SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) September 15, 1999
Teletrac, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 333-35021 48-172403
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
3220 Executive Ridge, Suite 100
Vista, California 92083 92008
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (760) 597-0510
(Former Name or Former Address, if Changed Since Last Report)
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
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On June 9, 1999 Teletrac, Inc. (the "Company") a wholly-owned
subsidiary of Teletrac Holdings, Inc. ("Holdings") filed a voluntary petition
(the "Petition") commencing a case under Chapter 11 of the United States
Bankruptcy Code with the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court") which was assigned to the Honorable Mary F.
Walrath, United States Bankruptcy Judge, entitled In re: Teletrac, Inc., Case
No. 99-2250 (MFW).
On September 15, 1999, the Bankruptcy Court entered an order
confirming the Company's Second Amended Plan of Reorganization, dated August 4,
1999 (the "Plan"). The confirmation order is filed as Exhibit 2.1 to this Form
8-K and is incorporated herein by reference. The effective date of the Plan was
September 29, 1999 (the "Effective Date"). The Plan is filed hereto as Exhibit
2.1 to this Form 8-K and is incorporated herein by reference.
Under the Plan, holders of the Company's 14% Senior Note due 2007 (the
"Old Notes"), received their ratable portion of the collateral held in the Old
Notes collateral account (as the proceeds thereof) and, at its election, its
ratable portion of (i) newly issued common stock par value $0.01 per share of
the Company ("New Common Stock"), (ii) $15 million principal amount of 9% Notes
due 2004 ("New Notes") and (iii) Class B Common Stock Purchase Warrants, which
entitle the holder thereof to purchase one share of New Common Stock of the
Company at a price of $7.40 per share ("Class B Warrants"). In addition, the
holders of the Old Notes will also have the right to purchase newly issued 10%
Senior Secured Notes in the aggregate principal amount of $3 million due 2000
(the "Senior Secured Notes") and Class A Common Stock Warrants, which entitles
the holder thereof to purchase one share of New Common Stock of the Company at a
price of $0.05 per share ("Class A Warrants").
As of September 29, 1999, all equity interests in the Company and
Holdings shall be cancelled, and certain holders of equity of Holdings will
receive, from a portion of the distributions payable to holders of old 14% Notes
of Teletrac, Inc., a portion of the New Common Stock, New Notes and Class B
Warrants and rights to purchase Senior Secured Notes and Class A Warrants
pursuant to the Plan.
Certain Holders of Category A Convenience Claims (as such term's is
defined in the Plan) will receive cash distribution as set forth in the Plan and
may elect to receive a ratable portion of New Common Stock, New Notes, Class B
Warrants and the right to purchase Senior Secured Notes and Class A Warrants, in
lieu of the cash distribution.
Certain holders of Category B Convenience Claims (as such term is
defined in the Plan) will receive cash distribution as set forth in the Plan.
Under the Plan, the reorganized company will have 20,000,000 shares of
New Common Stock authorized of which 10,000,000 are to be issued and
outstanding. Information regarding the assets and liabilities of the Company as
of the most recent practicable date is incorporated herein by reference to the
company's Quarterly Report or Form 10-Q for the period ended June 30, 1999.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
The following exhibits are filed as part of this Current Report on
Form 8-K:
2.1 Order Confirming Company's Second Amended Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code dated September 15, 1999.
2.2 The Company's Second Amended Plan of Reorganization, dated as of August 4,
1999.
3.1 Amended and Restated Certificate of Incorporation of the Company as filed
with the Secretary of State of Delaware on September 29, 1999.
3.2 By-laws of the Company duly adopted by the Board of Directors on September
29, 1999.
4.1 Form of Indenture between the Company and HSBC Bank USA with respect to the
9% Notes due 2004 (the "Indenture") (exhibit 2 to the Plan).
4.2 Form of 9% Note Due 2004 (exhibit A to the Indenture).
4.3 Form of Deferred Interest Note (exhibit B to the Indenture).
4.4 Form of Senior Secured Note and Class A Warrant Purchase Agreement among
the Company and the several Purchasers named in Schedule I thereto (the
"Security Purchase Agreement") (exhibit 3 to the Plan).
4.5 Form of 10% Senior Secured Note due 2000 (exhibit B to Securities Purchase
Agreement).
4.6 Form of Class A Stock Purchase Warrant (exhibit C to Securities Purchase
Agreement).
4.7 Form of Security Agreement between the Company and the several Purchases on
the signature pages thereto ("Security Agreement") (exhibit D to the
Securities Purchase Agreement).
4.8 Company Subscription Documents (exhibit E to the Securities Purchase
Agreement).
4.9 Form of Pledge Agreement between the Company, the Collateral Agent and the
Purchasers listed on the Signature pages thereto (exhibit to the Securities
Purchase Agreement).
4.10 Form of Class B Stock Purchase Warrant (exhibit 4 to the Plan).
4.11 The Company and its Subsidiaries 1999 Stock Purchase Plan (exhibit 5 to the
Plan).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TELETRAC, INC.
By: /s/ Steven Scheiwe
Name: Steven Scheiwe
Title: General Counsel
Date: September 30, 1999
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EXHIBIT INDEX
Exhibit Page
No. Description No.
2.1 Order Confirming Company's Second Amended Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code dated
September 15, 1999.
2.2 The Company's Second Amended Plan of Reorganization, dated as
of August 4, 1999.
3.1 Amended and Restated Certificate of Incorporation of the
Company as filed with the Secretary of State of Delaware on
September 29, 1999.
3.2 By-laws of the Company duly adopted by the Board of Directors
on September 29, 1999.
4.1 Form of Indenture between the Company and HSBC Bank USA with
respect to the 9% Notes due 2004 (the "Indenture") (exhibit 2
to the Plan).
4.2 Form of 9% Note Due 2004 (exhibit A to the Indenture).
4.3 Form of Deferred Interest Note (exhibit B to the Indenture).
4.4 Form of Senior Secured Note and Class A Warrant Purchase
Agreement among the Company and the several Purchasers named
in Schedule I thereto (the "Security Purchase Agreement")
(exhibit 3 to the Plan).
4.5 Form of 10% Senior Secured Note due 2000 (exhibit B to
Securities Purchase Agreement).
