote or, notwithstanding any contrary provision of
the Amended and Restated By-Laws of the Company (the "By-Laws"), written
consent of Holders of at least a majority of the outstanding shares of
Preferred Stock, voting or consenting, as the case may be, separately as one
class, given in person or by proxy, either in writing or by resolution
adopted at
-7-
<PAGE>
an annual or special meeting, except that, without the approval of Holders of
the Preferred Stock, the Company may issue shares of Senior Securities in
exchange for, or the proceeds of which are used to redeem or repurchase (1)
all (but not less than all) shares of Preferred Stock then outstanding or (2)
indebtedness of the Company.
(B) So long as any shares of the Preferred Stock are
outstanding, the Company shall not amend this Certificate of Designation so
as to affect adversely the specified rights (including, without limitations,
the covenants described in paragraph (l)), preferences, privileges or voting
rights of Holders of Preferred Stock, or authorize the issuance of any
additional shares of Preferred Stock, without the affirmative vote or,
notwithstanding any contrary provisions of the By-Laws, written consent of
Holders of at least a majority of the outstanding shares of Preferred Stock,
voting or consenting, as the case may be, separately as one class, given in
person or by proxy, either in writing or by resolution adopted at an annual
or special meeting. The Holders of at least a majority of the outstanding
shares of Preferred Stock, voting or consenting, as the case may be,
separately as one class, whether voting in person or by proxy, either in
writing or by resolution adopted at an annual or special meeting, may waive
compliance with any provision of this Certificate of Designation.
(C) Except as set forth in subparagraph (f)(ii) hereof,
(1) the creation, authorization or issuance of any shares of any Junior
Securities, Parity Securities or Senior Securities, or (2) the increase or
decrease in the amount of authorized capital stock of any class, including
any preferred stock, shall not require the consent of Holders of Preferred
Stock and shall not, unless not complying with subparagraph (f)(ii) hereof,
be deemed to affect adversely the rights, preferences, privileges or voting
rights of Holders of shares of Preferred Stock.
(iii) (A) If (1) dividends on the Preferred Stock are in
arrears and unpaid for four quarterly periods (whether or not consecutive),
(2) the Company fails to discharge any redemption obligation with respect to
the Preferred Stock, (3) the Company fails to make an Offer to Purchase (and
complete such purchase of) all of the outstanding shares of Preferred Stock
following a Change of Control, if such Offer to Purchase is required to be
made pursuant to paragraph (g) hereof, or (4) the Company breaches or
violates one of the provisions set forth in paragraph (l) hereof and the
breach or violation continues for a period of 30 consecutive days or more
after notice thereof to the Company by Holders of 25% or more of the shares
of the Preferred Stock then outstanding, and if at such time Albert H.
Pharis, Jr. is not then a member of the Board of Directors, then the number
of directors constituting the Board of Directors shall be adjusted to permit
the
-8-
<PAGE>
Holders of the majority of the then outstanding shares of Preferred Stock,
voting separately as one class, to elect one director. For the purpose of
determining the number of quarterly periods for which accrued dividends have
not been paid, any accrued and unpaid dividend that is subsequently paid
shall not be treated as unpaid. Each event described in clauses (1), (2),
(3) and (4) of this subparagraph (f)(iii)(A) is a "Voting Rights Triggering
Event." Within 15 days of the time the Company becomes aware of the
occurrence of any default referred to in clause (4) of this subparagraph
(f)(iii)(A), the Company shall give written notice thereof to the Holders.
(B) The right of the Holders of Preferred Stock voting
separately as one class to elect one director as described in subparagraph
(f)(iii)(A) shall continue until such time as (1) in the event such right
arises due to a default referred to in clause (1) of the preceding paragraph,
all accumulated dividends that are in arrears on the Preferred Stock are paid
in full; and (2) in the event such right arises due to any default referred
to in clause (2), (3) or (4) of the preceding paragraph, the Company remedies
any such failure, breach or default, at which time the term of any director
elected pursuant to subparagraph (f)(iii)(A) hereof shall terminate and the
number of directors constituting the board of directors shall be reduced to
the number necessary to reflect the termination of the right of the Holders
of the Preferred Stock to elect a director, subject always to the same
provisions for the renewal and divestment of such special voting rights in
the case of any future Voting Rights Triggering Event.
At any time after voting power to elect a director shall have
become vested and be continuing in the Holders of shares of the Preferred
Stock pursuant to subparagraph (f)(iii)(A) hereof, or if vacancies shall
exist in the office of director elected by the Holders of shares of the
Preferred Stock, a proper officer of the Company may, and upon the written
request of the Holders of record of at least 25% of the shares of Preferred
Stock then outstanding addressed to the Secretary of the Company shall, call
a special meeting of the Holders of Preferred Stock for the purpose of
electing the director which such Holders are entitled to elect. If such
meeting shall not be called by the proper officer of the Company within 30
days after personal service of said written request upon the Secretary of the
Company, or within 30 days after mailing the same within the United States by
certified mail, addressed to the Secretary of the Company at its principal
executive offices, then the Holders of record of at least 25% of the
outstanding shares of the Preferred Stock may designate in writing one of
their number to call such meeting at the expense of the Company, and such
meeting may be called by the Person so designated upon the notice required
for the annual meetings of stockholders of the Company and shall be held at
the place for holding the annual meetings of stockholders or such other place
in
-9-
<PAGE>
the United States as shall be designated in such notice. Notwithstanding the
provisions of this subparagraph (f)(iii)(B), no such special meeting shall be
called if any such request is received less than 40 days before the date
fixed for the next ensuing annual or special meeting of stockholders of the
Company. Any Holder of shares of the Preferred Stock so designated shall
have, and the Company shall provide, access to the lists of Holders of shares
of the Preferred Stock for purposes of calling a meeting pursuant to the
provisions of this subparagraph (f)(iii)(B).
(C) At any meeting held for the purpose of electing a
director at which the Holders of Preferred Stock shall have the right, voting
separately as one class, to elect a director as aforesaid, the presence in
person or by proxy of the Holders of at least a majority of the outstanding
Preferred Stock shall be required to constitute a quorum of such Preferred
Stock.
(D) Any vacancy occurring in the office of a director
elected by the Holders of the Preferred Stock shall be filled by such Holders.
(iv) In any case in which the Holders of shares of the
Preferred Stock shall be entitled to vote pursuant to this paragraph (f) or
pursuant to Oklahoma law, each Holder of shares of the Preferred Stock shall
be entitled to one vote for each share of Preferred Stock held. Any action
that may be taken hereunder by the Holders of the Preferred Stock at a
meeting may be taken by written consent of a majority of the Holders of such
Preferred Stock.
(g) CHANGE OF CONTROL. (i) Upon the occurrence of a Change of
Control, the Company shall be required (subject to any contractual and other
restrictions with respect thereto existing on the Closing Date and the legal
availability of funds therefor) to make an Offer to Purchase (the "Change of
Control Offer") to each Holder of Preferred Stock to repurchase all or any
part of such Holder's Preferred Stock at a cash purchase price equal to then
applicable optional redemption price specified in paragraph (e) hereof, plus
an amount in cash equal to all accumulated and unpaid dividends (including an
amount in cash equal to a prorated dividend for the period from the Dividend
Payment Date immediately prior to the date of purchase to the date of
purchase) and interest thereon, if any (the "Change of Control Payment").
Notwithstanding the foregoing, the Company shall not be required to make a
Change of Control Offer if any indebtedness outstanding on the Closing Date
would prohibit such Change of Control Offer or any indebtedness outstanding
under any of the Credit Facilities Agreements is outstanding upon the
occurrence of a Change of Control until such indebtedness is repaid, redeemed
or repurchased in full, in which case the date on which all such indebtedness
is so repaid, redeemed or repurchased will, under this Certificate of
Designation, be
-10-
<PAGE>
deemed to be the date on which such Change of Control shall have occurred.
(ii) Within 30 days following any Change of Control, the
Company shall mail a notice to such Holder stating: (A) that the Change of
Control Offer is being made pursuant to this Certificate of Designation and
that, to the extent lawful, all shares of Preferred Stock tendered will be
accepted for payment; (B) the purchase price and the purchase date, which
shall be no earlier than 30 days nor later than 40 days from the date such
notice is mailed (the "Change of Control Payment Date"); (C) that any shares
of Preferred Stock not tendered will continue to accrue dividends in
accordance with the terms of this Certificate of Designation; (D) that,
unless the Company defaults in the payment of the Change of Control Payment,
all shares of Preferred Stock accepted for payment pursuant to the Offer to
Purchase shall cease to accrue dividends on and after the Change of Control
Payment Date and all rights of the Holders of such Preferred Stock shall
terminate on and after the Change of Control Date; and (E) a description of
the procedures to be followed by such Holder in order to have its shares of
Preferred Stock repurchased.
(iii) On the Change of Control Payment Date, (A) the Company
shall, to the extent lawful, (1) accept for payment shares of Preferred Stock
tendered pursuant to the Offer to Purchase and (2) promptly wire to each
Holder of shares of Preferred Stock so accepted payment in an amount equal to
the Change of Control Payment for such shares and (B) unless the Company
defaults in the payment for the shares of Preferred Stock tendered pursuant
to the Offer to Purchase, dividends shall cease to accrue with respect to the
shares of Preferred Stock tendered and accepted and all rights of Holders of
such tendered and accepted shares shall terminate, except for the right to
receive payment therefor, on the Change of Control Payment Date. The Company
shall publicly announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.
(iv) The Company shall comply with Rule 14e-1 under the
Exchange Act and any securities laws and regulations to the extent such laws
and regulations are applicable to the repurchase of shares of the Preferred
Stock in connection with a Change of Control.
(h) CONVERSION OR EXCHANGE. The Holders of shares of Preferred
Stock shall not have any rights hereunder to convert such shares into or
exchange such shares for shares of any other class or classes or of any other
series of any class or classes of Capital Stock of the Company.
(i) PREEMPTIVE RIGHTS. No shares of Preferred Stock shall have
any rights of preemption whatsoever as to any securities of the Company, or
any warrants, rights or options issued or
-11-
<PAGE>
granted with respect thereto, regardless of how such securities or such
warrants, rights or options may be designated, issued or granted.
(j) REISSUANCE OF PREFERRED STOCK. Shares of Preferred Stock that
have been issued and reacquired in any manner, including shares purchased or
redeemed or exchanged, shall (upon compliance with any applicable provisions
of the laws of Oklahoma) have the status of authorized but unissued shares of
preferred stock of the Company undesignated as to series and may be
designated or redesignated and issued or reissued, as the case may be, as
part of any series of preferred stock of the Company, PROVIDED that any
issuance of such shares as Preferred Stock must be in compliance with the
terms hereof.
(k) BUSINESS DAY. If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately
succeeding Business Day.
(l) CERTAIN ADDITIONAL PROVISIONS. (1) LIMITATION ON DIVIDEND
AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES. The
Company shall not, and shall not permit any Restricted Subsidiary to, create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions permitted by
applicable law on any Capital Stock of such Restricted Subsidiary owned by
the Company or any other Restricted Subsidiary, (ii) pay any indebtedness
owed to the Company or any other Restricted Subsidiary, (iii) make loans or
advances to the Company or any other Restricted Subsidiary or (iv) transfer
any of its property or assets to the Company or any other Restricted
Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in this Certificate of
Designation, any of the Credit Facilities Agreements, the Senior Note
Indenture, the Dobson/Sygnet Note Indenture or any other agreements in effect
on the Closing Date, and any amendments, extensions, refinancings, renewals
or replacements of such agreements; PROVIDED that, other than as contemplated
in clause (vi) below, the encumbrances and restrictions in any such
amendments, extensions, refinancings, renewals or replacements are no less
favorable in any material respect to the Holders than those encumbrances or
restrictions that are then in effect and that are being extended, refinanced,
renewed or replaced; (ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or assets of such
Person acquired by the Company or any Restricted Subsidiary, existing at the
time of such acquisition and not incurred in contemplation thereof, which
encumbrances or restrictions are not applicable to any Person or the property
or
-12-
<PAGE>
assets of any Person other than such Person or the property or assets of such
Person so acquired; (iv) in the case of clause (iv) of the first paragraph of
this subparagraph (l)(1), (A) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that is a lease,
license, conveyance or contract or similar property or asset, (B) existing by
virtue of any transfer of, agreement to transfer, option or right with
respect to, or lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Certificate of
Designation or (C) arising or agreed to in the ordinary course of business,
not relating to any indebtedness, and that do not, individually or in the
aggregate, detract from the value of property or assets of the Company or any
Restricted Subsidiary in any manner material to the Company or any Restricted
Subsidiary; (v) with respect to a Restricted Subsidiary and imposed pursuant
to an agreement that has been entered into for the sale or disposition of all
or substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary; or (vi) contained in the terms of (A) any of the
Credit Facilities Agreements, PROVIDED any encumbrance or restriction that
would prevent payments of dividends or other distributions to the Company to
pay cash dividends on the Preferred Stock applies only in the event of an
event of default (other than an event of default resulting solely from a
breach of a representation or warranty) under any of the Credit Facilities
Agreements; PROVIDED with respect to any event of default (other than a
payment default (including by way of acceleration), bankruptcy default or a
loss of a material license or cellular system), such restriction will
terminate 180 days after the occurrence of such event of default; or (B) any
indebtedness of a Restricted Subsidiary, or any agreement pursuant to which
such indebtedness was issued, if the encumbrance or restriction applies only
in the event of a payment default or a default with respect to a financial
covenant contained in such indebtedness or agreement, if the encumbrance or
restriction is not materially more disadvantageous to the Holders of the
Preferred Stock than is customary in comparable financings (as determined by
the Company) and if the Company determines that any such encumbrance or
restriction will not materially affect the Company's ability to make dividend
payments on the Preferred Stock. Nothing contained in this subparagraph
(l)(1) shall prevent the Company or any Restricted Subsidiary from
restricting the sale or other disposition of property or assets of the
Company or any of its Restricted Subsidiaries that secure indebtedness of the
Company or any of its Restricted Subsidiaries.
(2) LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND
AFFILIATES. The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any
holder (or any Affiliate of such holder) of 5% or more of any class of
Capital Stock of the Company
-13-
<PAGE>
or with any Affiliate of the Company or any Restricted Subsidiary, except
upon fair and reasonable terms no less favorable to the Company or such
Restricted Subsidiary than could be obtained, at the time of such transaction
or, if such transaction is pursuant to a written agreement, at the time of
the execution of the agreement providing therefor, in a comparable
arm's-length transaction with a Person that is not such a holder or an
Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
obtains a written opinion of a nationally recognized investment banking firm
stating that the transaction is fair to the Company or such Restricted
Subsidiary from a financial point of view; (ii) any transaction solely
between the Company and any of its Wholly Owned Restricted Subsidiaries or
solely between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular fees to directors of the Company who are not
employees of the Company; (iv) any payments or other transactions pursuant to
any tax-sharing agreement between the Company and any other Person with which
the Company files a consolidated tax return or with which the Company is part
of a consolidated group for tax purposes; or (v) the distribution of the
capital stock of Logix to and among certain stockholders of the Company.
Notwithstanding the foregoing, any transaction covered by the first paragraph
of this subparagraph (l)(2) and not covered by clauses (ii) through (iv) of
this paragraph, the aggregate amount of which exceeds $2 million in value,
must be approved or determined to be fair in the manner provided for in
clause (i)(A) or (B) above.
(3) COMMISSION REPORTS AND REPORTS TO HOLDERS. Whether or
not the Company is required to file reports with the Commission, for so long
as any Preferred Stock is outstanding, the Company shall file with the
Commission all such reports and other information as it would be required to
file with the Commission by Sections 13(a) or 15(d) under the Exchange Act if
it were subject thereto. The Company shall supply each Holder, without cost
to such Holder, copies of such reports and other information.
(4) LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES. The Company shall not sell, and shall not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares
of Capital Stock of a Restricted Subsidiary (including options, warrants or
other rights to purchase shares of such Capital Stock) except (i) to the
Company or a Wholly Owned Restricted Subsidiary; (ii) issuances of Director's
qualifying shares or sales to foreign nationals of shares of Capital Stock of
foreign Restricted Subsidiaries, to the extent required by applicable law;
(iii) if, immediately after giving effect to such issuance or sale, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary and
(iv) the distribution of the
-14-
<PAGE>
Capital Stock of Logix to and among certain shareholders of the Company.
(m) DISTRIBUTION OF LOGIX. The Holders of shares of Preferred
Stock shall have no right to participate in the distribution of the Capital
Stock of Logix to and among certain shareholders of the Company.
(n) DEFINITIONS. As used in this Certificate of Designation, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and VICE VERSA),
unless the context otherwise requires.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities, by contract or otherwise.
"Board Resolution" means a copy of a resolution, certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification.
"Business Day" means any day except a Saturday or Sunday or other
day on which commercial banks in The City of New York are required or
authorized by law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in the equity of such Person, whether now
outstanding or issued after the Closing Date, including, without limitation,
all Common Stock and Preferred Shares.
"Change of Control" means such time as (i) (a) prior to the
occurrence of a Public Market, a "person" or "group" (within the meaning of
Section 13(d) or 14(d)(2) under the Exchange Act) becomes the ultimate
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
Voting Stock representing a greater percentage of the total voting power of
the Voting Stock of the Company, on a fully diluted basis, than is held by
the Existing Stockholders and their Affiliates on such date and (b) after the
occurrence of a Public Market, a "person" or "group" (within the meaning of
Section 13(d) or 14(d)(2) under the Exchange Act)
-15-
<PAGE>
becomes the ultimate "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) of more than 35% of the total voting power of the Voting Stock
of the Company on a fully diluted basis and such ownership represents a
greater percentage of the total voting power of the Voting Stock of the
Company, on a fully diluted basis, than is held by the Existing Stockholders
and their Affiliates on such date; or (ii) individuals who immediately
following the Closing Date constitute the Board of Directors (together with
any new directors whose election by the Board of Directors or whose
nomination for election by the Company's stockholders was approved by a vote
of at least a majority of the members of the Board of Directors then in
office who either were members of the Board of Directors immediately
following the Closing Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board of Directors then in office; or (iii) the Company shall
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as
an entirety or substantially an entirety in one transaction or a series of
related transactions) to any Person.
"Class A Preferred Stock" means the Class A Non-Voting,
Non-Convertible Preferred Stock, par value $1.00 per share, of the Company.
"Class B Preferred Stock" means the Class B Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Class C Preferred Stock" means the Class C Preferred Stock, par value
$1.00 per share, of the Company.
"Class D Preferred Stock" means the Class D Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Class E Preferred Stock" means the Class E Preferred Stock, par value
$1.00 per share, of the Company.
"Class F Preferred Stock" means the Class F Preferred Stock, par value
$1.00 per share, of the Company.
"Class G Preferred Stock" means the Class G 16% Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Class H Preferred Stock" means the Class H Preferred Stock, par value
$1.00 per share, of the Company.
"Closing Date" means the date on which the Preferred Stock is
originally issued.
"Commission" means the Securities and Exchange Commission.
-16-
<PAGE>
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's equity, other than Preferred
Shares of such Person, whether now outstanding or issued after the Closing
Date, including without limitation, all series and classes of such common
stock.
"Credit Facilities Agreements" means the DCOC Credit Facility
Agreement, the Dobson/Sygnet Credit Facilities Agreement and the DOC Credit
Facility Agreement.
"DCOC Credit Facility Agreement" means the credit agreement
established pursuant to the Revolving Credit Agreement and the 364-Day
Revolving Credit and Term Loan Agreement, each dated as of March 25, 1998,
among Dobson Cellular Operations Company, NationsBank of Texas, N.A., First
Union National Bank and Toronto Dominion (Texas), Inc., together with all
other agreements, instruments and documents executed or delivered pursuant
thereto or in connection therewith, in each case as such credit agreement,
other agreements, instruments or documents may be amended, supplemented,
extended, renewed, replaced or otherwise modified from time to time.
"Dividend Payment Date" means January 15, April 15, July 15 and
October 15 of each year.
"Dividend Period" means the dividend period commencing on each
January 15, April 15, July 15 and October 15 and ending on the day before the
following Dividend Payment Date; PROVIDED, HOWEVER, that the first such
Dividend Period shall commence on the Closing Date.
"Dobson/Sygnet Credit Facilities Agreement" means the credit
agreement to be established pursuant to the Credit Agreement among
Dobson/Sygnet Operating Company, NationsBanc Montgomery Securities LLC, and
NationsBank, N.A. dated as of December 23, 1998, together with all other
agreements, instruments and documents executed or delivered pursuant thereto
or in connection therewith, in each case as such credit agreement may be
amended, supplemented, extended, renewed, replaced or otherwise modified from
time to time.
"Dobson/Sygnet Note Indenture" means the indenture dated December
23, 1998 between Dobson/Sygnet Communications Company and United States Trust
Company of New York, as trustee.
"Dobson/Sygnet Notes" means the 12 1/4% Senior Notes due 2008 issued
by Dobson/Sygnet Communications Company pursuant to the Dobson/Sygnet Note
Indenture.
"DOC Credit Facility Agreement" means the credit agreement
established pursuant to the Dobson Operating Company
-17-
<PAGE>
Third Amended and Restated Credit Agreement dated as of March 25, 1998, among
Dobson Operating Company, Corestates Bank, N.A., Toronto Dominion (Texas),
Inc. and NationsBank of Texas, N.A., together with all other agreements,
instruments and documents executed or delivered pursuant thereto or in
connection therewith, in each case as such credit agreement, other
agreements, instruments or documents may be amended, supplemented, extended,
renewed, replaced or otherwise modified from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Stockholders" means Everett R. Dobson.
"Holder" means a holder of shares of Preferred Stock.
"Logix" means Logix Communications Enterprises, Inc.
"Mandatory Redemption Date" means December 31, 2010.
"Offer to Purchase" means an offer by the Company to purchase
Preferred Stock from the Holders commenced by mailing a notice to each Holder
stating: (i) the covenant pursuant to which the offer is being made and that
all Preferred Stock validly tendered will be accepted for payment on a pro
rata basis; (ii) the purchase price and the date of purchase (which shall be
a Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed) (the "Payment Date"); (iii) that any Preferred Stock
not tendered will continue to accrue dividends pursuant to its terms; (iv)
that, unless the Company defaults in the payment of the purchase price, any
Preferred Stock accepted for payment pursuant to the Offer to Purchase shall
cease to accrue dividends on and after the Payment Date; (v) that Holders
electing to have Preferred Stock purchased pursuant to the Offer to Purchase
will be required to surrender the Preferred Stock, together with the form
entitled "Option of the Holder to Elect Purchase" on the reverse side of the
Preferred Stock completed, to the Company at the address specified in the
notice prior to the close of business on the Business Day immediately
preceding the Payment Date; (vi) that Holders will be entitled to withdraw
their election if the Company receives, not later than the close of business
on the third Business Day immediately preceding the Payment Date, a telegram,
facsimile transmission or letter setting forth the name of such Holder, the
liquidation preference of Preferred Stock delivered for purchase and a
statement that such Holder is withdrawing its election to have such Preferred
Stock purchased; and (vii) that Holders whose Preferred Stock is being
purchased only in part will be issued new shares of Preferred Stock equal in
liquidation preference to the unpurchased portion of the Preferred Stock
surrendered; PROVIDED that each share of Preferred Stock purchased and each
new share of Preferred Stock issued shall be in a liquidation preference of
$1,000 or integral multiples thereof. On
-18-
<PAGE>
the Payment Date, the Company shall accept for payment on a pro rata basis
Preferred Stock or portions thereof validly tendered pursuant to an Offer to
Purchase and promptly wire to the Holders of Preferred Stock so accepted (i)
payment in an amount equal to the purchase price and (ii) new shares of
Preferred Stock equal in liquidation preference to any unpurchased portion of
the Preferred Stock surrendered; PROVIDED that each share of Preferred Stock
purchased and each new share of Preferred Stock issued shall be in a
liquidation preference of $1,000 or integral multiples thereof. The Company
will publicly announce the results of an Offer to Purchase as soon as
practicable after the Payment Date.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Preferred Shares" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference equity,
whether now outstanding or issued after the Closing Date, including, without
limitation, all series and classes of such preferred stock or preference stock.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
A "Public Market" shall be deemed to exist if (i) a Public Equity
Offering has been consummated and (ii) at least 15% of the total issued and
outstanding Common Stock of the Company has been distributed by means of an
effective registration statement under the Securities Act or sales pursuant to
Rule 144 under the Securities Act.
"Redemption Date" with respect to any shares of Preferred Stock, means
the date on which such shares of Preferred Stock are redeemed by the Company.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Senior Note Indenture" means the Indenture dated as of February 28,
1997 between the Company and United States Trust Company of New York, relating
to the Senior Notes, as such indenture may be amended, supplemented, extended,
renewed, replaced or otherwise modified from time to time.
"Senior Notes" means the 11 3/4% Senior Notes due 2007 issued by the
Company under the Senior Note Indenture.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more
-19-
<PAGE>
than 50% of the voting power of the outstanding Voting Stock is owned,
directly or indirectly, by such Person and one or more other Subsidiaries of
such Person.
"Unrestricted Subsidiary" means (i) Logix, Dobson/Sygnet
Communications Company, Dobson Tower Company or any other Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii)
any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may
designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns or holds any lien on any
property of, the Company or any Restricted Subsidiary. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED that immediately after giving effect to such designation
no Voting Rights Triggering Event, or any event which with the giving of
notice or the passage of time, or both, would become a Voting Rights
Triggering Event, shall have occurred and be continuing.
"Voting Stock" means with respect to any Person, Capital Stock of
any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person,
the ownership of all of the outstanding Capital Stock of such Subsidiary
(other than any director's qualifying shares or investments by foreign
nationals mandated by applicable law) by such Person or one or more Wholly
Owned Subsidiaries of such Person.
(o) TRANSFER AND LEGENDING OF SHARES. (i) No transfer of shares
of the Preferred Stock shall be effective until such transfer is registered
on the books of the Company. Until registered under the Securities Act, the
expiration of the time period referred to in Rule 144(k) (as then in effect)
under the Securities Act from the Closing Date, or the Company and the Holder
of such shares otherwise agree, all shares of Preferred Stock shall bear the
following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE"SECURITIES ACT") OR APPLICABLE STATE SECURITIES ACTS. THE
SECURITIES HAVE NOT BEEN ACQUIRED WITH A VIEW TO DISTRIBUTION,
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT AND/OR THE APPLICABLE STATE SECURITIES
ACTS, OR AN OPINION ACCEPTABLE TO THE
-20-
<PAGE>
ISSUER OF COUNSEL THAT REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OR SUCH OTHER ACTS."
(ii) The Company shall refuse to register any attempted transfer
of shares of Preferred Stock not in compliance with this paragraph (o).
(iii) In connection with proposed transfers of Preferred Stock
described in Exhibit A, the Company may require the transferor or transferee,
as the case may be, to deliver the appropriate letter attached hereto as
Exhibit A. Each Holder of Preferred Stock shall notify the Company in the
event of any transfer by such Holder of any shares of Preferred Stock to a
foreign transferee.
IN WITNESS WHEREOF, Dobson Communications Corporation has caused
this Certificate of Designation to be executed in its corporate name by
Ronald L. Ripley, its Vice President, and attested by Trent LeForce, its
Assistant Secretary, this 21st day of December, 1998.
-21-
<PAGE>
DOBSON COMMUNICATIONS CORPORATION
By: /s/ Ronald L. Ripley
--------------------------------
Name: Ronald L. Ripley
Title: Vice President
Attest:
By: /s/ Trent LeForce
-----------------------------------
Name: Trent LeForce
Title: Assistant Secretary
[Corporate Seal]
-22-
<PAGE>
EXHIBIT A
Form of Certificate to Be
Delivered in Connection with
Transfers to Accredited Investors
---------------------------------
_______________, ____
Dobson Communications Corporation
13439 N. Broadway Extension, Suite 200
Oklahoma City, Oklahoma 73114
Re: Dobson Communications Corporation (the "Company")
Class F Preferred Stock and the Warrants attached
thereto (the "Units")
Dear Ladies and Gentlemen:
In connection with our proposed purchase of _________ Units, we
confirm that:
1. We understand that any subsequent transfer of the Units is
subject to certain restrictions and conditions set forth in the Certificate
of Designation relating to the Units (the "Certificate of Designation") and
the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Units except in compliance with, such restrictions
and conditions and the Securities Act of 1933, as amended (the "Securities
Act").
2. We understand that the offer and sale of the Units have not been
registered under the Securities Act, and that the Units may not be offered
or sold except as permitted in the following sentence. We agree, on our
own behalf, that if we should sell any Units, we will do so only (A) to the
Company or any subsidiary thereof, (B) in accordance with available
exemptions from registration under the Securities Act or (C) pursuant to an
effective registration statement under the Securities Act, and we further
agree to provide to any person purchasing any of the Units from us a notice
advising such purchaser that resales of the Units are restricted as stated
herein.
3. We understand that, on any proposed resale of any Units, we will
be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably
require to confirm that the
<PAGE>
proposed sale complies with the foregoing restrictions. We further
understand that the certificates representing the Units purchased by us
will bear a legend to the effect set out in paragraph 2.
4. We are an "accredited investor," as defined in Rule 501(a) of
Regulation D under the Securities Act and have such knowledge and
experience in financial and business matters as to be capable of evaluating
the merits and risks of our investment in the Units, and we and any
accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Units purchased by us for our own account or
for one or more accounts (each of which is an "accredited investor") as to
each of which we exercise sole investment discretion.
6. We are not acquiring the Units with a view to a distribution
thereof or with any present intention of offering or selling any of the
Units, except as permitted above.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
--------------------------------
Authorized Signature
A-1
<PAGE>
DOBSON COMMUNICATIONS CORPORATION
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS
OF CLASS G PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS, AND RESTRICTIONS THEREOF
-------------------------------------
Pursuant to Title 18, Section 1032(G) of the
General Corporation Act of the State of Oklahoma
-------------------------------------
DOBSON COMMUNICATIONS CORPORATION (the "Corporation"), a corporation
organized and existing under the General Corporation Act of the State of
Oklahoma, does hereby certify that pursuant to the authority vested in the
Board of Directors of the Corporation by its Certificate of Incorporation,
and pursuant to the provisions of Title 18, Section 1032(G) of the General
Corporation Act of the State of Oklahoma, said Board of Directors, by
unanimous written consent, adopted the following resolution which remains in
full force and effect as of the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation (the "Board of Directors") by its Certificate of
Incorporation (hereinafter referred to as the "Certificate of
Incorporation"), and as authorized by the unanimous consent of the holders of
all classes and series of the Corporation's capital stock entitled to vote,
the Board of Directors does hereby establish the designations, preferences
and relative and other special rights, qualifications, limitations and
restrictions of the Corporation's authorized Class G Preferred Stock, $1.00
par value per share, consisting of 62,000 shares, as follows:
1. DESIGNATION. The designation of such class is "Class G Preferred
Stock" (hereinafter in this Certificate of Designation called the "Class G
Preferred Stock"), and the number of shares constituting such class shall be
62,000 which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; PROVIDED, HOWEVER, that such number
may not be decreased below the number of then currently outstanding shares of
Class G Preferred Stock subject to outstanding rights and options, if any.
All capitalized terms used in this Certificate of Designation and not
otherwise defined shall have the meaning given to such terms in Section 9
hereof.
2. DIVIDENDS. (a) The holders of shares of Class G Preferred Stock, in
preference to the holders of the Junior Securities, shall be entitled to
receive, out of funds legally available for the purpose, cumulative dividends in
an amount equal
<PAGE>
to (as determined on a per annum basis and on an as-if-converted basis) (i)
the sum of (A) the product of the Applicable Rate multiplied by the
Liquidation Value and (B) the product of the Applicable Rate multiplied by
all accrued and unpaid dividends thereon from the date of issuance to the end
of the immediately preceding calendar year plus (ii) all accrued and unpaid
dividends compounded through December 31 of the prior calendar year plus
(iii) any dividends paid with respect to the Class A Common Stock from the
date of issuance, and shall accrue on a daily basis and be payable as
provided in subparagraph (c) of this Section 2. All accrued but unpaid
dividends will compound annually on December 31 of each year (each, a
"dividend date") (the initial such calculation to be made at the Applicable
Rate for the number of days elapsed from the date of issue of the Class G
Preferred Stock to and including the 31st day of December, 1998). Such
dividends shall commence to accrue on each share of Class G Preferred Stock
from the date of issuance thereof whether or not declared by the Board of
Directors and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of such dividends, and shall
continue to accrue thereon until the date the Liquidation Preference of such
share is paid. For purposes of determining the amount of dividends accrued
on the Class G Preferred Stock pursuant to this Section 2 at any time prior
to December 31 of any year, the Applicable Rate for such period shall be
multiplied by a fraction, the numerator of which is the actual number of days
elapsed in the then current year and the denominator of which is 360.
Dividends shall cease to accrue, and no dividends shall be payable with
respect to the Class G Preferred Stock with respect to any period after
December 31, 2001.
(b) In the event of any dividend or distribution payable by the
Corporation in connection with the Logix Communications Spin-Off, in addition to
any dividends payable pursuant to paragraph (a) of this Section 2, each holder
of shares of Class G Preferred Stock shall be entitled to receive an amount
equal to such holder's PRO RATA share, calculated on a Fully-Diluted Basis
(which, for purposes hereof, assumes the exercise of all options issued and
committed as of the date of execution of the Investment and Transaction
Agreement pursuant to the Corporation Stock Option Plan and up to 5% of capital
stock of the Logix Communications Enterprises, Inc. 1998 Stock Option Plan) and
on an as-if converted basis (subject to any applicable adjustment pursuant to
Section 5(b) hereof).
(c) Subject to the terms of the Stockholder and Investor Rights
Agreement and any applicable prohibition on the payment of dividends in any
Financing Agreement, accrued dividends shall only be paid in cash upon any
liquidation, dissolution or winding up of the Corporation, or upon any
redemption of Class G Preferred Stock pursuant to Section 6 hereof, or the
exercise of any put or call rights pursuant to the Stockholder and Investor
Rights Agreement, provided, however, that upon the exercise by any holder of
Class G
-2-
<PAGE>
Preferred Stock of its conversion rights pursuant to Section 5(a) hereof,
accrued dividends shall be paid through the issuance to such converting
holder of Class G Preferred Stock of an amount of shares of Class H Preferred
Stock equivalent to the value of such accrued dividends (the "PIK Dividend")
such Class H Preferred Stock to have an aggregate initial liquidation value
equal to the value in cash of such accrued dividends upon the conversion date
(the "PIK Dividend Amount").
(d) Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then accrued with
respect to the Class G Preferred Stock, such payment shall be distributed
ratably among the holders thereof based upon the aggregate accrued but unpaid
dividends on the Class G Preferred Stock held by each holder.
(e) Except as otherwise may be specifically provided in this
Certificate of Designation and in accordance with Section 4(b), the
Investment and Transaction Agreement or the Stockholder and Investor Rights
Agreement, so long as any shares of Class G Preferred Stock are outstanding,
the Corporation will not declare, pay or set apart for payment any dividends
or make any other distribution on or redeem any Junior Securities (other than
any payments to holders of Class B Common Stock or Class C Common Stock
pursuant to the Corporation Stock Option Plan and the redemption by the
Dobson Partnership, in one or more transactions, of up to $25.0 million in
the aggregate of securities of the Corporation, together with any accrued and
unpaid dividends thereon, in accordance with the Stockholder and Investor
Rights Agreement) and will not permit any Subsidiary or other Affiliate to
redeem, purchase or otherwise acquire for value, or set apart for any sinking
or other analogous fund for the redemption or purchase of, any Junior
Securities or securities of such Subsidiary or Affiliate.
3. LIQUIDATION PREFERENCE. (a) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, either
voluntarily or involuntarily, each holder of Class G Preferred Stock shall be
entitled to be paid in cash, after provision for the payment of the
Corporation's debts and other liabilities, before any distribution is made on
any Junior Securities and concurrently with any distribution to the holders
of Parity Securities, but after any distribution to the holders of Senior
Securities, the Liquidation Preference. If, upon any such liquidation,
dissolution or other winding up of the affairs of the Corporation, the net
assets of the Corporation distributable among the holders of all outstanding
shares of the Class G Preferred Stock shall be insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled under this Certificate of Designation, then the entire net assets of
the Corporation remaining after the provision for the payment of the
Corporation's debts and other liabilities and required distributions to the
holders of Senior Securities, shall be
-3-
<PAGE>
distributed among the holders of the Class G Preferred Stock and of the
Parity Securities, ratably in proportion to the full amounts to which they
would otherwise be respectively entitled.
(b) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, either voluntarily or involuntarily, after
the payment of all preferential amounts required to be paid to the holders of
Senior Securities, the Parity Securities and Class G Preferred Stock, the
remaining assets and funds of the Corporation available for distribution to
its stockholders shall be distributed on a pro rata and as-if-converted basis
among the holders of Junior Securities and any other class or series of stock
entitled to participate in liquidation distributions with the holders of the
Junior Securities.
(c) The assets available for distribution pursuant to this Section
3 shall be determined by applicable law and, prior to payment of any
Liquidation Preference, the Corporation shall first satisfy its outstanding
obligations concerning rights, if any, of holders of Class G Preferred Stock
which have been exercised.
(d) The merger or consolidation of the Corporation into or with
another corporation in which Everett Dobson and his Affiliates, directly or
indirectly, cease to control 50.1% of the voting securities of the surviving
corporation or its parent or the sale, transfer or lease (but not including a
transfer or lease by pledge or mortgage to a bona fide lender) of all or
substantially all of the assets of the Corporation may be deemed by the
holders of the Class G Preferred Stock to be a liquidation, dissolution or
winding up of the Corporation as those terms are used in this Section 3. In
the event of such merger, consolidation, sale, transfer or lease, each holder
of shares of Class G Preferred Stock shall have the right to the liquidation
preference of the Class G Preferred Stock and to acquire and receive such
shares of stock, securities or assets as such holder would have received in
connection with such event as if such holder had converted his shares of
Class G Preferred Stock into shares of Class A Common Stock and Class H
Preferred Stock immediately prior to the merger, consolidation, sale,
transfer or lease, or alternatively, at such holder's election, shall have
the right to convert any or all of its shares of Class G Preferred Stock into
shares of Class A Common Stock and Class H Preferred Stock in accordance with
the provisions of Section 5 hereof and receive any such distribution of
assets as holders of Class A Common Stock and Class H Preferred Stock in
accordance with this Section 3.
(e) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Corporation's
assets to another person or other transaction which is effected in such a
manner that holders of Common Stock are entitled to receive (either directly
or upon subsequent liquidation) stock, securities or assets (other than
solely cash
-4-
<PAGE>
and/or publicly traded securities) with respect to or in exchange for Common
Stock is referred to herein as an "Organic Change." Prior to the consummation
of any Organic Change, the Corporation shall make appropriate provisions (in
form and substance reasonably satisfactory to the holders of a majority of
the Class G Preferred Stock then outstanding voting separately as a single
class) to ensure that each of the holders of Class G Preferred Stock shall
thereafter have the right to acquire and receive, in lieu of or in addition
to (as the case may be) the shares of Class A Common Stock and Class H
Preferred Stock immediately theretofore acquirable and receivable upon the
conversion of such holder's Class G Preferred Stock, such shares of stock,
securities or assets as such holder would have received in connection with
such Organic Change if such holder had converted its Class G Preferred Stock
into shares of Class A Common Stock and Class H Preferred Stock immediately
prior to the Organic Change or, if the Organic Change is to be deemed a
liquidation pursuant to subsection 3(d), the distribution and participation
provided in subsection 3(d). The Corporation shall not effect any such
Organic Change, unless, prior to the consummation thereof, the successor
corporation (if other than the Corporation) resulting from such consolidation
or merger or the corporation purchasing such assets assumes by written
instrument (in form and substance reasonably satisfactory to the holders of a
majority of the Class G Preferred Stock then outstanding voting separately as
a single class), the obligation to deliver to each such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire.