4.6 Form of Class A Stock Purchase Warrant (exhibit C to
Securities Purchase Agreement).
4.7 Form of Security Agreement between the Company and the several
Purchases on the signature pages thereto ("Security
Agreement") (exhibit D to the Securities Purchase Agreement).
4.8 Company Subscription Documents (exhibit E to the Securities
Purchase Agreement).
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4.9 Form of Pledge Agreement between the Company, the Collateral
Agent and the Purchasers listed on the Signature pages thereto
(exhibit to the Securities Purchase Agreement).
4.10 Form of Class B Stock Purchase Warrant(exhibit 4 to the Plan).
4.11 The Company and its Subsidiaries 1999 Stock Purchase Plan
(exhibit 5 to the Plan).
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: : Chapter 11
:
TELETRAC, INC., : Case No. 99- 2250(MFW)
:
Debtor. :
ORDER CONFIRMING DEBTOR'S SECOND AMENDED PLAN OF
REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
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Teletrac, Inc. (the "Debtor"), debtor and debtor-in-possession, having
filed its Plan of Reorganization Under Chapter 11 of the Bankruptcy Code on June
28, 1999, as amended by the First Amended Plan of Reorganization Under Chapter
11 of the Bankruptcy Code filed July 30, 1999, and the Second Amended Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code filed August 5, 1999 (as
so amended, the "Plan"), in accordance with Section 1121 of Title 11 of the
United States Code (the "Bankruptcy Code") (all capitalized terms not otherwise
defined in this Order shall have the meanings assigned to them in the Plan); and
the Debtor having filed its Second Amended Disclosure Statement Pursuant to
Section 1125 of the Bankruptcy Code on August 5, 1999 (the "Disclosure
Statement") pursuant to Section 1125 of the Bankruptcy Code; and this Court
having approved the adequacy of the information contained in the Disclosure
Statement by Order dated August 5, 1999 (the "Disclosure Statement Order"); and
the Disclosure Statement Order, the Disclosure Statement (with a copy of the
Plan annexed thereto), a ballot and related materials having been transmitted to
all creditors and other parties, as required by the Disclosure Statement Order,
and the solicitation of acceptances from holders of Claims in this Chapter 11
case having been made in the manner required by the Disclosure Statement Order;
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and no objections to confirmation of the Plan having been filed or, if filed,
withdrawn, settled or otherwise resolved as set forth herein, or overruled, and
a hearing (the "Confirmation hearing") to consider confirmation of the Plan and
other matters relating to confirmation having been held before this Court on
September 15, 1999 upon such notice as required by the Disclosure Statement
Order; and affidavits of service having been filed; and upon certification of
Kathleen M. Logan regarding the tabulation of the ballots in favor of and in
opposition to the Plan; and upon the entire record of this Chapter 11 case and
the record of the aforementioned hearings; and upon all proceedings heretofore
had herein; and after due deliberation and sufficient cause appearing therefor,
this court hereby FINDS that:
A. FINDINGS AND CONCLUSIONS. Findings of fact shall be construed as
conclusions of law and conclusions of law shall be construed as findings of fact
when necessary and appropriate.
B. PLAN COMPLIANCE WITH CODE (SECTION 1129(A)(1) OF THE BANKRUPTCY CODE).
The plan complies with the applicable provisions of Chapter 11 of the Bankruptcy
Code.
C. PROPER CLASSIFICATION (SECTION 1123(A)(A) OF THE BANKRUPTCY CODE). A
reasonable basis exists for the classification of Claims and Equity Interests in
the Plan. Claims and Equity Interests within each particular Class are
substantially similar. The classification of Claims and Equity Interests in the
Plan is reasonable and necessary to implement the Plan. Therefore, the
classification of claims and interests under the Plan is consistent with Section
1122 of the Bankruptcy Code.
D. SPECIFIED TREATMENT OF UNIMPAIRED CLASSES (SECTION 1123(A)(2) OF THE
BANKRUPTCY CODE). The Plan specifies that Class 1 (Priority Non-Tax Claims),
Class 2 (Secured Claims) and Class 5 (Category B Convenience Claims) are not
impaired under the Plan.
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E. SPECIFIED TREATMENT OF IMPAIRED CLASSES (SECTION 1123(A)(3) OF THE
BANKRUPTCY CODE). The Plan (i) specifies that Class 3 (Old Note Unsecured Claims
and Miscellaneous Unsecured Claims), Class 4 (Category "A" Convenience Class
Claims), Class 6 (Indemnity Claims) and Class 7 (Equity Interests) are impaired
under the Plan and (ii) specifies the treatment of claims and interests in such
classes.
F. NO DISCRIMINATION (SECTION 1123(A)(4) OF THE BANKRUPTCY CODE). The Plan
provides the same treatment for each claim or interest of each particular class.
G. IMPLEMENTATION OF THE PLAN (SECTION 1123(A)(6) OF THE BANKRUPTCY CODE).
The Plan provides adequate means for the Plan's implementation.
H. NON-VOTING EQUITY SECURITIES (SECTION 1123(A)(6) OF THE BANKRUPTCY
CODE). The provisions of Section 1123(a)(6) of the Bankruptcy Code are
inapplicable.
I. SELECTION OF OFFICERS AND DIRECTORS (SECTION 1123(A)(7) OF THE
BANKRUPTCY CODE). The Plan satisfies the requirements of Section 1123(a)(7) of
the Bankruptcy Code.
J. DEBTOR'S COMPLIANCE WITH THE BANKRUPTCY CODE (SECTION 1129(A)(2) OF THE
BANKRUPTCY CODE. The Debtor, as proponent of the Plan, has complied with all
applicable provisions of the Bankruptcy Code.
K. PLAN PROPOSED IN GOOD FAITH (SECTION 1129(A)(3) OF THE BANKRUPTCY CODE).
The Plan has been proposed in good faith and not by any means forbidden by law.
L. PAYMENTS OF COSTS AND EXPENSES (SECTION 1129(A)(4) OF THE BANKRUPTCY
CODE). Any payment made or promised by the Debtor for services or for costs and
expenses in or in connection with this Chapter 11 case, or in connection with
the Plan and incident to this Chapter 11 case, has been approved by, or is
subject to the approval of, this Court as being reasonable.