(f) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall
immediately after the date the Board of Directors approves such action, or in
the case of an involuntary liquidation, twenty (20) days prior to any
shareholders' meeting called to approve such action, or immediately after the
commencement of an involuntary proceeding, whichever is earliest, give each
holder of shares of Class G Preferred Stock initial written notice of the
proposed action. Such initial written notice shall describe the material
terms and conditions of such proposed action, including a description of the
stock, cash and property to be received by the holders of shares of Class G
Preferred Stock upon consummation of the proposed action and the date of
delivery thereof. If there shall occur any material change in the facts set
forth in the initial notice following its delivery, the Corporation shall
promptly give written notice to each holder of shares of Class G Preferred
Stock of such material change.
(g) The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation before
the expiration of thirty (30) days after the mailing of the initial notice
referred to in subparagraph (f) above or ten (10) days after the mailing of
any subsequent written
-5-
<PAGE>
notice, whichever is later; PROVIDED that any such 30-day or 10-day period
may be shortened upon the written consent of the holders of a majority of the
outstanding shares of the Class G Preferred Stock voting as a single class.
(h) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation which will involve the
distribution of assets other than cash, the Corporation shall promptly engage
independent appraisers to determine the value of the assets to be distributed
to the holders of shares of Class G Preferred Stock and the holders of shares
of Common Stock (it being understood that with respect to such valuation, the
Corporation shall engage such appraiser as shall be approved by the holders
of a majority of shares of the Corporation's outstanding Common Stock and
Class G Preferred Stock, each voting separately as a single class). The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice to each holder of shares of Common Stock and Class G Preferred
Stock of the appraiser's valuation.
4. VOTING. (a) Except as otherwise required by law or as set forth
herein, the shares of the Class G Preferred Stock shall vote together with
the shares of the Corporation's Class A Common Stock and any other securities
of the Corporation entitled to vote together with the shares of Class A
Common Stock at any annual or special meeting of shareholders of the
Corporation, or may act by written consent in the same manner as the
Corporation's Class A Common Stock, upon the following basis: each holder of
shares of Class G Preferred Stock shall be entitled to such number of votes
in respect of the Class G Preferred Stock held by him on the record date
fixed for such meeting, or on the effective date of such written consent, as
shall be equal to the whole number of shares of the Corporation's Class A
Common Stock into which his shares of Class G Preferred Stock are
convertible, in accordance with the terms of Section 5 hereof, immediately
after the close of business on the record date fixed for such meeting or the
effective date of such written consent.
(b) In addition, the holders of shares of Class G Preferred Stock
also shall have the following voting rights:
(i) The affirmative vote of the holders of a majority of
the outstanding shares of Class G Preferred Stock, voting separately as a
single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to (A) amend, repeal
or change, directly or indirectly, any of the provisions of the Certificate
of Incorporation or Bylaws of the Corporation, in any manner which would
alter or change the powers, preferences or special rights of the shares of
Class G Preferred Stock so as to affect them adversely, or (B) redeem,
repurchase or pay any dividends on any Junior Securities or Parity
Securities, except with respect to the
-6-
<PAGE>
Logix Communications Spin-Off, and repurchases of management, employee or
consultant stock pursuant to contractual rights, provided, that no such
repurchases shall exceed $500,000 in any fiscal year or in any event
$1,500,000 in the aggregate, or (C) authorize or effect the sale of all or
substantially all of the assets of the Corporation, or (D) authorize or
effect the merger or consolidation of the Corporation with any other Person
as the result of which Everett Dobson and his Affiliates, directly or
indirectly, cease to control 50.1% of the voting securities of the surviving
corporation or its parent, or (E) authorize or effect the liquidation
(whether complete or partial) dissolution or winding up of the Corporation,
or (F) amend the Certificate of Incorporation or Bylaws of the Corporation to
change the authorized number of directors, or (G) amend or waive any part of
this Certificate of Designation or (H) issue or authorize any shares of
Senior Securities or Parity Securities, including, without limitation, any
additional shares of Class G Preferred Stock or Class H Preferred Stock other
than shares of Class H Preferred Stock issued as the PIK Dividend or shares
of Class E Preferred Stock issued as a dividend payment; PROVIDED, HOWEVER,
that the Corporation may issue and authorize shares of capital stock in
connection with (x) public or private (which provides for registration within
one year of issuance) 144A preferred stock financing related to acquisitions
after the date hereof and capital projects, and (y) the Logix Communications
Spin-Off. Except for the provisions set forth in clauses (A), (B), (G) and
(H), the foregoing voting rights and provisions will terminate and no longer
be applicable once the total amount of outstanding shares of Class G
Preferred Stock represents less than 35% of the shares of Class G Preferred
Stock issued under the Investment and Transaction Agreement.
(ii) The rights of holders of shares of Class G Preferred
Stock to vote or take any other actions as provided in this Section 4 may be
exercised at any annual meeting of stockholders, at a special meeting of
stockholders held for such purpose or through any written action in lieu of a
meeting. At each meeting of stockholders at which the holders of shares of
Class G Preferred Stock shall have the right, voting separately as a single
class, to take any action as provided in this Section 4, the presence in
person or by proxy of the holders of record of a majority of the total number
of shares of Class G Preferred Stock then outstanding and entitled to vote on
the matter shall be necessary and sufficient to constitute a quorum. At any
such meeting or at any adjournment thereof, in the absence of a quorum of the
holders of shares of Class G Preferred Stock, a majority of the holders of
such shares present in person or by proxy shall have the power to adjourn the
meeting as to the actions to be taken by the holders of shares of Class G
Preferred Stock from time to time and place to place without notice other
than announcement at the meeting until a quorum shall be present.
-7-
<PAGE>
5. CONVERSION RIGHTS.
(a) At any time and from time to time until December 31, 2001, any
holder of Class G Preferred Stock may convert all or any portion of the Class
G Preferred Stock (including any fraction of a share) held by such holder
into shares of each of the Class A Common Stock and Class H Preferred Stock
of the Corporation. All shares of Class G Preferred Stock which are
outstanding at the close of business on December 31, 2001 shall automatically
be converted into one share of Class H Preferred Stock and into shares of
Class A Common Stock as herein provided. Each share of Class G Preferred
Stock shall be convertible into (i) one share of Class H Preferred Stock plus
such number of additional shares of Class H Preferred stock payable as the
PIK Dividend with respect to such share of Class G Preferred Stock, and (ii)
such number of shares of Class A Common Stock determined as follows:
(i) The aggregate number of shares of the Company's
outstanding Common Stock on a Fully Diluted Basis (the "Total Shares"), shall
be determined as of the date of exercise (the "Exercise Date");
(ii) The Total Shares shall be multiplied by 1.87%; and
(iii) The resulting product shall be multiplied by a fraction,
the numerator of which is the number of shares of Class G Preferred Stock
then being converted and the denominator of which is 37,853. The number
obtained shall be the number of shares of Class A Common Stock issuable upon
such conversion.
(b) Each conversion of Class G Preferred Stock shall be deemed to
have been effected as of the close of business on the date on which the
certificate or certificates representing the Class G Preferred Stock to be
converted have been surrendered at the principal office of the Corporation or
at such other place as may be designated by the Corporation. At such time as
such conversion has been effected, the rights of the holder of such Class G
Preferred Stock as to such Class G Preferred Stock shall cease and the Person
or Persons in whose name or names any certificate or certificates for shares
of Class A Common Stock and Class H Preferred Stock are to be issued upon
such conversion shall be deemed to have become the holder or holders of
record of the shares of Class A Common Stock and Class H Preferred Stock
represented thereby.
(c) The conversion rights of any share of Class G Preferred Stock
redeemed by the Corporation pursuant to Section 6 shall terminate on the date
the Liquidation Preference for such share is paid in full.
-8-
<PAGE>
(d) Notwithstanding any other provision hereof, if a conversion of
shares is to be made in connection with a Qualified Public Offering, the
conversion of such shares may, at the election of the holder thereof, be
conditioned upon the consummation of the Qualified Public Offering, in which
case such conversion shall not be deemed to be effective until the
consummation of the Qualified Public Offering.
(e) As soon as possible after a conversion has been effected (but
in any event within five (5) business days), the Corporation shall deliver to
the converting holder:
(i) a certificate or certificates representing, in the
aggregate, the number of shares of Class A Common Stock and Class H Preferred
Stock issuable by reason of such conversion, in the same name or names as the
certificates representing the converted shares and in such denomination or
denominations as the converting holder has specified; and
(ii) a certificate representing any shares of Class G
Preferred Stock which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion but which
were not converted.
(f) The issuance of certificates of shares of Class A Common Stock
and Class H Preferred Stock upon conversion of Class G Preferred Stock shall
be made without charge to the holders of such Class G Preferred Stock for any
issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such conversion and the related issuance of shares of Class A
Common Stock and Class H Preferred Stock. Upon conversion of any shares of
Class G Preferred Stock, the Corporation shall take all such actions as are
necessary in order to ensure that the shares of Class A Common Stock and
Class H Preferred stock issuable with respect to such conversion shall be
validly issued, fully paid and nonassessable.
(g) The Corporation shall not close its books against the transfer
of Class G Preferred Stock or of Class A Common Stock or Class H Preferred
Stock issued or issuable upon conversion of Class G Preferred Stock in any
manner which interferes with the timely conversion of Class G Preferred
Stock. The Corporation shall assist and cooperate with any holder of shares
of Class G Preferred Stock required to make any governmental filings or
obtain any governmental approval prior to or in connection with any
conversion of shares of Class G Preferred Stock hereunder (including, without
limitation, making any filings required to be made by the Corporation).
(h) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Class A Common Stock and Class H
Preferred Stock, solely for the purpose of
-9-
<PAGE>
issuance upon the conversion of the Class G Preferred Stock, such number of
shares of Class A Common Stock and Class H Preferred Stock as are issuable
upon the conversion of all outstanding Class G Preferred Stock. All shares
of Class A Common Stock and Class H Preferred Stock which are so issuable
shall, when issued, be duly and validly issued, fully paid and nonassessable
and free from all taxes, liens and charges. The Corporation shall take all
such actions as may be necessary to assure that all such shares of Class A
Common Stock and Class H Preferred Stock may be so issued without violation
of any applicable law or governmental regulation or any requirements of any
domestic securities exchange upon which shares of Class A Common Stock or
Class H Preferred Stock may be listed (except for official notice of issuance
which shall he immediately delivered by the Corporation upon each such
issuance).
6. STATUS OF REACQUIRED SHARES. Shares of Class G Preferred Stock
which have been issued and reacquired in any manner shall have the status of
authorized and unissued shares of Class G Preferred Stock.
7. RANK. The Class G Preferred Stock shall rank (i) senior as to
dividends and upon liquidation, dissolution or winding up to all Junior
Securities, whenever issued, (ii) junior as to dividends and upon
liquidation, dissolution or winding up, to all Senior Securities, whenever
issued, and (iii) PARI PASSU as to dividends and upon liquidation,
dissolution or winding up, to all Parity Securities, whenever issued.
8. CERTIFICATES. So long as any shares of the Class G Preferred Stock
are outstanding, there shall be set forth on the face or back of each stock
certificate issued by the Corporation a statement that the Corporation shall
furnish without charge to each shareholder who so requests, a full statement
of the designation and relative rights, preferences and limitations of each
class of stock or series thereof that the Corporation is authorized to issue
and of the authority of the Board of Directors to designate and fix the
relative rights, preferences and limitations of each series.
9. DEFINITIONS.
"Affiliate" shall have the meaning given such term in Rule 501(b) under
the Securities Act of 1933.
"Applicable Rate" means 16% per annum.
"Certificate of Designation" means this Certificate of Designation of
the Powers, Preferences and Relative, Participating, Optional and Other
Special Rights of Class G Preferred Stock and Qualifications, Limitations and
Restrictions Thereof.
"Certificate of Incorporation" means the Certificate of Incorporation of
the Corporation, as restated.
-10-
<PAGE>
"Class A Common Stock" means the Corporation's Class A Common Stock,
$0.001 par value per share.
"Class A Preferred Stock" means the Corporation's Class A Preferred
Stock, $1.00 par value per share.
"Class B Common Stock" means the Corporation's Class B Common Stock,
$0.001 par value per share.
"Class C Common Stock" means the Corporation's Class C Common Stock,
$0.001 par value per share.
"Class D Preferred Stock" means the Corporation's Class D Convertible
Preferred Stock, $1.00 par value per share.
"Class E Preferred Stock" means the Corporation's Class E Preferred
Stock, $1.00 par value per share.
"Class F Preferred Stock" means the Corporation's Class F Preferred
Stock, par value $1.00 per share.
"Class F Preferred Stock Documents" means the Class F Preferred Stock
Investors Agreement, the Class F Preferred Stock Warrants and the Class F
Preferred Stock (and the Certificate of Designation relating thereto).
"Class F Preferred Stock Investors Agreement" means the Investors
Agreement to be entered into by the Corporation, the Dobson Partnership and
the initial purchasers of the Class F Preferred Stock and the Class F
Preferred Stock Warrants.
"Class F Preferred Stock Warrants" means any warrant certificate
evidencing warrants to purchase Class A Common Stock issued by the
Corporation in conjunction with the Class F Preferred Stock.
"Class G Preferred Stock" means the Corporation's Class G Convertible
Preferred Stock, $1.00 par value per share.
"Class H Preferred Stock" means the Corporation's Class H Preferred
Stock, $1.00 par value per share.
"Common Stock" means, collectively, the Corporation's Class A Common
Stock, Class B Common Stock and Class C Common Stock and any other classes of
common stock issued from time to time by the Corporation.
"Convertible Securities" means the Class D Preferred Stock, the Class G
Preferred Stock and the Class F Preferred Stock Warrants and any other
securities of the Company which are convertible into, or exercisable for,
Common Stock.
-11-
<PAGE>
"Corporation Stock Option Plan" means the Dobson Communications
Corporation Stock Option Plan, as adopted on February 6, 1997 and as amended
by Amendment No. 1 thereto, of the Corporation, as the same may be amended,
supplemented or otherwise modified from time to time.
"Credit Agreements" means (i) the Credit Agreement, dated as of March
25, 1998, among First Union National Bank (as successor by merger to
Corestates Bank, N.A.) as Administrative Agent, Dobson Operating Company, as
Borrower, the Corporation, as Guarantor, and the Company Subsidiaries party
thereto, (ii) the Revolving Credit Agreement, dated as of March 25, 1998,
between Dobson Cellular Operations Company, as Borrower, and NationsBank,
N.A. (as successor by merger to NationsBank of Texas, N.A.), as
Administrative Agent, (iii) the 364-Day Revolving Credit and Term Loan
Agreement, dated as of March 25, 1998, between Dobson Cellular Operations
Company, as Borrower, and NationsBank, N.A. (as successor by merger to
NationsBank of Texas, N.A.), as Administrative Agent, (iv) the Credit
Agreement, dated the date hereof, between Dobson/Sygnet Operating Company, as
Borrower, and NationsBank, N.A., as Administrative Agent, and (v) the Term
Loan Agreement, dated the date hereof, between Dobson Tower Company and
NationsBank, N.A.
"Credit Documents" means, collectively, the Credit Agreements and all
documents and instruments evidencing or securing or guaranteeing indebtedness
thereunder.
"Dobson Partnership" means Dobson CC Limited Partnership, an Oklahoma
limited partnership.
"Dobson/Sygnet" means Dobson/Sygnet Communications Company, an Oklahoma
corporation.
"Dobson/Sygnet Note Documents" means, collectively, the Dobson/Sygnet
Note Indenture, the Dobson/Sygnet Note Purchase Agreement, the Dobson/Sygnet
Notes and the Dobson/Sygnet Notes Registration Rights Agreement.
"Dobson/Sygnet Note Indenture" means the Indenture, dated the date
hereof, between Dobson/Sygnet and United States Trust Company of New York, as
trustee thereunder in respect of the Dobson/Sygnet Notes.
"Dobson/Sygnet Note Purchase Agreement" means the Purchase Agreement,
dated as of December 16, 1998, among Dobson/Sygnet, the Corporation, and
NationsBanc Montgomery Securities LLC.
"Dobson/Sygnet Registration Rights Agreement" means the Registration
Rights Agreement, dated as of the date hereof, between Dobson/Sygnet and
NationsBanc Montgomery Securities LLC.
-12-
<PAGE>
"Financing Agreements" means, collectively, the Senior Note Documents,
the Dobson/Sygnet Notes Documents, the Credit Documents, the Senior PIK
Preferred Stock Certificate of Designation, the Sygnet PIK Preferred Stock
Documents and the Class F Preferred Stock Documents and, as appropriate, all
documents, instruments and agreements evidencing or securing the foregoing,
as amended or refinanced in accordance with the Investment and Transaction
Agreement and the Stockholder and Investor Rights Agreement.
"Fully Diluted Basis" means with respect to any equity securities issued
by any Person, without duplication, (a) all shares or units of, or interests
in, such equity securities outstanding at the time of determination, and (b)
all convertible securities, warrants or options with respect to such equity
securities, whether or not exercisable or convertible at the time of such
determination.
"Investment and Transaction Agreement" means that certain Investment and
Transaction Agreement, dated the date hereof, among the purchasers named
therein and the Corporation, as it may be amended, modified or otherwise
supplemented from time to time.
"Junior Securities" means any of the Corporation's Common Stock and all
other equity securities of the Corporation other than Parity Securities and
Senior Securities.
"Liquidation Preference" means the aggregate Liquidation Value of all
shares of Class G Preferred Stock held by a holder of Class G Preferred Stock
plus an amount equal to the sum of all accrued and unpaid dividends thereon,
whether or not declared to the date of payment.
"Liquidation Value" of any share of Class G Preferred Stock shall be Six
Hundred Sixty Dollars and Forty-Five Cents ($660.45).
"Logix Communications Enterprises, Inc. 1998 Stock Option Plan" means
that certain Logix Communications 1998 Stock Option Plan, effective as of
August 1, 1998, as the same may be amended, supplemented or otherwise
modified from time to time.
"Logix Communications Spin-Off" means the disposition by the Corporation
of the business of Logix Communications Enterprises, Inc.
"Organic Change" shall have the meaning set forth in Section 3(e) hereof.
"Parity Securities" means the Corporation's Class A Preferred Stock, the
Class H Preferred Stock and except with respect to Section 3, Section 6 and
the redemption and put rights of the Class D Preferred Stock and the Class E
Preferred Stock in accordance
-13-
<PAGE>
with the Stockholder and Investor Rights Agreement, the Class D Preferred
Stock and the Class E Preferred Stock.
"Person" means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization or other entity and any
government, governmental department or agency or political subdivision
thereof.
"Qualified Public Offering" means any offering by the Corporation of its
Class A Common Stock to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or any comparable
registration statement under any similar federal statute then in force (other
than an offering of shares being issued as consideration in a business
acquisition or combination or an offering in connection with an employee
benefit plan), and the aggregate gross proceeds in connection with such
registration statement equals or exceeds $50.0 million.
"Senior Note Documents" means, collectively, the Senior Note Indenture,
the Senior Notes and the Senior Notes Escrow and Security Agreement.
"Senior Note Escrow and Security Agreement" means the Escrow and
Security Agreement dated February 28, 1997 among the Corporation, the
placement agents parity thereto and United States Trust Company of New York.
"Senior Note Indenture" means the Indenture, dated as of February 28,
1997, between the Corporation and United States Trust Company of New York, as
trustee thereunder in respect of the Senior Notes.
"Senior PIK Preferred Stock" means the Corporation's 12 1/4% Senior
Exchangeable Preferred Stock issued on January 22, 1998 and mandatorily
redeemable 2008.
"Senior PIK Preferred Stock Certificate of Designation" means the
certificate of designation creating the Senior PIK Preferred Stock.
"Senior Securities" means (i) the Senior PIK Preferred Stock, (ii) the
Sygnet PIK Preferred Stock, (iii) the Class F Preferred Stock, (iv) with
respect to Section 3, Section 6 and the redemption and put rights of the
Class D Preferred Stock and the Class E Preferred Stock in accordance with
the Stockholder and Investor Rights Agreement, the Class D Preferred Stock
and the Class E Preferred Stock, and (v) each class or series of preferred
stock of the Corporation which is established by the Board of Directors after
the date this Certificate of Designation is filed with the Secretary of State
of the State of Oklahoma, the terms of which expressly provide that such
class or series shall rank senior to the Class G Preferred Stock as to
dividend distributions and
-14-
<PAGE>
distributions upon liquidation, dissolution or winding up of the Corporation.
"Stockholder and Investor Rights Agreement" means that certain
Stockholder and Investor Rights Agreement dated as of December 23, 1998 among
this Corporation and certain stockholders of this Corporation, as it may be
amended from time to time.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, 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 of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a
partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
partnership, association, or other business entity if such Person or Persons
shall be allocated a majority of partnership, association or other business
entity gains or losses or shall be or control the managing general partner of
such partnership, association or other business entity.
"Sygnet Acquisition" means the acquisition by Dobson/Sygnet
Communications Company of all of the outstanding capital stock of Sygnet
Wireless pursuant to the Agreement and Plan of Merger, dated as of July 28,
1998, as amended, between Dobson/Sygnet Operating Company and Sygnet Wireless.
"Sygnet PIK Preferred Stock" means the Corporation's 12 1/4% Senior
Exchangeable Preferred Stock of the Company issued on December 23, 1998 and
mandatorily redeemable 2008.
"Sygnet Preferred Stock Certificate of Designation" means the
Certificate of Designation creating the Sygnet PIK Preferred Stock.
"Sygnet PIK Preferred Stock Documents" means, collectively, the Sygnet
PIK Preferred Stock Purchase Agreement, the Sygnet PIK Preferred Stock
Certificate of Designation and the Sygnet PIK Preferred Stock Registration
Rights Agreement.
"Sygnet PIK Preferred Stock Purchase Agreement" means the Purchase
Agreement, dated December 16, 1998, between the Corporation and NationsBanc
Montgomery Securities LLC, in respect of the Sygnet PIK Preferred Stock.
-15-
<PAGE>
"Sygnet PIK Preferred Stock Registration Rights Agreement" means the
Registration Rights Agreement, dated the date hereof, between the Corporation
and NationsBanc Montgomery Securities LLC.
"Sygnet Wireless" means Sygnet Wireless, Inc., an Ohio Corporation.
10. SEVERABILITY OF PROVISIONS. If any right, preference or limitation
of the Class G Preferred Stock set forth in this Resolution (as such
Resolution may be amended from time to time) is invalid, unlawful or
incapable of being enforced by reason of any rule, law or public policy, all
other rights, preferences and limitations set forth in this Resolution (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable right, preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set
forth shall be deemed dependent upon any other right, preference or
limitation unless so expressed herein.
-16-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Ronald L. Ripley, its Vice President, and attested to by Trent
LeForce, its Assistant Secretary, this ____ day of December, 1998.
DOBSON COMMUNICATIONS CORPORATION
CORPORATION
By: _________________________________
Name: Ronald L. Ripley
Title: Vice President
ATTEST:
_________________________________
Name: Trent LeForce
Title: Assistant Secretary
-17-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Everett R. Dobson, its President, and attested to by Stephen T.
Dobson, its Secretary, this 23rd day of December, 1998.
EVERETT R. DOBSON
By: /s/ Everett R. Dobson
---------------------
Title: President
ATTEST:
STEPHEN T. DOBSON
/s/ Stephen T. Dobson
- ---------------------
Title: Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RELATIVE AND OTHER SPECIAL RIGHTS, AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF CLASS H PREFERRED STOCK
DOBSON COMMUNICATIONS CORPORATION, an Oklahoma corporation (the
"Corporation") does hereby certify that:
FIRST: That the Corporation's Board of Directors, by the unanimous written
consent of its members, filed with the minutes of the Board, duly adopted
resolutions setting forth proposed amendments to the Certificate of Designation,
Preferences and Relative and Other Special Rights, and Qualifications,
Limitations and Restrictions of Class H Preferred Stock (the "Class H
Certificate of Designation") of the Corporation, declaring such amendments to be
advisable and calling a meeting of the shareholders of the Corporation for
consideration thereof.
The Class H Certificate of Designation is proposed to be amended to
provide, in its entirety, as follows:
"1. DESIGNATION. The designation of such class is 'Class H Preferred
Stock' (hereinafter in this Certificate of Designation called the 'Class H
Preferred Stock'), and the number of shares constituting such class shall be
62,000, which number may be decreased (but not increased) by the Board of
Directors without a vote of stockholders; PROVIDED, HOWEVER, that such number
may not be decreased below the number of then currently outstanding shares of
Class H Preferred Stock subject to outstanding rights and options, if any. All
capitalized terms used in this Certificate of Designation and not otherwise
defined shall have the meaning given to such terms in Section 9 hereof.
2. DIVIDENDS. (a) The holders of shares of Class H Preferred Stock,
in preference to the holders of the Junior Securities, shall be entitled to
receive, out of funds legally available for the purpose, cumulative dividends
with respect to all periods ending December 31, 2001 in an amount equal to
(as determined on a per annum basis) (i) the sum of (A) the product of the
Applicable Rate multiplied by the aggregate amount of the Liquidation Value
and (B) the product of the Applicable Rate multiplied by all accrued and
unpaid dividends thereon from the date of issuance to the end of the
immediately preceding calendar year, plus (ii) all accrued and unpaid
dividends compounded through December 31 of the prior calendar year, and
shall accrue on a daily basis and be payable as provided in subparagraph (c)
of this Section 2. All accrued but unpaid dividends will compound annually
on December 31 of each year (each a 'dividend date') (the initial such
calculation to be made at the Applicable Rate for the number of days elapsed
from the date of issue of the Class H Preferred Stock to and including the
31st day of December, 1998). Such dividends shall commence to accrue on each
share of Class H Preferred Stock from
<PAGE>
the date of issuance thereof whether or not declared by the Board of
Directors and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of such dividends, and shall
continue to accrue thereon until the date the Liquidation Preference of such
share is paid. For purposes of determining the amount of dividends accrued on
the Class H Preferred Stock pursuant to this Section 2 which may occur prior
to December 31 of any year, the Applicable Rate for such period shall be
multiplied by a fraction, the numerator of which is the actual number of days
elapsed in the then current year and the denominator of which is 360.
Dividends shall cease to accrue, and no dividends shall be payable with
respect to the Class H Preferred Stock with respect to any period after
December 31, 2001.
(b) In the event of any dividend or distribution payable by the
Corporation in connection with the Logix Communications Spin-Off, in addition
to any dividends payable pursuant to paragraph (a) of this Section 2, each
holder of shares of Class H Preferred Stock shall be entitled to receive an
amount equal to such holder's PRO RATA share, calculated on a Fully-Diluted
Basis (which, for purposes hereof, assumes the exercise of all options issued
and committed as of the date of execution of the Investment and Transaction
Agreement pursuant to the Corporation Stock Option Plan and up to 5% of
capital stock of the Logix Communications Enterprises, Inc. 1998 Stock Option
Plan).
(c) Subject to the terms of the Stockholder and Investor Rights
Agreement and any applicable prohibition on the payment of dividends in any
Financing Agreement, accrued dividends shall be paid in cash only upon any
liquidation, dissolution or winding up of the Corporation, or upon any
redemption of Class H Preferred Stock pursuant to Section 5 hereof or the
exercise of any call right pursuant to the Stockholder and Investor Rights
Agreement.
(d) Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then accrued with
respect to the Class H Preferred Stock, such payment shall be distributed
ratably among the holders thereof based upon the aggregate accrued but unpaid
dividends on the Class H Preferred Stock held by each holder.
(e) Except as otherwise may be specifically provided in this
Certificate of Designation, the Investment and Transaction Agreement or the
Stockholder and Investor Rights Agreement, so long as any shares of Class H
Preferred Stock are outstanding, the Corporation will not declare, pay or set
apart for payment any dividends or make any other distribution on or redeem
any Junior Securities (other than any payments to holders of Class B Common
Stock or Class C Common Stock pursuant to the Corporation Stock Option Plan
and the redemption by the Dobson Partnership, in one or more transactions, of
up to $25.0 million in the aggregate of securities of the Corporation,
together with any accrued and unpaid
-2-
<PAGE>
dividends thereon, in accordance with the Stockholder and Investor Rights
Agreement) and will not permit any Subsidiary or other Affiliate to redeem,
purchase or otherwise acquire for value, or set apart for any sinking or
other analogous fund for the redemption or purchase of, any Junior Securities
or securities of such Subsidiary or Affiliate.
3. LIQUIDATION PREFERENCE. (a) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, either
voluntarily or involuntarily, each holder of Class H Preferred Stock shall be
entitled to be paid in cash, after provision for the payment of the
Corporation's debts and other liabilities, before any distribution is made on
any Junior Securities and concurrently with any distribution to the holders
of Parity Securities but after any distribution to the holders of Senior
Securities, the Liquidation Preference. If, upon any such liquidation,
dissolution or other winding up of the affairs of the Corporation, the net
assets of the Corporation distributable among the holders of all outstanding
shares of the Class H Preferred Stock shall be insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled under this Certificate of Designation, then the entire net assets of
the Corporation remaining after the provision for the payment of the
Corporation's debts and other liabilities and required distributions to the
holders of Senior Securities shall be distributed among the holders of the
Class H Preferred Stock and of the Parity Securities ratably in proportion to
the full amounts to which they would otherwise be respectively entitled.
(b) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, either voluntarily or involuntarily, after
the payment of all preferential amounts required to be paid to the holders of
Senior Securities, the Parity Securities and Class H Preferred Stock, the
remaining assets and funds of the Corporation available for distribution to
its stockholders shall be distributed on a pro rata basis among the holders
of Junior Securities and any other class or series of stock entitled to
participate in liquidation distributions with the holders of the Junior
Securities.
(c) The assets available for distribution pursuant to this Section
3 shall be determined by applicable law and, prior to payment of any
Liquidation Preference, the Corporation shall first satisfy its outstanding
obligations concerning rights, if any, of holders of Class H Preferred Stock
which have been exercised.
(d) The merger or consolidation of the Corporation into or with
another corporation in which Everett Dobson and his Affiliates, directly or
indirectly, cease to control 50.1% of the voting securities of the surviving
corporation or its parent or the sale, transfer or lease (but not including a
transfer or lease by pledge or mortgage to a bona fide lender) of all or
substantially
-3-
<PAGE>
all of the assets of the Corporation may be deemed by the holders of the
Class H Preferred Stock to be a liquidation, dissolution or winding up of the
Corporation as those terms are used in this Section 3. In the event of such
merger, consolidation, sale, transfer or lease of substantially all of the
Corporation's assets, each holder of shares of Class H Preferred Stock shall
have the right to preference in the merger or consolidation or upon the
distribution of assets as provided in this Section 3.
(e) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall
immediately after the date the Board of Directors approves such action, or,
in the case of an involuntary liquidation, twenty (20) days prior to any
shareholders' meeting called to approve such action, or immediately after the
commencement of an involuntary proceeding, whichever is earliest, give each
holder of shares of Class H Preferred Stock initial written notice of the
proposed action. Such initial written notice shall describe the material
terms and conditions of such proposed action, including a description of the
stock, cash and property to be received by the holders of shares of Class H
Preferred Stock upon consummation of the proposed action and the date of
delivery thereof. If there shall occur any material change in the facts set
forth in the initial notice following its delivery, the Corporation shall
promptly give written notice to each holder of shares of Class H Preferred
Stock of such material change.
(f) The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation before
the expiration of thirty (30) days after the mailing of the initial notice
referred to in subparagraph (e) above or ten (10) days after the mailing of
any subsequent written notice, whichever is later; PROVIDED, that any such
30-day or 10-day period may be shortened upon the written consent of the
holders of a majority of the outstanding shares of the Class H Preferred
Stock voting as a single class.
(g) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation which will involve the
distribution of assets other than cash, the Corporation shall promptly engage
independent appraisers to determine the value of the assets to be distributed
to the holders of shares of Class H Preferred Stock and the holders of shares
of Common Stock (it being understood that with respect to such valuation, the
Corporation shall engage such appraiser as shall be approved by the holders
of a majority of shares of the Corporation's outstanding Common Stock and
Class H Preferred Stock each voting separately as a single class). The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice to each holder of shares of Common Stock and Class H Preferred
Stock of the appraiser's valuation.
-4-
<PAGE>
4. VOTING. (a) Except as provided in Section 4(b)(i) and (ii), the
shares of the Class H Preferred Stock shall not be entitled or permitted to
vote, except as required by law. Whenever a holder of Class H Preferred
Stock is entitled or permitted to vote each holder of shares of Class H
Preferred Stock shall be entitled to one vote in respect of each share of
Class H Preferred Stock held by him on the record date fixed for such vote.
(b) In addition, the holders of shares of Class H Preferred Stock
also shall have the following voting rights:
(i) The affirmative vote of the holders of a majority of the
outstanding shares of Class H Preferred Stock, voting separately as a
single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to (A) amend,
repeal or change, directly or indirectly, any of the provisions of the
Certificate of Incorporation or Bylaws of the Corporation, in any manner
which would alter or change the powers, preferences or special rights of
the shares of Class H Preferred Stock so as to affect them adversely, or
(B) redeem, repurchase or pay any dividends on any Junior Securities or
Parity Securities, except with respect to the Logix Communications Spin-Off
and repurchases of management, employee or consultant stock pursuant to
contractual rights PROVIDED, that no such repurchases shall exceed $500,000
in any fiscal year or in any event $1,500,000 in the aggregate, or (C)
authorize or effect the sale of all or substantially all of the assets of
the Corporation, or (D) authorize or effect the merger or consolidation of
the Corporation with any other Person, the result of which Everett Dobson
and his Affiliates, directly or indirectly, cease to control 50.1% of the
voting securities of the surviving corporation or its parent, or (E)
authorize or effect the liquidation (whether complete or partial),
dissolution or winding up of the Corporation, or (F) amend the Certificate
of Incorporation or Bylaws of the Corporation to change the authorized
number of directors, or (G) amend or waive any part of this Certificate of
Designation or (H) issue or authorize any shares of Senior Securities or
Parity Securities, including, without limitation, any additional shares of
Class H Preferred Stock other than shares of Class H Preferred Stock issued
as the PIK Dividend or shares of Class E Preferred Stock issued as a
dividend payment; PROVIDED, HOWEVER, that the Corporation may issue and
authorize shares of capital stock in connection with (x) public or private
(which provides for registration within one year of issuance) 144A
preferred stock financing related to acquisitions after the date hereof and
capital projects, and (y) the Logix Communications Spin-Off. Except for
the provisions set forth in clauses (A), (B), (G) or (H), the foregoing
voting rights and provisions will terminate and no longer be applicable
once the total amount of outstanding
-5-
<PAGE>
shares of Class H Preferred Stock represents less than 35% of the shares
of Class H Preferred Stock issued under the Investment and Transaction
Agreement.
(ii) The rights of holders of shares of Class H Preferred Stock
to vote or take any other actions as provided in this Section 4 may be
exercised at any annual meeting of stockholders, at a special meeting of
stockholders held for such purpose or through any written action in lieu of
a meeting. At each meeting of stockholders at which the holders of shares
of Class H Preferred Stock shall have the right, voting separately as a
single class, to take any action as provided in this Section 4, the
presence in person or by proxy of the holders of record of a majority of
the total number of shares of Class H Preferred Stock then outstanding and
entitled to vote on the matter shall be necessary and sufficient to
constitute a quorum. At any such meeting or at any adjournment thereof, in
the absence of a quorum of the holders of shares of Class H Preferred
Stock, a majority of the holders of such shares present in person or by
proxy shall have the power to adjourn the meeting as to the actions to be
taken by the holders of shares of Class H Preferred Stock from time to time
and place to place without notice other than announcement at the meeting
until a quorum shall be present.
5. REDEMPTIONS.
(a) REDEMPTION PRICE. For each share which is to be redeemed
pursuant to this Section 5, the Corporation will, subject to the limitations
and restrictions contained in the Financing Agreements, be obligated on the
Redemption Date, (as defined in Section 5(e)),to pay to the holder thereof
(upon surrender by such holder at the Corporation's principal office of the
certificate representing such share) an amount in cash (the 'Redemption
Price') equal to the Liquidation Preference thereof as at the Redemption
Date. If the funds of the Corporation legally available for redemption of
shares of Class H Preferred Stock on any Redemption Date are insufficient to
redeem the total number of shares of Class H Preferred Stock to be redeemed
on such date, those funds which are legally available will be used to redeem
the maximum possible number of shares of Class H Preferred Stock ratably
among the holders of the shares of Class H Preferred Stock to be redeemed
based upon the aggregate Liquidation Preference of such shares of Class H
Preferred Stock held by each such holder. At any time thereafter when
additional funds of the Corporation are legally available for the redemption
of shares, such funds will immediately be used to redeem the balance of the
shares of Class H Preferred Stock which the Corporation has become obligated
to redeem on any Redemption Date but which it has not redeemed.
(b) NOTICE OF REDEMPTION. The Corporation will send by registered
mail written notice of each redemption of Class H
-6-
<PAGE>
Preferred Stock to each record holder of such class not more than 30 nor less
than 10 business days prior to the Redemption Date.
(c) DIVIDENDS AFTER REDEMPTION DATE. No shares of Class H
Preferred Stock will be entitled to any dividends accruing after the date on
which the Redemption Price of such shares of Class H Preferred Stock has been
paid. On such date all rights of the holders of such shares of Class H
Preferred Stock will cease, and such shares of Class H Preferred Stock will
not be deemed to be outstanding.
(d) ACCRUED DIVIDENDS MUST BE PAID PRIOR TO ANY REDEMPTION. The
Corporation may not redeem any shares of Class H Preferred Stock, unless all
dividends accrued on the outstanding Class H Preferred Stock through the
Redemption Date have been paid in full.
(e) OPTIONAL REDEMPTION. The Corporation will redeem all of the
then issued and outstanding shares of Class H Preferred Stock within 90 days
of the affirmative vote of the holders of a majority of the issued and
outstanding shares of Class H Preferred Stock at any time after December 23,
2010 (the 'Redemption Date'); PROVIDED, HOWEVER, that the exercise of such
redemption rights shall be subject to the restrictions and shall not give
rise to either a default or event of default in the Financing Agreements.
Upon the exercise of such redemption option by the holders of the Class E
Preferred Stock, the holders of the Class H Preferred Stock shall be entitled
to receive payment of the Redemption Price.
(f) OTHER REDEMPTIONS OR ACQUISITIONS. Neither the Corporation
nor any Subsidiary will redeem or otherwise acquire any Class H Preferred
Stock, except as expressly authorized herein or pursuant to a purchase offer
made pro rata to all holders of Class H Preferred Stock on the basis of the
number of shares of Class H Preferred Stock owned by each such holder.
6. STATUS OF REACQUIRED SHARES. Shares of Class H Preferred Stock
which have been issued and reacquired in any manner shall have the status of
authorized and unissued shares of Class H Preferred Stock.
7. RANK. The Class H Preferred Stock shall rank (i) senior as to
dividends and upon liquidation, dissolution or winding up to all Junior
Securities, whenever issued, (ii) junior as to dividends and upon
liquidation, dissolution or winding up to all Senior Securities, whenever
issued, and (iii) PARI PASSU as to dividends and upon liquidation,
dissolution or winding up to all Parity Securities whenever issued.
8. CERTIFICATES. So long as any shares of the Class H Preferred Stock
are outstanding, there shall be set forth on the face or back of each stock
certificate issued by the Corporation a
-7-
<PAGE>
statement that the Corporation shall furnish without charge to each
shareholder who so requests, a full statement of the designation and relative
rights, preferences and limitations of each class of stock or series thereof
that the Corporation is authorized to issue and of the authority of the Board
of Directors to designate and fix the relative rights, preferences and
limitations of each series.
9. DEFINITIONS.
'Affiliate' shall have the meaning given such term in Rule 501(b) under the
Securities Act of 1933.
'Applicable Rate' means 15% per annum.
'Certificate of Designation' means this Certificate of Designation of the
Powers, Preferences and Relative, Participating, Optional and Other Special
Rights of the Class H Preferred Stock and Qualifications, Limitations and
Restrictions Thereof.
'Certificate of Incorporation' means the Certificate of Incorporation of
the Corporation, as restated.
'Class A Common Stock' means the Corporation's Class A Common Stock, $0.001
par value per share.
'Class A Preferred Stock' means the Corporation's Class A Preferred Stock,
$1.00 par value per share.
'Class B Common Stock' means the Corporation's Class B Common Stock, $0.001
par value per share.
'Class C Common Stock' means the Corporation's Class C Common Stock,
$0.001 par value per share.
'Class D Preferred Stock' means the Corporation's Class D Convertible
Preferred Stock, $1.00 par value per share.
'Class E Preferred Stock' means the Corporation's Class E Preferred Stock,
$1.00 par value per share.
'Class F Preferred Stock' means the Corporation's Class F Preferred Stock,
par value $1.00 per share.
'Class F Preferred Stock Documents' means the Class F Preferred Stock
Investors Agreement, the Class F Preferred Stock Warrants and the Class F
Preferred Stock (and the Certificate of Designation relating thereto).
'Class F Preferred Stock Investors Agreement' means the Investors
Agreement, to be entered into between the Corporation and the Cash Equity, in
respect of the Class F Preferred Stock Warrants.
-8-
<PAGE>
'Class F Preferred Stock Warrants' means any warrant certificate evidencing
warrants to purchase Class A Common Stock issued by the Corporation in
conjunction with the Class F Preferred Stock.
'Class G Preferred Stock' means the Corporation's Class G Preferred
Stock, $1.00 par value per share.
'Class H Preferred Stock' means the Corporation's Class H Preferred Stock,
$1.00 par value per share.
'Common Stock' means, collectively, the Corporation's Class A Common Stock,
Class B Common Stock and Class C Common Stock and any other classes of common
stock issued from time to time by the Corporation.
'Corporation Stock Option Plan' means the Dobson Communications Corporation
1996 Stock Option Plan, adopted on February 6, 1997 and as amended by Amendment
No.1 thereto, as the same may be amended, supplemented or otherwise modified
from time to time.
'Credit Agreements' means (i) the Credit Agreement, dated as of March
25, 1998, among First Union National Bank (as successor by merger to
CoreStates Bank, N.A.) as Administrative Agent, Dobson Operating Company, as
Borrower, the Corporation, as Guarantor, and the Company Subsidiaries party
thereto, (ii) the Revolving Credit Agreement, dated as of March 25, 1998,
between Dobson Cellular Operations Company as Borrower, and NationsBank, N.A.
(as successor by merger to NationsBank of Texas, N.A.), as Administrative
Agent, (iii) the 364-Day Revolving Credit and Term Loan Agreement, dated as
of March 25, 1998, between Dobson Cellular Operations Company, as Borrower,
and NationsBank, N.A. (as successor by merger to NationsBank of Texas, N.A.),
as Administrative Agent, (iv) the Credit Agreement, dated the date hereof,
between Dobson/Sygnet Operating Company, as Borrower and NationsBank N.A., as
Administrative Agent and (v) the Term Loan Agreement, dated as of the date
hereof, between Dobson Tower Company and NationsBank, N.A.
'Credit Documents' means, collectively, the Credit Agreements and all
documents and instruments evidencing or securing or guaranteeing indebtedness
thereunder.
'Dobson Partnership' means Dobson CC Limited Partnership, an Oklahoma
limited partnership.
'Dobson/ Sygnet' means Dobson/ Sygnet Communications Company, an
Oklahoma corporation.
'Dobson/Sygnet Note Documents' means, collectively, the Dobson/Sygnet
Note Indenture, the Dobson/Sygnet Note Purchase
-9-
<PAGE>
Agreement, the Dobson/Sygnet Notes, and the Dobson/Sygnet Notes Registration
Rights Agreement.
'Dobson/Sygnet Note Indenture' means the Indenture, dated the date
hereof, among Dobson/Sygnet, and United States Trust Company of New York, as
trustee thereunder in respect of the Dobson/Sygnet Notes.
'Dobson/Sygnet Note Purchase Agreement' means the Purchase Agreement,
dated as of December 16, 1998, among Dobson/Sygnet, the Corporation, and
NationsBanc Montgomery Securities LLC.
'Dobson/Sygnet Registration Rights Agreement' means the Registration
Rights Agreement, dated the date hereof, among Dobson/Sygnet and NationsBanc
Montgomery Securities LLC.
'Financing Agreements' means, collectively, the Senior Note Documents,
the Dobson/Sygnet Notes Documents, the Credit Documents, the Senior PIK
Preferred Stock Certificate of Designation, the Sygnet PIK Preferred Stock
Documents and the Class F Preferred Stock Documents and, as appropriate, all
documents, instruments and agreements evidencing, securing the foregoing, as
amended or refinanced in accordance with the Investment and Transaction
Agreement and the Stockholder and Investor Rights Agreement.
'Fully Diluted Basis' means with respect to any equity securities issued
[or issuable] by any Person, without duplication, (a) all shares or units of,
or interests in, such equity securities outstanding at the time of
determination, and (b) all convertible securities with respect to such Equity
Securities, whether or not exercisable or convertible at the time of such
determination.
'Investment and Transaction Agreement' means that certain Investment and
Transaction Agreement, dated as of December 23, 1998, among the purchasers
named therein and the Corporation, as it may be amended, modified or
otherwise supplemented from time to time.
'Junior Securities' means any of the Corporation's Common Stock and all
other equity securities of the Corporation other than Parity Securities and
Senior Securities.
'Liquidation Preference' means the aggregate Liquidation Value of all
shares of Class H Preferred Stock held by a holder of Class H Preferred Stock
plus an amount equal to the sum of all accrued and unpaid dividends thereon,
whether or not declared to the date of payment.
'Liquidation Value' of any share of Class H Preferred Stock shall be One
Thousand One Hundred and Thirty-One Dollars and Ninety-Two Cents ($1,131.92).
-10-
<PAGE>
'Logix Communications Enterprises, Inc. 1998 Stock Option Plan' means
that certain Logix Communications Enterprises, Inc. 1998 Stock Option Plan,
dated effective as of August 1, 1998, as the same may be amended,
supplemented or otherwise modified from time to time.
'Logix Communications Spin-Off' means the disposition by the Corporation
of the business of Logix Communications Enterprises, Inc.
'Parity Securities' means the Corporation's Class A Preferred Stock and
except with respect to Section 3, Section 6 and the redemption and put rights
of the Class D Preferred Stock and the Class E Preferred Stock in accordance
with the Stockholder and Investor Rights Agreement, the Class D Preferred
Stock and the Class E Preferred Stock.
'Person' means an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization or other entity and any
government, governmental department or agency or political subdivision
thereof.
'Qualified Public Offering' means any offering by the Corporation of its
Class A Common Stock to the public pursuant to an effective registration
statement under the Securities Act of 1933, as amended, or any comparable
registration statement under any similar federal statute then in force,
(other than an offering of shares being issued as consideration in a business
acquisition or combination or an offering in connection with an employee
benefit plan) and the aggregate gross proceeds in connection with such
registration statement equals or exceeds $50.0 million.
'Senior Note Documents' means, collectively, the Senior Note Indenture,
the Senior Notes, and the Senior Notes Escrow and Security Agreement.
'Senior Note Escrow and Security Agreement' means the Escrow and
Security Agreement, dated February 28, 1997, among the Corporation and the
placement agents, party thereto, and United States Trust Company of New York,
as Trustee thereunder.
'Senior Note Indenture' means the Indenture, dated as of February 28,
1997, among the Corporation and United States Trust Company of New York, as
trustee thereunder in respect of the Senior Notes.
'Senior PIK Preferred Stock' means the Corporation's 12 1/4% Senior
Exchangeable Preferred Stock, issued on January 22, 1998 and mandatorily
redeemable 2008.
-11-
<PAGE>
'Senior PIK Preferred Stock Certificate of Designation' means the
Certificate of Designation in respect of the Senior PIK Preferred Stock.
'Senior Securities' means the Senior PIK Preferred Stock, the Sygnet PIK
Preferred Stock, the Class F Preferred Stock, with respect to Section 3,
Section 6 and the redemption and put rights of the Class D Preferred Stock
and the Class E Preferred Stock in accordance with the Stockholder and
Investor Rights Agreement, the Class D Preferred Stock and the Class E
Preferred Stock and each class or series of preferred stock of the
Corporation which is established by the Board of Directors after the date
this Certificate of Designation is filed with the Secretary of State of the
State of Oklahoma, the terms of which expressly provide that such class or
series shall rank senior to the Class H Preferred Stock as to dividend
distributions and distributions upon liquidation, dissolution or winding up
of the Corporation.
'Stockholder and Investor Rights Agreement' means that certain
Stockholder and Investor Rights Agreement dated the date hereof among this
Corporation and the stockholders of this Corporation, as it may be amended
from time to time.
'Subsidiary' means, with respect to any Person, any corporation,
partnership, 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 of the
other Subsidiaries of that Person or a combination thereof, or (ii) if a
partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned
or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
partnership, association, or other business entity if such Person or Persons
shall be allocated a majority of partnership, association or other business
entity gains or losses or shall be or control the managing general partner of
such partnership, association or other business entity.
'Sygnet Acquisition' means the acquisition by Dobson / Sygnet
Communications Company of all of the outstanding capital stock of Sygnet
Wireless pursuant to the Agreement and Plan of Merger, dated as of July 28,
1998, as amended, between Dobson/Sygnet Operating Company and Sygnet Wireless.
'Sygnet PIK Preferred Stock' means the 12 1/4% Senior Exchangeable
Preferred Stock of the Corporation, issued on December 23, 1998 and
mandatorily redeemable 2008.
-12-
<PAGE>
'Sygnet PIK Preferred Stock Certificate of Designation' means the
Certificate of Designation for the Sygnet PIK Preferred Stock.
'Sygnet PIK Preferred Stock Documents' means, collectively, the Sygnet
PIK Preferred Stock Purchase Agreement, the Sygnet PIK Preferred Stock
Certificate of Designation and the Sygnet PIK Preferred Stock Registration
Rights Agreement.
'Sygnet PIK Preferred Stock Purchase Agreement' means the Purchase
Agreement, dated December 16, 1998, between the Corporation and NationsBanc
Montgomery Securities LLC, in respect of the Sygnet PIK Preferred Stock.
'Sygnet PIK Preferred Stock Registration Rights Agreement' means the
Registration Rights Agreement, dated the date hereof, between the Corporation
and NationsBanc Montgomery Securities LLC.
'Sygnet Wireless' means Sygnet Wireless, Inc., an Ohio Corporation.
10. SEVERABILITY OF PROVISIONS. If any right, preference or limitation
of the Class H Preferred Stock set forth in this Resolution (as such
Resolution may be amended from time to time) is invalid, unlawful or
incapable of being enforced by reason of any rule, law or public policy, all
other rights, preferences and limitations set forth in this Resolution (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable right, preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set
forth shall be deemed dependent upon any other right, preference or
limitation unless so expressed herein."
SECOND: That, thereafter, the shareholders, including all holders
of the issued and outstanding shares of the Corporation's Class H Preferred
Stock, unanimously voted in favor of the Amendment pursuant to written
consent given in accordance with the provisions of Section 73 of the Oklahoma
General Corporation Act.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 77 of the Oklahoma General Corporation Act.
-13-
<PAGE>
DOBSON COMMUNICATIONS CORPORATION
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS
OF 12 1/4% SENIOR EXCHANGEABLE
PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
-----------------------------------------
Pursuant to Title 18, Section 1032(G) of the
General Corporation Act of the State of Oklahoma
-----------------------------------------
Dobson Communications Corporation, a corporation organized and
existing under the General Corporation Act of the State of Oklahoma (the
"Company"), does hereby certify that, pursuant to authority conferred upon
the board of directors of the Company (or any committee of such board of
directors, the "Board of Directors") by its Amended and Restated Certificate
of Incorporation, as amended (hereinafter referred to as the "Certificate of
Incorporation"), and pursuant to the provisions of Title 18, Section 1032(G)
of the General Corporation Act of the State of Oklahoma, said Board of
Directors with full power and authority to act on behalf of the Board of
Directors, acting by written consent dated December 23, 1998, duly approved
and adopted the following resolution (the "Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board of
Directors by its Certificate of Incorporation, the Board of Directors does
hereby create, authorize and provide for the issue of 12 1/4% Senior
Exchangeable Preferred Stock, par value $1.00 per share, with a liquidation
preference of $1,000 per share, consisting of 184,000 shares, having the
designations, voting power, preferences and relative, participating, optional
and other special rights, qualifications, limitations and restrictions
thereof that are set forth in the Certificate of Incorporation and in this
Resolution as follows (the terms used herein, unless otherwise defined
herein, are used herein as defined in paragraph (n) hereof):
(a) DESIGNATION. There is hereby created out of the authorized
and unissued shares of preferred stock of the Company a series of preferred
stock designated as the "12 1/4% Senior Exchangeable Preferred Stock". The
number of shares constituting such series shall be 184,000 shares of 12 1/4%
Senior Exchangeable Preferred Stock, consisting of an initial issuance of
64,646 shares of 12 1/4% Senior Exchangeable Preferred Stock plus additional
shares of such Preferred Stock which may be issued to pay dividends on such
Preferred Stock if the Company elects to pay dividends in additional shares
of such Preferred Stock (collectively, the "Original Preferred Stock"), plus
registered shares of 12 1/4% Senior
<PAGE>
2
Exchangeable Preferred Stock which may be issued in the Preferred Stock
Exchange Offer (the "Registered Preferred Stock") plus additional shares of
Preferred Stock which may be issued to pay dividends on the Registered
Preferred Stock (collectively, with the Original Preferred Stock and the
Registered Preferred Stock, the "Preferred Stock"). The liquidation
preference of the Preferred Stock shall be $1,000 per share.
(b) RANK. The Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank (i) senior to all classes of Common Stock
of the Company, the Class B Preferred Stock, the Class C Preferred Stock, the
Class D Preferred Stock, the Class E Preferred Stock, the Class F Preferred
Stock, the Class G Preferred Stock, the Class H Preferred Stock and to each
other class of capital stock or series of preferred stock hereafter created
by the Board of Directors, the terms of which do not expressly provide that
it ranks senior to or on parity with the Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company (collectively referred to herein, together with
all classes of common stock of the Company, as the "Junior Securities"); (ii)
subject to certain conditions, with any class of capital stock or series of
preferred stock hereafter created by the Board of Directors, the terms of
which expressly provide that such class or series will rank on a parity with
the Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to as "Parity Securities"); and (iii) subject to certain conditions, junior
to each class of capital stock or series of preferred stock hereafter created
by the Board of Directors, the terms of which have been approved by the
Holders of the Preferred Stock in accordance with subparagraph (f)(ii) hereof
and which expressly provide that such class or series will rank senior to the
Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to as "Senior Securities").
(c) DIVIDENDS. (i) Beginning on the Issue Date, the Holders of the
outstanding shares of Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors, out of funds legally available therefor,
dividends on each share of Preferred Stock at a rate per annum equal to 12 1/4%
of the liquidation preference per share, payable quarterly. All dividends shall
be cumulative, whether or not earned or declared, on a daily basis from the
Issue Date and shall be payable quarterly in arrears each Dividend Payment Date,
commencing on the first Dividend Payment Date after the Issue Date. On and
before January 15, 2003, the Company may pay dividends, at its option, in cash
or in additional fully paid and nonassessable Preferred Stock having an
aggregate liquidation preference equal to the amount of such dividends.
Dividends paid in additional shares of Preferred Stock will be calculated and
paid to registered holders to the nearest whole share. After January 15, 2003,
dividends may be paid only in cash. If any dividend (or portion thereof)
payable on any Dividend Payment Date after January 15, 2003 is not declared or
paid in full in cash (or on or prior to January 15, 2003, in cash or Preferred
Stock) on such Dividend Payment Date, the amount of accrued and unpaid dividends
will bear interest at the
<PAGE>
3
dividend rate on the Preferred Stock, compounding quarterly, until declared
and paid in full. Each distribution in the form of a dividend (whether in
cash or in additional shares of Preferred Stock) shall be payable to Holders
of record as they appear on the stock books of the Company on such record
date, not less than 10 nor more than 60 days preceding the relevant Dividend
Payment Date, as shall be fixed by the Board of Directors. Dividends shall
cease to accumulate in respect of shares of the Preferred Stock on the
Exchange Date (as defined in paragraph (g)(i)(A) hereof) or on the date of
their earlier redemption unless the Company shall have failed to issue the
appropriate aggregate principal amount of Exchange Debentures in respect of
the Preferred Stock on the Exchange Date or shall have failed to pay the
relevant redemption price on the date fixed for redemption.
(ii) Notwithstanding anything else provided herein, if the Company
fails to consummate a Preferred Stock Exchange Offer and cause a shelf
registration statement with respect to resales of the Preferred Stock to
become effective in accordance with the Registration Rights Agreement dated
the Issue Date on or prior to the date that is 180 days after the Issue Date,
the dividend rate on the Preferred Stock will increase 0.5% per annum to
12 3/4% per annum of liquidation preference per share of Preferred Stock from
June 21, 1998, payable in additional shares of Preferred Stock quarterly in
arrears on each Dividend Payment Date, commencing July 15, 1999 until (i)
such Preferred Stock Exchange Offer is consummated or (ii) such shelf
registration statement with respect to resales of the Preferred Stock is
declared effective in accordance with the Registration Rights Agreement dated
the Issue Date.
(iii) All dividends paid with respect to shares of the
Preferred Stock pursuant to paragraph (c)(i) hereof shall be paid pro rata to
the Holders entitled thereto.
(iv) Dividends that are in arrears and unpaid for any past Dividend
Period and dividends in connection with any optional redemption pursuant to
paragraph (e)(i) hereof may be declared and paid at any time, without
reference to any regular Dividend Payment Date, to Holders of record on such
date, not more than 45 days prior to the payment thereof, as may be fixed by
the Board of Directors.
(v) No full dividends shall be declared by the Board of Directors
or paid or funds set apart for payment of dividends by the Company on any
Parity Securities for any period unless full cumulative dividends shall have
been or contemporaneously shall be declared and paid in full or declared and,
if payable in cash, a sum in cash shall be set apart sufficient for such
payment on the Preferred Stock for all Dividend Periods terminating on or
prior to the date of payment of such full dividends on such Parity
Securities. If full dividends are not paid, as aforesaid, upon the shares of
the Preferred Stock, all dividends declared upon shares of the Preferred
Stock and any other Parity Securities shall be declared PRO RATA so that the
amount of dividends declared per share on the Preferred Stock and such Parity
Securities
<PAGE>
4
shall in all cases bear to each other the same ratio that accrued dividends
per share on the Preferred Stock and such Parity Securities bear to each
other.
(vi) (A) Holders of shares of Preferred Stock shall be entitled to
receive the dividends provided for in paragraph (c)(i) hereof in preference
to and in priority over any dividends upon any of the Junior Securities.
(B) So long as any shares of Preferred Stock are outstanding, the
Company shall not declare, pay or set apart for payment any dividend on any
of the Junior Securities (other than distributions or dividends in Junior
Securities to the holders of Junior Securities) or make any payment on
account of, or set apart for payment money for a sinking or other similar
fund for, the repurchase, redemption or other retirement of any of the Junior
Securities or any warrants, rights, calls or options exercisable for or
convertible into any of the Junior Securities (other than the repurchase,
redemption or other acquisition or retirement for value of Junior Securities
(or options, warrants or other rights to acquire such Junior Securities)
permitted under clause (ii) of the second paragraph in subparagraph (m)(4)
hereof), and shall not permit any corporation or other entity directly or
indirectly controlled by the Company to purchase or redeem any of the Junior
Securities or any such warrants, rights, calls or options, unless full
cumulative dividends determined in accordance herewith have been paid in full
on the Preferred Stock.
(C) So long as any shares of the Preferred Stock are outstanding,
the Company shall not make any payment on account of, or set apart for
payment money for a sinking or other similar fund for, the repurchase,
redemption or other retirement of any of the Parity Securities or any
warrants, rights, calls or options exercisable for or convertible into any of
the Parity Securities, and shall not permit any corporation or other entity
directly or indirectly controlled by the Company to purchase or redeem any of
the Parity Securities or any such warrants, rights, calls or options, unless
full cumulative dividends determined in accordance herewith on the Preferred
Stock have been paid in full.
(vii) Dividends payable on shares of the Preferred Stock for any
period less than a year shall be computed on the basis of a 360-day year of
twelve 30-day months and the actual number of days elapsed in the period for
which dividends are payable. If any Dividend Payment Date occurs on a day
that is not a Business Day, any accrued dividends otherwise payable on such
Dividend Payment Date shall be paid on the next succeeding Business Day.
(d) LIQUIDATION PREFERENCE. Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the Company, Holders
of Preferred Stock then outstanding shall be entitled to be paid, out of the
assets of the Company available for distribution to its stockholders, $1,000
per share of Preferred Stock, plus an amount in cash equal to accumulated and
unpaid dividends thereon to the date fixed for liquidation,
<PAGE>
5
dissolution or winding-up (including an amount equal to a prorated dividend
for the period from the last Dividend Payment Date to the date fixed for
liquidation, dissolution or winding-up), before any payment shall be made on
or any assets distributed to the holders of any of the Junior Securities,
including, without limitation, the Class A Preferred Stock, the Class B
Preferred Stock, the Class C Preferred Stock, the Class D Preferred Stock,
the Class E Preferred Stock, the Class F Preferred Stock, the Class G
Preferred Stock, the Class H Preferred Stock and the Common Stock of the
Company. If, upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the amounts payable with respect to the Preferred
Stock and all other Parity Securities are not paid in full, the holders of
the Preferred Stock and the Parity Securities shall share equally and ratably
in any distribution of assets of the Company in proportion to the full
liquidation preference and accumulated and unpaid dividends to which each is
entitled. After payment of the full amount of the liquidation preferences
and accumulated and unpaid dividends to which they are entitled, the Holders
of Preferred Stock shall not be entitled to any further participation in any
distribution of assets of the Company. However, a merger, consolidation or
sale, of all or substantially all of the assets of the Company that complies
with the provisions under subparagraph (m)(10) shall not be deemed to be a
liquidation, dissolution or winding-up of the Company.
(e) REDEMPTION. (i) OPTIONAL REDEMPTION. (A) The Preferred
Stock may be redeemed (subject to contractual and other restrictions with
respect thereto and the legal availability of funds therefor) at any time on
or after January 15, 2003, at the Company s option, in whole or in part, in
the manner provided in subparagraph (e)(iii), at the redemption prices
(expressed as a percentage of the liquidation preference thereof) set forth
below, plus an amount in cash equal to all accumulated and unpaid dividends
(including an amount in cash equal to a prorated dividend for the period from
the Dividend Payment Date immediately prior to the Redemption Date to the
Redemption Date, but subject to the right of Holders of Preferred Stock on a
record date to receive dividends on a Dividend Payment Date), if redeemed
during the 12-month period beginning January 15 of each of the years set
forth below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
<S> <C>
2003 .............................. 106.125%
2004 .............................. 104.084%
2005 .............................. 102.042%
2006 and thereafter ................ 100.000%
</TABLE>
PROVIDED that no optional redemption pursuant to this subparagraph (e)(i)(A)
shall be authorized or made unless prior thereto full unpaid cumulative
dividends for all Dividend Periods terminating on or prior to the
Redemption Date, and for an amount equal to a prorated dividend for the
period from the Dividend Payment Date immediately prior to the Redemption
Date to the Redemption Date, shall have been, or immediately prior to the
<PAGE>
6
Redemption Date are, declared and paid in cash or declared and a sum set
apart sufficient for such cash payment on the Redemption Date on the
outstanding shares of such Preferred Stock.
(B) In addition, on or prior to January 15, 2001, the Company may
redeem Preferred Stock having an aggregate liquidation preference of up to
35% of the aggregate liquidation preference of all Preferred Stock originally
issued on the Issue Date, at a redemption price equal to 112.250% of the
liquidation preference, plus an amount in cash equal to all accumulated and
unpaid dividends (including an amount in cash equal to a prorated dividend
for the period from the Dividend Payment Date immediately prior to the
Redemption Date to the Redemption Date, but subject to the right of Holders
of Preferred Stock on a record date to receive dividends due on a Dividend
Payment Date), with the proceeds of any sale of its Common Stock; PROVIDED
that such Redemption Date occurs within 180 days after consummation of such
sale and at least 65% aggregate liquidation preference of Preferred Stock
originally issued remains outstanding after each such redemption, and
PROVIDED FURTHER that no optional redemption pursuant to this subparagraph
(e)(i)(B) shall be authorized or made unless prior thereto full unpaid
cumulative dividends for all Dividend Periods terminating on or prior to the
Redemption Date and for an amount equal to a prorated dividend for the period
from the Dividend Payment Date immediately prior to the Redemption Date to
the Redemption Date shall have been, or immediately prior to the Redemption
Date are, declared and paid in full in cash or declared and a sum set apart
sufficient for such payment in full in cash on the Redemption Date on the
outstanding shares of the Preferred Stock.
(C) In the event of a redemption pursuant to paragraph (e)(i)
hereof of only a portion of the then outstanding shares of the Preferred
Stock, the Company shall effect such redemption as it determines, PRO RATA
according to the number of shares held by each Holder of Preferred Stock,
PROVIDED that the Company may redeem such shares held by any Holder of fewer
than 100 shares of Preferred Stock without regard to such PRO RATA redemption
requirement, or by lot, in each case, as may be determined by the Company in
its sole discretion.
(ii) MANDATORY REDEMPTION. On January 15, 2008, the Company shall
redeem from any source of funds legally available therefor, in the manner
provided in paragraph (e)(iii) hereof, all of the shares of the Preferred
Stock then outstanding at a redemption price equal to 100% of the liquidation
preference per share, plus, without duplication, an amount in cash equal to
all accumulated and unpaid dividends per share (including an amount equal to
a prorated dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date).
(iii) PROCEDURES FOR REDEMPTION. (A) At least 30 days and not
more than 60 days prior to the date fixed for any redemption of the Preferred
Stock, written notice (the "Redemption Notice") shall be given by first-class
mail, postage prepaid, to each Holder of
<PAGE>
7
record on the record date fixed for such redemption of the Preferred Stock at
such Holder's address as the same appears on the stock register of the
Company, PROVIDED that no failure to give such notice nor any deficiency
therein shall affect the validity of the procedure for the redemption of any
shares of Preferred Stock to be redeemed except as to the Holder or Holders
to whom the Company has failed to give said notice or except as to the Holder
or Holders whose notice was defective. The Redemption Notice shall state:
(1) whether the redemption is pursuant to subparagraph (e)(i)(A),
(e)(i)(B) or (e)(ii) hereof;
(2) the redemption price;
(3) whether all or less than all the outstanding shares of the
Preferred Stock are to be redeemed and the total number of shares of the
Preferred Stock being redeemed;
(4) the number of shares of Preferred Stock held, as of the
appropriate record date, by the Holder that the Company intends to redeem;
(5) the date fixed for redemption;
(6) that the Holder is to surrender to the Company, at the place or
places where certificates for shares of Preferred Stock are to be
surrendered for redemption, in the manner and at the price designated, its
certificate or certificates representing the shares of Preferred Stock to
be redeemed; and
(7) that dividends on the shares of the Preferred Stock to be
redeemed shall cease to accrue on such Redemption Date unless the Company
defaults in the payment of the redemption price.
(B) Each Holder of Preferred Stock shall surrender the certificate
or certificates representing such shares of Preferred Stock to the Company,
duly endorsed, in the manner and at the place designated in the Redemption
Notice and on the Redemption Date. The full redemption price for such shares
of Preferred Stock shall be payable in cash to the Person whose name appears
on such certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired. In the event that
less than all of the shares represented by any such certificate are redeemed,
a new certificate shall be issued representing the unredeemed shares.
(C) Unless the Company defaults in the payment in full of the
applicable redemption price, dividends on the Preferred Stock called for
redemption shall cease to accumulate on the Redemption Date, and the Holders
of such redeemed shares shall cease to
<PAGE>
8
have any further rights with respect thereto from and after the Redemption
Date, other than the right to receive the redemption price, without interest.
(f) VOTING RIGHTS. (i) The Holders of shares of the Preferred
Stock, except as otherwise required under Oklahoma law or as set forth in
paragraphs (f)(ii), (f)(iii) and (f)(iv) hereof, shall not be entitled or
permitted to vote on any general corporate matters.
(ii) (A) So long as any shares of the Preferred Stock are
outstanding, the Company shall not authorize any class of Senior Securities
without the affirmative vote or, notwithstanding any contrary provision of
the Amended and Restated By-Laws of the Company (the "By-Laws"), written
consent of Holders of at least a majority of the outstanding shares of
Preferred Stock, voting or consenting, as the case may be, separately as one
class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting, except that, without the approval of
Holders of the Preferred Stock, the Company may issue shares of Senior
Securities in exchange for, or the proceeds of which are used to redeem or
repurchase (1) all (but not less than all) shares of Preferred Stock then
outstanding or (2) indebtedness of the Company.
(B) So long as any shares of the Preferred Stock are outstanding,
the Company shall not amend this Certificate of Designation so as to affect
adversely the specified rights (including, without limitations, the covenants
described in paragraph (m)), preferences, privileges or voting rights of
Holders of Preferred Stock, or authorize the issuance of any additional
shares of Preferred Stock (other than to pay dividends in kind), without the
affirmative vote or, notwithstanding any contrary provisions of the By-Laws,
written consent of Holders of at least a majority of the outstanding shares
of Preferred Stock, voting or consenting, as the case may be, separately as
one class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting. The Holders of at least a majority
of the outstanding shares of Preferred Stock, voting or consenting, as the
case may be, separately as one class, whether voting in person or by proxy,
either in writing or by resolution adopted at an annual or special meeting,
may waive compliance with any provision of this Certificate of Designation.
(C) Except as set forth in subparagraph (f)(ii) hereof, (1) the
creation, authorization or issuance of any shares of any Junior Securities,
Parity Securities or Senior Securities, or (2) the increase or decrease in
the amount of authorized capital stock of any class, including any preferred
stock, shall not require the consent of Holders of Preferred Stock and shall
not, unless not complying with subparagraph (f)(ii) hereof, be deemed to
affect adversely the rights, preferences, privileges or voting rights of
Holders of shares of Preferred Stock.
(iii) (A) If (1) dividends on the Preferred Stock are in arrears
and unpaid (and, with respect to dividends that become payable after January
15, 2003, are not paid in
<PAGE>
9
cash) for four quarterly periods (whether or not consecutive); (2) the
Company fails to discharge any redemption obligation with respect to the
Preferred Stock; (3) the Company fails to make an Offer to Purchase (and
complete such purchase of) all of the outstanding shares of Preferred Stock
following a Change of Control, if such Offer to Purchase is required to be
made pursuant to paragraph (h) hereof; (4) the Company breaches or violates
one of the provisions set forth in paragraph (m) hereof and the breach or
violation continues for a period of 30 consecutive days or more after notice
thereof to the Company by Holders of 25% or more of the shares of the
Preferred Stock then outstanding; or (5) there occurs with respect to any
issue or issues of Indebtedness of the Company and/or any Significant
Subsidiary having an outstanding principal amount of $10 million or more in
the aggregate for all such issues of the Company and/or any Significant
Subsidiary, whether such Indebtedness now exists or shall hereafter be
created, (i) an event of default that has caused the holder thereof to
declare such Indebtedness to be due and payable prior to its Stated Maturity
and such Indebtedness has not been discharged in full or such acceleration
has not been rescinded or annulled within 30 days of such acceleration and/or
(ii) the failure to make a principal payment at the final (but not any
interim) fixed maturity and such defaulted payment shall not have been made,
waived or extended within 30 days of such payment default, then the number of
directors constituting the Board of Directors shall be adjusted to permit the
Holders of the majority of the then outstanding shares of Preferred Stock,
voting separately as one class, to elect two directors. For the purpose of
determining the number of quarterly periods for which accrued dividends have
not been paid, any accrued and unpaid dividend that is subsequently paid
shall not be treated as unpaid. Each event described in clauses (1), (2),
(3), (4) and (5) of this subparagraph (f)(iii)(A) is a "Voting Rights
Triggering Event". Within 15 days of the time the Company becomes aware of
the occurrence of any default referred to in clause (4) or (5) of this
subparagraph (f)(iii)(A), the Company shall give written notice thereof to
the Holders.
(B) The right of the Holders of Preferred Stock voting separately
as one class to elect two directors as described in subparagraph (f)(iii)(A)
shall continue until such time as (1) in the event such right arises due to a
default referred to in clause (1) of the preceding paragraph, all accumulated
dividends that are in arrears on the Preferred Stock and that gave rise to
such default are paid in full (and, in the case of dividends payable after
January 15, 2003, paid in cash); and (2) in the event such right arises due
to any default referred to in clause (2), (3), (4) or (5) of the preceding
paragraph, the Company remedies any such failure, breach or default, at which
time the term of any directors elected pursuant to subparagraph (f)(iii)(A)
hereof shall terminate and the number of directors constituting the board of
directors shall be reduced to the number necessary to reflect the termination
of the right of the Holders of the Preferred Stock to elect directors,
subject always to the same provisions for the renewal and divestment of such
special voting rights in the case of any future Voting Rights Triggering
Event.
At any time after voting power to elect directors shall have become
vested and be continuing in the Holders of shares of the Preferred Stock
pursuant to
<PAGE>
10
subparagraph (f)(iii)(A) hereof, or if vacancies shall exist in the offices
of directors elected by the Holders of shares of the Preferred Stock, a
proper officer of the Company may, and upon the written request of the
Holders of record of at least 25% of the shares of Preferred Stock then
outstanding addressed to the Secretary of the Company shall, call a special
meeting of the Holders of Preferred Stock for the purpose of electing the
directors which such Holders are entitled to elect. If such meeting shall
not be called by the proper officer of the Company within 30 days after
personal service of said written request upon the Secretary of the Company,
or within 30 days after mailing the same within the United States by
certified mail, addressed to the Secretary of the Company at its principal
executive offices, then the Holders of record of at least 25% of the
outstanding shares of the Preferred Stock may designate in writing one of
their number to call such meeting at the expense of the Company, and such
meeting may be called by the Person so designated upon the notice required
for the annual meetings of stockholders of the Company and shall be held at
the place for holding the annual meetings of stockholders or such other place
in the United States as shall be designated in such notice. Notwithstanding
the provisions of this subparagraph (f)(iii)(B), no such special meeting
shall be called if any such request is received less than 40 days before the
date fixed for the next ensuing annual or special meeting of stockholders of
the Company. Any Holder of shares of the Preferred Stock so designated shall
have, and the Company shall provide, access to the lists of Holders of shares
of the Preferred Stock for purposes of calling a meeting pursuant to the
provisions of this subparagraph (f)(iii)(B).
(C) At any meeting held for the purpose of electing directors at
which the Holders of Preferred Stock shall have the right, voting separately
as one class, to elect directors as aforesaid, the presence in person or by
proxy of the Holders of at least a majority of the outstanding Preferred
Stock shall be required to constitute a quorum of such Preferred Stock.
(D) Any vacancy occurring in the office of a director elected by
the Holders of the Preferred Stock may be filled by the remaining director
elected by such Holders unless and until such vacancy shall be filled by such
Holders.
(iv) In any case in which the Holders of shares of the Preferred
Stock shall be entitled to vote pursuant to this paragraph (f) or pursuant to
Oklahoma law, each Holder of shares of the Preferred Stock shall be entitled
to one vote for each share of Preferred Stock held. Any action that may be
taken hereunder by the Holders of the Preferred Stock at a meeting may be
taken by written consent of a majority of the Holders of such Preferred Stock.
(g) EXCHANGE. (i) REQUIREMENTS. (A) The Company may, at the sole
option of the Board of Directors (subject to the legal availability of funds
therefor), exchange all, but not less than all, of the outstanding Preferred
Stock, including any Preferred Stock issued as payment for dividends, into
Exchange Debentures, subject to the conditions set forth
<PAGE>
11
in this subparagraph (g)(i)(A). In order to effect such exchange, the
Company shall (a) if necessary to satisfy the condition set forth in clause
(II) of this subparagraph (g)(i)(A) based upon the written advice of counsel
to the Company, file a registration statement with the Commission relating to
the exchange, and (b) if a registration statement is filed with the
Commission pursuant to clause (a), use its best efforts to cause such
registration statement to be declared effective as soon as practicable by the
Commission unless the opinion referred to in clause (II) of this subparagraph
(g)(i)(A) shall have been subsequently delivered. In order to effectuate
such exchange, the Company shall send a written notice (the "Exchange
Notice") of exchange by mail to each Holder of record of shares of Preferred
Stock, which notice shall state: (v) that the Company is exchanging the
Preferred Stock into Exchange Debentures pursuant to this Certificate of
Designation; (w) the date fixed for exchange (the "Exchange Date"), which
date shall not be less than 15 days nor more than 60 days following the date
on which the Exchange Notice is mailed (except as provided in the last
sentence of this subparagraph (g)(i)(A)); (x) that the Holder is to surrender
to the Company, at the place or places where certificates for shares of
Preferred Stock are to be surrendered for exchange, in the manner designated
in the Exchange Notice, such Holder s certificate or certificates
representing the shares of Preferred Stock to be exchanged; (y) that
dividends on the shares of Preferred Stock to be exchanged shall cease to
accrue on the Exchange Date whether or not certificates for shares of
Preferred Stock are surrendered for exchange on the Exchange Date unless the
Company shall default in the delivery of Exchange Debentures; and (z) that
interest on the Exchange Debentures shall accrue from the Exchange Date
whether or not certificates for shares of Preferred Stock are surrendered for
exchange on the Exchange Date. On the Exchange Date, if the conditions set
forth in clauses (I) through (VI) of this subparagraph (g)(i)(A) are
satisfied and the exchange is permitted under the Company s then outstanding
indebtedness, the Company shall issue Exchange Debentures in exchange for the
Preferred Stock as provided in subparagraph (g)(ii)(A), PROVIDED that on the
Exchange Date: (I) there shall be legally available funds sufficient therefor
(including, without limitation, legally available funds sufficient therefor
under Title 18, Sections 1032(B) and 1041 (or any successor provisions) of
the Oklahoma General Corporation Act); (II) either (x) a registration
statement relating to the Exchange Debentures shall have been declared
effective under the Securities Act of 1933, as amended (the "Securities Act")
prior to such exchange and shall continue to be in effect on the Exchange
Date or (y) (i) the Company shall have obtained a written opinion of counsel
that an exemption from the registration requirements of the Securities Act is
available for such exchange and that upon receipt of such Exchange Debentures
pursuant to such exchange made in accordance with such exemption, each Holder
that is not an Affiliate of the Company will not be subject to any
restrictions imposed by the Securities Act upon the resale thereof and (ii)
such exemption is relied upon by the Company for such exchange; (III) the
Exchange Indenture shall have been duly executed by the Company and the
trustee thereunder (the "Trustee") with irrevocable instructions to
authenticate the Exchange Debentures necessary for such exchange, (IV) the
Exchange Indenture and the Trustee shall have been qualified under the Trust
Indenture Act of 1939, as amended; (V) immediately after giving effect to
such exchange, no Default or Event of
<PAGE>
12
Default (each as defined in the Exchange Indenture) would exist under the
Exchange Indenture; and (VI) the Company shall have delivered to the Trustee
a written opinion of counsel, dated the date of the exchange, regarding the
satisfaction of the conditions set forth in clauses (I), (II), (III) and
(IV). In the event that the issuance of the Exchange Debentures is not
permitted on the Exchange Date or any of the conditions set forth in clauses
(I) through (VI) of the preceding sentence are not satisfied on the Exchange
Date, the Company shall use its best efforts to satisfy such conditions and
effect such exchange as soon as practicable.