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M. DIRECTORS AND OFFICERS (SECTION 1129(A)(5) OF THE BANKRUPTCY CODE). The
Plan satisfies the requirements of Section 1129(a)(5) of the Bankruptcy Code.
N. NO RATE CHANGE (SECTION 1129(A)(6) OF THE BANKRUPTCY CODE). The
provisions of Section 1129(a)(6) of the Bankruptcy Code are inapplicable.
O. BEST INTERESTS OF CREDITORS (SECTION 1129(A)(7) OF THE BANKRUPTCY CODE)
With respect to each impaired class of Claims or Interests, each holder of a
Claim or Interest of such class has accepted the Plan or will receive or retain
under the Plan on account of such Claim or Interest property of a value, as of
the Effective Date, that is not less than the amount that such holder would
receive or retain if the Debtor were liquidated under Chapter 7 of the
Bankruptcy Code on such date.
P. PLAN ACCEPTANCE (SECTION 1129(A)(8) OF THE BANKRUPTCY CODE). With
respect to each impaired class of claims specified in the Plan, ballots
accepting the Plan have been timely received from creditors that hold at least
two-thirds in dollar amount and more than one-half in number of the allowed
Claims of such class held by creditors that have accepted or rejected the Plan.
Q. PLAN TREATMENT OF ADMINISTRATIVE EXPENSES AND PRIORITY CLAIMS (SECTION
1129(A)(9) OF THE BANKRUPTCY CODE). The treatment under the Plan of Claims of
the types specified in Sections 507(a)(1) through 507(a)(7) of the Bankruptcy
Code complies with the provisions of Section 1129(a)(9) of the Bankruptcy Code,
except to the extent that the holder of a particular Claim has agreed to a
different treatment. Notwithstanding the foregoing, Allowed Administrative
Expenses, representing post-Filing Date liabilities incurred in the ordinary
course of business of the Debtor, shall be paid in full in accordance with the
terms and conditions of the particular transactions giving rise to such
liabilities and any agreements relating thereto.
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R. AT LEAST ONE IMPAIRED CLASS ACCEPTED PLAN (SECTION 1129(A)(10) OF THE
BANKRUPTCY CODE). Classes 3 and 4 (without including any acceptance of the Plan
by any insider, as defined in the Bankruptcy Code) have accepted the Plan;
therefore, at least one impaired class of Claims or Interests has accepted the
Plan, which acceptance has been determined without including any acceptance of
the Plan by any insider, as defined in the Bankruptcy Code.
S. FEASIBILITY (SECTION 1129(A)(11) OF THE BANKRUPTCY CODE). The
confirmation of the Plan is not likely to be followed by the liquidation of
Reorganized Teletrac or the need for further financial reorganization of
Reorganized Teletrac. The requirements of Section 1129(a)(11) of the Bankruptcy
Code are therefore satisfied.
T. CERTAIN FEES (SECTION 1129(A)(12) OF THE BANKRUPTCY CODE). All fees
payable under 28 U.S.C. ss. 1930 have been paid or will be paid on or before the
Effective Date.
U. RETIREE BENEFITS (SECTION 1129(A)(13) OF THE BANKRUPTCY CODE). Section
1129(a)(13) of the Bankruptcy Code is inapplicable.
V. PLAN IS FAIR AND EQUITABLE AND DOES NOT UNFAIRLY DISCRIMINATE (SECTION
1129(B) OF THE BANKRUPTCY CODE). Each class of Claims entitled on the Plan has
vote in favor of the Plan other than Class 6 (Indemnity Claims), which has no
Class members. Although Class 7 (Equity Interests) was not eligible to vote on
the Plan under Section 1126(g) and is therefore deemed not to have accepted the
Plan, the holders of any interest in the Debtor junior to that of the holders of
Class 7 Interests will not receive or retain under the Plan on account of such
interest any property. Accordingly, Section 1129(b) of the Bankruptcy Code is
either inapplicable (with respect to Class 6) or satisfied (with respect to
Class 7).
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W. NO OTHER PLAN (SECTION 1129(C) OF THE BANKRUPTCY CODE). The Plan is the
only plan of reorganization pending before this Court, or any other court, with
respect to the Debtor.
X. NO AVOIDANCE OF TAXES OR APPLICATION OF SECURITIES LAWS (SECTION 1129(D)
OF THE BANKRUPTCY CODE). The primary purpose of the Plan is not the avoidance of
taxes or the avoidance of the requirements of section 5 of the Securities Act of
1933.
Y. ELIMINATION OF CLASS 6 FOR VOTING PURPOSES. There are no holders of
claims classified as Class 6 Claims. Accordingly, Class 6 Claims will be
eliminated for voting purposes.
Finding that the Plan is confirmable for all of the foregoing reasons, this
Court hereby ORDERS, ADJUDGES AND DECREES that:
1. CONFIRMATION. The Plan is hereby confirmed.
2. IMPLEMENTATION OF PLAN AND ORDER. The Debtor and all other parties
are hereby authorized to take all steps and perform all acts as may be necessary
to implement and effectuate the Plan, all other related instruments and
documents and this Order, and to satisfy all other conditions precedent to the
implementation and Effective Date of the Plan. Prior to the Effective Date, the
Debtor may make technical, conforming, and other changes to the Plan, exhibits
and other relevant documents to the extent such changes are consistent with the
Plan. Except as otherwise required by the Plan, no further action by the Debtor
shall be required to authorize the consummation of the Plan, or any other action
contemplated to be taken by the Debtor pursuant to the Plan or this Order.
3. BINDING NATURE OF PLAN AND ORDER. The provisions of the Plan and
this Order shall be binding upon the Debtor, and any holder of a Claim or
Interest, and any other party in interest in this Chapter 11 case, and their
respective successors and assigns, whether or not the Claim or Interest or
obligation of any party in interest is impaired under the Plan, whether or not
such creditor, equity security holder or party in interest has accepted the Plan
and whether or not such creditor, equity security holder or other party in
interest has filed a proof of claim.