(B) Upon any exchange pursuant to subparagraph (g)(i)(A) hereof,
the Holders of outstanding Preferred Stock shall be entitled to receive a
principal amount of Exchange Debentures for Preferred Stock, the liquidation
preference of which, plus the amount of accumulated and unpaid dividends
(including a prorated dividend for the period from the immediately preceding
Dividend Payment Date to the Exchange Date) with respect to which, equals
such principal amount; PROVIDED that the Company at its option may pay cash
for any or all accrued and unpaid dividends in lieu of issuing Exchange
Debentures in respect of such dividends and PROVIDED FURTHER that the Company
may, at the sole option of the Board of Directors, subject to the
restrictions in the Senior Note Indenture, the DOC Facility Agreement, the
DCOC Facility Agreement and any of its other then-existing Indebtedness, pay
cash in lieu of issuing an Exchange Debenture in a principal amount less than
$1,000.
(ii) PROCEDURE FOR EXCHANGE. (A) On or before the Exchange Date,
each Holder of Preferred Stock shall surrender the certificate or
certificates representing such shares of Preferred Stock, in the manner and
at the place designated in the Exchange Notice. The Company shall cause the
Exchange Debentures to be executed on the Exchange Date and, upon surrender
in accordance with the Exchange Notice of the certificates for any shares of
Preferred Stock so exchanged (properly endorsed or assigned for transfer, if
the notice shall so state), such shares shall be exchanged by the Company
into Exchange Debentures. The Company shall pay interest on the Exchange
Debentures at the rate and on the dates described in the Memorandum.
(B) If notice has been mailed as aforesaid, and if before the
Exchange Date (1) the Exchange Indenture shall have been duly executed and
delivered by the Company and the Trustee and (2) all Exchange Debentures
necessary for such exchange shall have been duly executed by the Company and
delivered to the Trustee with irrevocable instructions to authenticate the
Exchange Debentures necessary for such exchange, then dividends will cease to
accrue on the Preferred Stock on and after the Exchange Date and the rights
of the Holders of the Preferred Stock as stockholders of the Company shall
cease on and after the Exchange Date (except the right to receive Exchange
Debentures, an amount in cash, to the extent applicable, equal to the accrued
and unpaid dividends to the Exchange Date, and, if the Company so elects,
cash in lieu of any Exchange Debenture which is in an amount that is less
than $1,000), and the Person or Persons entitled to receive the Exchange
Debentures issuable
<PAGE>
13
upon exchange shall be treated for all purposes as the registered Holder or
Holders of such Exchange Debentures as of the Exchange Date.
(h) CHANGE OF CONTROL. (i) Upon the occurrence of a Change
of Control, the Company shall be required (subject to any contractual and
other restrictions with respect thereto existing on the Closing Date and the
legal availability of funds therefor) to make an Offer to Purchase (the
"Change of Control Offer") to each Holder of Preferred Stock to repurchase
all or any part of such Holder s Preferred Stock at a cash purchase price
equal to 101% of the liquidation preference thereof, plus an amount in cash
equal to all accumulated and unpaid dividends (including an amount in cash
equal to a prorated dividend for the period from the Dividend Payment Date
immediately prior to the date of purchase to the date of purchase) (the
"Change of Control Payment"). Notwithstanding the foregoing, the Company
shall not be required to make a Change of Control Offer if any Indebtedness
outstanding on the Closing Date which would prohibit such Change of Control
Offer or any Indebtedness outstanding under the DOC Facility or the New DCOC
Facility is outstanding upon the occurrence of a Change of Control until such
Indebtedness is repaid, redeemed or repurchased in full, in which case the
date on which all such Indebtedness is so repaid, redeemed or repurchased
will, under this Certificate of Designation, be deemed to be the date on
which such Change of Control shall have occurred.
(ii) Within 30 days following any Change of Control, the Company
shall mail a notice to such Holder stating: (A) that the Change of Control
Offer is being made pursuant to this Certificate of Designation and that, to
the extent lawful, all shares of Preferred Stock tendered will be accepted
for payment; (B) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 40 days from the date such notice is
mailed (the "Change of Control Payment Date"); (C) that any shares of
Preferred Stock not tendered will continue to accrue dividends in accordance
with the terms of this Certificate of Designation; (D) that, unless the
Company defaults in the payment of the Change of Control Payment, all shares
of Preferred Stock accepted for payment pursuant to the Offer to Purchase
shall cease to accrue dividends on and after the Change of Control Payment
Date and all rights of the Holders of such Preferred Stock shall terminate on
and after the Change of Control Date; and (E) a description of the procedures
to be followed by such Holder in order to have its shares of Preferred Stock
repurchased.
(iii) On the Change of Control Payment Date, (A) the Company shall,
to the extent lawful, (1) accept for payment shares of Preferred Stock
tendered pursuant to the Offer to Purchase and (2) promptly mail to each
Holder of shares of Preferred Stock so accepted payment in an amount equal to
the Change of Control Payment for such shares and (B) unless the Company
defaults in the payment for the shares of Preferred Stock tendered pursuant
to the Offer to Purchase, dividends shall cease to accrue with respect to the
shares of Preferred Stock tendered and all rights of Holders of such tendered
shares shall terminate, except for the right to receive payment therefor, on
the Change of Control Payment Date. The Company
<PAGE>
14
shall publicly announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.
(iv) The Company shall comply with Rule 14e-1 under the Exchange
Act and any securities laws and regulations to the extent such laws and
regulations are applicable to the repurchase of shares of the Preferred Stock
in connection with a Change of Control.
(i) CONVERSION OR EXCHANGE. The Holders of shares of Preferred
Stock shall not have any rights hereunder to convert such shares into or
exchange such shares for shares of any other class or classes or of any other
series of any class or classes of Capital Stock of the Company.
(j) PREEMPTIVE RIGHTS. No shares of Preferred Stock shall have
any rights of preemption whatsoever as to any securities of the Company, or
any warrants, rights or options issued or granted with respect thereto,
regardless of how such securities or such warrants, rights or options may be
designated, issued or granted.
(k) REISSUANCE OF PREFERRED STOCK. Shares of Preferred Stock that
have been issued and reacquired in any manner, including shares purchased or
redeemed or exchanged, shall (upon compliance with any applicable provisions
of the laws of Oklahoma) have the status of authorized but unissued shares of
preferred stock of the Company undesignated as to series and may be
designated or redesignated and issued or reissued, as the case may be, as
part of any series of preferred stock of the Company, PROVIDED that any
issuance of such shares as Preferred Stock must be in compliance with the
terms hereof.
(l) BUSINESS DAY. If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately
succeeding Business Day.
(m) CERTAIN ADDITIONAL PROVISIONS. (1) LIMITATION ON
INDEBTEDNESS. (a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness (other than Indebtedness
existing on the Closing Date); PROVIDED that the Company and any Restricted
Subsidiary may Incur Indebtedness, if, after giving effect to the Incurrence
of such Indebtedness and the receipt and application of the proceeds
therefrom, the Consolidated Leverage Ratio would be less than 8 to 1, for
Indebtedness Incurred on or prior to December 31, 1998, or 7 to 1, for
Indebtedness Incurred thereafter.
Notwithstanding the foregoing, the Company and any Restricted
Subsidiary (except as specified below) may Incur each and all of the
following: (i) Indebtedness outstanding at any time in an aggregate principal
amount not to exceed $250 million; (ii) Indebtedness (A) to the Company
evidenced by a promissory note or (B) to any of its Restricted Subsidiaries;
PROVIDED that any event which results in any such Restricted Subsidiary
ceasing to be a Restricted
<PAGE>
15
Subsidiary or any subsequent transfer of such Indebtedness (other than to the
Company or another Restricted Subsidiary) shall be deemed, in each case, to
constitute an Incurrence of such Indebtedness not permitted by this clause
(ii); (iii) Indebtedness issued in exchange for, or the net proceeds of which
are used to refinance or refund, then outstanding Indebtedness, other than
Indebtedness Incurred under clause (i), (ii), (iv), (vi) or (ix) of this
paragraph, and any refinancings thereof in an amount not to exceed the amount
so refinanced or refunded (plus premiums, accrued interest, accrued
dividends, fees and expenses); PROVIDED that such new Indebtedness,
determined as of the date of Incurrence of such new Indebtedness, does not
mature or have a mandatory redemption or repurchase date prior to the Stated
Maturity of the Indebtedness to be refinanced or refunded, and the Average
Life of such new Indebtedness is at least equal to the remaining Average Life
of the Indebtedness to be refinanced or refunded; and PROVIDED FURTHER that
in no event may Indebtedness of the Company be refinanced by means of any
Indebtedness of any Restricted Subsidiary pursuant to this clause (iii); (iv)
Indebtedness (A) in respect of performance, surety or appeal bonds provided
in the ordinary course of business, (B) under Currency Agreements and
Interest Rate Agreements; PROVIDED that such agreements (a) are designed
solely to protect the Company or its Subsidiaries against fluctuations in
foreign currency exchange rates or interest rates and (b) do not increase the
Indebtedness of the obligor outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or interest rates or by
reason of fees, indemnities and compensation payable thereunder; or (C)
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from Guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or any of
its Restricted Subsidiaries pursuant to such agreements, in any case Incurred
in connection with the disposition of any business, assets or Restricted
Subsidiary of the Company (other than Guarantees of Indebtedness Incurred by
any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary of the Company for the purpose of financing such
acquisition), in an amount not to exceed the gross proceeds actually received
by the Company or any Restricted Subsidiary in connection with such
disposition; (v) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (A) used to purchase Senior Preferred Stock and
Preferred Stock, pro rata, tendered in an Offer to Purchase (or similar offer
to purchase made under the certificate of designation relating to the Senior
Preferred Stock) made as a result of a Change in Control or (B) deposited to
defease the Senior Notes; (vi) Guarantees of Indebtedness of the Company by
any Restricted Subsidiary; (vii) Indebtedness Incurred to finance the cost
(including the cost of design, development, construction, installation or
integration) of telecommunications network assets, equipment or inventory
acquired by the Company or a Restricted Subsidiary after the Closing Date;
(viii) Indebtedness of the Company not to exceed, at any one time
outstanding, two times the sum of (x) the Net Cash Proceeds received by the
Company on or after the Closing Date from the issuance and sale of its
Capital Stock (other than Disqualified Stock), including the Preferred Stock,
to a Person that is not a Subsidiary of the Company to the extent such Net
Cash Proceeds have not been used pursuant to clause (C) (2) of the first
paragraph, or clause (ix) of
<PAGE>
16
the second paragraph, of subparagraph (m)(4) to make a Restricted Payment and
(y) 80% of the fair market value of property other than cash received by the
Company after the Closing Date from the issuance and sale of its Capital
Stock (other than Disqualified Stock) to a Person that is not a Subsidiary of
the Company; PROVIDED that such Indebtedness does not mature prior to the
Mandatory Redemption Date; and (ix) Indebtedness outstanding at any time in
an aggregate principal amount not to exceed $25.0 million.
(b) Notwithstanding any other provision of this subparagraph
(m)(1), the maximum amount of Indebtedness that the Company or a Restricted
Subsidiary may Incur pursuant to this subparagraph (m)(1), shall not be
deemed to be exceeded, with respect to any outstanding Indebtedness due
solely to the result of fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of
Indebtedness under this subparagraph (m)(1), Guarantees, Liens or obligations
with respect to letters of credit supporting Indebtedness otherwise included
in the determination of such particular amount shall not be included. For
purposes of determining compliance with this subparagraph (m)(1), in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described in the above clauses, the Company, in its
sole discretion, shall classify, and from time to time may reclassify, such
item of Indebtedness and only be required to include the amount and type of
such Indebtedness in one of such clauses.
(2) LIMITATION ON SENIOR SUBORDINATED INDEBTEDNESS. The Company
shall not Incur any Indebtedness that is subordinate in right of payment to
any Senior Indebtedness unless such Indebtedness would be pari passu with, or
subordinated in right of payment to, the Exchange Debentures; PROVIDED that
the foregoing limitation shall not apply to distinctions between categories
of Senior Indebtedness of the Company that exist by reason of any Liens or
Guarantees arising or created in respect of some but not all such Senior
Indebtedness.
(3) LIMITATION ON LIENS. The Company shall not Incur any
Indebtedness secured by a Lien ("Secured Indebtedness") which is not Senior
Indebtedness unless effective provision is made to have the Exchange
Debentures (if and when issued) secured equally and ratably with (or, if the
Secured Indebtedness would be subordinated in right of payment to the
Exchange Debentures, prior to) such Secured Indebtedness for so long as such
Secured Indebtedness is secured by a Lien.
(4) LIMITATION ON RESTRICTED PAYMENTS. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on or with respect to
its Junior Securities (other than (x) dividends or distributions payable
solely in shares of its Junior Securities (other than Disqualified Stock) or
in options, warrants or other rights to acquire shares of such Junior
Securities and (y) pro rata dividends or distributions on Common Stock of
Restricted Subsidiaries held by minority
<PAGE>
17
stockholders, PROVIDED that such dividends do not in the aggregate exceed the
minority stockholders pro rata share of such Restricted Subsidiaries net
income from the first day of the fiscal quarter beginning immediately
following the Closing Date) held by Persons other than the Company or any of
its Restricted Subsidiaries, (ii) purchase, redeem, retire or otherwise
acquire for value any shares of Junior Securities of (A) the Company or an
Unrestricted Subsidiary (including options, warrants or other rights to
acquire such shares of Junior Securities) held by any Person or (B) a
Restricted Subsidiary (including options, warrants or other rights to acquire
such shares of Junior Securities) held by any Affiliate of the Company (other
than a Wholly Owned Restricted Subsidiary) or any holder (or any Affiliate of
such holder) of 5% or more of the Capital Stock of the Company, or (iii) make
any Investment, other than a Permitted Investment, in any Person (such
payments or any other actions described in clauses (i) through (iii) being
collectively "Restricted Payments") if, at the time of, and after giving
effect to, the proposed Restricted Payment: (A) a Voting Rights Triggering
Event, or an event which with the giving of notice or the passage of time, or
both, would become a Voting Rights Triggering Event, shall have occurred and
be continuing, (B) the Company could not Incur at least $1.00 of Indebtedness
under the first paragraph of subparagraph (m)(1), (C) the aggregate amount of
all Restricted Payments (the amount, if other than in cash, to be determined
in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) made after the Closing Date
shall exceed the sum of (1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a
loss, minus 100% of the amount of such loss) (determined by excluding income
resulting from transfers of assets by the Company or a Restricted Subsidiary
to an Unrestricted Subsidiary) accrued on a cumulative basis during the
period (taken as one accounting period) beginning on the first day of the
fiscal quarter immediately following the Closing Date and ending on the last
day of the last fiscal quarter preceding the Transaction Date for which
reports have been filed pursuant to subparagraph (m)(9) PLUS (2) the
aggregate Net Cash Proceeds received by the Company after the Closing Date
from the issuance and sale permitted by this Certificate of Designation of
its Capital Stock (other than Disqualified Stock) to a Person who is not a
Subsidiary of the Company (except to the extent such Net Cash Proceeds are
used to Incur Indebtedness pursuant to clause (viii) under subparagraph
(m)(1)) or from the issuance to a Person who is not a Subsidiary of the
Company of any options, warrants or other rights to acquire Capital Stock of
the Company (in each case, exclusive of any Disqualified Stock or any
options, warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Mandatory Redemption
Date) PLUS (3) an amount equal to the net reduction in Investments (other
than reductions in Permitted Investments and reductions in Investments made
pursuant to clause (ix) of the second paragraph of this subparagraph (m)(4))
in any Person resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances, or other transfers of assets, in each case
to the Company or any Restricted Subsidiary or from the Net Cash Proceeds
from the sale of any such Investment (except, in each case, to the extent any
such payment or proceeds are included in the calculation of Adjusted
Consolidated Net Income), or from redesignations of Unrestricted Subsidiaries
as
<PAGE>
18
Restricted Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of Investments
previously made by the Company or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary or (D) dividends on the Senior Preferred Stock and
the Preferred Stock shall not have been paid in full as provided in the
certificate of designation with respect to the Senior Preferred Stock and
this Certificate of Designation, respectively.
The foregoing provision shall not be violated by reason of: (i) the
payment of any dividend within 60 days after the date of declaration thereof
if, at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the repurchase, redemption or other acquisition of Junior
Securities of the Company (or options, warrants or other rights to acquire
such Junior Securities) in exchange for, or out of the proceeds of a
substantially concurrent offering of, shares of Junior Securities (other than
Disqualified Stock) of the Company; (iii) the declaration or payment of
dividends on the Common Stock of the Company following a Public Equity
Offering of such Common Stock, of up to 6% per annum of the Net Cash Proceeds
received by the Company in such Public Equity Offering; (iv) payments or
distributions, to dissenting stockholders pursuant to applicable law,
pursuant to or in connection with a consolidation, merger or transfer of
assets that complies with the provisions described in subparagraph (m)(10);
(v) the purchase, redemption, acquisition, cancellation or other retirement
for value of shares of Junior Securities of the Company to the extent
necessary in the good faith judgment of the Board of Directors of the
Company, to prevent the loss or secure the renewal or reinstatement of any
license or franchise held by the Company or any Restricted Subsidiary from
any governmental agency; (vi) the purchase of shares of Fleet Investors
Preferred Stock of the Company (or the Class A Common Stock into which the
Class B Preferred Stock may be converted) pursuant to the exercise of the put
rights granted to the Fleet Investors under the Shareholders Agreement or
any mandatory redemption provisions, in each case as in effect on the Closing
Date; PROVIDED (a) after giving pro forma effect to any such purchase the
Consolidated Leverage Ratio would be less than 7.5 to 1, and (b) if the event
triggering the exercisability of the put rights constitutes a Change of
Control, no such repurchase shall be made prior to the Company s repurchase
of such Senior Preferred Stock as is required to be repurchased pursuant to
subparagraph (h); (vii) the declaration or payment of dividends on the Fleet
Investors Preferred Stock (I) if after giving pro forma effect to any such
dividend, the Consolidated Leverage Ratio would be less than 6 to 1 or (II)
following a Public Equity Offering of Junior Securities; PROVIDED (A) the Net
Cash Proceeds received by the Company in such Public Equity Offering is at
least equal to $90 million and (B) the aggregate amount of dividends
permitted to be made in any fiscal year of the Company under clause (iii) and
this clause (vii) shall not exceed 6% of the Net Cash Proceeds received by
the Company in the Public Equity Offering; (viii) the purchase, redemption,
retirement or other acquisition for value of Junior Securities of the
Company, or options to purchase such shares, held by directors, employees or
former directors or employees of the Company or any Restricted Subsidiary (or
their estates or beneficiaries under their estates) upon death, disability,
retirement, termination of employment or pursuant
<PAGE>
19
to the terms of any agreement under which such shares of Junior Securities or
options were issued; PROVIDED that the aggregate consideration paid for such
purchase, redemption, acquisition, cancellation or other retirement of such
shares of Junior Securities or options after the Closing Date does not exceed
$500,000 in any calendar year, or $1.5 million in the aggregate; (ix)
Investments in any Person or Persons, the primary business of which is
related, ancillary or complementary to the business of the Company and its
Restricted Subsidiaries on the date of such Investments, in an aggregate
amount not to exceed $30 million plus an amount not to exceed the Net Cash
Proceeds received by the Company after the Closing Date from the issuance and
sale of its Capital Stock (other than Disqualified Stock) to a Person that is
not a Subsidiary of the Company, except to the extent such Net Cash Proceeds
are used to Incur Indebtedness outstanding pursuant to clause (viii) of
subparagraph (m)(1) or to make Restricted Payments pursuant to clause (C)(2)
of the first paragraph, or clause (ii) or (x) of this paragraph, of this
subparagraph (m)(4); or (x) the distribution on or with respect to the
holders of the Company s Junior Securities of the Capital Stock of Logix;
PROVIDED that, except in the case of clauses (i) and (ii), no Voting Rights
Triggering Event, or an event which with the giving of notice or the passage
of time, or both, would become a Voting Rights Triggering Event, shall have
occurred and be continuing or occur as a consequence of the actions or
payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding
paragraph (other than an exchange of Junior Securities for Junior Securities
referred to in clause (ii) thereof) and the Net Cash Proceeds from any
issuance of Junior Securities referred to in clause (ii) or Capital Stock
referred to in clause (ix) shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this subparagraph (m)(4)
have been met with respect to any subsequent Restricted Payments.
(5) LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. The Company shall not, and shall not
permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any Restricted Subsidiary to (i) pay dividends or make
any other distributions permitted by applicable law on any Capital Stock of
such Restricted Subsidiary owned by the Company or any other Restricted
Subsidiary, (ii) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (iii) make loans or advances to the Company or any
other Restricted Subsidiary or (iv) transfer any of its property or assets to
the Company or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in the certificate of
designation for the Senior Preferred Stock, the Bank Facility Agreement, the
Senior Note Indenture or any other agreements in effect on the Closing Date,
and any amendments, extensions, refinancings, renewals or replacements of
such agreements; PROVIDED that, other than as contemplated in clause (vi)
below, the encumbrances and restrictions in any such amendments, extensions,
refinancings,
<PAGE>
20
renewals or replacements are no less favorable in any material respect to the
Holders than those encumbrances or restrictions that are then in effect and
that are being extended, refinanced, renewed or replaced; (ii) existing under
or by reason of applicable law; (iii) existing with respect to any Person or
the property or assets of such Person acquired by the Company or any
Restricted Subsidiary, existing at the time of such acquisition and not
incurred in contemplation thereof, which encumbrances or restrictions are not
applicable to any Person or the property or assets of any Person other than
such Person or the property or assets of such Person so acquired; (iv) in the
case of clause (iv) of the first paragraph of this subparagraph (m)(5), (A)
that restrict in a customary manner the subletting, assignment or transfer of
any property or asset that is a lease, license, conveyance or contract or
similar property or asset, (B) existing by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary not otherwise
prohibited by this Certificate of Designation or (C) arising or agreed to in
the ordinary course of business, not relating to any Indebtedness, and that
do not, individually or in the aggregate, detract from the value of property
or assets of the Company or any Restricted Subsidiary in any manner material
to the Company or any Restricted Subsidiary; (v) with respect to a Restricted
Subsidiary and imposed pursuant to an agreement that has been entered into
for the sale or disposition of all or substantially all of the Capital Stock
of, or property and assets of, such Restricted Subsidiary; or (vi) contained
in the terms of (A) the DOC Facility Agreement and the DCOC Facility
Agreement, PROVIDED any encumbrance or restriction that would prevent
payments of dividends or other distributions to the Company to pay cash
interest on the Exchange Debentures or cash dividends on the Preferred Stock
applies on or prior to January 15, 2003, or applies thereafter only in the
event of an event of default (other than an event of default resulting solely
from a breach of a representation or warranty) under the DOC Facility
Agreement; PROVIDED (x) with respect to any event of default (other than a
payment default (including by way of acceleration), bankruptcy default or a
loss of a material license or cellular system), such restriction will
terminate 180 days after the occurrence of such event of default and (y) the
financial covenants which create such encumbrance or restriction on dividends
or other distributions in the DOC Facility Agreement or the DCOC Credit
Facility Agreement are no less favorable to the Company or its Subsidiaries
than the financial covenants set forth in the New DOC Facility Commitment
Letter or the New DCOC Facility Commitment Letter, respectively; or (B) any
Indebtedness of a Restricted Subsidiary, or any agreement pursuant to which
such Indebtedness was issued, if the encumbrance or restriction applies only
in the event of a payment default or a default with respect to a financial
covenant contained in such Indebtedness or agreement, if the encumbrance or
restriction is not materially more disadvantageous to the Holders of the
Preferred Stock than is customary in comparable financings (as determined by
the Company) and if the Company determines that any such encumbrance or
restriction will not materially affect the Company s ability to make dividend
payments on the Preferred Stock or principal or interest payments on the
Exchange Debentures. Nothing contained in this subparagraph (m)(5) shall
prevent the Company or any Restricted Subsidiary from (1) creating,
incurring, assuming or suffering to exist any Liens
<PAGE>
21
otherwise permitted in subparagraph (m)(3) or (2) restricting the sale or
other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
(6) LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not sell, and shall not permit
any Restricted Subsidiary, directly or indirectly, to issue or sell, any
shares of Capital Stock of a Restricted Subsidiary (including options,
warrants or other rights to purchase shares of such Capital Stock) except (i)
to the Company or a Wholly Owned Restricted Subsidiary; (ii) issuances of
director s qualifying shares or sales to foreign nationals of shares of
Capital Stock of foreign Restricted Subsidiaries, to the extent required by
applicable law; (iii) if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary, PROVIDED any Investment in such Person remaining after giving
effect to such issuance or sale would have been permitted to be made under
subparagraph (m)(4), if made on the date of such issuance or sale; and (iv)
sales of Common Stock of a Restricted Subsidiary; PROVIDED that the assets of
such Restricted Subsidiary consist solely of assets relating to the Company s
PCS or resale business.
(7) LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into, renew or extend any transaction
(including, without limitation, the purchase, sale, lease or exchange of
property or assets, or the rendering of any service) with any holder (or any
Affiliate of such holder) of 5% or more of any class of Capital Stock of the
Company or with any Affiliate of the Company or any Restricted Subsidiary,
except upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than could be obtained, at the time of such
transaction or, if such transaction is pursuant to a written agreement, at
the time of the execution of the agreement providing therefor, in a
comparable arm s-length transaction with a Person that is not such a holder
or an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Transfer Agent a written opinion of a nationally recognized
investment banking firm stating that the transaction is fair to the Company
or such Restricted Subsidiary from a financial point of view; (ii) any
transaction solely between the Company and any of its Wholly Owned Restricted
Subsidiaries or solely between Wholly Owned Restricted Subsidiaries; (iii)
the payment of reasonable and customary regular fees to directors of the
Company who are not employees of the Company; (iv) any payments or other
transactions pursuant to any tax-sharing agreement between the Company and
any other Person with which the Company files a consolidated tax return or
with which the Company is part of a consolidated group for tax purposes; or
(v) any Restricted Payments not prohibited by subparagraph (m)(4).
Notwithstanding the foregoing, any transaction covered by the first paragraph
of this subparagraph (m)(7) and not covered by
<PAGE>
22
clauses (ii) through (v) of this paragraph, the aggregate amount of which
exceeds $2 million in value, must be approved or determined to be fair in the
manner provided for in clause (i)(A) or (B) above.
(8) LIMITATIONS ON SENIOR PREFERRED STOCK. The Company shall not
(a) exchange any Senior Preferred Stock for Senior Exchange Debentures unless
it will have previously exchanged, or will contemporaneously exchange, all of
the Preferred Stock for Exchange Debentures or (b) redeem any Senior
Preferred Stock unless it will contemporaneously redeem a pro rata portion of
the Preferred Stock.
(9) COMMISSION REPORTS AND REPORTS TO HOLDERS. Whether or not the
Company is required to file reports with the Commission, for so long as any
Preferred Stock is outstanding, the Company shall file with the Commission
all such reports and other information as it would be required to file with
the Commission by Sections 13(a) or 15(d) under the Exchange Act if it were
subject thereto. The Company shall supply the Transfer Agent and each Holder
or shall supply to the Transfer Agent for forwarding to each such Holder,
without cost to such Holder, copies of such reports and other information.
(10) CONSOLIDATION, MERGER AND SALE OF ASSETS. The Company shall
not consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as
an entirety or substantially an entirety in one transaction or a series of
related transactions) to any Person or permit any Person to merge with or
into the Company unless: (i) the Company shall be the continuing Person, or
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or that acquired or leased such property and
assets of the Company shall be a corporation organized and validly existing
under the laws of the United States of America or any jurisdiction thereof
and the Preferred Stock shall be converted into or exchanged for and shall
become shares of such successor company, having in respect of such successor
company or resulting company substantially the same powers, preferences and
relative participating, optional or other special rights and the
qualifications, limitations or restrictions thereon that the Preferred Stock
had immediately prior to such transaction; (ii) immediately after giving
effect to such transaction, no Voting Rights Triggering Event, or an event
which with the giving of notice or the passage of time, or both, would become
a Voting Rights Triggering Event, shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a pro forma
basis, the Company, or, if other than the Company, the successor company or
resulting company, as the case may be, shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction; (iv) immediately after giving effect
to such transaction on a pro forma basis the Company, or, if other than the
Company, the successor company or resulting company, as the case may be,
could Incur at least $1.00 of Indebtedness under the first paragraph of
subparagraph (m)(1); PROVIDED that this clause (iv) shall not apply to a
consolidation or merger with or into a Wholly Owned Restricted Subsidiary
with a positive
<PAGE>
23
net worth; PROVIDED that, in connection with any such merger or
consolidation, no consideration (other than Common Stock in the surviving
Person or the Company) shall be issued or distributed to the stockholders of
the Company; and (v) the Company delivers to the Transfer Agent an Officers
Certificate (attaching the arithmetic computations to demonstrate compliance
with clauses (iii) and (iv)) and opinion of counsel, in each case stating
that such consolidation, merger or transfer complies with this provision and
that all conditions precedent provided for herein relating to such
transaction have been complied with; PROVIDED, HOWEVER, that clauses (iii)
and (iv) above do not apply if, in the good faith determination of the Board
of Directors of the Company, whose determination shall be evidenced by a
Board Resolution, the principal purpose of such transaction is to change the
state of incorporation of the Company and any such transaction shall not have
as one of its purposes the evasion of the foregoing limitations.
(n) DEFINITIONS. As used in this Certificate of Designation, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and VICE VERSA),
unless the context otherwise requires.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection
with an Asset Acquisition by a Restricted Subsidiary and not Incurred in
connection with, or in anticipation of, such Person becoming a Restricted
Subsidiary or such Asset Acquisition; PROVIDED that Indebtedness of such
Person which is redeemed, defeased, retired or otherwise repaid at the time
of or immediately upon consummation of the transactions by which such Person
becomes a Restricted Subsidiary or such Asset Acquisition shall not be
Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with GAAP; PROVIDED that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person (other than net income
attributable to a Restricted Subsidiary) in which any Person (other than the
Company or any of its Restricted Subsidiaries) has a joint interest and the
net income of any Unrestricted Subsidiary, except to the extent of the amount
of dividends or other distributions actually paid to the Company or any of
its Restricted Subsidiaries by such other Person or such Unrestricted
Subsidiary during such period; (ii) solely for the purposes of calculating
the amount of Restricted Payments that may be made pursuant to clause (C) of
the first paragraph of subparagraph (m)(4) (and in such case, except to the
extent includable pursuant to clause (i) above), the net income (or loss) of
any Person accrued prior to the date it becomes a Restricted Subsidiary or is
merged into or consolidated with the Company or any of its Restricted
Subsidiaries or all or substantially all of the property and assets of such
Person are acquired by the Company or any of its Restricted Subsidiaries;
(iii) except in the case of any restriction or encumbrance permitted under
clause (vi) of subparagraph (m)(5), the
<PAGE>
24
net income of any Restricted Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary
of such net income is not at the time permitted by the operation of the terms
of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary; (iv) any gains or losses (on an after-tax basis) attributable to
Asset Sales; (v) except for purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
subparagraph (m)(4), any amount paid or accrued as dividends on Preferred
Shares of the Company or any Restricted Subsidiary owned by Persons other
than the Company and any of its Restricted Subsidiaries; and (vi) all
extraordinary gains and extraordinary losses, net of tax.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into or consolidated
with the Company or any of its Restricted Subsidiaries; PROVIDED that such
Person s primary business is related, ancillary or complementary to the
businesses of the Company and its Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the Company
or any of its Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person; PROVIDED that the property and
assets acquired are related, ancillary or complementary to the businesses of
the Company and its Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the Company
or any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock
of any Restricted Subsidiary or (ii) all or substantially all of the assets
that constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any
Restricted Subsidiary, (ii) all or substantially all of the property and
assets of an operating unit or business of the Company or any of its
Restricted Subsidiaries or (iii) any other
<PAGE>
25
property and assets of the Company or any of its Restricted Subsidiaries
outside the ordinary course of business of the Company or such Restricted
Subsidiary and, in each case, that is not governed by the provisions
described under subparagraph (m)(10); PROVIDED that "Asset Sale" shall not
include (a) sales or other dispositions of inventory, receivables and other
current assets, (b) sales or other dispositions of assets for consideration
at least equal to the fair market value of the assets sold or disposed of,
PROVIDED that the consideration received consists of property or assets
(other than current assets) of a nature or type or that are used in a
business (or a company having property or assets of a nature or type, or
engaged in a business) similar or related to the nature or type of the
property and assets of, or business of, the Company and its Restricted
Subsidiaries existing on the date of such sale or other disposition or (c)
sales, transfers or other dispositions of assets constituting a Restricted
Payment permitted to be made under subparagraph (m)(4).
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products
of (a) the number of years from such date of determination to the dates of
each successive scheduled principal payment of such debt security and (b) the
amount of such principal payment by (ii) the sum of all such principal
payments.
"Bank Facility Agreement" means the Second Amended and Restated Credit
Agreement, dated February 28, 1997, as amended, among Dobson Operating
Company and CoreStates Bank, N.A., First Union National Bank of North
Carolina, NationsBank of Texas, N.A. and the other banks party thereto, as
the same may be further amended, supplemented, extended, renewed, replaced or
otherwise modified from time to time, including the credit agreement
contemplated by the New DOC Facility Commitment Letter, together with all
other agreements, instruments and documents executed or delivered pursuant
thereto or in connection therewith, in each case as such agreements,
instruments or documents may be amended, supplemented, extended, renewed,
replaced or otherwise modified from time to time.
"Board Resolution" means a copy of a resolution, certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Transfer Agent.
"Business Day" means any day except a Saturday or Sunday or other day on
which commercial banks in The City of New York are required or authorized by
law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in
<PAGE>
26
equity of such Person, whether now outstanding or issued after the Issue
Date, including, without limitation, all Common Stock and Preferred Shares.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
GAAP, is required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Change of Control" means such time as (i) (a) prior to the occurrence
of a Public Market, a "person" or "group" (within the meaning of Section
13(d) or 14(d)(2) under the Exchange Act) becomes the ultimate "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of Voting Stock
representing a greater percentage of the total voting power of the Voting
Stock of the Company, on a fully diluted basis, than is held by the Existing
Stockholders and their Affiliates on such date and (b) after the occurrence
of a Public Market, a "person" or "group" (within the meaning of Section
13(d) or 14(d)(2) under the Exchange Act) becomes the ultimate "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of more than 35% of
the total voting power of the Voting Stock of the Company on a fully diluted
basis and such ownership represents a greater percentage of the total voting
power of the Voting Stock of the Company, on a fully diluted basis, than is
held by the Existing Stockholders and their Affiliates on such date; or (ii)
individuals who on the Closing Date constitute the Board of Directors
(together with any new directors whose election by the Board of Directors or
whose nomination for election by the Company s stockholders was approved by a
vote of at least a majority of the members of the Board of Directors then in
office who either were members of the Board of Directors on the Closing Date
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the members of the Board of
Directors then in office.
"Class A Common Stock" means the Class A Common Stock, par value $.001
per share, of the Company.
"Class A Preferred Stock" means the Class A Non-Voting, Non-Convertible
Preferred Stock, par value $1.00 per share, of the Company.
"Class D Preferred Stock" means the Class D 15% Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Class E Preferred Stock" means the Class E Preferred Stock, par value
$1.00 per share, of the Company.
<PAGE>
27
" Class F Preferred Stock"means the Class F 16% Preferred Stock, par
value $1.00 per share, of the Company.
"Class G Preferred Stock" means the Class G 16% Convertible Preferred
Stock, par value $1.00 per share, of the Company.
"Class H Preferred Stock" means the Class H Preferred Stock, par value
$1.00 per share, of the Company.
"Closing Date" means January 22, 1998.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person s equity, other than Preferred Shares of
such Person, whether now outstanding or issued after the Issue Date,
including without limitation, all series and classes of such Common Stock.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iii) depreciation expense, (iv) amortization expense, and
(v) all other non-cash items reducing Adjusted Consolidated Net Income (other
than items that will require cash payments and for which an accrual or
reserve is, or is required by GAAP to be, made), less all non-cash items
increasing Adjusted Consolidated Net Income, all as determined on a
consolidated basis for the Company and its Restricted Subsidiaries in
conformity with GAAP; PROVIDED that, if any Restricted Subsidiary is not a
Wholly Owned Restricted Subsidiary, Consolidated EBITDA shall be reduced (to
the extent not otherwise reduced in accordance with GAAP) by an amount equal
to (A) the amount of the Adjusted Consolidated Net Income attributable to
such Restricted Subsidiary multiplied by (B) the quotient of (1) the number
of shares of outstanding Common Stock of such Restricted Subsidiary not owned
on the last day of such period by the Company or any of its Restricted
Subsidiaries divided by (2) the total number of shares of outstanding Common
Stock of such Restricted Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers
<PAGE>
28
acceptance financing; the net costs associated with Interest Rate Agreements;
and Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be
paid or to be accrued by the Company and its Restricted Subsidiaries during
such period; EXCLUDING, HOWEVER, (i) any amount of such interest of any
Restricted Subsidiary if the net income of such Restricted Subsidiary is
excluded in the calculation of Adjusted Consolidated Net Income pursuant to
clause (iii) of the definition thereof (but only in the same proportion as
the net income of such Restricted Subsidiary is excluded from the calculation
of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof) and (ii) any premiums, fees and expenses (and any
amortization thereof) payable in connection with the offering of the Senior
Notes and the Preferred Stock, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with
GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio
of (i) the aggregate amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding on such Transaction Date,
plus, solely for purpose of calculating whether a Restricted Payment may be
made pursuant to clause (vi) or (vii) of subparagraph (m)(4), the maximum
fixed redemption or repurchase price of the Preferred Stock and any Senior
Securities or Parity Securities at the time of determination, to (ii) the
aggregate amount of Consolidated EBITDA for the then most recent four fiscal
quarters for which financial statements of the Company have been filed with
the Commission (such four fiscal quarter period being the "Four Quarter
Period"); PROVIDED that (A) pro forma effect shall be given to any
Indebtedness that is to be Incurred or repaid on the Transaction Date as if
such Incurrence or repayment had occurred on the first day of such Four
Quarter Period; (B) pro forma effect shall be given to Asset Dispositions and
Asset Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Disposition) that occur during the period beginning on
the first day of the Four Quarter Period and ending on the Transaction Date
(the "Reference Period") as if they had occurred and such proceeds had been
applied on the first day of such Reference Period; and (C) pro forma effect
shall be given to asset dispositions and asset acquisitions (including giving
pro forma effect to the application of proceeds of any asset disposition)
that have been made by any Person that has become a Restricted Subsidiary or
has been merged with or into the Company or any Restricted Subsidiary during
such Reference Period and that would have constituted Asset Dispositions or
Asset Acquisitions had such transactions occurred when such Person was a
Restricted Subsidiary as if such asset dispositions or asset acquisitions
were Asset Dispositions or Asset Acquisitions that occurred on the first day
of such Reference Period; PROVIDED that to the extent that clause (B) or (C)
of this sentence requires that pro forma effect be given to an Asset
Acquisition or Asset Disposition, such pro forma calculation shall be based
upon the four full fiscal quarters immediately preceding the Transaction Date
of the Person, or division or line of business of the Person, that is
acquired or disposed of for which financial information is available.