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4. DISCHARGE AND INJUNCTION. Unless this Court orders otherwise, as of
the Effective Date, the rights afforded in Plan and the treatment of all Claims
and Interests therein shall be in complete satisfaction, discharge and release
of all Claims against, and all Interests in, the Debtor or any of its assets or
properties of any nature whatsoever. Except as otherwise specifically provided
herein, and unless this Court orders otherwise, on the Effective Date all Claims
and Interests shall forever be satisfied, discharged and released in full, and
all holders of Claims and Interests shall be forever precluded and enjoined from
asserting against the Debtor or Reorganized Teletrac, and the assets and
properties of the Debtor or Reorganized Teletrac any other or further
liabilities, liens, obligations or Claims based upon any act or omission,
transaction or other activity or security agreement or other agreement of any
kind or nature occurring, arising or existing prior to the Effective Date in
connection with the Debtor or its properties, except as otherwise expressly
preserved or left unaltered pursuant to the Plan.
5. VESTING OF PROPERTY. Upon the Effective Date, title to all assets
then owned by the Debtor shall pass to Reorganized Teletrac free and clear of
all liens, Claims and Interests in accordance with Section 1141 of the
Bankruptcy Code.
6. OBJECTIONS TO CLAIMS. Unless otherwise ordered by this Court after
notice and a hearing, the Debtor shall, after the Effective Date, have the
exclusive right (except as to applications for allowance of compensation and
reimbursement of expenses under Sections 330 and 503 of the Bankruptcy Code) to
make, prosecute and settle objections to Claims and Interests. The Debtor may
compromise and settle any objection to any Claim or Interest.
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7. EXECUTORY CONTRACTS AND UNEXPIRED LEASES. All Executory Contracts
or unexpired leases that exist between the Debtor and any Person shall be
assumed as of the Effective Date except for any Executory Contract or unexpired
lease (i) which has been rejected pursuant to an Order of this Court entered
prior to the date hereof; (ii) as to which a motion for approval of the
rejection of such contract or lease has been filed prior to the date hereof; or
(iii) which is set forth on Schedule 9.1 to the Plan, as such Schedule may have
been amended in accordance with the Plan.
8. BAR TO REJECTION DAMAGES. Claims arising out of the rejection of an
Executory Contract or unexpired lease pursuant to a motion for approval of the
rejection of such contract or lease which is pending as of the date hereof must
be filed with this Court no later than twenty (20) days after of entry of an
Order approving the rejection of such contract or lease. Claims arising out of
the rejection of an Executory Contract or unexpired lease set forth on Schedule
9.1 to the Plan, as such Schedule may have been amended in accordance with the
Plan, must be filed with this Court no later than twenty (20) days after notice
of entry of this Confirmation Order. Any Claims not filed within the foregoing
time periods will be forever barred from assertion against the Debtor, its
estate and its property.
9. PROFESSIONALS' FEES. Professionals' fees and expenses incurred
after the Effective Date shall be paid by the Debtor, in the ordinary course of
business and without further approval by this Court. This Court, however, shall
retain jurisdiction to hear and settle disputes arising in connection with the
assertion of claims for such professionals' fees and expenses.
10. APPROVALS AND CONSENTS. The Debtor is authorized hereby to take
such actions as may be necessary and appropriate to implement and effectuate the
consummation of the Plan and this Order.
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11. RETENTION OF JURISDICTION. Notwithstanding Confirmation of the
Plan or the Effective Date having occurred, this Court shall retain and have
exclusive jurisdiction over both the Debtor and the Debtor's estate for the
following purposes:
(i) to hear and determine any and all objections to the allowance
and amount of Claims and Interests;
(ii) to hear and determine any and all disputes arising under or
relating to interpretation, implementation and enforcement of the Plan;
(iii) to hear and determine any and all applications for
allowance of compensation and reimbursement of expenses of professionals or of
others under Sections 330, 331 and 503(b) of the Bankruptcy Code;
(iv) to hear and determine any and all pending applications for
assumption, assignment or rejection of Executory Contracts and unexpired leases
and the allowance of any Claims resulting from the rejection thereof or from the
rejection of Executory Contracts or unexpired leases under the Plan;
(v) to hear and determine any and all applications, adversary
proceedings and contested and litigated matters including but not limited to
avoiding actions;
(vi) to enforce and administer the provisions of the Plan,
including but not limited to the exhibits thereto and the annexes to such
exhibits;
(vii) to modify any provisions of the Plan to the full extent
permitted by the Bankruptcy Code;
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(viii) to correct any defect, cure any omission, or reconcile any
inconsistency in the Plan, the exhibits to the Plan and annexes thereto or this
Order, as may be necessary to carry out the purposes and intent of the Plan;
(ix) to determine such other matters as may be provided for in
this Order or may from time to time be authorized under the provisions of the
Bankruptcy code or any other applicable law;
(x) to determine the scope of and enforce all orders, judgments,
injunctions and rulings entered in connection with this case and to determine
the scope of and enforce all releases and injunctions under the Plan;
(xi) to enter such orders in aid of confirmation and to
facilitate implementation of the Plan, including without limitation, appropriate
orders to protect the Debtor and its successors from creditor action;
(xii) to recover all assets of the Debtor and property of the
estate wherever located and to conduct any hearings on the disposition of
assets, to the extent necessary pursuant to the Plan;
(xiii) to hear and determine matters concerning state, local and
federal taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy
Code;
(xiv) to hear and determine all matters and disputes to the
fullest extent permitted by applicable law; and
(xv) to enter a final decree closing the Case.
12. EXEMPTION FROM REGISTRATION. To the extent any of the
distributions or rights arising under the Plan constitute securities under
applicable law, they shall be exempt from registration under applicable
securities laws pursuant to Section 1145 of the Bankruptcy Code as securities
issued under a Plan.
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13. EXCULPATION. Upon the Effective Date, none of the Debtor, the
Reorganized Debtor, the Committee, the Ad Hoc Committee, the Old Notes Indenture
Trustee, the Disbursing Agent and the holders of the Equity Interests, nor any
of their respective members, partners, officers, directors, employees, employees
and agents (including any attorneys, financial advisors, investment bankers and
other professionals retained by such persons) shall have or incur any liability
to any holder of a Claim or Interest for any act or omission in connection with,
or arising out of, the conduct of this case, the pursuit of confirmation of the
Plan, the consummation of the Plan or the administration of the Plan or the
property to be distributed under the Plan except for willful misconduct or gross
negligence and, in all respects, the Debtor, the Reorganized Debtor, the
Committee, the Ad Hoc Committee, the Old Notes Indenture Trustee, the Disbursing
Agent and the holders of the Equity Interests, nor any of their respective
members, partners, officers, directors, employees, employees and agents
(including any attorneys, financial advisors, investment bankers and other
professionals retained by such persons) shall be entitled to rely upon the
advice of counsel with respect to their duties and responsibilities under the
Plan.