<PAGE>
29
"Consolidated Net Worth" means, at any date of determination,
stockholders equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted
Subsidiaries (which shall be as of a date not more than 90 days prior to the
date of such computation, and which shall not take into account Unrestricted
Subsidiaries), less any amounts attributable to Disqualified Stock or any
equity security convertible into or exchangeable for Indebtedness, the cost
of treasury stock and the principal amount of any promissory notes receivable
from the sale of the Capital Stock of the Company or any of its Restricted
Subsidiaries, each item to be determined in conformity with GAAP (excluding
the effects of foreign currency exchange adjustments under Financial
Accounting Standards Board Statement of Financial Accounting Standards No.
52).
"Credit Facilities" means the DOC Facility and the DCOC Facility.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"DCOC" means Dobson Cellular Operations Company.
"DCOC Facility" means the $120 million and $80 million credit facilities
created and established by DCOC Facility Agreement.
"DCOC Facility Agreement" means the agreement among DCOC, NationsBank of
Texas, N.A., First Union National Bank and Toronto Dominion (Texas), Inc.,
each dated as of March 25, 1998, establishing the DCOC Facility, together
with all other agreements, instruments, and documents executed or delivered
pursuant thereto or in connection therewith, in each case as such agreement,
other agreements, instruments or documents may be amended, supplemented,
extended, renewed, replaced or otherwise modified from time to time.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Mandatory Redemption Date, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Mandatory
Redemption Date or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Mandatory Redemption Date; PROVIDED that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of a "change of control"
occurring prior to the Mandatory Redemption Date shall not constitute
Disqualified Stock if the "change of control" provisions applicable to such
Capital Stock are no more favorable to the holders of such Capital Stock than
the provisions contained in subparagraph (h) and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Company s repurchase of such
Senior Preferred Stock as is required to be repurchased pursuant to
subparagraph (h).
<PAGE>
30
"Dobson/Sygnet" means Dobson/Sygnet Communications Company.
"Dobson/Sygnet Indenture" means the Indenture dated as of December 23,
1998 between Dobson/Sygnet and United States Trust Company of New York,
relating to the Dobson/Sygnet Notes, as such indenture may be amended,
supplemented, extended, renewed, replaced or otherwise modified from time to
time.
"Dividend Payment Date" means January 15, April 15, July 15 and October
15 of each year.
"Dividend Period" means the dividend period commencing on each January
15, April 15, July 15 and October 15 and ending on the day before the
following Dividend Payment Date; PROVIDED, HOWEVER, that the first such
Dividend Period shall commence on the Issue Date.
"Dobson Wireline" means Dobson Wireline Company.
"Dobson/Sygnet Notes" means the 12 1/4% Senior Notes due 2008 to be
issued by Dobson/Sygnet under the Dobson/Sygnet Indenture.
"DOC Facility" means that certain credit facility created and
established by the DOC Facility Agreement.
"DOC Facility Agreement" means the Third Amended and Restated Credit
Agreement among Dobson Operating Company, Corestates Bank, N.A., Toronto
Dominion (Texas), Inc. and NationsBank of Texas, N.A., dated as of March 25,
1998, together with all other agreements, instruments and documents executed
or delivered pursuant thereto or in connection therewith, in each case as
such agreements, instruments or documents may be amended, supplemented,
extended, renewed, replaced or otherwise modified from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debentures" means the Company s Senior Subordinated Debentures
due 2008 issued pursuant to the Exchange Indenture.
"Exchange Indenture" means the indenture for the Exchange Debentures,
the terms of which may be modified to the extent the corresponding terms in
the Preferred Stock have been modified in accordance with this Certificate of
Designation.
"Existing Stockholders" means Everett R. Dobson.
<PAGE>
31
"fair market value" means the price that would be paid in an arm
s-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to
buy, as determined in good faith by the Board of Directors, whose
determination shall be conclusive if evidenced by a Board Resolution;
PROVIDED that for purposes of clause (viii) of the second paragraph of
subparagraph (m)(1), (x) the fair market value of any security registered
under the Exchange Act shall be the average of the closing prices, regular
way, of such security for the 20 consecutive trading days immediately
preceding the sale of Capital Stock and (y) in the event the aggregate fair
market value of any other property received by the Company exceeds $10
million, the fair market value of such property shall be determined by a
nationally recognized investment banking firm and set forth in their written
opinion which shall be delivered to the Transfer Agent.
"FCC" means the Federal Communications Commission.
"Fleet Investors" means Fleet Venture Resources, Inc., Fleet Equity
Partners VI, L.P. and Kennedy Plaza Partners and their Affiliates.
"Fleet Investors Preferred Stock" means the Class B Preferred Stock and
the Class C Preferred Stock.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved
by a significant segment of the accounting profession. All ratios and
computations contained or referred to in this Certificate of Designation
shall be computed in conformity with GAAP applied on a consistent basis,
except that calculations made for purposes of determining compliance with the
terms of the covenants and with other provisions of this Certificate of
Designation shall be made without giving effect to (i) the amortization of
any expenses incurred in connection with the offering of the Senior Notes and
the Senior Preferred Stock and (ii) except as otherwise provided, the
amortization of any amounts required or permitted by Accounting Principles
Board Opinion Nos. 16 and 17.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i)
to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreements to keep-well,
to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of
<PAGE>
32
such Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part); PROVIDED
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Holder" means a holder of shares of Preferred Stock.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to,
or become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Indebtedness by reason of a Person
becoming a Restricted Subsidiary; PROVIDED that neither the accrual of
interest nor the accretion of original issue discount shall be considered an
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto, but excluding
obligations with respect to letters of credit (including trade letters of
credit) securing obligations (other than obligations described in (i) or (ii)
above or (v), (vi), (vii) or (viii) below) entered into in the ordinary
course of business of such Person to the extent such letters of credit are
not drawn upon or, if drawn upon, to the extent such drawing is reimbursed no
later than the third Business Day following receipt by such Person of a
demand for reimbursement), (iv) all obligations of such Person to pay the
deferred and unpaid purchase price of property or services, which purchase
price is due more than six months after the date of placing such property in
service or taking delivery and title thereto or the completion of such
services, except Trade Payables, (v) all obligations of such Person as lessee
under Capitalized Leases, (vi) all Indebtedness of other Persons secured by a
Lien on any asset of such Person, whether or not such Indebtedness is assumed
by such Person; PROVIDED that the amount of such Indebtedness shall be the
lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness, (vii) all Indebtedness
of other Persons Guaranteed by such Person to the extent such Indebtedness is
Guaranteed by such Person, (viii) the maximum fixed redemption or repurchase
price of Disqualified Stock of such Person at the time of determination and
(ix) to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at
such date (or in the case of a revolving credit or other similar facility,
the total amount of funds outstanding and/or available on the date of
determination) of all unconditional obligations as described above and, with
respect to contingent obligations, the maximum liability upon the occurrence
of the contingency giving rise to the obligation, PROVIDED (A) that the
amount outstanding at any time of any Indebtedness issued with original issue
discount is the face amount of such Indebtedness less the unamortized portion
of the
<PAGE>
33
original issue discount of such Indebtedness at the time of its issuance as
determined in conformity with GAAP, (B) money borrowed at the time of the
Incurrence of any Indebtedness in order to pre-fund the payment of interest
on such Indebtedness shall be deemed not to be "Indebtedness" and (C) that
Indebtedness shall not include any liability for federal, state, local or
other taxes.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee
or similar arrangement; but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the balance sheet of the Company or its Restricted
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other similar instruments issued by, such Person
and shall include (i) the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary and (ii) the fair market value of the Capital Stock
(or any other Investment), held by the Company or any of its Restricted
Subsidiaries, of (or in) any Person that has ceased to be a Restricted
Subsidiary (other than as a result of being designated as an Unrestricted
Subsidiary under clause (i) above), including without limitation, by reason
of any transaction permitted by clause (iii) of subparagraph (m)(6). For
purposes of the definition of "Unrestricted Subsidiary" and subparagraph
(m)(4), (i) "Investment" shall include the fair market value of the assets
(net of liabilities (other than liabilities to the Company or any of its
Subsidiaries)) of any Restricted Subsidiary at the time that such Restricted
Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair market
value of the assets (net of liabilities (other than liabilities to the
Company or any of its Subsidiaries)) of any Unrestricted Subsidiary at the
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary
shall be considered a reduction in outstanding Investments and (iii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer.
"Issue Date" means the date on which the Preferred Stock was originally
issued.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
"Logix" means Logix Communications Enterprises, Inc., formally named
Dobson Wireline Company.
<PAGE>
34
"Logix Indenture" means the Indenture dated as of June 12, 1998 between
Logix and United States Trust Company of New York, relating to the Logix
Notes, as such indenture may be amended, supplemented, extended, renewed,
replaced or otherwise modified from time to time.
"Logix Notes" means the 12 1/4% Senior Notes due 2008 issued by Logix
under the Logix Indenture.
"Mandatory Redemption Date" means January 15, 2008.
"Memorandum" means the offering memorandum dated December 16, 1998 in
connection with the offering of the Preferred Stock.
"Moody s" means Moody s Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii) provisions
for all taxes (whether or not such taxes will actually be paid or are
payable) as a result of such Asset Sale without regard to the consolidated
results of operations of the Company and its Restricted Subsidiaries, taken
as a whole, (iii) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either (A) is secured by a
Lien on the property or assets sold or (B) is required to be paid as a result
of such sale and (iv) appropriate amounts to be provided by the Company or
any Restricted Subsidiary of the Company as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP
and (b) with respect to any issuance or sale of Capital Stock, the proceeds
of such issuance or sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary of the Company) and proceeds from the conversion of
other property received when converted to cash or cash equivalents, net of
attorney's fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
<PAGE>
35
"New DOC Facility Agreement" means the credit agreement established
pursuant to the New DOC Facility Commitment Letter, together with all other
agreements, instruments and documents executed or delivered pursuant thereto
or in connection therewith, in each case as such credit agreement, other
agreements, instruments or documents may be amended, supplemented, extended,
renewed, replaced or otherwise modified from time to time.
"New DOC Facility Commitment Letter" means the commitment letter
(including the Summary of Terms and Conditions attached thereto) dated
January 7, 1998 among Dobson Communications Corporation, Dobson Operating
Company, NationsBank of Texas, N.A. and NationsBanc Montgomery Securities LLC.
"Offer to Purchase" means an offer by the Company to purchase Preferred
Stock from the Holders commenced by mailing a notice to the Transfer Agent
and each Holder stating: (i) the covenant pursuant to which the offer is
being made and that all Preferred Stock validly tendered will be accepted for
payment on a pro rata basis; (ii) the purchase price and the date of purchase
(which shall be a Business Day no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the "Payment Date"); (iii) that any
Preferred Stock not tendered will continue to accrue dividends pursuant to
its terms; (iv) that, unless the Company defaults in the payment of the
purchase price, any Preferred Stock accepted for payment pursuant to the
Offer to Purchase shall cease to accrue dividends on and after the Payment
Date; (v) that Holders electing to have Preferred Stock purchased pursuant to
the Offer to Purchase will be required to surrender the Preferred Stock,
together with the form entitled "Option of the Holder to Elect Purchase" on
the reverse side of the Preferred Stock completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the
Business Day immediately preceding the Payment Date; (vi) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the third Business Day immediately
preceding the Payment Date, a telegram, facsimile transmission or letter
setting forth the name of such Holder, the liquidation preference of
Preferred Stock delivered for purchase and a statement that such Holder is
withdrawing its election to have such Preferred Stock purchased; and (vii)
that Holders whose Preferred Stock is being purchased only in part will be
issued new shares of Preferred Stock equal in liquidation preference to the
unpurchased portion of the Preferred Stock surrendered; PROVIDED that each
share of Preferred Stock purchased and each new share of Preferred Stock
issued shall be in a liquidation preference of $1,000 or integral multiples
thereof. On the Payment Date, the Company shall (i) accept for payment on a
pro rata basis Preferred Stock or portions thereof validly tendered pursuant
to an Offer to Purchase; (ii) deposit with the Paying Agent money sufficient
to pay the purchase price of all Preferred Stock or portions thereof so
accepted; and (iii) deliver, or cause to be delivered, to the Transfer Agent
all Preferred Stock or portions thereof so accepted together with an Officers
Certificate specifying the Preferred Stock or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail to the Holders
of Preferred Stock so accepted payment in an amount equal to the purchase
price, and the Transfer Agent shall promptly countersign and
<PAGE>
36
mail to such Holders new shares of Preferred Stock equal in liquidation
preference to any unpurchased portion of the Preferred Stock surrendered;
PROVIDED that each share of Preferred Stock purchased and each new share of
Preferred Stock issued shall be in a liquidation preference of $1,000 or
integral multiples thereof. The Company will publicly announce the results of
an Offer to Purchase as soon as practicable after the Payment Date. The
Transfer Agent shall act as the Paying Agent for an Offer to Purchase.
"Officer" means (i) the Chairman of the Board, the President, any Vice
President or the Chief Financial Officer and (ii) the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary.
"Officers Certificate" means a certificate signed by one Officer listed
in clause (i) of the definition thereof and one Officer listed in clause (ii)
of the definition thereof or any two Officers listed in clause (i) of the
definition thereof.
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with
or into or transfer or convey all or substantially all its assets to, the
Company or a Restricted Subsidiary; PROVIDED that such Person s primary
business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such Investment; (ii)
Temporary Cash Investments; (iii) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses in accordance with GAAP; and (iv) stock, obligations or
securities received in satisfaction of judgments.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Preferred Shares" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person s preferred or preference
equity, whether now outstanding or issued after the Issue Date, including,
without limitation, the Preferred Stock and all other series and classes of
such preferred stock or preference stock.
"Preferred Stock Exchange Offer" means each registered offer to exchange
the Preferred Stock for Exchange Preferred Stock.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration
statement under the Securities Act.
A "Public Market" shall be deemed to exist if (i) a Public Equity
Offering has been consummated and (ii) at least 15% of the total issued and
outstanding Common Stock of the
<PAGE>
37
Company has been distributed by means of an effective registration statement
under the Securities Act or sales pursuant to Rule 144 under the Securities
Act.
"Redemption Date" with respect to any shares of Preferred Stock, means
the date on which such shares of Preferred Stock are redeemed by the Company.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Senior Indebtedness" means (i) Indebtedness of the Company under the
Senior Notes, the Senior Note Indenture, the DOC Facility Agreement and the
DCOC Facility Agreement and all fees, expenses and indemnities payable in
connection with any of the foregoing and (ii) all other Indebtedness of the
Company, including principal and interest on such Indebtedness, unless such
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such Indebtedness is issued, would be PARI PASSU with, or
subordinated in right of payment to, the Exchange Debentures; PROVIDED that
the term "Senior Indebtedness" shall not include (a) any Indebtedness of the
Company that, when Incurred and without respect to any election under Section
1111(b) of the United States Bankruptcy Code, was without recourse to the
Company, (b) any Indebtedness of the Company to a Subsidiary of the Company
or to a joint venture in which the Company has an interest, (c) any
Indebtedness of the Company, to the extent not permitted by subparagraph
(m)(1) or subparagraph (m)(2), (d) any repurchase, redemption or other
obligation in respect of Disqualified Stock, (e) any Indebtedness to any
employee of the Company or any of its Subsidiaries, (f) any liability for
federal, state, local or other taxes owed or owing by the Company or (g) any
Trade Payables. Senior Indebtedness will also include interest accruing
subsequent to events of bankruptcy of the Company at the rate provided for in
the document governing such Senior Indebtedness, whether or not such interest
is an allowed claim enforceable against the debtor in a bankruptcy case under
federal bankruptcy law.
"Senior Exchange Debentures" means the Company s 12 1/4% Senior
Subordinated Debentures due 2008 which may be issue by the Company.
"Senior Note Indenture" means the Indenture dated as of February 28,
1997 between the Company and United States Trust Company of New York,
relating to the Senior Notes, as such indenture may be amended, supplemented,
extended, renewed, replaced or otherwise modified from time to time.
"Senior Notes" means the 11 3/4% Senior Notes due 2007 issued by the
Company under the Senior Note Indenture.
"Senior Preferred Stock" means the Company s 12 1/4% Senior Exchangeable
Preferred Stock Mandatorily Redeemable 2008 issued by the Company on January
22, 1998.
<PAGE>
38
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as
set forth on the most recently available consolidated financial statements of
the Company for such fiscal year.
"S&P" means Standard & Poor s Ratings Services and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii)
with respect to any scheduled installment of principal of or interest on any
debt security, the date specified in such debt security as the fixed date on
which such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting
power of the outstanding Voting Stock is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of
America or any agency thereof, (ii) time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of
$50 million (or the foreign currency equivalent thereof) and has outstanding
debt which is rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined
in Rule 436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) commercial paper,
maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in
existence under the laws of the United States of America, any state thereof
or any foreign country recognized by the United States of America with a
rating at the time as of which any investment therein is made of "P-1" (or
higher) according to Moody s or "A-1" (or higher) according to S&P, and (v)
securities with maturities of six months or less from the date of acquisition
issued or fully and unconditionally guaranteed by any state, commonwealth or
territory of the United States of
<PAGE>
39
America, or by any political subdivision or taxing authority thereof, and
rated at least "A" by S&P or Moody s.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in
the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and, with respect to any Restricted
Payment, the date such Restricted Payment is to be made.
"Transfer Agent" means United States Trust Company of New York.
"Unrestricted Subsidiary" means (i) Logix, Dobson/Sygnet, Dobson Tower
Company or any other Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company
or any Restricted Subsidiary; PROVIDED that (A) any Guarantee by the Company
or any Restricted Subsidiary of any Indebtedness of the Subsidiary being so
designated shall be deemed an "Incurrence" of such Indebtedness and an
"Investment" by the Company or such Restricted Subsidiary (or both, if
applicable) at the time of such designation; (B) either (I) the Subsidiary to
be so designated has total assets of $1,000 or less or (II) if such
Subsidiary has assets greater than $1,000, such designation would be
permitted under subparagraph (m)(4) and (C) if applicable, the Incurrence of
Indebtedness and the Investment referred to in clause (A) of this proviso
would be permitted under subparagraphs (m)(1) and (m)(4). The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; PROVIDED that immediately after giving effect to such designation
(x) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately after such designation would, if Incurred at such time, have been
permitted to be incurred for all purposes of this Certificate of Designation
and (y) no Voting Rights Triggering Event, or an event which with the giving
of notice or the passage of time, or both, would become a Voting Rights
Triggering Event, shall have occurred and be continuing. Any such designation
by the Board of Directors shall be evidenced to the Transfer Agent by
promptly providing the Transfer Agent a copy of the Board Resolution giving
effect to such designation and an Officers Certificate certifying that such
designation complied with the foregoing provisions.
<PAGE>
40
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director s qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
(o) TRANSFER AND LEGENDING OF SHARES. (i) No transfer of shares
of the Preferred Stock shall be effective until such transfer is registered
on the books of the Company. Until registered under the Securities Act, the
expiration of the time period referred to in Rule 144(k) (as then in effect)
under the Securities Act from the Issue Date, or the Company and the Holder
of such shares otherwise agree, all shares of Preferred Stock other than the
Exchange Preferred Stock shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
<PAGE>
41
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRANSFER AGENT'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (E) OR (F)
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND (ii)IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS SECURITY IS COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
(ii) The Transfer Agent shall refuse to register any attempted
transfer of shares of Original Preferred Stock not in compliance with this
paragraph (o).
(iii) At any time after 40 days following the Issue Date, upon
receipt by the Transfer Agent and the Company of a certificate substantially in
the form of Exhibit A hereto, the Transfer Agent shall authenticate and deliver
one or more shares of unlegended Preferred Stock in the place of the legended
Preferred Stock.
(iv) In connection with proposed transfers of Original Preferred
Stock described in Exhibit B or Exhibit C, the Transfer Agent or the Company may
require the transferor or transferee, as the case may be, to deliver the
appropriate letter attached hereto as
<PAGE>
42
Exhibits B or C. Each Holder of Original Preferred Stock shall notify the
Company or the Transfer Agent in the event of any transfer by such Holder of
any shares of Original Preferred Stock to a foreign transferee.
<PAGE>
43
IN WITNESS WHEREOF, Dobson Communications Corporation has caused this
Certificate of Designation to be executed in its corporate name by Ronald L.
Ripley, its Vice President, and attested by Trent LeForce, its Assistant
Secretary, this 23rd day of December, 1998.
DOBSON COMMUNICATIONS CORPORATION
By: /s/ Ronald L. Ripley
----------------------------------------
Name: Ronald L. Ripley
Title: Vice President
Attest:
By: /s/ Trent LeForce
------------------------------------
Name: Trent LeForce
Title: Assistant Secretary
[corporate seal]
<PAGE>
EXHIBIT A
Form of Certificate as to
Completion of Distribution and
Termination of Restricted Period
--------------------------------
__________________, ____
United States Trust Company of New York
114 W. 47th Street
New York, NY 10036-1532
Attention: Corporate Trust Department
Re: Dobson Communications Corporation
(the "Company") Senior Exchangeable
Preferred Stock (the "Securities")
--------------------------------------
Dear Ladies and Gentlemen:
This letter relates to ___ shares of Securities represented by the
attached Certificate (the "Legended Certificate") which bears a legend
outlining restrictions upon transfer of such Legended Certificate. Pursuant
to paragraph (o) of the Certificate of Designation (the "Certificate of
Designation") filed with the Secretary of State of the State of Oklahoma on
December 23, 1998 relating to the Securities, we hereby certify that we are a
person outside the United States to whom the Securities could be transferred
in accordance with Rule 904 of Regulation S promulgated under the U.S.
Securities Act of 1933, as amended. Accordingly, you are hereby requested to
exchange the Legended Certificate for an unlegended certificate representing
an identical number of shares of Securities, all in the manner provided for
in the Certificate of Designation.
<PAGE>
A-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
-----------------------------------
Authorized Signature
<PAGE>
EXHIBIT B
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
_______________, ____
United States Trust Company of New York
114 W. 47th Street
New York, NY 10036-1532
Attention: Corporate Trust Department
Re: Dobson Communications Corporation
(the "Company") Senior Exchangeable
Preferred Stock (the "Securities")
--------------------------------------
Dear Ladies and Gentlemen:
In connection with our proposed purchase of ___ shares of the
Securities, we confirm that:
1. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Certificate
of Designation relating to the Securities (the "Certificate of
Designation") and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
2. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not
be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Securities, we
will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (C) inside the United States to
an institutional "accredited investor" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act) that, prior to such
transfer, furnishes to you a signed letter substantially
<PAGE>
B-2
in the form of this letter and, if such transfer is in respect of
Securities having an aggregate liquidation preference at the time of
transfer of less than $100,000, an opinion of counsel acceptable to the
Company that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S
under the Securities Act, (E) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if
available) or (F) pursuant to an effective registration statement under
the Securities Act, and we further agree to provide to any person
purchasing any of the Securities from us a notice advising such
purchaser that resales of the Securities are restricted as stated herein.
3. We understand that, on any proposed resale of any Securities, we
will be required to furnish to you and the Company such certifications,
legal opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us
will bear a legend to the effect set out in paragraph 2.
4. We are an institutional "accredited investor" and have such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and
we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Securities purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
6. We are not acquiring the Securities with a view to a distribution
thereof or with any present intention of offering or selling any of the
Securities, except as permitted above; provided that the disposition of our
property and property of our accounts for which we are acting as fiduciary
will remain at all times within our control.
<PAGE>
B-3
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Holder]
By:
-----------------------------------
Authorized Signature
<PAGE>
EXHIBIT C
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
_______________, _____
United States Trust Company of New York
114 W. 47th Street
New York, NY 10036-1532
Attention: Corporate Trust Department
Re: Dobson Communications Corporation
(the "Company") Senior Exchangeable
Preferred Stock (the "Securities")
--------------------------------------
Dear Ladies and Gentlemen:
In connection with our proposed sale of ____ shares of the Securities,
we confirm that such sale has been effected pursuant to and in accordance with
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
<PAGE>
C-2
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
--------------------------------
Authorized Signature
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Everett R. Dobson, its President, and attested to by Stephen T.
Dobson, its Secretary, this 23rd day of December, 1998.
EVERETT R. DOBSON
By: /s/ Everett R. Dobson
---------------------
Title: President
ATTEST:
STEPHEN T. DOBSON
/s/ Stephen T. Dobson
- ---------------------
Title: Secretary
<PAGE>
===============================================================================
DOBSON/SYGNET COMMUNICATIONS COMPANY,
Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
--------------------
Indenture
Dated as of December 23, 1998
--------------------
12 1/4% Senior Notes due 2008
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Sections Indenture Sections
- ------------ ------------------
<S> <C>
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . 7.08
Section 313(c) . . . . . . . . . . . . . . . . . . . . . . . 7.06; 11.02
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . 4.17; 11.02
(a)(4). . . . . . . . . . . . . . . . . . . . . . 4.16; 11.02
(c)(1). . . . . . . . . . . . . . . . . . . . . . 11.03
(c)(2). . . . . . . . . . . . . . . . . . . . . . 11.03
(e) . . . . . . . . . . . . . . . . . . . . . . . 11.04
Section 315(b) . . . . . . . . . . . . . . . . . . . . . . . 7.05; 11.02
Section 316(a)(1)(A) . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . 6.04
(b) . . . . . . . . . . . . . . . . . . . . . . . 6.07
Section 317(a)(1). . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . 6.09
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . 11.01
(c) . . . . . . . . . . . . . . . . . . . . . . . 11.01
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act . . . . . . . . . 21
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.02. Restrictive Legends . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.03. Execution, Authentication and Denominations . . . . . . . . . . . . 25
SECTION 2.04. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.05. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . 27
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.07. Book-Entry Provisions for Global Notes. . . . . . . . . . . . . . . 28
SECTION 2.08. Special Transfer Provisions . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.09. Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.10. Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.11. Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.12. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.13. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.14. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.15. Issuance of Additional Notes. . . . . . . . . . . . . . . . . . . . 36
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption; Mandatory Redemption . . . . . . . . . . . . . 36
SECTION 3.02. Notices to Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3.03. Selection of Notes to Be Redeemed . . . . . . . . . . . . . . . . . 37
- --------------------
Note: The Table of Contents shall not for any purposes be deemed to be a
part of the Indenture.
<PAGE>
ii
SECTION 3.04. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 3.05. Effect of Notice of Redemption. . . . . . . . . . . . . . . . . . . 38
SECTION 3.06. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . 38
SECTION 3.07. Payment of Notes Called for Redemption. . . . . . . . . . . . . . . 38
SECTION 3.08. Notes Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 4.02. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . 39
SECTION 4.03. Limitation on Indebtedness. . . . . . . . . . . . . . . . . . . . . 40
SECTION 4.04. Limitation on Restricted Payments . . . . . . . . . . . . . . . . . 43
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted Subsidiaries. . 48
SECTION 4.08. Limitation on Transactions with Stockholders and Affiliates . . . . 49
SECTION 4.09. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 4.10. Limitation on Asset Sales . . . . . . . . . . . . . . . . . . . . . 51
SECTION 4.11. Repurchase of Notes upon a Change of Control. . . . . . . . . . . . 52
SECTION 4.12. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 4.13. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . 52
SECTION 4.14. Maintenance of Properties and Insurance . . . . . . . . . . . . . . 53
SECTION 4.15. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.16. Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.17. Commission Reports and Reports to Holders . . . . . . . . . . . . . 54
SECTION 4.18. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . 54
SECTION 4.19. Limitation on Sale-Leaseback Transactions. . . . . . . . . . . . . 55
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc.. . . . . . . . . . . . . . . . . . . . 55
SECTION 5.02. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . 56
<PAGE>
iii
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 6.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.05. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.07. Rights of Holders to Receive Payment. . . . . . . . . . . . . . . . 60
SECTION 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . . . . . . 60
SECTION 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . . . 60
SECTION 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 6.12. Restoration of Rights and Remedies. . . . . . . . . . . . . . . . . 61
SECTION 6.13. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . 62
SECTION 6.14. Delay or Omission Not Waiver. . . . . . . . . . . . . . . . . . . . 62
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.02. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . . . . . . 63
SECTION 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.05. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . 64
SECTION 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . . . . . . 64
SECTION 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 7.09. Successor Trustee by Merger, Etc. . . . . . . . . . . . . . . . . . 66
SECTION 7.10. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.11. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 7.12. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. . . . . . . . . . . . . . . . 67
<PAGE>
iv
SECTION 8.02. Defeasance and Discharge of Indenture . . . . . . . . . . . . . . . 67
SECTION 8.03. Defeasance of Certain Obligations . . . . . . . . . . . . . . . . . 70
SECTION 8.04. Application of Trust Money. . . . . . . . . . . . . . . . . . . . . 71
SECTION 8.05. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 8.06. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.03. Revocation and Effect of Consent. . . . . . . . . . . . . . . . . . 74
SECTION 9.04. Notation on or Exchange of Notes. . . . . . . . . . . . . . . . . . 74
SECTION 9.05. Trustee to Sign Amendments, Etc.. . . . . . . . . . . . . . . . . . 75
SECTION 9.06. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . 75
ARTICLE TEN
SECURITY
SECTION 10.01. Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act of 1939. . . . . . . . . . . . . . . . . . . . 77
SECTION 11.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.03. Certificate and Opinion as to Conditions Precedent . . . . . . . . 78
SECTION 11.04. Statements Required in Certificate or Opinion. . . . . . . . . . . 78
SECTION 11.05. Rules by Trustee, Paying Agent or Registrar. . . . . . . . . . . . 79
SECTION 11.06. Payment Date Other Than a Business Day . . . . . . . . . . . . . . 79
SECTION 11.07. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.08. No Adverse Interpretation of Other Agreements. . . . . . . . . . . 79
SECTION 11.09. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.10. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 11.11. Duplicate Originals. . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.12. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 11.13. Table of Contents, Headings, Etc.. . . . . . . . . . . . . . . . . 80
<PAGE>
v
EXHIBIT A Form of Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Certificate. . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Non-QIB Accredited Investors. . . . . . . C-1
EXHIBIT D Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S. . . . . . . . . . . . . . . D-1
</TABLE>
<PAGE>
INDENTURE, dated as of December 23, 1998, between DOBSON/SYGNET
COMMUNICATIONS COMPANY, an Oklahoma corporation (the "COMPANY"), and United
States Trust Company of New York, a bank and trust company organized under the
New York banking law (the "TRUSTEE").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $200,000,000 aggregate
principal amount of the Company's 12 1/4% Senior Notes due 2008 (the "NOTES")
issuable as provided in this Indenture. The Notes will be partially secured
pursuant to the terms of a Collateral Pledge and Security Agreement (as defined
herein) by Government Securities as provided by Article Ten of this Indenture.
All things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done, and the Company has done all things
necessary to make the Notes, when executed by the Company and authenticated and
delivered by the Trustee hereunder and duly issued by the Company, the valid
obligations of the Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act of 1939 that are required to be a part of and to govern
indentures qualified under the Trust Indenture Act of 1939.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, the Company and the Trustee, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Indebtedness" means Indebtedness of a Person existing at the time
such Person becomes a Restricted Subsidiary or assumed in connection with an
Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary or
such Asset Acquisition; PROVIDED that Indebtedness of such Person which is
redeemed, defeased, retired or otherwise repaid at the time of or immediately
upon consummation of the transactions by which such Person becomes a Restricted
Subsidiary or such Asset Acquisition shall not be Acquired Indebtedness.
<PAGE>
2
"Adjusted Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
determined in conformity with GAAP; PROVIDED that the following items shall be
excluded in computing Adjusted Consolidated Net Income (without duplication):
(i) the net income of any Person (other than net income attributable to a
Restricted Subsidiary) in which any Person (other than the Company or any of its
Restricted Subsidiaries) has a joint interest and the net income of any
Unrestricted Subsidiary, except to the extent of the amount of dividends or
other distributions actually paid to the Company or any of its Restricted
Subsidiaries by such other Person or such Unrestricted Subsidiary during such
period; (ii) solely for the purposes of calculating the amount of Restricted
Payments that may be made pursuant to clause (C) of the first paragraph of
Section 4.04 (and in such case, except to the extent includable pursuant to
clause (i) above), the net income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or consolidated with
the Company or any of its Restricted Subsidiaries or all or substantially all of
the property and assets of such Person are acquired by the Company or any of its
Restricted Subsidiaries; (iii) the net income of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar distributions
by such Restricted Subsidiary of such net income is not at the time permitted by
the operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Restricted Subsidiary; (iv) any gains or losses (on an after-tax basis)
attributable to Asset Sales; (v) except for purposes of calculating the amount
of Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 4.04, any amount paid or accrued as dividends on Preferred
Stock of the Company or any Restricted Subsidiary owned by Persons other than
the Company and any of its Restricted Subsidiaries; and (vi) all extraordinary
gains and extraordinary losses, net of tax.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles (other than FCC license acquisition costs), all as set forth on the
most recent quarterly or annual consolidated balance sheet of the Company and
its Restricted Subsidiaries, prepared in conformity with GAAP and filed with the
Commission.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the
<PAGE>
3
management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
"Agent Members" has the meaning provided in Section 2.07(a).
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries; PROVIDED that such Person's
primary business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such investment or
(ii) an acquisition by the Company or any of its Restricted Subsidiaries of the
property and assets of any Person other than the Company or any of its
Restricted Subsidiaries that constitute substantially all of a division or line
of business of such Person; PROVIDED that the property and assets acquired are
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such acquisition.
"Asset Disposition" means the sale or other disposition by the Company or
any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets of the Company or any of its Restricted
Subsidiaries outside the ordinary course of business of the Company or such
Restricted Subsidiary and, in each case, that is not governed by Article Five;
PROVIDED that "Asset Sale" shall not include (a) sales or other dispositions of
inventory, receivables and other current assets, (b) sales, transfers or other
dispositions of assets constituting a Restricted Payment permitted to be made
under Section 4.04, (c) sales or other dispositions of assets for consideration
at least equal to the fair market value of the assets sold or disposed of, to
the extent that the consideration received consists of property or assets (other
than current assets) of a nature or type or that are used in a business (or a
company having property or assets of a nature or type, or engaged in a business)
similar or related to the nature or type of the property and assets of, or
business of, the Company and its Restricted Subsidiaries existing on the date of
such sale or other disposition, (d) sales, transfers or other dispositions of
assets with a fair market value (as certified in an Officer's Certificate) not
in excess of $5.0 million in any transaction or series of related transactions
or (e) the Tower Sale.
<PAGE>
4
"Average Life" means, at any date of determination with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Bank Agent" means NationsBank, N.A., or its successors as agent for the
lenders under the New Credit Agreement.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution, certified by the Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the Closing Date, including, without limitation, all Common Stock
and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of the
rental obligations under a Capitalized Lease.
"Change of Control" means such time as (i) (a) prior to the occurrence of a
Public Market, a "person" or "group" (within the meaning of Section 13(d) or
14(d)(2) under the Exchange Act) becomes the ultimate "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of Voting Stock representing a
greater percentage of the total voting power of the Voting Stock of (x) Dobson
Communications, on a fully diluted basis, than is beneficially owned by Everett
R. Dobson and his Affiliates on such date or (y) the Company, on a fully diluted
basis, than is beneficially owned by the Existing Stockholders on such date and
(b) after the occurrence of a Public Market, a "person" or "group" (within the
meaning of Section 13(d) or 14(d)(2) under the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the
<PAGE>
5
Exchange Act) of more than 35% of the total voting power of the Voting Stock
of the Company on a fully diluted basis and such ownership represents a
greater percentage of the total voting power of the Voting Stock of the
Company, on a fully diluted basis, than is held by the Existing Stockholders
on such date; or (ii) individuals who on the Closing Date constitute the
Board of Directors (together with any new directors (x) whose election by the
Board of Directors or whose nomination for election by the Company's
stockholders was approved by a vote of at least a majority of the members of
the Board of Directors then in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for election
was previously so approved or (y) so long as no "person" or "group" (within
the meaning of Section 13(d) or 14(d)(2) under the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of Voting Stock representing a greater percentage of the total voting power
of the Voting Stock of Dobson Communications, on a fully diluted basis, than
is beneficially owned by Everett R. Dobson and his Affiliates on such date,
whose election was approved by Dobson Communications) cease for any reason to
constitute a majority of the members of the Board of Directors then in
office.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether now outstanding or issued after the Closing Date, including
without limitation, all series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of the
Company (i) by its Chairman, a Vice Chairman, its President or a Vice President
and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary and delivered to the Trustee; PROVIDED, HOWEVER, that such written
request or order may be signed by any two of the officers or directors listed in
clause (i) above in lieu of being signed by one of such officers or directors
listed in such clause (i) and one of the officers listed in clause (ii) above.
<PAGE>
6
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income (i) Consolidated Interest Expense,
(ii) income taxes, (other than income taxes (either positive or negative)
attributable to extraordinary and non-recurring gains or losses or sales of
assets), (iii) depreciation expense, (iv) amortization expense, and (v) all
other non-cash items reducing Adjusted Consolidated Net Income (other than items
that will require cash payments and for which an accrual or reserve is, or is
required by GAAP to be, made), less all non-cash items increasing Adjusted
Consolidated Net Income, all as determined on a consolidated basis for the
Company and its Restricted Subsidiaries in conformity with GAAP; PROVIDED that,
if any Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,
Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in
accordance with GAAP) by an amount equal to (A) the amount of the Adjusted
Consolidated Net Income attributable to such Restricted Subsidiary multiplied by
(B) the percentage ownership interest in the income of such Restricted
Subsidiary not owned on the last day of such period by the Company or any of its
Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate amount
of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Notes, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding on such Transaction Date to
(ii) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters for which financial statements of the Company have been filed
with the Commission (such four fiscal quarter period being the "Four Quarter
Period"); PROVIDED that in making the foregoing calculation (A) pro forma effect
shall be given to any Indebtedness that is to be Incurred or repaid on the
Transaction Date as if
<PAGE>
7
such Incurrence or repayment had occurred on the first day of such Four
Quarter Period; (B) pro forma effect shall be given to Asset Dispositions and
Asset Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Disposition) that occur during the period beginning on
the first day of the Four Quarter Period and ending on the Transaction Date
(the "Reference Period") as if they had occurred and such proceeds had been
applied on the first day of such Reference Period; and (C) pro forma effect
shall be given to asset dispositions and asset acquisitions (including giving
pro forma effect to the application of proceeds of any asset disposition)
that have been made by any Person that has become a Restricted Subsidiary or
has been merged with or into the Company or any Restricted Subsidiary during
such Reference Period and that would have constituted Asset Dispositions or
Asset Acquisitions had such transactions occurred when such Person was a
Restricted Subsidiary as if such asset dispositions or asset acquisitions
were Asset Dispositions or Asset Acquisitions that occurred on the first day
of such Reference Period; PROVIDED that to the extent that clause (B) or (C)
of this sentence requires that pro forma effect be given to an Asset
Acquisition or Asset Disposition, such pro forma calculation shall be based
upon the four full fiscal quarters immediately preceding the Transaction Date
of the Person, or division or line of business of the Person, that is
acquired or disposed for which financial information is available.
"Consolidated Net Worth" means, at any date of determination, stockholders'
equity as set forth on the most recently available quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 114 West 47th Street, New York, NY 10036, Attention: Corporate Trust
Department.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
<PAGE>
8
"Depositary" shall mean The Depository Trust Company, its nominees, and
their respective successors.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; PROVIDED that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Section 4.10 and Section 4.11 and
such Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Section
4.10 and Section 4.11.
"Dobson Communications" means Dobson Communications Corporation, an
Oklahoma corporation.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.10.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exchange Notes" means any securities of the Company containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for the Notes pursuant
to the Registration Rights Agreement and this Indenture.
"Existing Stockholders" means (i) Everett R. Dobson and his Affiliates and
(ii) Dobson Communications, so long as no "person" or "group" (within the
meaning of Section 13(d) or 14(d)(2) under the Exchange Act) becomes the
ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 35% of the total voting power of the Voting Stock of Dobson
Communications on a fully diluted basis and such ownership represents a greater
percentage of the total voting power of the Voting Stock of Dobson
Communications, on a fully diluted basis, than is held by the Existing
Stockholders in clause (i) on such date.
<PAGE>
9
"fair market value" means the price that would be paid in an arm's-length
transaction between an informed and willing seller under no compulsion to sell
and an informed and willing buyer under no compulsion to buy, as determined in
good faith by the Board of Directors, whose determination shall be conclusive if
evidenced by a Board Resolution.
"FCC" means the Federal Communications Commission.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Closing Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations contained or referred to in
this Indenture shall be computed in conformity with GAAP applied on a consistent
basis, except that calculations made for purposes of determining compliance with
the terms of the covenants and with other provisions of this Indenture shall be
made without giving effect to (i) the amortization of any expenses incurred in
connection with the offering of the Notes and (ii) except as otherwise provided,
the amortization of any amounts required or permitted by Accounting Principles
Board Opinion Nos. 16 and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Government Securities" means direct obligations of, obligations fully
guaranteed by, or participations in pools consisting solely of obligations of or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the option of the
issuer thereof.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); PROVIDED that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
<PAGE>
10
"Guaranteed Indebtedness" has the meaning provided in Section 4.07.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an "Incurrence" of Indebtedness by reason of a Person becoming a
Restricted Subsidiary; PROVIDED that neither the accrual of interest nor the
accretion of original issue discount shall be considered an Incurrence of
Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto, but excluding obligations with
respect to letters of credit (including trade letters of credit) securing
obligations (other than obligations described in (i) or (ii) above or (v), (vi)
or (vii) below) entered into in the ordinary course of business of such Person
to the extent such letters of credit are not drawn upon or, if drawn upon, to
the extent such drawing is reimbursed no later than the third Business Day
following receipt by such Person of a demand for reimbursement), (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, (v) all obligations of
such Person as lessee under Capitalized Leases, (vi) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; PROVIDED that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (viii) to the extent not otherwise
included in this definition, obligations under Currency Agreements and Interest
Rate Agreements. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date (or in the case of a revolving credit or
other similar facility, the total amount of funds outstanding and/or available
on the date of determination) of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, PROVIDED
(A) that the amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less the
unamortized portion of the original issue discount of such Indebtedness at such
time as determined in conformity with GAAP, (B) money borrowed at the time of
the Incurrence of any Indebtedness in order to pre-fund the payment of interest
on such Indebtedness, shall be deemed not to be "Indebtedness" so long as such
money is held to
<PAGE>
11
secure the payment of such interest and (C) that Indebtedness shall not
include any liability for federal, state, local or other taxes.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on June
15 and December 15 of each year, commencing June 15, 1999.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee or
similar arrangement, but excluding advances to customers in the ordinary course
of business that are, in conformity with GAAP, recorded as accounts receivable
on the balance sheet of the Company or its Restricted Subsidiaries) or a capital
contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person and shall include (i) the designation
of a Restricted Subsidiary as an Unrestricted Subsidiary and (ii) the fair
market value of the Capital Stock (or any other Investment), held by the Company
or any of its Restricted Subsidiaries, of (or in) any Person that has ceased to
be a Restricted Subsidiary, including without limitation, by reason of any
transaction permitted by clause (iii) of Section 4.06. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.04, (i) "Investment" shall
include the fair market value of the assets (net of liabilities (other than
liabilities to the Company or any of its Subsidiaries)) of any Restricted
Subsidiary at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary, (ii) the fair market value of the assets (net of
liabilities (other than liabilities to the Company or any of its Subsidiaries))
of any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary shall be considered a reduction in
outstanding Investments and (iii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer.
<PAGE>
12
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any
agreement to give any security interest).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of
counsel and investment bankers) related to such Asset Sale, (ii) provisions
for all taxes (whether or not such taxes will actually be paid or are
payable) as a result of such Asset Sale without regard to the consolidated
results of operations of the Company and its Restricted Subsidiaries, taken
as a whole, (iii) payments made to repay Indebtedness or any other obligation
outstanding at the time of such Asset Sale that either (A) is secured by a
Lien on the property or assets sold or (B) is required to be paid as a result
of such sale and (iv) appropriate amounts to be provided by the Company or
any Restricted Subsidiary of the Company as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with GAAP
and (b) with respect to any issuance or sale of Capital Stock, the proceeds
of such issuance or sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Company or any
Restricted Subsidiary of the Company) and proceeds from the conversion of
other property received when converted to cash or cash equivalents, net of
attorney's fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"New Credit Agreement" means the credit agreement dated as of the
Closing Date between Dobson/Sygnet Operating Company and NationsBank, N.A.
and certain other financial institutions, together with any agreements,
instruments and documents executed or delivered pursuant to or in connection
with such credit agreement (including without limitation any Guarantees and
security documents), in each case as such credit agreement or such
agreements, instruments or documents may be amended (including any amendment
and restatement thereof), supplemented, extended, renewed, replaced or
otherwise modified from time to time (including any agreement extending the
maturity of, refinancing or otherwise restructuring (including the
<PAGE>
13
inclusion of additional borrowers thereunder that are Subsidiaries of the
Company) all or a portion of the Indebtedness under such agreement or any
successor agreement).
"Notes" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
the Notes initially issued on the Closing Date, any Exchange Notes to be
issued and exchanged for any Notes pursuant to the Registration Rights
Agreement and this Indenture and any other Notes issued after the Closing
Date under this Indenture. For purposes of this Indenture, all Notes shall
vote together as one series of Notes under this Indenture.
"Non-U.S. Person" means a person who is not a U.S. person, as defined in
Regulation S.
"Offer to Purchase" means an offer by the Company to purchase Notes from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such notice
is mailed) (the "Payment Date"); (iii) that any Note not tendered will
continue to accrue interest pursuant to its terms; (iv) that, unless the
Company defaults in the payment of the purchase price, any Note accepted for
payment pursuant to the Offer to Purchase shall cease to accrue interest on
and after the Payment Date; (v) that Holders electing to have a Note
purchased pursuant to the Offer to Purchase will be required to surrender the
Note, together with the form entitled "Option of the Holder to Elect
Purchase" on the reverse side of the Note completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
Business Day immediately preceding the Payment Date; (vi) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the third Business Day immediately
preceding the Payment Date, a telegram, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Notes
delivered for purchase and a statement that such Holder is withdrawing his
election to have such Notes purchased; and (vii) that Holders whose Notes are
being purchased only in part will be issued new Notes equal in principal
amount to the unpurchased portion of the Notes surrendered; PROVIDED that
each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof. On the Payment Date, the Company
shall (i) accept for payment on a pro rata basis Notes or portions thereof
validly tendered pursuant to an Offer to Purchase; (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all Notes or
portions thereof so accepted; and (iii) deliver, or cause to be delivered, to
the Trustee all Notes or portions thereof so accepted together with an
Officers' Certificate specifying the Notes or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail to the Holders
of Notes so accepted payment in an amount equal to the purchase price, and
the Trustee shall promptly authenticate and mail to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered;
PROVIDED that each Note purchased and each new Note issued shall be in a
principal
<PAGE>
14
amount of $1,000 or integral multiples thereof. The Company will publicly
announce the results of an Offer to Purchase as soon as practicable after the
Payment Date. The Trustee shall act as the Paying Agent for an Offer to
Purchase. The Company will comply with Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws
and regulations are applicable, in the event that the Company is required to
repurchase Notes pursuant to an Offer to Purchase.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer, and
(ii) the Treasurer or any Assistant Treasurer, or the Secretary or any
Assistant Secretary.
"Officers' Certificate" means a certificate signed by one Officer listed
in clause (i) of the definition thereof and one Officer listed in clause (ii)
of the definition thereof or two officers listed in clause (i) of the
definition thereof. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"Offshore Global Note" has the meaning provided in Section 2.01.
"Offshore Notes Exchange Date" has the meaning provided in Section 2.01.
"Offshore Physical Notes" has the meaning provided in Section 2.01.
"Opinion of Counsel" means a written opinion signed by legal counsel,
who may be an employee of or counsel to the Company, that meets the
requirements of Section 11.04 hereof. Each such Opinion of Counsel shall
include the statements provided for in TIA Section 314(e).
"Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company
or a Subsidiary of the Company or an Affiliate of any of them. The term
"Paying Agent" includes any additional Paying Agent.
"Permanent Offshore Global Note" has the meaning provided in Section
2.01.
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with
or into or transfer or convey all or substantially all its assets to, the
Company or a Restricted Subsidiary; PROVIDED that such person's primary
business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such Investment; (ii)
Temporary Cash Investments; (iii) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses in accordance with GAAP; (iv) stock, obligations or
securities received in satisfaction
<PAGE>
15
of judgments; (v) Investments in prepaid expenses, negotiable instruments
held for collection and lease, utility and worker's compensation, performance
and other similar deposits; (vi) Interest Rate Agreements and Currency
Agreements designed solely to protect the Company or its Restricted
Subsidiaries against fluctuations in interest rates or foreign currency
exchange rates; and (vii) loans or advances to officers or employees of the
Company or of any Restricted Subsidiary that do not in the aggregate exceed
$3 million at any time outstanding.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made; (ii) statutory and common law
Liens of landlords and carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen or other similar Liens arising in the ordinary course
of business and with respect to amounts not yet delinquent or being contested
in good faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision,
if any, as shall be required in conformity with GAAP shall have been made;
(iii) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types
of social security; (iv) Liens incurred or deposits made (including deposits
made to the FCC) to secure the performance of tenders, bids, leases,
statutory or regulatory obligations, bankers' acceptances, surety and appeal
bonds, government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (v) easements,
rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Restricted Subsidiaries; (vi) Liens (including extensions and renewals
thereof) upon real or personal property acquired after the Closing Date;
PROVIDED that (a) such Lien is created solely for the purpose of securing
Indebtedness Incurred, in accordance with Section 4.03, (1) to finance the
cost (including the cost of design, development, improvement, construction,
installation or integration) of the item of property or assets subject
thereto and such Lien is created prior to, at the time of or within six
months after the later of the acquisition, the completion of construction or
the commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost and (c)
any such Lien shall not extend to or cover any property or assets other than
such item of property or assets and any improvements on such item; (vii)
leases or subleases granted to others that do not materially interfere with
the ordinary course of business of the Company and its Restricted
Subsidiaries, taken as a whole; (viii) Liens encumbering property or assets
under construction arising from progress or partial payments by a customer of
the Company or its Restricted Subsidiaries relating to such property or
assets; (ix) any interest or title of a lessor in the property subject to any
Capitalized Lease or operating lease; (x) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (xi) Liens on property
of, or on shares
<PAGE>
16
of Capital Stock or Indebtedness of, any Person existing at the time such
Person becomes, or becomes a part of, any Restricted Subsidiary; PROVIDED
that such Liens do not extend to or cover any property or assets of the
Company or any Restricted Subsidiary other than the property or assets
acquired; (xii) Liens in favor of the Company or any Restricted Subsidiary;
(xiii) Liens arising from the rendering of a final judgment or order against
the Company or any Restricted Subsidiary of the Company that does not give
rise to an Event of Default; (xiv) Liens securing reimbursement obligations
with respect to letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds thereof;
(xv) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods; (xvi) Liens encumbering customary initial deposits and margin
deposits, and other Liens that are either within the general parameters
customary in the industry and incurred in the ordinary course of business, in
each case, securing Indebtedness under Interest Rate Agreements and Currency
Agreements and forward contracts, options, future contracts, futures options
or similar agreements or arrangements designed solely to protect the Company
or any of its Restricted Subsidiaries from fluctuations in interest rates,
currencies or the price of commodities; (xvii) Liens arising out of
conditional sale, title retention, consignment or similar arrangements for
the sale of goods entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business in accordance with the past
practices of the Company and its Restricted Subsidiaries prior to the Closing
Date; (xviii) Liens that secure Indebtedness with an aggregate principal
amount not in excess of $5 million at any time outstanding; and (xix) Liens
on or sales of receivables.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Physical Notes" has the meaning provided in Section 2.01.
"Pledge Account" means an account established with the Trustee pursuant
to the terms of the Pledge Agreement for the deposit of the Pledged
Securities to be purchased by the Company with the net proceeds from the
Notes.
"Pledge Agreement" means the Collateral Pledge and Security Agreement,
dated as of the Closing Date, made by the Company in favor of the Trustee,
governing the disbursement of funds from the Pledge Account, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time.
"Pledged Securities" means the Government Securities to be purchased by
the Company and held in the Pledge Account in accordance with the Pledge
Agreement.
<PAGE>
17
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non voting) of such Person's preferred or preference equity,
whether now outstanding or issued after the Closing Date, including, without
limitation, all series and classes of such preferred stock or preference
stock.
"principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
"Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration
statement under the Securities Act.
A "Public Market" shall be deemed to exist if (i) a Public Equity
Offering has been consummated and (ii) at least 15% of the total issued and
outstanding Common Stock of the Company has been distributed by means of an
effective registration statement under the Securities Act or sales pursuant
to Rule 144 under the Securities Act.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price at which such Note is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning provided in Section 2.04.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated December 23, 1998, between the Company and NationsBanc Montgomery
Securities LLC, Lehman Brothers Inc., First Union Capital Markets, a division
of Wheat First Securities, Inc., and TD Securities (USA) Inc.
"Registration Statement" means the Registration Statement as defined and
described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the June 1 or December 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
<PAGE>
18
"Regulation S" means Regulation S under the Securities Act.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee in its Corporate Trust
Department having direct responsibility for the administration of this
Indenture or the Pledge Agreement and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Payments" has the meaning provided in Section 4.04.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933.
"Security Register" has the meaning provided in Section 2.04.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii)
as of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as
set forth on the most recently available consolidated financial statements of
the Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii)
with respect to any scheduled installment of principal of or interest on
<PAGE>
19
any debt security, the date specified in such debt security as the fixed date
on which such installment is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting
power of the outstanding Voting Stock is owned, directly or indirectly, by
such Person and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.07.
"Sygnet Acquisition" means, collectively, the transfer of the stock of
Dobson/Sygnet Operating Company to the Company and the merger of
Dobson/Sygnet Operating Company with and into Sygnet Wireless, Inc., pursuant
to which Sygnet Wireless, Inc. will survive as a Wholly Owned Restricted
Subsidiary of the Company.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of
America or any agency thereof, (ii) time deposit accounts, certificates of
deposit and money market deposits maturing within 180 days of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America, and which bank or
trust company has capital, surplus and undivided profits aggregating in
excess of $50 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization
(as defined in Rule 436 under the Securities Act) or any money-market fund
sponsored by a registered broker dealer or mutual fund distributor, (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (i) above entered into with a
bank meeting the qualifications described in clause (ii) above, (iv)
commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America,
any state thereof or any foreign country recognized by the United States of
America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to
S&P, and (v) securities with maturities of six months or less from the date
of acquisition issued or fully and unconditionally guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
S&P or Moody's.
"Temporary Offshore Global Note" has the meaning provided in Section
2.01.
<PAGE>
20
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
(15 U.S. Code Sections 77aaa-77bbbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"Tower Lease" means the lease of the towers sold in the Tower Sale
pursuant to a tower lease agreement between Sygnet Communications, Inc. and
Dobson Tower Company.
"Tower Sale" means the sale of substantially all of Sygnet
Communications, Inc.'s towers to Dobson Tower Company or any of its
Affiliates.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in
the ordinary course of business in connection with the acquisition of goods
or services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date
such Indebtedness is to be Incurred and, with respect to any Restricted
Payment, the date such Restricted Payment is to be made.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended and as codified in Title 11 of the United States Code, as amended
from time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary
by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may
designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary of the Company) to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any
property of, the Company or any Restricted Subsidiary; PROVIDED that (A) any
Guarantee by the Company or any Restricted Subsidiary of any Indebtedness of
the Subsidiary being so designated shall be deemed an "Incurrence" of such
Indebtedness and an "Investment" by the Company or such Restricted Subsidiary
(or both, if applicable) at the time of such designation; (B) either (I) the
Subsidiary to be so designated has total assets of $1,000 or less or (II) if
such Subsidiary has assets greater than $1,000, such designation would be
permitted under Section 4.04 and (C) if applicable, the Incurrence of
Indebtedness and the Investment referred to in clause (A) of this proviso
would be permitted under Section 4.03 and Section 4.04. The Board of
Directors may designate any Unrestricted Subsidiary
<PAGE>
21
to be a Restricted Subsidiary; PROVIDED that immediately after giving effect
to such designation (x) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately after such designation would, if Incurred
at such time, have been permitted to be incurred for all purposes of this
Indenture and (y) no Default or Event of Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced
to the Trustee by promptly providing the Trustee a copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"U.S. Global Note" has the meaning provided in Section 2.01.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof at any
time prior to the Stated Maturity of the Notes, and shall also include a
depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt; PROVIDED
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
"U.S. Physical Notes" has the meaning provided in Section 2.01.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other
than any director's qualifying shares or Investments by foreign nationals
mandated by applicable law) by such Person or one or more Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
<PAGE>
22
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to
them therein.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set
forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
<PAGE>
23
ARTICLE TWO
THE NOTES
SECTION 2.01. FORM AND DATING. The Notes and the Trustee's
certificate of authentication shall be substantially in the form annexed
hereto as Exhibit A with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange agreements to which the Company is subject or usage. The
Company shall approve the form of the Notes and any notation, legend or
endorsement on the Notes. Each Note shall be dated the date of its
authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part
of this Indenture. To the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of a single permanent global Note in registered form,
substantially in the form set forth in Exhibit A (the "U.S. GLOBAL NOTE"),
registered in the name of the nominee of the Depositary, deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the U.S. Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian
for the Depositary or its nominee, in accordance with the instructions given
by the Holder thereof, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of a single temporary
global Note in registered form substantially in the form set forth in Exhibit
A (the "TEMPORARY OFFSHORE GLOBAL NOTE"), registered in the name of the
nominee of the Depositary, deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. At any time following February 1, 1998 (the "OFFSHORE
NOTES EXCHANGE DATE"), upon receipt by the Trustee and the Company of a
certificate substantially in the form of Exhibit B hereto, a single permanent
global Note in registered form substantially in the form set forth in Exhibit
A (the "PERMANENT OFFSHORE GLOBAL NOTE"; and together with the Temporary
Offshore Global Note, the "OFFSHORE GLOBAL NOTES") duly executed by the
Company and authenticated by the Trustee as hereinafter provided shall be
deposited with the Trustee, as custodian for the Depositary, and the
Registrar shall reflect on its books and records the date and a decrease in
the principal amount of the Temporary Offshore Global Note in an amount equal
to the principal amount of the beneficial interest in the Temporary Offshore
Global Note transferred.
<PAGE>
24
Notes transferred to Institutional Accredited Investors and Notes
issued pursuant to Section 2.07 in exchange for interests in the U.S. Global
Note shall be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A (the "U.S.
PHYSICAL NOTES"). Notes issued pursuant to Section 2.07 in exchange for
interests in the Offshore Global Note shall be in the form of permanent
certificated Notes in registered form substantially in the form set forth in
Exhibit A (the "OFFSHORE PHYSICAL NOTES").
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "PHYSICAL NOTES." The U.S. Global
Note and the Offshore Global Note are sometimes referred to herein as the
"GLOBAL NOTES."
The definitive Notes shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange on
which the Notes may be listed, all as determined by the Officers executing
such Notes, as evidenced by their execution of such Notes.
SECTION 2.02. RESTRICTIVE LEGENDS. Unless and until a Note is
exchanged for an Exchange Note in connection with an effective Registration
pursuant to the Registration Rights Agreement, the U.S. Global Note,
Temporary Offshore Global Note and each U.S. Physical Note shall bear the
following legend on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION
TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY, (B) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
<PAGE>
25
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE
ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) PRIOR TO THE
END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSES (E) OR (F)
PRIOR TO THE RESALE RESTRICTIONS TERMINATION DATE TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) IN EACH OF THE FOREGOING CASES, TO
REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
SECURITY IS COMPLETE AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
Each Global Note, whether or not an Exchange Note, shall also bear
the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
<PAGE>
26
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.08 OF THE INDENTURE.
SECTION 2.03. EXECUTION, AUTHENTICATION AND DENOMINATIONS.
Subject to Article Four, the aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is unlimited. The Notes
shall be executed by two Officers of the Company. The signature of these
Officers on the Notes may be by facsimile or manual signature in the name and
on behalf of the Company.
If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee or authenticating agent authenticates the
Note, the Note shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Notes in the aggregate
principal amount specified in such Company Order; PROVIDED that the Trustee
shall be entitled to receive an Officers' Certificate and an Opinion of
Counsel of the Company in connection with such authentication of Notes. Such
Company Order shall specify the amount of Notes to be authenticated and the
date on which the original issue of Notes is to be authenticated and in case
of an issuance of Notes pursuant to Section 2.15, shall certify that such
issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee
may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an
Affiliate of the Company. The Trustee shall not be liable for the misconduct
or negligence of any authenticating agent appointed with due care.
<PAGE>
27
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 in principal amount and any integral
multiple of $1,000 in excess thereof.
SECTION 2.04. REGISTRAR AND PAYING AGENT. The Company shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (the "REGISTRAR"), an office or agency where Notes
may be presented for payment (the "PAYING AGENT") and an office or agency
where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served, which shall be in the Borough of Manhattan, The
City of New York. The Company shall cause the Registrar to keep a register
of the Notes and of their transfer and exchange (the "SECURITY REGISTER").
The Company may have one or more co-Registrars and one or more additional
Paying Agents.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
give prompt written notice to the Trustee of the name and address of any such
Agent and any change in the address of such Agent. If the Company fails to
maintain a Registrar, Paying Agent and/or agent for service of notices and
demands, the Trustee shall act as such Registrar, Paying Agent and/or agent
for service of notices and demands. The Company may remove any Agent upon
written notice to such Agent and the Trustee; PROVIDED that no such removal
shall become effective until (i) the acceptance of an appointment by a
successor Agent to such Agent as evidenced by an appropriate agency agreement
entered into by the Company and such successor Agent and delivered to the
Trustee or (ii) notification to the Trustee that the Trustee shall serve as
such Agent until the appointment of a successor Agent in accordance with
clause (i) of this proviso. The Company, any Subsidiary of the Company, or
any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying
Agent, authenticating agent and agent for service of notice and demands. The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders and
shall otherwise comply with TIA Section 312(a). If the Trustee is not the
Registrar, the Company shall furnish to the Trustee as of each Regular Record
Date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require of the
names and addresses of Holders, including the aggregate principal amount of
Notes held by each Holder.
<PAGE>
28
SECTION 2.05. PAYING AGENT TO HOLD MONEY IN TRUST. Not later than
11:00 a.m. (New York City time) each due date of the principal, premium, if
any, and interest on any Notes, the Company shall deposit with the Paying
Agent money in immediately available funds sufficient to pay such principal,
premium, if any, and interest so becoming due. The Company shall require
each Paying Agent other than the Trustee to agree in writing that such Paying
Agent shall hold in trust for the benefit of the Holders or the Trustee all
money held by the Paying Agent for the payment of principal of, premium, if
any, and interest on the Notes (whether such money has been paid to it by the
Company or any other obligor on the Notes), and such Paying Agent shall
promptly notify the Trustee of any default by the Company (or any other
obligor on the Notes) in making any such payment. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent shall have
no further liability for the money so paid over to the Trustee. If the
Company or any Subsidiary of the Company or any Affiliate of any of them acts
as Paying Agent, it will, on or before each due date of any principal of,
premium, if any, or interest on the Notes, segregate and hold in a separate
trust fund for the benefit of the Holders a sum of money sufficient to pay
such principal, premium, if any, or interest so becoming due until such sum
of money shall be paid to such Holders or otherwise disposed of as provided
in this Indenture, and will promptly notify the Trustee of its action or
failure to act.
SECTION 2.06. TRANSFER AND EXCHANGE. The Notes are issuable only
in registered form. A Holder may transfer a Note only by written application
to the Registrar stating the name of the proposed transferee and otherwise
complying with the terms of this Indenture. No such transfer shall be
effected until, and such transferee shall succeed to the rights of a Holder
only upon, final acceptance and registration of the transfer by the Registrar
in the Security Register. Prior to the registration of any transfer by a
Holder as provided herein, the Company, the Trustee, and any agent of the
Company shall treat the person in whose name the Note is registered as the
owner thereof for all purposes whether or not the Note shall be overdue, and
neither the Company, the Trustee, nor any such agent shall be affected by
notice to the contrary. Furthermore, any Holder of a Global Note shall, by
acceptance of such Global Note, agree that transfers of beneficial interests
in such Global Note may be effected only through a book entry system
maintained by the Holder of such Global Note (or its agent) and that
ownership of a beneficial interest in the Note shall be required to be
reflected in a book entry. When Notes are presented to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for
an equal principal amount of Notes of other authorized denominations
(including an exchange of Notes for Exchange Notes), the Registrar shall
register the transfer or make the exchange as requested if its requirements
for such transactions are met (including that such Notes are duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee and Registrar duly executed by the Holder thereof or by an attorney
who is authorized
<PAGE>
29
in writing to act on behalf of the Holder); PROVIDED that no exchanges of
Notes for Exchange Notes shall occur until a Registration Statement shall
have been declared effective by the Commission and that any Notes that are
exchanged for Exchange Notes shall be cancelled by the Trustee. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange or
redemption of the Notes, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or other similar
governmental charge payable upon exchanges pursuant to Section 2.11, 3.08 or
9.04).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
SECTION 2.07. BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES. (a) The
U.S. Global Note and Offshore Global Note initially shall (i) be registered
in the name of the Depositary for such Global Notes or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 2.02.
Members of, or participants in, the Depositary ("AGENT MEMBERS")
shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as
between the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a holder of any Note.
Neither the Company nor the Trustee shall be liable for any delay by the
Depositary in identifying the beneficial owners of the Notes and the Company
and the Trustee may conclusively rely on, and shall be protected in relying
on, instructions from the Depositary for all purposes (including with respect
to the registration and delivery, and the respective principal amounts, of
any Notes to be issued).
(b) Transfers of a Global Note shall be limited to transfers of
such Global Note in whole, but not in part, to the Depositary, its successors
or their respective nominees. Interests of beneficial owners in a Global Note
may be transferred in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.08. In addition, U.S. Physical
Notes and Offshore Physical Notes shall be transferred to all beneficial
owners in exchange for their
<PAGE>
30
beneficial interests in the U.S. Global Note or the Offshore Global Note,
respectively, if (i) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for the U.S. Global Note or the Offshore
Global Note, as the case may be, and a successor depositary is not appointed
by the Company within 90 days of such notice, (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depositary or (iii) in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.08.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Note for
as long as it remains such an interest.
(d) In connection with any transfer of a portion of the
beneficial interests in the U.S. Global Note to beneficial owners pursuant to
paragraph (b) of this Section, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the U.S. Global
Note in an amount equal to the principal amount of the beneficial interest in
the U.S. Global Note to be transferred, and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more U.S. Physical Notes
of like tenor and amount.
(e) In connection with the transfer of the entire U.S. Global
Note or Offshore Global Note to beneficial owners pursuant to paragraph (b)
of this Section, the U.S. Global Note or Offshore Global Note, as the case
may be, shall be deemed to be surrendered to the Trustee for cancellation,
and the Company shall execute, and the Trustee shall authenticate and
deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the U.S. Global Note or Offshore Global Note,
as the case may be, an equal aggregate principal amount of U.S. Physical
Notes or Offshore Physical Notes, as the case may be, of authorized
denominations.
(f) Any U.S. Physical Note delivered in exchange for an interest
in the U.S. Global Note pursuant to paragraph (b) or (d) of this Section
shall, except as otherwise provided by paragraph (f) of Section 2.08, bear
the legend regarding transfer restrictions applicable to the U.S. Physical
Note set forth in Section 2.02.
(g) Any Offshore Physical Note delivered in exchange for an
interest in the Offshore Global Note pursuant to paragraph (b) of this
Section shall, except as otherwise provided by paragraph (f) of Section 2.08,
bear the legend regarding transfer restrictions applicable to the Offshore
Physical Note set forth in Section 2.02.
<PAGE>
31
(h) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.08. SPECIAL TRANSFER PROVISIONS. Unless and until a
Note is exchanged for an Exchange Note in connection with an effective
Registration pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS.
The following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether
or not such Note bears the Private Placement Legend, if (x) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act or (y) the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C hereto.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note, upon receipt by the Registrar
of (x) the documents, if any, required by paragraph (i) and (y)
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Note in an amount
equal to the principal amount of the beneficial interest in the U.S. Global
Note to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more U.S. Physical Notes of like
tenor and amount.
(b) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Physical Note
or an interest in the U.S. Global Note to a QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of (x) U.S. Physical
Notes, the Registrar shall register the transfer if such transfer is being
made by a proposed transferor who has checked the box provided for on the
form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
<PAGE>
32
information regarding the Company as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to
claim the exemption from registration provided by Rule 144A or (y) an
interest in the U.S. Global Note, the transfer of such interest may be
effected only through the book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Note to
be transferred consists of U.S. Physical Notes, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions given
in accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount of the U.S. Global Note in an amount equal to the
principal amount of the U.S. Physical Notes, to be transferred, and the
Trustee shall cancel the U.S. Physical Note so transferred.
(c) TRANSFERS OF INTERESTS IN THE TEMPORARY OFFSHORE GLOBAL
NOTE. The following provisions shall apply with respect to registration of
any proposed transfer of interests in the Temporary Offshore Global Note:
(i) The Registrar shall register the transfer of any Note (x) if
the proposed transferee is a Non-U.S. Person and the proposed transferor
has delivered to the Registrar a certificate substantially in the form of
Exhibit D hereto or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A
to a transferee who has signed the certification provided for on the form
of Note stating, or has otherwise advised the Company and the Registrar in
writing, that it is purchasing the Note for its own account or an account
with respect to which it exercises sole investment discretion and that it
and any such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as it has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the U.S. Global Note, in an
amount equal to the principal amount of the Temporary Offshore
<PAGE>
33
Global Note to be transferred, and the Trustee shall decrease the amount
of the Temporary Offshore Global Note.
(d) TRANSFERS OF INTERESTS IN THE PERMANENT OFFSHORE GLOBAL NOTE
OR OFFSHORE PHYSICAL NOTES. The following provision shall apply with respect
to any transfer of interests in the Permanent Offshore Global Note or
Offshore Physical Notes. The Registrar shall register the transfer of any
such Note without requiring any additional certification.
(e) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) Prior to February 1, 1999, the Registrar shall register any
proposed transfer of a Note to a Non-U.S. Person upon receipt of a
certificate substantially in the form of Exhibit D hereto from the proposed
transferor.
(ii) On and after February 1, 1999, the Registrar shall register
any proposed transfer to any Non-U.S. Person if the Note to be transferred
is a U.S. Physical Note or an interest in the U.S. Global Note, upon
receipt of a certificate substantially in the form of Exhibit D from the
proposed transferor.
(iii) (a) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note, upon receipt by the Registrar
of (x) the documents, if any, required by paragraph (ii) and (y)
instructions in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Note in an amount
equal to the principal amount of the beneficial interest in the U.S. Global
Note to be transferred, and (b) if the proposed transferee is an Agent
Member, upon receipt by the Registrar of instructions given in accordance
with the Depositary's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the principal
amount of the Offshore Global Note in an amount equal to the principal
amount of the U.S. Physical Notes or the U.S. Global Note, as the case may
be, to be transferred, and the Trustee shall cancel the Physical Note, if
any, so transferred or decrease the amount of the U.S. Global Note.
(f) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement
Legend, the Registrar shall deliver only Notes that bear the Private
Placement Legend unless either (i) the circumstances contemplated by the
fourth paragraph of Section 2.01 or paragraphs (a)(i)(x) or (e)(ii) of this
Section 2.08 exist or (ii) there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the effect
that
<PAGE>
34
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(g) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as provided
in this Indenture. The Registrar shall not register a transfer of any Note
unless such transfer complies with the restrictions on transfer of such Note
set forth in this Indenture. In connection with any transfer of Notes, each
Holder agrees by its acceptance of the Notes to furnish the Registrar or the
Company such certifications, legal opinions or other information as either of
them may reasonably require to confirm that such transfer is being made
pursuant to an exemption from, or a transaction not subject to, the
registration requirements of the Securities Act; PROVIDED that the Registrar
shall not be required to determine (but may rely on a determination made by
the Company with respect to) the sufficiency of any such certifications,
legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section
2.08. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
SECTION 2.09. REPLACEMENT NOTES. If a mutilated Note is
surrendered to the Trustee or if the Holder claims that the Note has been
lost, destroyed or wrongfully taken, the Company shall issue and the Trustee
shall authenticate a replacement Note of like tenor and principal amount and
bearing a number not contemporaneously outstanding; PROVIDED that the
requirements of the second paragraph of Section 2.10 are met. If required by
the Trustee or the Company, an indemnity bond must be furnished that is
sufficient in the judgment of both the Trustee and the Company to protect the
Company, the Trustee or any Agent from any loss that any of them may suffer
if a Note is replaced. The Company may charge such Holder for its expenses
and the expenses of the Trustee in replacing a Note. In case any such
mutilated, lost, destroyed or wrongfully taken Note has become or is about to
become due and payable, the Company in its discretion may pay such Note
instead of issuing a new Note in replacement thereof.
Every replacement Note is an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
SECTION 2.10. OUTSTANDING NOTES. Notes outstanding at any time
are all Notes that have been authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation and those described
in this Section 2.10 as not outstanding.
<PAGE>
35
If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a BONA FIDE purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on the maturity date money sufficient to pay Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Company or one
of its Affiliates holds such Note, PROVIDED, HOWEVER, that, in determining
whether the Holders of the requisite principal amount of the outstanding
Notes have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Notes owned by the Company or any other obligor
upon the Notes or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes which
the Trustee knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or of such
other obligor.
SECTION 2.11. TEMPORARY NOTES. Until definitive Notes are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officers executing the
temporary Notes, as evidenced by their execution of such temporary Notes. If
temporary Notes are issued, the Company will cause definitive Notes to be
prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 4.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall be entitled to
the same benefits under this Indenture as definitive Notes.
SECTION 2.12. CANCELLATION. The Company at any time may deliver
to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee for cancellation any Notes
previously authenticated hereunder which the Company has not issued and sold.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee shall
cancel all Notes surrendered for
<PAGE>
36
transfer, exchange, payment or cancellation and shall destroy them in
accordance with its normal procedure. Except as expressly permitted by this
Indenture, the Company may not issue new Notes to replace Notes it has paid
in full or delivered to the Trustee for cancellation.
SECTION 2.13. CUSIP NUMBERS. The Company in issuing the Notes may
use "CUSIP", "CINS" or "ISIN" numbers (if then generally in use), and the
Trustee shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices
of redemption or exchange as a convenience to Holders; PROVIDED that any such
notice shall state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company will promptly
notify the Trustee of any change in "CUSIP", "CINS" or "ISIN" numbers for the
Notes.
SECTION 2.14. DEFAULTED INTEREST. If the Company defaults in a
payment of interest on the Notes, it shall pay, or shall deposit with the
Paying Agent money in immediately available funds sufficient to pay the
defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, to the Persons who are Holders on a subsequent special
record date. A special record date, as used in this Section 2.14 with
respect to the payment of any defaulted interest, shall mean the 15th day
next preceding the date fixed by the Company for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15 days before
the subsequent special record date, the Company shall mail to each Holder and
to the Trustee a notice that states the subsequent special record date, the
payment date and the amount of defaulted interest to be paid.
SECTION 2.15. ISSUANCE OF ADDITIONAL NOTES. The Company may, subject
to Article Four of this Indenture, issue additional Notes under this
Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.
ARTICLE THREE
REDEMPTION
SECTION 3.01. RIGHT OF REDEMPTION; MANDATORY REDEMPTION. (a) The Notes
may be redeemed at the election of the Company, in whole or in part, at any
time and from time to time on or after December 15, 2003 and prior to
maturity, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holder's last address as it appears in the Security
Register, at the following Redemption Prices (expressed in percentages of
their principal amount), plus accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date that is on or prior to the Redemption Date to receive
interest due on an Interest Payment Date) if redeemed during the 12-month
period commencing on December 15 of the applicable year set forth below:
<PAGE>
37
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2003 106.125%
2004 103.063
2005 101.531
2006 and thereafter 100.000
</TABLE>
(b) At any time prior to December 15, 2001, the Company may redeem up
to 35% of the aggregate principal amount of the Notes with the Net Cash
Proceeds from one or more sales of Capital Stock of the Company (other than
Disqualified Stock), at any time as a whole or from time to time in part,
upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holder's last address as it appears in the Security
Register, at a Redemption Price (expressed in percentages of their principal
amount) of 112.250%, plus accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date); PROVIDED that (i) at least 65% of the aggregate
principal amount of Notes originally issued remains outstanding after each
such redemption and (ii) such redemption occurs within 60 days of the related
sale of Capital Stock.
SECTION 3.02. NOTICES TO TRUSTEE. If the Company elects to redeem
Notes pursuant to Section 3.01(a) or (b), it shall notify the Trustee in
writing of the Redemption Date and the principal amount of Notes to be
redeemed.
The Company shall give each notice provided for in this Section 3.02 in
an Officers' Certificate at least 45 days before the Redemption Date (unless
a shorter period shall be satisfactory to the Trustee).
SECTION 3.03. SELECTION OF NOTES TO BE REDEEMED. If less than all of
the Notes are to be redeemed at any time, the Trustee shall select the Notes
to be redeemed in compliance with the requirements, as certified to it by the
Company, of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not listed on a national securities
exchange, by lot or by such other method as the Trustee in its sole
discretion shall deem fair and appropriate; PROVIDED that no Notes of $1,000
in principal amount or less shall be redeemed in part.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in
principal amount may only be redeemed in whole. The Trustee may select for
redemption portions (equal to $1,000 in principal amount or any integral
multiple thereof) of Notes that have denominations larger than $1,000 in
principal amount. Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes called for redemption. The
Trustee shall notify the Company and the Registrar promptly in writing of the
Notes or portions of Notes to be called for redemption.