14. EXEMPTION FROM TRANSFER TAXES. The transfer of any of the Debtor's
assets pursuant to the Plan, including the transfer of any assets approved by
the Court following the date hereof, and the making, delivery or recordation of
any deed, termination or modification of any case or other instrument of
transfer, or assignment, executed in connection with any transaction
contemplated in connection with the Plan shall not be subject to taxation under
any state or local law imposing a stamp, transfer or other similar tax in
accordance with Section 1146(c) and
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Section 105 of the Bankruptcy Code.
15. FAILURE OF REFERENCE. The failure to reference or discuss any
particular provision of the Plan in this Order shall have no effect on the
validity, binding effect and enforceability of such provision and such provision
shall have the same validity, binding effect and enforceability as every other
provision of the Plan.
16. INCONSISTENCY. To the extent of any inconsistency between the
terms of the Plan and this Order, the terms of the Plan shall govern.
17. NOTICE OF CONFIRMATION ORDER. The Debtor's mailing of notice of
entry of this Order, in substantially the form annexed hereto as Exhibit "A", to
all parties in interest appearing at the Confirmation Hearing and all parties
who have filed notices of appearance pursuant to Bankruptcy Rule 2002 in this
case, shall be deemed good and sufficient notice of the entry of this Order.
18. CLAIMS OF THE UNITED STATES. Notwithstanding anything in the Plan
to the contrary, (i) if Reorganized Teletrac elects to pay any Priority Tax
Claims of the Internal Revenue Service (the "IRS") over a period not exceeding
six (6) years after the date of assessment of such claim pursuant to Section 2.2
of the Plan, then (A) Reorganized Teletrac's payments to the IRS on account of
such Priority Tax Claims shall be made quarterly, rather than annually and (B)
the IRS' Priority Tax Claims shall be entitled to accrue interest at the Federal
Statutory Rate of interest; (ii) nothing in the Plan shall affect the right of
the IRS to assert a right to penalties on account of its Tax Claims, if any,
provided, however, that all parties shall preserve the right to contest the
allowance and priority of any such asserted penalties; and (iii) confirmation of
the Plan shall not affect the right of the United States, if any, to assert a
set-off against Reorganized Teletrac, or the right of Reorganized Teletrac to
assert any objections to any such asserted set-off.
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19. DEBTOR'S SETTLEMENT WITH HOUSTON TAXING AUTHORITIES. The
Stipulation Resolving Objection of Taxing Authority to Confirmation of Debtor's
Second Amended Plan of Reorganization is hereby approved and made an Order of
the Court.
20. TERMINATION OF COMMITTEE. Upon the Effective Date, the Committee
shall be terminated and dissolved; PROVIDED, HOWEVER, that the Committee shall
survive the Effective Date solely for purposes of considering and, if
appropriate, objecting to any requests for interim and/or final allowance of
compensation or reimbursement of fees under Sections 330 and/or 331 of the
Bankruptcy Code.
21. SUBSCRIPTION DEADLINE. Notwithstanding anything in the Plan or
this Order to the contrary, the deadlines established by Section 6.3(A)(iii) of
the Plan shall be deemed to be extended through and until September 23, 1999,
PROVIDED, HOWEVER, that upon agreement of the Debtor and a Creditors' Committee
Majority, such deadline may be further extended, without further Order of the
Court.
22. INJUNCTIONS AND AUTOMATIC STAY. All injunctions or stays provided
for in this case pursuant to Section 362 of the Bankruptcy Code or otherwise
existing as of the date of entry of this Order shall remain in full force and
effect until the Effective Date.
23. DISTRIBUTIONS. All distributions of Cash, New Common Stock and New
Warrants required to be made by the Debtor pursuant to the Plan shall be made
within the time provided by the Plan and shall be deemed timely and proper if
mailed by first-class U.S. mail on or before the distribution dates set forth in
the Plan to the last know address of the persons entitled thereto. The record
date for distributions under the Plan shall be the date of the entry of this
Order.
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24. GOOD FAITH. Based on the record before the Court in this case, the
Debtor, each of the members of the Ad Hoc Committee and the Creditors'
Committee, and each of their respective affiliates, agents, directors, officers,
employees, investment bankers, financial advisors, attorneys and other
professionals have acted in "good faith" within the meaning of Section 1125(e)
of the Bankruptcy Code in compliance with the applicable provisions of the
Bankruptcy Code and the Federal Rules of Bankruptcy Procedure in connection with
all of their respective activities relating to the solicitation of acceptances
to the Plan and their participation in the activities described in Section
1125(e) of the Bankruptcy Code. Without limitation, to the extent any such
entity or person participated in the offer, sale, distribution, issuance and/or
purchase of the New Common Stock, such purchase, offer, sale or issuance is
deemed to be in "good faith" within the meaning of Section 1125(e) of the
Bankruptcy Code and in compliance with the applicable provisions of the
Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.
25. FINAL ORDER. In accordance with Federal Rule of Bankruptcy
Procedure 7062, this Order is a final order and immediately enforceable upon
entry. To the extent necessary under Bankruptcy Rule 5003, 9014, 9021 and 9022,
the Court expressly finds that there is no just reason for delay in the
implementation of this Order and expressly directs entry of this Order.
Dated: Wilmington, DE
September 15, 1999 BY THE COURT:
By: _______________________________
Mary F. Walrath
UNITED STATES BANKRUPTCY JUDGE
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EXHIBIT "A"
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
IN RE: : Chapter 11
:
TELETRAC, INC., : Case No. 99-2250(MFW)
:
Debtor. :
NOTICE OF ENTRY OF ORDER CONFIRMING DEBTOR'S SECOND
AMENDED PLAN UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
----------------------------------------------------
PLEASE TAKE NOTICE that on September ___, 1999, the Honorable Mary F.
Walrath, United States Bankruptcy Judge, entered an order (the "Confirmation
Order") confirming the above-referenced Debtor's Second Amended Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code (the "Plan").
PLEASE TAKE NOTICE that copies of the Confirmation Order and the Plan are
on file and may be examined with the Clerk of the United States Bankruptcy Court
for the District of Delaware, 824 Market Street, 5th Floor, Wilmington, DE
19801, during the Clerk's normal business hours.
DATED: September ___, 1999
CLERK, UNITED STATES BANKRUPTCY COURT
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
:
: CHAPTER 11
In re:
: Case No. 99-2250 (MFW)
TELETRAC, INC.
a Delaware Corporation, :
Debtor. :
:
DEBTOR'S PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
REBOUL, MacMURRAY, HEWITT, SAUL, EWING, REMICK & SAUL LLP
MAYNARD & KRISTOL Co-Counsel for Teletrac, Inc.
Co-counsel for Teletrac, Inc. 222 Delaware Avenue
45 Rockefeller Plaza P.O. Box 1266
New York, New York 10111 Wilmington, Delaware 19899
(212) 841-0608 (302) 421-6824
Dated: Wilmington, Delaware
August 4, 1999
1
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND INTERPRETATION...............................1
1.1 ADMINISTRATIVE EXPENSE CLAIM.................................1
1.2 AD HOC COMMITTEE.............................................1
1.3 ALLOWED......................................................1
1.4 BANKRUPTCY CODE..............................................2
1.5 BANKRUPTCY COURT.............................................2
1.6 BANKRUPTCY RULES.............................................2
1.7 BUSINESS DAY.................................................2
1.8 CASH.........................................................2
1.9 CATEGORY A CONVENIENCE CLAIM.................................2
1.10 CATEGORY B CONVENIENCE CLAIM.................................2
1.11 CHAPTER 11 CASE..............................................2
1.12 CHARTER......................................................2
1.13 CLAIM........................................................2
1.14 CLASS........................................................3
1.15 CLASS A WARRANTS.............................................3
1.16 CLASS B WARRANTS.............................................3
1.17 CLOSING DATE.................................................3
1.18 COLLATERAL...................................................3
1.19 COLLATERAL AGENT.............................................3
1.20 COMMITMENT AMOUNT............................................3
1.21 CONFIRMATION DATE............................................3
1.22 CONFIRMATION HEARING.........................................3
1.23 CONFIRMATION ORDER...........................................3
1.24 CREDITORS' COMMITTEE.........................................3
1.25 CREDITORS' COMMITTEE MAJORITY................................4
1.26 DEBTOR.......................................................4
1.27 DEBTOR IN POSSESSION.........................................4
1.28 DGCL.........................................................4
1.29 DIP LOANS....................................................4
1.30 DISALLOWED...................................................4
1.31 DISBURSING AGENT.............................................4
1.32 DISCLOSURE STATEMENT.........................................4
1.33 DISPUTED.....................................................4
1.34 EFFECTIVE DATE...............................................5
1.35 EMPLOYMENT AGREEMENTS........................................5
1.36 EQUITY INTEREST..............................................5
1.37 FINAL ORDER..................................................5
1.38 HOLDINGS.....................................................5
1.39 INCENTIVE OPTIONS............................................5
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1.40 INDEMNITY CLAIM..............................................5
1.41 LIEN.........................................................5
1.42 MISCELLANEOUS UNSECURED CLAIM................................6
1.43 NEW COMMON STOCK.............................................6
1.44 NEW NOTES....................................................6
1.45 NEW NOTES INDENTURE..........................................6
1.46 NEW SENIOR SECURED NOTES.....................................6
1.47 NEW SENIOR SECURED NOTES AND CLASS A WARRANT AGREEMENT.......6
1.48 NOTEHOLDER PLAN SUPPORT AGREEMENT............................6
1.49 OLD NOTES....................................................6
1.50 OLD NOTE CLAIM...............................................6
1.51 OLD NOTES COLLATERAL.........................................7
1.52 OLD NOTES COLLATERAL ACCOUNT.................................7
1.53 OLD NOTES INDENTURE..........................................7
1.54 OLD NOTES INDENTURE TRUSTEE..................................7
1.55 OLD NOTES PLEDGE AGREEMENT...................................7
1.56 OLD NOTE SECURED CLAIM.......................................7
1.57 OLD NOTE UNSECURED CLAIM.....................................7
1.58 PETITION DATE................................................7
1.59 PLAN.........................................................7
1.60 PLAN DOCUMENTS...............................................7
1.61 PRINCIPAL OFFICERS...........................................7
1.62 PRIORITY NON-TAX CLAIM.......................................7
1.63 PRIORITY TAX CLAIM...........................................8
1.64 RATABLE PROPORTION...........................................8
1.65 REORGANIZED TELETRAC.........................................8
1.66 SCHEDULES....................................................8
1.67 SECURED CLAIM................................................8
1.68 SECURITIES ACT...............................................8
1.69 SHAREHOLDERS SUPPORT AGREEMENT...............................8
1.70 SPECIFIED PERCENTAGE.........................................8
1.71 STOCK OPTION PLAN............................................8
1.72 SUBSCRIBING PARTIES..........................................8
1.73 TELETRAC LICENSE.............................................9
1.74 TORT CLAIM...................................................9
1.75 UNSECURED CLAIM..............................................9
SECTION 2. PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSE
CLAIMS AND PRIORITY CLAIMS...................................9
2.1 ADMINISTRATIVE EXPENSE CLAIMS................................9
2.2 PRIORITY TAX CLAIMS.........................................10
SECTION 3. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS...............10
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SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS AND