<PAGE>
38
SECTION 3.04. NOTICE OF REDEMPTION. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption by
first class mail to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of
the principal amount (equal to $1,000 in principal amount or any integral
multiple thereof) of such Note to be redeemed and that, on and after the
Redemption Date, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be reissued;
and
(vii) that, if any Note contains a CUSIP, CINS or ISIN number as
provided in Section 2.13, no representation is being made as to the
correctness of the CUSIP, CINS or ISIN number either as printed on the
Notes or as contained in the notice of redemption and that reliance may be
placed only on the other identification numbers printed on the Notes.
At the Company's request (which request may be revoked by the Company at
any time prior to the time at which the Trustee shall have given such notice
to the Holders), made in writing to the Trustee at least 45 days (or such
shorter period as shall be satisfactory to the Trustee) before a Redemption
Date, the Trustee shall give the notice of redemption in the name and at the
expense of the Company. If, however, the Company gives such notice to the
Holders,
<PAGE>
39
the Company shall concurrently deliver to the Trustee an Officers'
Certificate stating that such notice has been given.
SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION. Once notice of
redemption is mailed, Notes called for redemption become due and payable on
the Redemption Date and at the Redemption Price. Upon surrender of any Notes
to the Paying Agent, such Notes shall be paid at the Redemption Price, plus
accrued interest, if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the
proceedings for the redemption of Notes held by Holders to whom such notice
was properly given.
SECTION 3.06. DEPOSIT OF REDEMPTION PRICE. On or prior to any
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company is acting as its own Paying Agent, shall segregate and hold in trust
as provided in Section 2.05) money sufficient to pay the Redemption Price of
and accrued interest on all Notes to be redeemed on that date other than
Notes or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation.
SECTION 3.07. PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given in the manner provided above, the Notes or portion
of Notes specified in such notice to be redeemed shall become due and payable
on the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless
the Company shall default in the payment of such Notes at the Redemption
Price and accrued interest to the Redemption Date, in which case the
principal, until paid, shall bear interest from the Redemption Date at the
rate prescribed in the Notes), such Notes shall cease to accrue interest.
Upon surrender of any Note for redemption in accordance with a notice of
redemption, such Note shall be paid and redeemed by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; PROVIDED that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders registered as
such at the close of business on the relevant Regular Record Date.
SECTION 3.08. NOTES REDEEMED IN PART. Upon surrender of any Note that
is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Note equal in principal amount
to the unredeemed portion of such surrendered Note.
<PAGE>
40
ARTICLE FOUR
COVENANTS
SECTION 4.01. PAYMENT OF NOTES. The Company shall pay the principal
of, premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal,
premium, if any, or interest shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Company, a Subsidiary of the Company,
or any Affiliate of any of them) holds on that date money designated for and
sufficient to pay the installment. If the Company or any Subsidiary of the
Company or any Affiliate of any of them, acts as Paying Agent, an installment
of principal, premium, if any, or interest shall be considered paid on the
due date if the entity acting as Paying Agent complies with the last sentence
of Section 2.05. As provided in Section 6.09, upon any bankruptcy or
reorganization procedure relative to the Company, the Trustee shall serve as
the Paying Agent, if any, for the Notes.
The Company shall pay interest on overdue principal, premium, if any,
and interest on overdue installments of interest, to the extent lawful, at
the rate per annum specified in the Notes.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company shall
maintain in the Borough of Manhattan, The City of New York an office or
agency where Notes may be surrendered for registration of transfer or
exchange or for presentation for payment and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
PROVIDED that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency in the Borough
of Manhattan, The City of New York for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of
the Trustee as such office of the Company in accordance with Section 2.04.
SECTION 4.03. LIMITATION ON INDEBTEDNESS. (a) The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (other than the Notes and other
<PAGE>
41
Indebtedness existing on the Closing Date); PROVIDED that the Company may
Incur Indebtedness, and any Restricted Subsidiary may Incur Acquired
Indebtedness, if, after giving effect to the Incurrence of such Indebtedness
and the receipt and application of the proceeds therefrom, the Consolidated
Leverage Ratio would be less than 8 to 1, for Indebtedness Incurred on or
prior to December 31, 1999, or 7 to 1, for Indebtedness Incurred thereafter.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following:
(i) Indebtedness, and refinancings thereof, outstanding at any
time under the New Credit Agreement in an aggregate principal amount not to
exceed $450.0 million, less any amount of such Indebtedness permanently
repaid as provided under Section 4.10;
(ii) Indebtedness owed (A) to the Company evidenced by a promissory
note or (B) to any of its Restricted Subsidiaries; PROVIDED that any event
which results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of such Indebtedness (other than to
the Company or another Restricted Subsidiary) shall be deemed, in each
case, to constitute an Incurrence of such Indebtedness not permitted by
this clause (ii);
(iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness, other
than Indebtedness Incurred under clause (i), (ii), (iv), (vi), (viii) or
(x) of this paragraph, and any refinancings thereof in an amount not to
exceed the amount so refinanced or refunded (plus premiums, accrued
interest, fees and expenses); PROVIDED that Indebtedness the proceeds of
which are used to refinance or refund the Notes or Indebtedness that is
PARI PASSU with, or subordinated in right of payment to, the Notes shall
only be permitted under this clause (iii) if (A) in case the Notes are
refinanced in part or the Indebtedness to be refinanced is PARI PASSU with
the Notes, such new Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such new Indebtedness is
outstanding, is expressly made PARI PASSU with, or subordinate in right of
payment to, the remaining Notes, (B) in case the Indebtedness to be
refinanced is subordinated in right of payment to the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is issued or remains outstanding,
is expressly made subordinate in right of payment to the Notes at least to
the extent that the Indebtedness to be refinanced is subordinated to the
Notes and (C) such new Indebtedness, determined as of the date of
Incurrence of such new Indebtedness, does not mature prior to the Stated
Maturity of the Indebtedness to be refinanced or refunded, and the Average
Life of such new Indebtedness is at least equal to the remaining Average
Life of the Indebtedness to be refinanced or refunded; and PROVIDED FURTHER
that in no event may Indebtedness of the
<PAGE>
42
Company be refinanced by means of any Indebtedness of any Restricted
Subsidiary pursuant to this clause (iii);
(iv) Indebtedness (A) in respect of performance, surety or appeal
bonds provided in the ordinary course of business, (B) under Currency
Agreements and Interest Rate Agreements; PROVIDED that such agreements
(a) are designed solely to protect the Company or its Subsidiaries against
fluctuations in foreign currency exchange rates or interest rates and
(b) do not increase the Indebtedness of the obligor outstanding at any time
other than as a result of fluctuations in foreign currency exchange rates
or interest rates or by reason of fees, indemnities and compensation
payable thereunder; or (C) arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any of its Restricted
Subsidiaries pursuant to such agreements, in any case Incurred in
connection with the disposition of any business, assets or Restricted
Subsidiary (other than Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in an amount not
to exceed the gross proceeds actually received by the Company or any
Restricted Subsidiary in connection with such disposition;
(v) Indebtedness of the Company, to the extent the net proceeds
thereof are promptly (A) used to purchase Notes tendered in an Offer to
Purchase made as a result of a Change in Control or (B) deposited to
defease the Notes in accordance with Article Eight;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of the
Company by any Restricted Subsidiary provided the Guarantee of such
Indebtedness is permitted by and made in accordance with Section 4.07;
(vii) Indebtedness Incurred to finance the cost (including the cost
of design, development, construction, installation or integration) of
tangible telecommunications network assets, equipment or inventory acquired
by the Company or a Restricted Subsidiary after the Closing Date;
(viii) Indebtedness of the Company, and any refinancings thereof, not
to exceed, at any one time outstanding, two times the Net Cash Proceeds
received by the Company after the Closing Date as a capital contribution or
from the issuance and sale of its Capital Stock (other than Disqualified
Stock) to a Person that is not a Subsidiary of the Company to the extent
such Net Cash Proceeds have not been used pursuant to clause (C)(2) of the
first paragraph or clause (iii), (iv), (v) or (viii) of the second
paragraph of Section 4.04
<PAGE>
43
to make a Restricted Payment; PROVIDED that such Indebtedness does not
mature prior to the Stated Maturity of the Notes and has an Average Life
longer than the Notes;
(ix) Indebtedness of Sygnet Wireless, Inc. and its Subsidiaries on
the Closing Date; PROVIDED that upon consummation of the Sygnet
Acquisition, no such Indebtedness (other than any of the 11 1/2% Senior
Notes due 2006 of Sygnet Wireless, Inc. not tendered into Sygnet
Wireless, Inc.'s tender offer) shall remain outstanding; and
(x) Indebtedness, and any refinancings thereof, outstanding at any
time in an aggregate amount not to exceed $10 million, less any amount of
such Indebtedness permanently repaid as provided under Section 4.10.
(b) Notwithstanding any other provision of this Section 4.03 the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary
may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded,
with respect to any outstanding Indebtedness due solely to the result of
fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Indebtedness Incurred under the New Credit
Agreement on or prior to the Closing Date, and any of Sygnet Wireless, Inc.'s
11 1/2% Senior Notes due 2006, shall be treated as Incurred pursuant to clause
(i) of the second paragraph of this Section 4.03, (2) Guarantees, Liens or
obligations with respect to letters of credit supporting Indebtedness
otherwise included in the determination of such particular amount shall not
be included and (3) any Liens granted pursuant to the equal and ratable
provisions referred to in Section 4.09 shall not be treated as Indebtedness.
For purposes of determining compliance with this Section 4.03, in the event
that an item of Indebtedness meets the criteria of more than one of the types
of Indebtedness described in the above clauses, the Company, in its sole
discretion, shall classify, and from time to time may reclassify, such item
of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
SECTION 4.04. LIMITATION ON RESTRICTED PAYMENTS. The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, (i) declare or pay any dividend or make any distribution on or
with respect to its Capital Stock held by Persons other than the Company or
any of its Restricted Subsidiaries (other than (x) dividends or distributions
payable solely in shares of its Capital Stock (other than Disqualified Stock)
or in options, warrants or other rights to acquire shares of such Capital
Stock and (y) pro rata dividends or distributions on Common Stock of
Restricted Subsidiaries held by minority stockholders, PROVIDED that such
dividends do not in the aggregate exceed the minority stockholders' pro rata
share of such Restricted Subsidiaries' net income from the first day of the
fiscal quarter beginning immediately following the Closing Date) (ii)
purchase, redeem, retire or otherwise acquire for value any shares of Capital
Stock of (A) the Company or an Unrestricted Subsidiary (including options,
warrants
<PAGE>
44
or other rights to acquire such shares of Capital Stock) held by any Person
or (B) a Restricted Subsidiary (including options, warrants or other rights
to acquire such shares of Capital Stock) held by any Affiliate of the Company
(other than a Wholly Owned Restricted Subsidiary) or any holder (or any
Affiliate of such holder) of 5% or more of the Capital Stock of the Company,
(iii) make any voluntary or optional principal payment, or voluntary or
optional redemption, repurchase, defeasance, or other acquisition or
retirement for value, of Indebtedness of the Company that is subordinated in
right of payment to the Notes or (iv) make any Investment, other than a
Permitted Investment, in any Person (such payments or any other actions
described in clauses (i) through (iv) being collectively "Restricted
Payments"), if, at the time of, and after giving effect to, the proposed
Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing,
(B) the Company could not Incur at least $1.00 of Indebtedness
under the first paragraph of Section 4.03(a) or
(C) the aggregate amount of all Restricted Payments (the amount,
if other than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a Board
Resolution) made after the Closing Date shall exceed the sum of
(1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income
is a loss, minus 100% of the amount of such loss) (determined by
excluding income resulting from transfers of assets by the Company or
a Restricted Subsidiary to an Unrestricted Subsidiary) accrued on a
cumulative basis during the period (taken as one accounting period)
beginning on the first day of the fiscal quarter immediately following
the Closing Date and ending on the last day of the last fiscal quarter
preceding the Transaction Date for which reports have been filed
pursuant to Section 4.17 PLUS
(2) the aggregate Net Cash Proceeds received by the Company
after the Closing Date as a capital contribution or from the issuance
and sale permitted by this Indenture of its Capital Stock (other than
Disqualified Stock) to a Person who is not a Subsidiary of the Company
(except to the extent such Net Cash Proceeds are used to Incur
Indebtedness pursuant to clause (viii) under Section 4.03) or from the
issuance to a Person who is not a Subsidiary of the Company of any
options, warrants or other rights to acquire Capital Stock of the
Company (in each case, exclusive of any Disqualified Stock or any
options, warrants or other rights that are redeemable at the option of
the holder, or are required to be redeemed, prior to the Stated
Maturity of the Notes) PLUS
<PAGE>
45
(3) an amount equal to the net reduction in Investments
(other than reductions in Permitted Investments) in any Person
resulting from payments of interest on Indebtedness, dividends,
repayments of loans or advances, returns of capital or other transfers
of assets, in each case to the Company or any Restricted Subsidiary or
from the Net Cash Proceeds from the sale of any such Investment
(except, in each case, to the extent any such payment or proceeds are
included in the calculation of Adjusted Consolidated Net Income), or
from redesignations of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of
"Investments"), not to exceed, in each case, the amount of Investments
previously made by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of:
(i) the payment of any dividend within 60 days after the date of
declaration thereof if, at said date of declaration, such payment would
comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of
payment to the Notes including premium, if any, and accrued and unpaid
interest, with the proceeds of, or in exchange for, Indebtedness Incurred
under clause (iii) of the second paragraph of part (a) of Section 4.03;
(iii) the repurchase, redemption or other acquisition of Capital
Stock of the Company (or options, warrants or other rights to acquire such
Capital Stock) in exchange for, or out of the proceeds of a substantially
concurrent capital contribution or offering of, shares of Capital Stock
(other than Disqualified Stock) of the Company (or options, warrants or
other rights to acquire such Capital Stock, exclusive of any options,
warrants or other rights that are redeemable at the option of the holder,
or are required to be redeemed, prior to the Stated Maturity of the Notes);
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to
the Notes in exchange for, or out of the proceeds of, a substantially
concurrent capital contribution or offering of, shares of the Capital Stock
(other than Disqualified Stock) of the Company (or options, warrants or
other rights to acquire such Capital Stock, exclusive of any options,
warrants or other rights that are redeemable at the option of the holder,
or are required to be redeemed, prior to the Stated Maturity of the Notes);
<PAGE>
46
(v) the declaration or payment of dividends on the Common Stock of
the Company following a Public Equity Offering of such Common Stock, of up
to 6% per annum of the Net Cash Proceeds received by the Company in such
Public Equity Offering;
(vi) payments or distributions, to dissenting stockholders pursuant
to applicable law, pursuant to or in connection with a consolidation,
merger or transfer of assets that complies with the provisions of Article
Five;
(vii) the purchase, redemption, acquisition, cancellation or other
retirement for value of shares of Capital Stock of the Company to the
extent necessary in the good faith judgment of the Board of Directors of
the Company, to prevent the loss or secure the renewal or reinstatement of
any license or franchise held by the Company or any Restricted Subsidiary
from any governmental agency;
(viii) Investments in any Person the primary business of which is
related, ancillary or complementary to the business of the Company and its
Restricted Subsidiaries on the date of such Investments; PROVIDED that the
aggregate amount of Investments made pursuant to this clause (viii) does
not exceed the sum of (a) $10 million plus the amount of Net Cash Proceeds
received by the Company after the Closing Date as a capital contribution or
from the sale of its Capital Stock (other than Disqualified Stock) to a
Person who is not a Subsidiary of the Company, except to the extent such
Net Cash Proceeds are used to Incur Indebtedness pursuant to clause
(viii) under Section 4.03 or to make Restricted Payments pursuant to clause
(C)(2) of the first paragraph, or clauses (iii), (iv) or (v) of this
paragraph, of this Section 4.04, plus (b) the net reduction in Investments
made pursuant to this clause (viii) resulting from distributions on or
repayments of such Investments or from the Net Cash Proceeds from the sale
of any such Investment (except in each case to the extent any such payment
or proceeds is included in the calculation of Adjusted Consolidated Net
Income) or from such Person becoming a Restricted Subsidiary (valued in
each case as provided in the definition of "Investments"), PROVIDED that
the net reduction in any Investment shall not exceed the amount of such
Investment;
(ix) Investments acquired as a capital contribution or in exchange
for Capital Stock (other than Disqualified Stock) of the Company; or
(x) the purchase, redemption, retirement or other acquisition for
value of Capital Stock of the Company, or options to purchase such shares,
held by directors, employees or former directors or employees of the
Company or any Restricted Subsidiary (or their estates or beneficiaries
under their estates) upon death, disability, retirement, termination of
employment or pursuant to the terms of any agreement under which such
shares of Capital Stock or options were issued; PROVIDED that the aggregate
consideration paid for such purchase, redemption, acquisition, cancellation
or other retirement of such
<PAGE>
47
shares of Capital Stock or options after the Closing Date does not exceed
$1 million in any calendar year;
PROVIDED that, except in the case of clauses (i) and (iii), no Default or
Event of Default shall have occurred and be continuing or occur as a
consequence of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (ix)
thereof), and the Net Cash Proceeds from any capital contribution or any
issuance of Capital Stock referred to in clauses (iii), (iv) and (viii),
shall be included in calculating whether the conditions of clause (C) of the
first paragraph of this Section 4.04 have been met with respect to any
subsequent Restricted Payments. In the event the proceeds of an issuance of
Capital Stock of the Company are used for the redemption, repurchase or other
acquisition of the Notes, or Indebtedness that is PARI PASSU with the Notes,
then the Net Cash Proceeds of such issuance shall be included in clause (C)
of the first paragraph of this Section 4.04 only to the extent such proceeds
are not used for such redemption, repurchase or other acquisition of
Indebtedness.
SECTION 4.05. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. The Company shall not, and shall not
permit any Restricted Subsidiary to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any Restricted Subsidiary to (i) pay dividends or make
any other distributions permitted by applicable law on any Capital Stock of
such Restricted Subsidiary owned by the Company or any other Restricted
Subsidiary, (ii) pay any Indebtedness owed to the Company or any other
Restricted Subsidiary, (iii) make loans or advances to the Company or any
other Restricted Subsidiary or (iv) transfer any of its property or assets to
the Company or any other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Closing Date in the New Credit Agreement, this
Indenture or any other agreements in effect on the Closing Date, and any
amendments, extensions, refinancings, renewals or replacements of such
agreements; PROVIDED that the encumbrances and restrictions in any such
amendments, extensions, refinancings, renewals or replacements are no less
favorable in any material respect to the Holders than those encumbrances or
restrictions that are then in effect and that are being extended,
refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law;
<PAGE>
48
(iii) existing with respect to any Person or the property or assets
of such Person acquired by the Company or any Restricted Subsidiary,
existing at the time of such acquisition and not incurred in contemplation
thereof, which encumbrances or restrictions are not applicable to any
Person or the property or assets of any Person other than such Person or
the property or assets of such Person so acquired;
(iv) in the case of clause (iv) of the first paragraph of this
Section 4.05, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a lease, license,
conveyance or contract or similar property or asset, (B) existing by virtue
of any transfer of, agreement to transfer, option or right with respect to,
or Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by this Indenture or (C) arising or
agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract
from the value of property or assets of the Company or any Restricted
Subsidiary in any manner material to the Company or any Restricted
Subsidiary;
(v) with respect to a Restricted Subsidiary and imposed pursuant
to an agreement that has been entered into for the sale or disposition of
all or substantially all of the Capital Stock of, or property and assets
of, such Restricted Subsidiary; or
(vi) contained in the terms of any Indebtedness of a Restricted
Subsidiary, or any agreement pursuant to which such Indebtedness was
issued, if the encumbrance or restriction applies only in the event of a
payment default or a default with respect to a financial covenant contained
in such Indebtedness or agreement, if the encumbrance or restriction is not
materially more disadvantageous to the Holders of the Notes than is
customary in comparable financings (as determined by the Company) and if
the Company determines that any such encumbrance or restriction will not
materially affect the Company's ability to make principal or interest
payments on the Notes.
Nothing contained in this Section 4.05 shall prevent the Company or any
Restricted Subsidiary from (1) creating, incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.09 or (2) restricting the
sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.06. LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not sell, and shall not permit
any Restricted Subsidiary, directly or indirectly, to issue or sell, any
shares of Capital Stock of a Restricted Subsidiary (including options,
warrants or other rights to purchase shares of such Capital Stock) except:
(i) to the Company or a Wholly Owned Restricted Subsidiary;
<PAGE>
49
(ii) issuances of director's qualifying shares or sales to foreign
nationals of shares of Capital Stock of foreign Restricted Subsidiaries, to
the extent required by applicable law;
(iii) if, immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would no longer constitute a Restricted
Subsidiary, PROVIDED any Investment in such Person remaining after giving
effect to such issuance or sale would have been permitted to be made under
Section 4.04, if made on the date of such issuance or sale; and
(iv) sales of Common Stock of a Restricted Subsidiary; PROVIDED
that the Net Cash Proceeds, if any, of such sale are applied in accordance
with clause (A) or (B) of Section 4.10.
SECTION 4.07. LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES. The Company shall not permit any Restricted Subsidiary,
directly or indirectly, to Guarantee any Indebtedness of the Company which is
PARI PASSU with or subordinate in right of payment to the Notes ("Guaranteed
Indebtedness"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee (a "Subsidiary Guarantee") of payment of the Notes by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives, and will
not in any manner whatsoever claim or take the benefit or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights against
the Company or any other Restricted Subsidiary as a result of any payment by
such Restricted Subsidiary under its Subsidiary Guarantee; PROVIDED that this
paragraph shall not be applicable to any Guarantee of any Restricted
Subsidiary that existed at the time such Person became a Restricted
Subsidiary and was not Incurred in connection with, or in contemplation of,
such Person becoming a Restricted Subsidiary. If the Guaranteed Indebtedness
is (A) PARI PASSU with the Notes, then the Guarantee of such Guaranteed
Indebtedness shall be PARI PASSU with, or subordinated to, the Subsidiary
Guarantee or (B) subordinated to the Notes, then the Guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that the Guaranteed Indebtedness is subordinated to the
Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the
Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or (ii) the release
or discharge of the Guarantee which resulted in the creation of such
Subsidiary Guarantee, except a discharge or release by or as a result of
payment under such Guarantee.
<PAGE>
50
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH STOCKHOLDERS AND
AFFILIATES. The Company shall not, and will not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase, sale, lease or
exchange of property or assets, or the rendering of any service) with any
holder (or any Affiliate of such holder) of 5% or more of any class of
Capital Stock of the Company or with any Affiliate of the Company or any
Restricted Subsidiary, except upon fair and reasonable terms no less
favorable to the Company or such Restricted Subsidiary than could be
obtained, at the time of such transaction or, if such transaction is pursuant
to a written agreement, at the time of the execution of the agreement
providing therefor, in a comparable arm's-length transaction with a Person
that is not such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the members of the
Board of Directors who do not have any material direct or indirect
financial interest in or with respect to such transactions or (B) for which
the Company or a Restricted Subsidiary delivers to the Trustee a written
opinion of a nationally recognized investment banking firm stating that the
transaction is fair to the Company or such Restricted Subsidiary from a
financial point of view;
(ii) any transaction solely between the Company and any of its
Wholly Owned Restricted Subsidiaries or solely between Wholly Owned
Restricted Subsidiaries;
(iii) the payment of reasonable and customary regular fees to
directors of the Company who are not employees of the Company;
(iv) any payments or other transactions pursuant to any tax-sharing
agreement between the Company and any other Person with which the Company
files a consolidated tax return or with which the Company is part of a
consolidated group for tax purposes;
(v) the Tower Sale and the Tower Lease; PROVIDED that the Company
and its Restricted Subsidiaries receive at least $25 million from the Tower
Sale and the annual rental expense under the Tower Lease is no more than
$1.6 million;
(vi) transactions between the Company or any of its Restricted
Subsidiaries and Dobson Communications or its Affiliates on terms of the
kind customarily employed to allocate charges among members of a
consolidated group of entities, in any such case that are fair and
reasonable to the Company or such Restricted Subsidiary; PROVIDED that the
aggregate consideration subject to such transactions does not exceed $3
million in any calendar year; or
<PAGE>
51
(vii) any Restricted Payments not prohibited by Section 4.04.
Notwithstanding the foregoing, any transaction covered by the first
paragraph of this Section 4.08 and not covered by clauses (ii) through (vii)
of the second paragraph of this Section 4.08, the aggregate amount of which
(x) exceeds $1.0 million in value, must be approved or determined to be fair
in the manner provided for in clause (i)(A) or (B) above or (y) exceeds $5.0
million in value, must be approved or determined to be fair in the manner
provided for in clause (i)(B) above.
SECTION 4.09. LIMITATION ON LIENS. The Company shall not, and shall
not permit any Restricted Subsidiary to, create, incur, assume or suffer to
exist any Lien on any of its assets or properties of any character, or any
shares of Capital Stock or Indebtedness of any Restricted Subsidiary, without
making effective provision for all of the Notes and all other amounts due
under this Indenture to be directly secured equally and ratably with (or, if
the obligation or liability to be secured by such Lien is subordinated in
right of payment to the Notes, prior to) the obligation or liability secured
by such Lien.
The foregoing limitation does not apply to:
(i) Liens existing on the Closing Date;
(ii) Liens granted after the Closing Date on any assets or Capital
Stock of the Company or its Restricted Subsidiaries created in favor of the
Holders;
(iii) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company or a Wholly Owned
Restricted Subsidiary to secure Indebtedness owing to the Company or such
other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance
secured Indebtedness which is permitted to be Incurred under clause
(iii) of the second paragraph of Section 4.03; PROVIDED that such Liens do
not extend to or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or assets securing the
Indebtedness being refinanced;
(v) Liens on the Capital Stock of, or any property or assets of, a
Restricted Subsidiary securing Indebtedness of such Restricted Subsidiary
permitted under Section 4.03;
(vi) Liens securing Indebtedness Incurred under clause (i) of the
second paragraph of Section 4.03; or
<PAGE>
52
(vii) Permitted Liens.
SECTION 4.10. LIMITATION ON ASSET SALES. The Company shall not, and
shall not permit any Restricted Subsidiary to, consummate any Asset Sale,
unless (i) the consideration received by the Company or such Restricted
Subsidiary is at least equal to the fair market value of the assets sold or
disposed of and (ii) at least 85% of the consideration received consists of
cash or Temporary Cash Investments.
In the event and to the extent that the Net Cash Proceeds received by
the Company or any of its Restricted Subsidiaries from one or more Asset
Sales occurring on or after the Closing Date in any period of 12 consecutive
months exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as
of the date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its subsidiaries has been filed
with the Commission), then the Company shall or shall cause the relevant
Restricted Subsidiary to:
(i) within 12 months after the date Net Cash Proceeds so received
exceed 10% of Adjusted Consolidated Net Tangible Assets
(A) apply an amount equal to such excess Net Cash Proceeds
to permanently repay senior Indebtedness of the Company or any
Restricted Subsidiary providing a Subsidiary Guarantee pursuant to
Section 4.07 or Indebtedness of any other Restricted Subsidiary, in
each case owing to a Person other than the Company or any of its
Restricted Subsidiaries or
(B) invest an equal amount, or the amount not so applied
pursuant to clause (A) (or enter into a definitive agreement
committing to so invest within 12 months after the date of such
agreement), in property or assets (other than current assets) of a
nature or type or that are used in a business (or in a company having
property and assets of a nature or type, or engaged in a business)
similar or related to the nature or type of the property and assets
of, or the business of, the Company and its Restricted Subsidiaries
existing on the date of such investment and
(ii) apply (no later than the end of the 12-month period referred
to in clause (i)) such excess Net Cash Proceeds (to the extent not applied
pursuant to clause (i)) as provided in the following paragraph of this
Section 4.10. The amount of such excess Net Cash Proceeds required to be
applied (or to be committed to be applied) during such twelve-month period
as set forth in clause (i) of the preceding sentence and not applied as so
required by the end of such period shall constitute "Excess Proceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.10 totals at least $5 million,
<PAGE>
53
the Company must commence, not later than the fifteenth Business Day of such
month, and consummate an Offer to Purchase from the Holders on a pro rata
basis an aggregate principal amount of Notes equal to the Excess Proceeds on
such date, at a purchase price equal to 100% of the principal amount thereof,
plus, in each case, accrued interest (if any) to the Payment Date.
SECTION 4.11. REPURCHASE OF NOTES UPON A CHANGE OF CONTROL. The
Company must commence, within 30 days of the occurrence of a Change of
Control, and consummate an Offer to Purchase for all Notes then outstanding,
at a purchase price equal to 101% of the principal amount thereof, plus
accrued interest (if any) to the Payment Date.
SECTION 4.12. EXISTENCE. Subject to Articles Four and Five of this
Indenture, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and the existence of
each of its Restricted Subsidiaries in accordance with the respective
organizational documents of the Company and each such Subsidiary and the
rights (whether pursuant to charter, partnership certificate, agreement,
statute or otherwise), material licenses and franchises of the Company and
each such Subsidiary; PROVIDED that the Company shall not be required to
preserve any such right, license or franchise, or the existence of any
Restricted Subsidiary, if the maintenance or preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole.
SECTION 4.13. PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay
or discharge and shall cause each of its Subsidiaries to pay or discharge, or
cause to be paid or discharged, before the same shall become delinquent (i)
all material taxes, assessments and governmental charges levied or imposed
upon (a) the Company or any such Subsidiary, (b) the income or profits of any
such Subsidiary which is a corporation or (c) the property of the Company or
any such Subsidiary and (ii) all material lawful claims for labor, materials
and supplies that, if unpaid, might by law become a lien upon the property of
the Company or any such Subsidiary; PROVIDED that the Company shall not be
required to pay or discharge, or cause to be paid or discharged, any such
tax, assessment, charge or claim the amount, applicability or validity of
which is being contested in good faith by appropriate proceedings and for
which adequate reserves have been established.
SECTION 4.14. MAINTENANCE OF PROPERTIES AND INSURANCE. The Company
shall cause all properties used or useful in the conduct of its business or
the business of any of its Restricted Subsidiaries, to be maintained and kept
in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED
that nothing in this Section 4.14 shall prevent the Company or any such
Subsidiary from discontinuing the use, operation or maintenance of any of
<PAGE>
54
such properties or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Company, desirable in the conduct of the
business of the Company or such Subsidiary.
The Company shall provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by
corporations similarly situated and owning like properties, including, but
not limited to, products liability insurance and public liability insurance,
with reputable insurers or with the government of the United States of
America, or an agency or instrumentality thereof, in such amounts, with such
deductibles and by such methods as shall be customary for corporations
similarly situated in the industry in which the Company or such Restricted
Subsidiary, as the case may be, is then conducting business.
SECTION 4.15. NOTICE OF DEFAULTS. In the event that the Company
becomes aware of any Default or Event of Default the Company, promptly after
it becomes aware thereof, shall give written notice thereof to the Trustee.
SECTION 4.16. COMPLIANCE CERTIFICATES. (a) The Company shall deliver
to the Trustee, within 45 days after the end of each fiscal quarter (90 days
after the end of the last fiscal quarter of each year), an Officers'
Certificate stating whether or not the signers know of any Default or Event
of Default that occurred during such fiscal quarter. In the case of the
Officers' Certificate delivered within 90 days of the end of the Company's
fiscal year, such certificate shall contain a certification from the
principal executive officer, principal financial officer or principal
accounting officer that a review has been conducted of the activities of the
Company and its Restricted Subsidiaries and the Company's and its Restricted
Subsidiaries' performance under this Indenture and that the Company has
complied with all conditions and covenants under this Indenture. For
purposes of this Section 4.16, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. If they do know of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default and its
status. The first certificate to be delivered pursuant to this Section
4.16(a) shall be for the first fiscal quarter beginning after the execution
of this Indenture.
(b) The Company shall deliver to the Trustee, within 90 days after the end
of the Company's fiscal year, a certificate signed by the Company's independent
certified public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Notes as they relate to
accounting matters, (ii) that they have read the most recent Officers'
Certificate delivered to the Trustee pursuant to paragraph (a) of this Section
4.16 and (iii) whether, in connection with their audit examination, anything
came to their attention that caused them to believe that the Company was not in
compliance with any of the terms, covenants, provisions or conditions of Article
Four and Section 5.01 of this Indenture as they pertain to accounting matters
and, if any Default or Event of Default has come to their attention, specifying
the nature and period of existence thereof; PROVIDED that such independent
certified public
<PAGE>
55
accountants shall not be liable in respect of such statement by reason of any
failure to obtain knowledge of any such Default or Event of Default that
would not be disclosed in the course of an audit examination conducted in
accordance with generally accepted auditing standards in effect at the date
of such examination.
SECTION 4.17. COMMISSION REPORTS AND REPORTS TO HOLDERS. At all times
from and after the earlier of (i) the date of the commencement of an Exchange
Offer or the effectiveness of the Shelf Registration Statement (the
"Registration") and (ii) June 21, 1999, in either case, whether or not the
Company is then required to file reports with the Commission, the Company
shall file with the Commission all such reports and other information as it
would be required to file with the Commission by Sections 13(a) or 15(d)
under the Securities Exchange Act of 1934 if it were subject thereto. The
Company shall supply the Trustee and each Holder or shall supply to the
Trustee for forwarding to each such Holder, without cost to such Holder,
copies of such reports and other information. In addition, at all times prior
to the earlier of the date of the Registration and June 21, 1999, the Company
shall, at its cost, deliver to each Holder of the Notes quarterly and annual
reports substantially equivalent to those which would be required by the
Exchange Act. In addition, at all times prior to the Registration, upon the
request of any Holder or any prospective purchaser of the Notes designated by
a Holder, the Company shall supply to such Holder or such prospective
purchaser the information required under Rule 144A under the Securities Act.
The Company also shall comply with the other provisions of TIA Section 314(a).
SECTION 4.18. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Company from paying all or any portion
of the principal of, premium, if any, or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or that may affect the covenants or the performance of this Indenture; and
(to the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law and covenants that it will
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.19. LIMITATION ON SALE-LEASEBACK TRANSACTIONS. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
sale-leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred.
<PAGE>
56
The foregoing restriction does not apply to any sale-leaseback
transaction if (i) the lease is for a period, including renewal rights, of
not in excess of three years; (ii) the lease secures or relates to industrial
revenue or pollution control bonds; (iii) the transaction is solely between
the Company and any Wholly Owned Restricted Subsidiary or solely between
Wholly Owned Restricted Subsidiaries; (iv) the Tower Sale and the Tower
Lease; or (v) the Company or such Restricted Subsidiary, within twelve months
after the sale or transfer of any assets or properties is completed, applies
an amount not less than the net proceeds received from such sale in
accordance with clause (A) or (B) of the first paragraph of Section 4.10.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC. The Company will not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as
an entirety or substantially an entirety in one transaction or a series of
related transactions) to, any Person or permit any Person to merge with or
into the Company unless: (i) the Company shall be the continuing Person, or
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or that acquired or leased such property and
assets of the Company shall be a corporation organized and validly existing
under the laws of the United States of America or any jurisdiction thereof
and shall expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, all of the obligations of the Company on all of the
Notes and under this Indenture; (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) immediately after giving effect to such transaction on a
pro forma basis, the Company or any Person becoming the successor obligor of
the Notes shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to such transaction;
(iv) immediately after giving effect to such transaction on a pro forma basis
the Company, or any Person becoming the successor obligor of the Notes, as
the case may be, could Incur at least $1.00 of Indebtedness under the first
paragraph of Section 4.03(a); PROVIDED that this clause (iv) shall not apply
to a consolidation or merger with or into a Wholly Owned Restricted
Subsidiary with a positive net worth; PROVIDED that, in connection with any
such merger or consolidation, no consideration (other than Common Stock in
the surviving Person or the Company) shall be issued or distributed to the
stockholders of the Company; and (v) the Company delivers to the Trustee an
Officers' Certificate (attaching the arithmetic computations to demonstrate
compliance with clauses (iii) and (iv)) and Opinion of Counsel, in each case
stating that such consolidation, merger or transfer and such supplemental
indenture complies with this provision and that all conditions precedent
provided for herein relating to such transaction have been complied with;
PROVIDED, HOWEVER, that clauses (iii) and (iv) above do not apply if, in the
good faith determination of the Board of Directors of the Company, whose
determination shall be evidenced by a Board Resolution, the principal purpose
of such transaction is to change the
<PAGE>
57
state of incorporation of the Company; and PROVIDED FURTHER that any such
transaction shall not have as one of its purposes the evasion of the
foregoing limitations.
SECTION 5.02. SUCCESSOR SUBSTITUTED. Upon any consolidation or merger,
or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance
with Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to,
and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; PROVIDED that the Company shall not be
released from its obligation to pay the principal of, premium, if any, or
interest on the Notes in the case of a lease of all or substantially all of
its property and assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" shall occur
with respect to the Notes if:
(a) the Company defaults in the payment of the principal of (or
premium, if any, on) any Note when the same becomes due and payable at
maturity, upon acceleration, redemption or otherwise;
(b) the Company defaults in the payment of interest on any Note
when the same becomes due and payable, and such default continues for a
period of 30 days; PROVIDED that a failure to make any of the first six
scheduled interest payments on the Notes on the applicable Interest Payment
Date will constitute an Event of Default with no grace or cure period;
(c) the Company defaults in the performance of, or breaches the
provisions of, Article Five or fails to make or consummate an Offer to
Purchase in accordance with Section 4.10 or 4.11;
(d) the Company defaults in the performance of or breaches any
other covenant or agreement of the Company in this Indenture or under the
Notes (other than a default specified in clause (a), (b) or (c) above) and
such default or breach continues for a period of 30 consecutive days after
written notice to the Company by the Trustee or to the Company and the
Trustee by the Holders of 25% or more in aggregate principal amount of the
Notes;
<PAGE>
58
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $5 million or more in the aggregate for all
such issues of all such Persons, whether such Indebtedness now exists or
shall hereafter be created, (I) an event of default that has caused the
holder thereof to declare such Indebtedness to be due and payable prior to
its Stated Maturity and such Indebtedness has not been discharged in full
or such acceleration has not been rescinded or annulled within 30 days of
such acceleration and/or (II) the failure to make a principal payment at
the final (but not any interim) fixed maturity and such defaulted payment
shall not have been made, waived or extended within 30 days of such payment
default;
(f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $5 million in the aggregate for all such
final judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered) shall be
rendered against the Company or any Significant Subsidiary and shall not be
paid or discharged, and there shall be any period of 30 consecutive days
following entry of the final judgment or order that causes the aggregate
amount for all such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $5 million during which a
stay of enforcement of such final judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (B) appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary and, in each case, such decree
or order shall remain unstayed and in effect for a period of 30 consecutive
days;
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consents to the entry of an order for
relief in an involuntary case under any such law, (B) consents to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) effects any
general assignment for the benefit of creditors; or
<PAGE>
59
(i) the Pledge Agreement shall cease to be in full force and
effect or enforceable in accordance with its terms, other than in
accordance with its terms.