EQUITY INTERESTS............................................10
4.1 PRIORITY NON-TAX CLAIMS (CLASS 1)...........................10
4.2 SECURED CLAIMS (CLASS 2)....................................11
4.3 OLD NOTE UNSECURED CLAIMS AND MISCELLANEOUS
UNSECURED CLAIMS (CLASS 3)................................11
4.4 CATEGORY A CONVENIENCE CLAIMS (CLASS 4).....................12
4.5 CATEGORY B CONVENIENCE CLAIMS (CLASS 5).....................13
4.6 INDEMNITY CLAIMS (CLASS 6)..................................14
4.7 EQUITY INTERESTS (CLASS 7)..................................14
4.8 ALTERNATIVE TREATMENT FOR HOLDERS OF ALLOWED CLAIMS.........14
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS
IMPAIRED; ACCEPTANCE OR REJECTION OF THE PLAN...............14
5.1 HOLDERS OF CLAIMS AND EQUITY INTERESTS ENTITLED TO VOTE.....14
SECTION 6. MEANS OF IMPLEMENTATION.....................................15
6.1 DISTRIBUTIONS...............................................15
6.2 AUTHORIZATION OF NEW SECURITIES.............................15
6.3 SENIOR SECURED NOTE FACILITY................................15
6.4 ADOPTION OF STOCK OPTION PLAN...............................17
6.5 EMPLOYMENT AGREEMENTS.......................................17
6.6 CANCELLATION OF EXISTING SECURITIES AND AGREEMENTS..........17
6.7 CORPORATE ACTION............................................18
6.8 RESTATED CERTIFICATE OF INCORPORATION.......................18
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS..........................18
7.1 DATE OF DISTRIBUTIONS.......................................18
7.2 DISBURSING AGENT............................................18
7.3 SURRENDER OF INSTRUMENTS....................................19
7.4 COMPENSATION OF PROFESSIONALS...............................19
7.5 DELIVERY OF DISTRIBUTIONS...................................19
7.6 MANNER OF PAYMENT UNDER THE PLAN............................20
7.7 FRACTIONAL SHARES...........................................20
7.8 SETOFFS AND RECOUPMENT......................................20
7.9 DISTRIBUTIONS AFTER EFFECTIVE DATE..........................20
7.10 RIGHTS AND POWERS OF DISBURSING AGENT.......................20
7.11 EXCULPATION.................................................20
SECTION 8. PROCEDURES FOR TREATING DISPUTED CLAIMS UNDER THE
PLAN........................................................21
8.1 DISPUTED CLAIMS.............................................21
8.2 NO DISTRIBUTIONS PENDING ALLOWANCE..........................22
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8.3 DISTRIBUTIONS AFTER ALLOWANCE...............................22
8.4 VOTING RIGHTS OF HOLDERS OF DISPUTED CLAIMS.................22
SECTION 9. PROVISIONS GOVERNING EXECUTORY CONTRACTS AND
UNEXPIRED LEASES............................................22
9.1 ASSUMPTION OR REJECTION OF CONTRACTS AND LEASES.............22
9.2 AMENDMENTS TO SCHEDULE; EFFECT OF AMENDMENTS................23
9.3 BAR TO REJECTION DAMAGE CLAIMS..............................23
9.4 INDEMNIFICATION OBLIGATIONS.................................23
SECTION 10. CONDITIONS PRECEDENT TO EFFECTIVE DATE .....................24
10.1 CONDITIONS PRECEDENT TO EFFECTIVE DATE OF THE PLAN..........24
10.2 WAIVER OF CONDITIONS PRECEDENT..............................25
SECTION 11. EFFECT OF CONFIRMATION......................................25
11.1 VESTING OF ASSETS...........................................25
11.2 BINDING EFFECT..............................................25
11.3 DISCHARGE OF DEBTOR.........................................26
11.4 TERM OF INJUNCTIONS OR STAYS................................26
11.5 INDEMNIFICATION OBLIGATIONS.................................26
11.6 RELEASE.....................................................26
SECTION 12. RETENTION OF JURISDICTION...................................27
SECTION 13. MISCELLANEOUS PROVISIONS....................................28
13.1 PAYMENT OF STATUTORY FEES...................................28
13.2 RETIREE BENEFITS............................................28
13.3 ADMINISTRATIVE EXPENSES INCURRED AFTER THE CONFIRMATION
DATE......................................................28
13.4 SECTION 1125(E) OF THE BANKRUPTCY CODE......................29
13.5 MODIFICATION OF PLAN DOCUMENTS..............................29
13.6 COMPLIANCE WITH TAX REQUIREMENTS............................29
13.7 NOTICES.....................................................30
13.8 GOVERNING LAW...............................................30
13.9 BINDING EFFECT..............................................32
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EXHIBITS TO THE PLAN
Exhibit 1 -- Charter of Reorganized Teletrac, Inc.
Exhibit 2 -- New Note Indenture and Form of New Notes
Exhibit 3 -- New Senior Secured Note and Class A Warrant Agreement,
Senior Secured Note, Form of Class A Warrant, Security
Agreement, and Subscription Agreement
Exhibit 4 -- Class B Warrant
Exhibit 5 -- 1999 Teletrac Stock Option Plan
Annex A -- Shareholder Allocation
Schedule 9.1 -- Schedule of Certain Executory Contracts to be Rejected
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DEBTOR'S FIRST AMENDED PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
Teletrac, Inc. ("Teletrac") proposes the following Plan of
Reorganization, under Chapter 11 of the Bankruptcy Code, dated as of August 4,
1999, pursuant to Section 1121(a) of the Bankruptcy Code:
SECTION 1. DEFINITIONS AND INTERPRETATION
A. DEFINITIONS.
The following terms herein shall have the respective meanings defined
below:
1.1 ADMINISTRATIVE EXPENSE CLAIM means any right to payment constituting a
cost or expense of administration of the Chapter 11 Case allowed under Sections
503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, (a)
any actual and necessary costs and expenses of preserving the Debtor's estate,
(b) any actual and necessary costs and expenses of operating the Debtor's
business during the Chapter 11 Case in the ordinary course of business, (c) any
indebtedness or obligations incurred or assumed by the Debtor in Possession
during the Chapter 11 Case in the ordinary course of business, (d) any
allowances of compensation and reimbursement of expenses to the extent allowed
by Final Order under Section 330 or 503 of the Bankruptcy Code, (e) Claims, if
any, as approved by the Bankruptcy Court, for actual fees, charges, or
reasonable attorneys' fees incurred by the Old Notes Indenture Trustee and
Collateral Agent during the Chapter 11 Case in the aggregate amount of not
greater than $15,000, (f) any fees or charges assessed against the Debtor's
estate under Section 1930, title 28, United States Code, and (g) the DIP Loan.