SECTION 6.02. ACCELERATION. If an Event of Default (other than an
Event of Default specified in clause (g) or (h) of Section 6.01 that occurs
with respect to the Company) occurs and is continuing under this Indenture,
the Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding, by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal of, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration
of acceleration because an Event of Default set forth in clause (e) of
Section 6.01 has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default
triggering such Event of Default pursuant to clause (e) shall be remedied or
cured by the Company or the relevant Significant Subsidiary or waived by the
holders of the relevant Indebtedness within 60 days after the declaration of
acceleration hereunder with respect thereto. If an Event of Default
specified in clause (g) or (h) of Section 6.01 occurs with respect to the
Company, the principal of, premium, if any, and accrued interest on the Notes
then outstanding shall IPSO FACTO become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
At any time after such a declaration of acceleration, but before a
judgment or decree for the payment of the money due has been obtained by the
Trustee, the Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may
waive all past Defaults and rescind and annul such declaration of
acceleration and its consequences if (i) all existing Events of Default,
other than the non-payment of the principal of, premium, if any, and interest
on the Notes that have become due solely by such declaration of acceleration,
have been cured or waived and (ii) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law
or in equity to collect the payment of principal of, premium, if any, or
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
SECTION 6.04. WAIVER OF PAST DEFAULTS. Subject to Sections 6.02, 6.07
and 9.02, the Holders of at least a majority in principal amount of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default
<PAGE>
60
in the payment of principal of, premium, if any, or interest on any Note as
specified in clause (a) or (b) of Section 6.01 or in respect of a covenant or
provision of this Indenture which cannot be modified or amended without the
consent of the Holder of each outstanding Note affected. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereto.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of at least a majority
in aggregate principal amount of the outstanding Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee; PROVIDED,
that the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that may involve the Trustee in personal liability, or
that the Trustee determines in good faith may be unduly prejudicial to the
rights of Holders of Notes not joining in the giving of such direction; and
PROVIDED FURTHER, that the Trustee may take any other action it deems proper
that is not inconsistent with any such direction received from Holders of
Notes pursuant to this Section 6.05.
SECTION 6.06. LIMITATION ON SUITS. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture or the
Notes, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) the Holder has previously given to the Trustee written notice
of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made written request to the Trustee to pursue
the remedy;
(iii) such Holder or Holders have offered and, if requested,
provided to the Trustee indemnity satisfactory to the Trustee against any
costs, liabilities or expenses to be incurred in compliance with such
request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to comply with such request; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes have not given the
Trustee a direction that is inconsistent with such written request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination
of whether the Holders of the
<PAGE>
61
required aggregate principal amount of outstanding Notes have concurred in
any request or direction of the Trustee to pursue any remedy available to the
Trustee or the Holders with respect to this Indenture or the Notes or
otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding
any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal of, premium, if any, or interest on such
Holder's Note on or after the respective due dates expressed on such Note, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b), (c)
or (d) of Section 6.01 occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the
Company or any other obligor of the Notes for the whole amount of principal,
premium, if any, and accrued interest remaining unpaid, together with
interest on overdue principal, premium, if any, and, to the extent that
payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate specified in the Notes, and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its
property and shall be entitled and empowered to collect and receive any
monies, securities or other property payable or deliverable upon conversion
or exchange of the Notes or upon any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to empower the Trustee to authorize
or consent to, or accept or adopt on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights
<PAGE>
62
of any Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant
to this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Notes for principal, premium, if any, and interest, respectively; and
Third: to the Company or any other obligors of the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section
6.10.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the
Trustee for any action taken or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of
the suit, and the court may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07 of this Indenture, or a suit by Holders
of more than 10% in principal amount of the outstanding Notes.
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder,
then, and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Company, Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 6.13. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy
<PAGE>
63
shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14. DELAY OR OMISSION NOT WAIVER. No delay or omission of
the Trustee or of any Holder to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right
and remedy given by this Article Six or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. GENERAL. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it. Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Article Seven.
SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Subject to TIA Sections
315(a) through (d):
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter
stated in the document;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall
conform to Section 11.04. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such certificate or
opinion;
<PAGE>
64
(iii) the Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed
with due care;
(iv) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such
request or direction;
(v) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance
with the written direction of the Holders of a majority in principal amount
of the outstanding Notes relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate; and
(vii) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
personally or by agent or attorney.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company or its Affiliates with the same
rights it would have if it were not the Trustee. Any Agent may do the same
with like rights. However, the Trustee is subject to TIA Sections 310(b) and
311.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement
in the Notes other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULT. If any Default or any Event of
Default occurs and is continuing and if such Default or Event of Default is
known to a Responsible Officer of the
<PAGE>
65
Trustee, the Trustee shall mail to each Holder in the manner and to the
extent provided in TIA Section 313(c) notice of the Default or Event of
Default within 45 days after it occurs, unless such Default or Event of
Default has been cured; PROVIDED, HOWEVER, that, except in the case of a
default in the payment of the principal of, premium, if any, or interest on
any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the
Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
May 15, beginning with May 15, 1999, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such May 15, if
required by TIA Section 313(a).
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its
services. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses and
advances incurred or made by the Trustee. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities, obligations, damages, penalties, judgments, actions, suits,
proceedings, reasonable costs and expenses (including reasonable fees and
disbursements of counsel) of any kind whatsoever which may be incurred by the
Trustee in connection with any investigative, administrative or judicial
proceeding (whether or not such indemnified party is designated a party to
such proceeding) arising out of or in connection with the acceptance or
administration of its duties under this Indenture; PROVIDED, HOWEVER, that
the Company need not reimburse any expense or indemnify against any loss,
obligation, damage, penalty, judgment, action, suit, proceeding, reasonable
cost or expense (including reasonable fees and disbursements of counsel) of
any kind whatsoever which may be incurred by the Trustee in connection with
any investigative, administrative or judicial proceeding (whether or not such
indemnified party is designated a party to such proceeding) in which it is
determined that the Trustee acted with negligence, bad faith or willful
misconduct. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder, unless the
Company is materially prejudiced thereby. The Company shall defend the claim
and the Trustee shall cooperate in the defense. Unless otherwise set forth
herein, the Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for
any settlement made without its consent, which consent shall not be
unreasonably withheld.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity
<PAGE>
66
as Trustee, except money or property held in trust to pay principal of,
premium, if any, and interest on particular Notes.
If the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in clause (g) or (h) of Section 6.01, the
expenses and the compensation for the services will be intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy
Code or any applicable federal or state law for the relief of debtors.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee with the consent of the Company. The Company may remove
the Trustee if: (i) the Trustee is no longer eligible under Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or
other public officer takes charge of the Trustee or its property; or (iv) the
Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company. If the successor Trustee does not deliver its written acceptance
required by the next succeeding paragraph of this Section 7.08 within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of a majority in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
the delivery of such written acceptance, subject to the lien provided in
Section 7.07, (i) the retiring Trustee shall transfer all property held by it
as Trustee to the successor Trustee, (ii) the resignation or removal of the
retiring Trustee shall become effective and (iii) the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture.
A successor Trustee shall mail notice of its succession to each Holder.
If the Trustee is no longer eligible under Section 7.10 or shall fail to
comply with TIA Section 310(b), any Holder who satisfies the requirements of
TIA Section 310(b) may petition any
<PAGE>
67
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligation under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national
banking association, the resulting, surviving or transferee corporation or
national banking association without any further act shall be the successor
Trustee with the same effect as if the successor Trustee had been named as
the Trustee herein.
SECTION 7.10. ELIGIBILITY. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall
have a combined capital and surplus of at least $25 million as set forth in
its most recent published annual report of condition.
SECTION 7.11. MONEY HELD IN TRUST. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law and except for money held in
trust under Article Eight of this Indenture.
SECTION 7.12. WITHHOLDING TAXES. The Trustee, as agent for the
Company, shall exclude and withhold from each payment of principal and
interest and other amounts due hereunder or under the Notes any and all
withholding taxes applicable thereto as required by law. The Trustee agrees
to act as such withholding agent and, in connection therewith, whenever any
present or future taxes or similar charges are required to be withheld with
respect to any amounts payable in respect of the Notes, to withhold such
amounts and timely pay the same to the appropriate authority in the name of
and on behalf of the holders of the Notes, that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each Holder of a Note
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such Holders may reasonably request from
time to time.
<PAGE>
68
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. Except as otherwise
provided in this Section 8.01, the Company may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that are
paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 8.05) have been delivered to the Trustee
for cancellation and the Company has paid all sums payable by it hereunder;
or
(ii) (A) the Notes mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption, (B) the Company
irrevocably deposits in trust with the Trustee during such one-year period,
under the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds solely for the benefit of the
Holders for that purpose, money or U.S. Government Obligations sufficient
(in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee), without consideration of any reinvestment of any interest
thereon, to pay principal, premium, if, any, and interest on the Notes to
maturity or redemption, as the case may be, and to pay all other sums
payable by it hereunder, (C) no Default or Event of Default with respect to
the Notes shall have occurred and be continuing on the date of such
deposit, (D) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound and (E)
the Company has delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, in each case stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with.
With respect to the foregoing clause (i), the Company's obligations under
Section 7.07 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the
Notes are no longer outstanding. Thereafter, only the Company's obligations in
Sections 7.07, 8.05 and 8.06 shall survive. After any such irrevocable deposit,
the Trustee upon request shall acknowledge in writing the discharge of the
Company's obligations under the Notes and this Indenture except for those
surviving obligations specified above.
SECTION 8.02. DEFEASANCE AND DISCHARGE OF INDENTURE. The Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the
<PAGE>
69
123rd day after the date of the deposit referred to in clause (A) of this
Section 8.02, and the provisions of this Indenture will no longer be in
effect with respect to the Notes, and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same, except as
to (i) rights of registration of transfer and exchange, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Notes, (iii) rights
of Holders to receive payments of principal thereof and interest thereon,
(iv) the Company's obligations under Section 4.02, (v) the rights,
obligations and immunities of the Trustee hereunder and (vi) the rights of
the Holders as beneficiaries of this Indenture with respect to the property
so deposited with the Trustee payable to all or any of them; PROVIDED that
the following conditions shall have been satisfied:
(A) with reference to this Section 8.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10 of
this Indenture) and conveyed all right, title and interest for the benefit
of the Holders, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee as trust funds in trust,
specifically pledged to the Trustee for the benefit of the Holders as
security for payment of the principal of, premium, if any, and interest, if
any, on the Notes, and dedicated solely to, the benefit of the Holders, in
and to (1) money in an amount, (2) U.S. Government Obligations that,
through the payment of interest, premium, if any, and principal in respect
thereof in accordance with their terms, will provide, not later than one
day before the due date of any payment referred to in this clause (A),
money in an amount or (3) a combination thereof in an amount sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, without consideration of the reinvestment of
such interest and after payment of all federal, state and local taxes or
other charges and assessments in respect thereof payable by the Trustee,
the principal of, premium, if any, and accrued interest on the outstanding
Notes at the Stated Maturity of such principal or interest; PROVIDED that
the Trustee shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations to the payment of such
principal, premium, if any, and interest with respect to the Notes;
(B) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(C) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the 123rd day
after such date of deposit;
(D) the Company shall have delivered to the Trustee (1) either (x)
a ruling directed to the Trustee received from the Internal Revenue Service
to the effect that the
<PAGE>
70
Holders will not recognize income, gain or loss for federal income tax
purposes as a result of the Company's exercise of its option under this
Section 8.02 and will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have
been the case if such option had not been exercised or (y) an Opinion of
Counsel to the same effect as the ruling described in clause (x) above
accompanied by a ruling to that effect published by the Internal Revenue
Service, unless there has been a change in the applicable federal income
tax law since the date of this Indenture such that a ruling from the
Internal Revenue Service is no longer required and (2) an Opinion of
Counsel to the effect that (x) the creation of the defeasance trust does
not violate the Investment Company Act of 1940 and (y) after the passage of
123 days following the deposit (except, with respect to any trust funds for
the account of any Holder who may be deemed to be an "insider" for purposes
of the United States Bankruptcy Code, after one year following the
deposit), the trust funds will not be subject to the effect of Section 547
of the United States Bankruptcy Code or Section 15 of the New York Debtor
and Creditor Law in a case commenced by or against the Company under either
such statute, and either (I) the trust funds will no longer remain the
property of the Company (and therefore will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally) or (II) if a court were to rule
under any such law in any case or proceeding that the trust funds remained
property of the Company, (a) assuming such trust funds remained in the
possession of the Trustee prior to such court ruling to the extent not paid
to the Holders, the Trustee will hold, for the benefit of the Holders, a
valid and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise except for the effect of Section
552(b) of the United States Bankruptcy Code on interest on the trust funds
accruing after the commencement of a case under such statute and (b) the
Holders will be entitled to receive adequate protection of their interests
in such trust funds if such trust funds are used in such case or
proceeding;
(E) if the Notes are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit, defeasance and discharge will not
cause the Notes to be delisted; and
(F) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (D)(2)(y) of this Section 8.02, none of
the Company's obligations under this Indenture shall be discharged.
Subsequent to the end of such 123-day (or one year) period with respect to
this Section 8.02, the Company's obligations in Sections 2.02, 2.03, 2.04,
2.05, 2.06, 2.07, 2.08, 2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06
shall survive until the Notes are no longer outstanding. Thereafter, only
the Company's obligations in Sections 7.07, 8.05 and
<PAGE>
71
8.06 shall survive. If and when a ruling from the Internal Revenue Service
or an Opinion of Counsel referred to in clause (D)(1) of this Section 8.02 is
able to be provided specifically without regard to, and not in reliance upon,
the continuance of the Company's obligations under Section 4.01, then the
Company's obligations under such Section 4.01 shall cease upon delivery to
the Trustee of such ruling or Opinion of Counsel and compliance with the
other conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. DEFEASANCE OF CERTAIN OBLIGATIONS. The Company may omit
to comply with any term, provision or condition set forth in clauses (iii)
and (iv) of Section 5.01 and Sections 4.03 through 4.17, Section 4.19 and
clause (c) and (d) of Section 6.01 with respect to clauses (iii) and (iv) of
Section 5.01 and Sections 4.03 through 4.17, Section 4.19 and clauses (e) and
(f) of Section 6.01 shall be deemed not to be Events of Default, in each case
with respect to the outstanding Notes if:
(i) with reference to this Section 8.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10)
and conveyed all right, title and interest to the Trustee for the benefit
of the Holders, under the terms of an irrevocable trust agreement in form
and substance satisfactory to the Trustee as trust funds in trust,
specifically pledged to the Trustee for the benefit of the Holders as
security for payment of the principal of, premium, if any, and interest, if
any, on the Notes, and dedicated solely to, the benefit of the Holders, in
and to (A) money in an amount, (B) U.S. Government Obligations that,
through the payment of interest and principal in respect thereof in
accordance with their terms, will provide, not later than one day before
the due date of any payment referred to in this clause (i), money in an
amount or (C) a combination thereof in an amount sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such interest and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest; PROVIDED that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal, premium,
if any, and interest with respect to the Notes;
<PAGE>
72
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(iii) immediately after giving effect to such deposit on a pro forma
basis, no Default or Event of Default shall have occurred and be continuing
on the date of such deposit or during the period ending on the 123rd day
after such date of deposit;
(iv) the Company has delivered to the Trustee an Opinion of Counsel
to the effect that (A) the creation of the defeasance trust does not
violate the Investment Company Act of 1940, (B) the Trustee, for the
benefit of the Holders, has a valid first-priority security interest in the
trust funds, (C) the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and defeasance of
certain obligations and will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred and (D) after the
passage of 123 days following the deposit (except, with respect to any
trust funds for the account of any Holder who may be deemed to be an
"insider" for purposes of the United States Bankruptcy Code, after one year
following the deposit), the trust funds will not be subject to the effect
of Section 547 of the United States Bankruptcy Code or Section 15 of the
New York Debtor and Creditor Law in a case commenced by or against the
Company under either such statute, and either (1) the trust funds will no
longer remain the property of the Company (and therefore will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally) or
(2) if a court were to rule under any such law in any case or proceeding
that the trust funds remained property of the Company, (x) assuming such
trust funds remained in the possession of the Trustee prior to such court
ruling to the extent not paid to the Holders, the Trustee will hold, for
the benefit of the Holders, a valid and perfected security interest in such
trust funds that is not avoidable in bankruptcy or otherwise (except for
the effect of Section 552(b) of the United States Bankruptcy Code on
interest on the trust funds accruing after the commencement of a case under
such statute) and (y) the Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds are
used in such case or proceeding;
(v) if the Notes are then listed on a national securities
exchange, the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit defeasance and discharge will not
cause the Notes to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
<PAGE>
73
SECTION 8.04. APPLICATION OF TRUST MONEY. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the
case may be, and shall apply the deposited money and the money from U.S.
Government Obligations in accordance with the Notes and this Indenture to the
payment of principal of, premium, if any, and interest on the Notes; but such
money need not be segregated from other funds except to the extent required
by law.
SECTION 8.05. REPAYMENT TO COMPANY. Subject to Sections 7.07, 8.01,
8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the
Company upon request set forth in an Officers' Certificate any excess money
held by them at any time and thereupon shall be relieved from all liability
with respect to such money. The Trustee and the Paying Agent shall pay to
the Company upon request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years. After
payment to the Company, Holders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.06. REINSTATEMENT. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with Section
8.01, 8.02 or 8.03, as the case may be, by reason of any legal proceeding or
by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02
or 8.03, as the case may be, until such time as the Trustee or Paying Agent
is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 8.01, 8.02 or 8.03, as the case may be; PROVIDED
that, if the Company has made any payment of principal of, premium, if any,
or interest on any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company, when authorized
by a resolution of its Board of Directors (as evidenced by a Board Resolution
delivered to the Trustee), and the Trustee may amend or supplement this
Indenture or the Notes without notice to or the consent of any Holder:
<PAGE>
74
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; PROVIDED that such amendments or supplements shall not adversely
affect the interests of the Holders in any material respect;
(2) to comply with Article Five;
(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee; or
(5) to make any change that, in the good faith opinion of the
Board of Directors as evidenced by a Board Resolution, does not materially
and adversely affect the rights of any Holder.
SECTION 9.02. WITH CONSENT OF HOLDERS. Subject to Sections 6.04 and
6.07 and without prior notice to the Holders, the Company, when authorized by
its Board of Directors (as evidenced by a Board Resolution delivered to the
Trustee), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of a majority in principal amount of the Notes
then outstanding, and the Holders of a majority in principal amount of the
Notes then outstanding by written notice to the Trustee may waive future
compliance by the Company with any provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the consent
of each Holder affected, an amendment or waiver, including a waiver pursuant
to Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or adversely affect any right of repayment at the
option of any Holder of any Note, or change any place of payment where, or
the currency in which, any Note or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date);
(ii) reduce the percentage in principal amount of outstanding Notes
the consent of whose Holders is required for any such supplemental
indenture, for any waiver of compliance with certain provisions of this
Indenture or certain Defaults and their consequences provided for in this
Indenture;
<PAGE>
75
(iii) waive a Default in the payment of principal of, premium, if
any, or interest on, any Note; or
(iv) modify any of the provisions of this Section 9.02, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Note affected thereby.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. REVOCATION AND EFFECT OF CONSENT. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the time the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it is of the type described in any of clauses (i) through
(iv) of Section 9.02. In case of an amendment or waiver of the type described
in clauses (i) through (iv) of Section 9.02, the
<PAGE>
76
amendment or waiver shall bind each Holder who has consented to it and every
subsequent Holder of a Note that evidences the same indebtedness as the Note
of the consenting Holder.
SECTION 9.04. NOTATION ON OR EXCHANGE OF NOTES. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Holder and
the Trustee may place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Note shall issue and the Trustee shall
authenticate a new Note that reflects the changed terms. Failure to make the
appropriate notation, or issue a new Note, shall not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 9.05. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and that it will be valid and binding upon the Company. Subject to
the preceding sentence, the Trustee shall sign such amendment, supplement or
waiver if the same does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. The Trustee may, but shall not be obligated
to, execute any such amendment, supplement or waiver that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.06. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
SECURITY
SECTION 10.01. SECURITY. (a) On the Closing Date, the Company shall (i)
enter into the Pledge Agreement and comply with the terms and provisions thereof
and (ii) purchase the Pledged Securities to be pledged to the Trustee for the
benefit of the Holders in an amount sufficient upon receipt of scheduled
interest and principal payments of such Pledged Securities to provide for the
payment in full of the first six scheduled interest payments due on the Notes.
The Pledged Securities shall be pledged by the Company to the Trustee for the
benefit of the Holders and shall be held by the Trustee in the Pledge Account
pending disposition pursuant to the Pledge Agreement.
(b) Each Holder, by its acceptance of a Note, consents and agrees to the
terms of the Pledge Agreement (including, without limitation, the provisions
providing for foreclosure and release of the Pledged Securities) as the same may
be in effect or may be amended from time to
<PAGE>
77
time in accordance with its terms, and authorizes and directs the Trustee to
enter into the Pledge Agreement and to perform its respective obligations and
exercise its respective rights thereunder in accordance therewith. The
Company will do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Pledge
Agreement, to assure and confirm to the Trustee the security interest in the
Pledged Securities contemplated hereby, by the Pledge Agreement or any part
thereof, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Notes secured
hereby, according to the intent and purposes herein expressed. The Company
shall take, or shall cause to be taken, any and all actions reasonably
required (and any action requested by the Trustee) to cause the Pledge
Agreement to create and maintain, as security for the obligations of the
Company under this Indenture and the Notes, valid and enforceable first
priority liens in and on all the Pledged Securities, in favor of the Trustee,
superior to and prior to the rights of third Persons and subject to no other
Liens.
(c) The release of any Pledged Securities pursuant to the Pledge
Agreement will not be deemed to impair the security under this Indenture in
contravention of the provisions hereof if and to the extent the Pledged
Securities are released pursuant to this Indenture and the Pledge Agreement.
To the extent applicable, the Company shall cause TIA Section 314(d) relating
to the release of property or securities from the Lien and security interest
of the Pledge Agreement and relating to the substitution therefor of any
property or securities to be subjected to the Lien and security interest of
the Pledge Agreement to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by an Officer of the Company,
except in cases where TIA Section 314(d) requires that such certificate or
opinion be made by an independent Person, which Person shall be an
independent engineer, appraiser or other expert selected by the Company.
(d) The Company shall cause TIA Section 314(b), relating to opinions of
counsel regarding the Lien under the Pledge Agreement, to be complied with.
The Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof,
accept as conclusive evidence of compliance with the foregoing provisions the
appropriate statements contained in such instruments.
(e) The Trustee, in its sole discretion and without the consent of the
Holders, may, and at the request of the Holders of at least 25% in aggregate
principal amount of Notes then outstanding shall, on behalf of the Holders,
take all actions it deems necessary or appropriate in order to (i) enforce
any of the terms of the Pledge Agreement and (ii) collect and receive any and
all amounts payable in respect of the obligations of the Company thereunder.
The Trustee shall have power to institute and to maintain such suits and
proceedings as the Trustee may deem expedient to preserve or protect its
interests and the interests of the Holders in the Pledged Securities
(including power to institute and maintain suits or proceedings to restrain
the enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such
<PAGE>
78
enactment, rule or order would impair the security interest hereunder or be
prejudicial to the interests of the Holders or of the Trustee).
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT OF 1939. Prior to the effectiveness
of the Registration Statement, this Indenture shall incorporate and be
governed by the provisions of the TIA that are required to be part of and to
govern indentures qualified under the TIA. After the effectiveness of the
Registration Statement, this Indenture shall be subject to the provisions of
the TIA that are required to be a part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
SECTION 11.02. NOTICES. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:
IF TO THE COMPANY:
Dobson/Sygnet Communications Company
13439 N. Broadway Extension, Suite 200
Oklahoma City, OK 73114
Attention: Chief Financial Officer
IF TO THE TRUSTEE:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036-1532
Attention: Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to it at
its address as it appears on the Security Register by first class mail and
shall be sufficiently given to him if so mailed within the time prescribed.
Copies of any such communication or notice to a Holder shall also be mailed
to the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except
for a notice to the Trustee, which is deemed
<PAGE>
79
given only when received, and except as otherwise provided in this Indenture,
if a notice or communication is mailed in the manner provided in this Section
11.02, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 11.03. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
Counsel, all such conditions precedent have been complied with.
SECTION 11.04. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained
in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
<PAGE>
80
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; PROVIDED,
HOWEVER, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 11.05. RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR. The
Trustee may make reasonable rules for action by or at a meeting of Holders.
The Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 11.06. PAYMENT DATE OTHER THAN A BUSINESS DAY. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of
maturity of any Note shall not be a Business Day, then payment of principal
of, premium, if any, or interest on such Note, as the case may be, need not
be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the Interest Payment Date,
Payment Date or Redemption Date, or at the Stated Maturity or date of
maturity of such Note; PROVIDED that no interest shall accrue for the period
from and after such Interest Payment Date, Payment Date, Redemption Date,
Stated Maturity or date of maturity, as the case may be.
SECTION 11.07. GOVERNING LAW. The laws of the State of New York shall
govern this Indenture and the Notes. The Trustee, the Company and the
Holders agree to submit to the jurisdiction of the courts of the State of New
York in any action or proceeding arising out of or relating to this Indenture
or the Notes.
SECTION 11.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 11.09. NO RECOURSE AGAINST OTHERS. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company contained
in the Pledge Agreement, this Indenture or in any of the Notes, or because of
the creation of any Indebtedness represented thereby, shall be had against
any incorporator or against any past, present or future partner, stockholder,
other equityholder, officer, director, employee or controlling person, as
such, of the Company or of any successor Person, either directly or through
the Company or any successor Person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for,
the execution of this Indenture and the issue of the Notes.
<PAGE>
81
SECTION 11.10. SUCCESSORS. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 11.11. DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
SECTION 11.12. SEPARABILITY. In case any provision in this Indenture
or in the Notes 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.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any of
the terms and provisions hereof.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
DOBSON/SYGNET COMMUNICATIONS
COMPANY
By: /s/ Everett R. Dobson
--------------------------------------
Name: Everett R. Dobson
Title: Chief Executive Officer
UNITED STATES TRUST COMPANY
OF NEW YORK
By: /s/ Louis P. Young
--------------------------------------
Name: Louis P. Young
Title: Vice President
<PAGE>
EXHIBIT A
[FACE OF NOTE]
DOBSON/SYGNET COMMUNICATIONS COMPANY
12 1/4% Senior Note due 2008
[CUSIP] [CINS] [__________]
No. $_________
DOBSON/SYGNET COMMUNICATIONS COMPANY, an Oklahoma corporation (the
"Company", which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to _____________, or its
registered assigns, the principal sum of ____________ ($____) on December 15,
2008.
Interest Payment Dates: June 15 and December 15, commencing June 15,
1999.
Regular Record Dates: June 1 and December 1.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE>
A-2
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: DOBSON/SYGNET COMMUNICATIONS
COMPANY
By:
-------------------------------------------
Name: Everett R. Dobson
Title: Chief Executive Officer
By:
-------------------------------------------
Name:
Title:
(Trustee's Certificate of Authentication)
This is one of the 12 1/4% Senior Notes due 2008 described in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF
NEW YORK,
as Trustee
By:
-------------------------------------------
Authorized Signatory
<PAGE>
A-3
[REVERSE SIDE OF NOTE]
DOBSON/SYGNET COMMUNICATIONS COMPANY
12 1/4% Senior Note due 2008
1. PRINCIPAL AND INTEREST.
The Company will pay the principal of this Note on December 15, 2008.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the June 1 or December 1 immediately
preceding the Interest Payment Date) on each Interest Payment Date,
commencing June 15, 1999.
If an exchange offer registered under the Securities Act is not
consummated, or a Shelf Registration Statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission,
on or before June 21, 1999 in accordance with the terms of the Registration
Rights Agreement dated December 23, 1998 between the Company and NationsBanc
Montgomery Securities LLC, Lehman Brothers Inc., First Union Capital Markets,
a division of Wheat First Securities, Inc. and TD Securities (USA) Inc., the
Company will pay liquidated damages to the Holder of this Note in an amount
equal to 0.5% per annum of the principal amount hereof, payable in cash
semiannually, in arrears, on each Interest Payment Date, commencing December
15, 1999, until the Exchange Offer is consummated or the Shelf Registration
Statement is declared effective. The Holder of this Note is entitled to the
benefits of such Registration Rights Agreement.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from December 23,
1998; PROVIDED that, if there is no existing default in the payment of
interest and this Note is authenticated between a Regular Record Date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such Interest Payment Date. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 2% in excess of the rate otherwise payable.
<PAGE>
A-4
2. METHOD OF PAYMENT.
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each June 15 and December
15 commencing June 15, 1999 to the persons who are Holders (as reflected in
the Security Register at the close of business on the June 1 or December 1,
immediately preceding the Interest Payment Date), in each case, even if the
Note is cancelled on registration of transfer or registration of exchange
after such record date; PROVIDED that, with respect to the payment of
principal, the Company will make payment to the Holder that surrenders this
Note to a Paying Agent on or after December 15, 2008.
The Company will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by its check payable in such money.
It may mail an interest check to a Holder's registered address (as reflected
in the Security Register). If a payment date is a date other than a Business
Day at a place of payment, payment may be made at that place on the next
succeeding day that is a Business Day and no interest shall accrue for the
intervening period.
3. PAYING AGENT AND REGISTRAR.
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Company may change any authenticating agent, Paying Agent
or Registrar without notice. The Company, any Subsidiary or any Affiliate of
any of them may act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE; LIMITATIONS.
The Company issued the Notes under an Indenture dated as of December 23,
1998 (the "Indenture"), between the Company and United States Trust Company
of New York, trustee (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise indicated. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Notes are subject to all such
terms, and Holders are referred to the Indenture and the Trust Indenture Act
for a statement of all such terms. To the extent permitted by applicable
law, in the event of any inconsistency between the terms of this Note and the
terms of the Indenture, the terms of the Indenture shall control.
The Notes are general obligations of the Company.
<PAGE>
A-5
5. OPTIONAL REDEMPTION.
The Notes will be redeemable, at the Company's option, in whole or in
part, at any time on or after December 15, 2003 and prior to maturity, upon
not less than 30 nor more than 60 days' prior notice mailed by first-class
mail to each Holder's last address as it appears in the Security Register, at
the following Redemption Prices (expressed in percentages of their principal
amount), plus accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date), if redeemed during the 12-month period commencing on
December 15 of the applicable year set forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2003 106.125%
2004 103.063
2005 101.531
2006 and thereafter 100.000
</TABLE>
In addition, at any time prior to December 15, 2001, the Company may
redeem up to 35% of the aggregate principal amount of the Notes with the Net
Cash Proceeds from one or more sales of Capital Stock of the Company (other
than Disqualified Stock), at any time as a whole or from time to time in
part, upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holder's last address as it appears in the Security
Register, at a Redemption Price (expressed in percentages of their principal
amount) of 112.250%, plus accrued and unpaid interest to the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record
Date that is on or prior to the Redemption Date to receive interest due on an
Interest Payment Date); provided that (i) at least 65% of the aggregate
principal amount of Notes originally issued remains outstanding after each
such redemption and (ii) such redemption occurs within 60 days after the
related sale of Capital Stock.
Notes in original denominations larger than $1,000 may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
6. Repurchase upon Change of Control.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase (the "Payment Date").
<PAGE>
A-6
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at its last address as it appears
in the Security Register. Notes in original denominations larger than $1,000
may be sold to the Company in part. On and after the Payment Date, interest
ceases to accrue on Notes or portions of Notes surrendered for purchase by
the Company, unless the Company defaults in the payment of the purchase price.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount and multiples of $1,000 in excess thereof. A
Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption.
Also, it need not register the transfer or exchange of any Notes for a period
of 15 days before the day of mailing of a notice of redemption of Notes
selected for redemption.
8. PERSONS DEEMED OWNERS.
A Holder shall be treated as the owner of a Note for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay
the money back to the Company at its request. After that, Holders entitled
to the money must look to the Company for payment, unless an abandoned
property law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in
certain circumstances for certain sections thereof, and (b) to the Stated
Maturity, the Company will be discharged from certain covenants set forth in
the Indenture.
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then
<PAGE>
A-7
outstanding, and any existing default or compliance with any provision may be
waived with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding. Without notice to or the consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency and
make any change that does not materially and adversely affect the rights of
any Holder.
12. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the Company
and its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, make Restricted Payments, use the proceeds from Asset Sales,
engage in transactions with Affiliates or merge, consolidate or transfer
substantially all of its assets. Within 45 days after the end of each fiscal
quarter (90 days after the end of the last fiscal quarter of each year), the
Company must report to the Trustee on compliance with such limitations.
13. SUCCESSOR PERSONS.
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person
will be released from those obligations.
14. DEFAULTS AND REMEDIES.
The following events constitute "Events of Default" under the Indenture:
(a) default in the payment of principal of (or premium, if any, on) any Note
when the same becomes due and payable at maturity, upon acceleration, redemption
or otherwise; (b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
PROVIDED that a failure to make any of the first six scheduled interest payments
on the Notes on the applicable Interest Payment Date will constitute an Event of
Default with no grace or cure period; (c) default in the performance or breach
of Article Five of the Indenture or the failure to make or consummate an Offer
to Purchase in accordance with Section 4.10 or 4.11 of the Indenture; (d) the
Company defaults in the performance of or breaches any other covenant or
agreement of the Company in the Indenture or under the Notes (other than a
default specified in clause (a), (b) or (c) above) and such default or breach
continues for a period of 30 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes; (e) there occurs with respect to any issue or issues of Indebtedness of
the Company or any Significant Subsidiary having an outstanding principal amount
of $5 million or more in the aggregate for all such issues of all such Persons,
whether such Indebtedness now exists or shall hereafter be created, (I) an event
of default that has caused the holder thereof to declare such Indebtedness to be
due and payable prior to its Stated Maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration and/or (II) the failure to make a principal
payment at the final (but
<PAGE>
A-8
not any interim) fixed maturity and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default; (f) any
final judgment or order (not covered by insurance) for the payment of money
in excess of $5 million in the aggregate for all such final judgments or
orders against all such Persons (treating any deductibles, self-insurance or
retention as not so covered) shall be rendered against the Company or any
Significant Subsidiary and shall not be paid or discharged, and there shall
be any period of 30 consecutive days following entry of the final judgment or
order that causes the aggregate amount for all such final judgments or orders
outstanding and not paid or discharged against all such Persons to exceed $5
million during which a stay of enforcement of such final judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; (g) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any Significant Subsidiary in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (B) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company
or any Significant Subsidiary or for all or substantially all of the property
and assets of the Company or any Significant Subsidiary or (C) the winding up
or liquidation of the affairs of the Company or any Significant Subsidiary
and, in each case, such decree or order shall remain unstayed and in effect
for a period of 30 consecutive days; (h) the Company or any Significant
Subsidiary (A) commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or consents to
the entry of an order for relief in an involuntary case under any such law,
(B) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or substantially all of
the property and assets of the Company or any of its Significant Subsidiaries
or (C) effects any general assignment for the benefit of creditors; or (i)
the Pledge Agreement shall cease to be in full force and effect or
enforceable in accordance with its terms, other than in accordance with its
terms.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Notes may declare all the Notes to be due and payable. If a bankruptcy
or insolvency default with respect to the Company occurs and is continuing,
the Notes automatically become due and payable. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee may
require indemnity satisfactory to it before it enforces the Indenture or the
Notes. Subject to certain limitations, Holders of at least a majority in
principal amount of the Notes then outstanding may direct the Trustee in its
exercise of any trust or power.
15. COLLATERAL.
The payment of the Notes will be secured by Government Securities held
in an account to secure and fund the first six scheduled interest payments on
the Notes. Once the first six scheduled interest payments are made, the
Notes will be unsecured.
<PAGE>
A-9
16. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for
the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
17. NO RECOURSE AGAINST OTHERS.
No incorporator or any past, present or future partner, stockholder,
other equityholder, officer, director, employee or controlling person as
such, of the Company or of any successor Person shall have any liability for
any obligations of the Company under the Pledge Agreement, the Notes or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
18. AUTHENTICATION.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
19. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Dobson/Sygnet
Communications Company, 13439 N. Broadway Extension, Suite 200, Oklahoma
City, OK 73114 Attention: Chief Financial Officer.
<PAGE>
A-10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
INSERT TAXPAYER IDENTIFICATION NO.
- ------------------------------------------------------------------------------
Please print or typewrite name and address including zip code of assignee
- ------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing __________________________________________________________________
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL NOTES OTHER THAN EXCHANGE NOTES,
PERMANENT OFFSHORE GLOBAL NOTES AND
PERMANENT OFFSHORE PHYSICAL NOTES]
In connection with any transfer of this Note occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement is
declared effective or (ii) the end of the period referred to in Rule 144(k)
under the Securities Act, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
/ / (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933 provided by Rule 144A
thereunder.
OR
/ / (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
<PAGE>
A-11
If none of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer
of registration set forth herein and in Section 2.08 of the Indenture shall
have been satisfied.
Date:
------------------- ----------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933 and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
---------------------- -------------------------------------------
NOTICE: To be executed by an executive
officer
<PAGE>
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 4.10 or 4.11 of the Indenture, check the Box: / /
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.10 or 4.11 of the Indenture, state the amount:
$___________________.
Date:
-----------------
Your Signature:
------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
--------------------------------
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE
_____________ ,____
United States Trust Company
of New York
114 W. 47th Street
New York, NY 10036-1532
Attention: Corporate Trust Department
Re: Dobson/Sygnet Communications Company (the "Company")
12 1/4% Senior Notes due 2008 (the "Notes")
Dear Sirs:
This letter relates to U.S. $_________ principal amount of Notes
represented by a Note (the "Legended Note") which bears a legend outlining
restrictions upon transfer of such Legended Note. Pursuant to Section 2.01
of the Indenture dated as of December 23, 1998 (the "Indenture") relating to
the Notes, we hereby certify that we are (or we will hold such securities on
behalf of) a person outside the United States to whom the Notes could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933. Accordingly, you are hereby requested to
exchange the legended certificate for an unlegended certificate representing
an identical principal amount of Notes, all in the manner provided for in the
Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
-------------------------------
Authorized Signature
<PAGE>
EXHIBIT C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
_____________ ,____
United States Trust Company
of New York
114 W. 47th Street
New York, NY 10036-1532
Attention: Corporate Trust Department
Re: Dobson/Sygnet Communications Company (the "Company")
12 1/4% Senior Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed purchase of $____________ aggregate
principal amount of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as of
December 23, 1998 (the "Indenture"), relating to the Notes, and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and
conditions and the Securities Act of 1933 (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Notes, we will do so only (A) to the
Company or any subsidiary thereof, (B) in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined therein), (C)
to an institutional "accredited investor" (as defined below) that, prior to
such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you and to the Company a signed letter substantially in the
form of this letter, (D) outside the United States in accordance with Rule
904 of Regulation S under the Securities Act, (E) pursuant to the exemption
from registration provided by Rule 144 under the Securities Act, or (F)
pursuant to an effective registration statement under the Securities Act, and
we further agree to provide to any person purchasing any of the Notes from us
a notice advising such purchaser that resales of the Notes are restricted as
stated herein.
<PAGE>
C-2
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company may reasonably require
to confirm that the proposed sale complies with the foregoing restrictions.
We further understand that the Notes purchased by us will bear a legend to
the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
------------------------------------
Authorized Signature
<PAGE>
EXHIBIT D
Form of Certificate to Be Delivered in
Connection with Transfers Pursuant to Regulation S
_____________ ,____
United States Trust Company
of New York
114 W. 47th Street
New York, NY 10036-1532
Attention: Corporate Trust Department
Re: Dobson/Sygnet Communications Company (the "Company")
12 1/4% Senior Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$_____________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933 and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
------------------------------------
Authorized Signature