1.2 AD HOC COMMITTEE means the unofficial committee of certain holders of
Old Notes, the members of which consisted, as of the Petition Date, of Lutheran
Brotherhood, Post Advisory Group, Bank of Montreal, Harvard Management Group,
Prospect St. Yield Inc., TD Securities (USA) Inc., Capital Research and
Management Company, and Georgica Advisors.
1.3 ALLOWED means, with reference to any Claim or Equity Interest, (a) any
Claim or Equity Interest as to which no objection to allowance has been
interposed on or before the Confirmation Date or such other applicable period of
limitation fixed by the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy
Court, or as to which any objection has been determined by a Final Order to the
extent such objection is determined in favor of the respective holder, (b) any
Claim or Equity Interest as to which the liability of the Debtor and the amount
thereof are determined by final order of a court of competent jurisdiction other
than the Bankruptcy Court or (c) any Claim or Equity Interest expressly allowed
hereunder. Unless otherwise specified in the Plan or in a Final Order of the
Bankruptcy Court allowing such Claim, "Allowed" in reference to a Claim shall
not include (a) interest on the amount of such Claim accruing from and after the
Petition Date, (b) punitive or exemplary damages, or (c) any fine, penalty or
forfeiture.
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1.4 BANKRUPTCY CODE means title 11, United States Code, as amended from
time to time, as applicable to the Chapter 11 Case.
1.5 BANKRUPTCY COURT means the United States District Court for the
District of Delaware having jurisdiction over the Chapter 11 Case and, to the
extent of any reference made under Section 157, title 28, of the United States
Code, the unit of such District Court having jurisdiction over the Chapter 11
Case under Section 151, title 28, United States Code.
1.6 BANKRUPTCY RULES means the Federal Rules of Bankruptcy Procedure as
promulgated by the United States Supreme Court under Section 2075, title 28,
United States Code, as amended from time to time, applicable to the Chapter 11
Case, and any Local Rules of the Bankruptcy Court.
1.7 BUSINESS DAY means any day other than a Saturday, a Sunday or any other
day on which banking institutions in New York, New York are required or
authorized to close by law or executive order.
1.8 CASH means legal tender of the United States of America.
1.9 CATEGORY A CONVENIENCE CLAIM means any Unsecured Claim other than an
Old Note Unsecured Claim which is Allowed in an amount not in excess of $20,000
(but greater than $1,000), or which is allowed in an amount greater than $20,000
but which the holder of such Claim elects to convert in its entirety into a
Category A Convenience Claim in the amount of $20,000 in accordance with the
provisions of this Plan.
1.10 CATEGORY B CONVENIENCE CLAIM means any Unsecured Claim other than an
Old Note Unsecured Claim which is Allowed in an amount not in excess of $1,000,
or which is Allowed in an amount greater than $1,000 but which the holder of
such Claim elects to convert in its entirety into a Category B Convenience Claim
in the amount of $1,000 in accordance with the Plan.
1.11 CHAPTER 11 CASE means the Debtor's voluntary case filed with the
Bankruptcy Court under Chapter 11 of the Bankruptcy Code.
1.12 CHARTER means the Restated Certificate of Incorporation of Reorganized
Teletrac, which shall be in substantially the form annexed hereto as Exhibit 1.
1.13 CLAIM means (a) any right to payment from the Debtor, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, legal, equitable, secured, or unsecured, known or
unknown, or (b) any right to an equitable remedy for breach of performance if
such breach gives rise to a right of payment from the Debtor, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured, known or
unknown.
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1.14 CLASS means any group of substantially similar Claims or Equity
Interests classified by the Plan as a Class pursuant to Section 1123(c)(1) of
the Bankruptcy Code.
1.15 CLASS A WARRANTS means the Class A Warrants which shall be in
substantially the form annexed hereto as Exhibit 3 and which are issued pursuant
to and exercisable in accordance with the terms and conditions of the New Senior
Secured Note and Class A Warrant Agreement; each Class A Warrant shall entitle
the holder thereof to purchase 1 share of New Common Stock of Reorganized
Teletrac at a price of $0.05 per share for a period of 5 years from the
Effective Date.
1.16 CLASS B WARRANTS means the Class B Warrants, which shall be in
substantially the form annexed hereto as Exhibit 4; each Class B Warrant shall
entitle the holder thereof to purchase 1 share of New Common Stock of
Reorganized Teletrac at a price of $7.40 per share for a period of 5 years from
the Effective Date.
1.17 CLOSING DATE means the Closing Date as defined in the New Senior
Secured Note and Class A Warrant Agreement.
1.18 COLLATERAL means any property or interest in property of the Debtor's
estate, which is subject to a Lien to secure the payment or performance of a
Claim, and which Lien is not subject to avoidance under the Bankruptcy Code.
1.19 COLLATERAL AGENT means Norwest Bank Minnesota, National Association,
as collateral agent under the Old Note Pledge Agreement.
1.20 COMMITMENT AMOUNT means the amount which each Subscribing Party is
committed to pay for the New Senior Secured Notes and Class A Warrants pursuant
to the New Senior Secured Note and Class A Warrant Agreement and Section 6.3 of
this Plan.
1.21 CONFIRMATION DATE means the date on which the Clerk of the Bankruptcy
Court enters the Confirmation Order on its docket.
1.22 CONFIRMATION HEARING means the hearing to be held by the Bankruptcy
Court regarding confirmation of the Plan, as such hearing may be adjourned or
continued from time to time.
1.23 CONFIRMATION ORDER means the order of the Bankruptcy Court regarding
confirmation of the Plan, as such hearing may be adjourned or continued from
time to time.
1.24 CREDITORS' COMMITTEE means the statutory committee of unsecured
creditors, if any, appointed in the Chapter 11 Case pursuant to Section 1102 of
the Bankruptcy Code, which as of the date hereof consists of the following
3
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entities: Georgica Advisors, Capital Research & Management Co., LB Series Fund,
Inc., TD Securities (USA) Inc., Associates Capital Services Corporation, and
Norwest Bank, as Indenture Trustee.
1.25 CREDITORS' COMMITTEE MAJORITY means, at any time, a majority of the
voting members of the Creditors' Committee.
1.26 DEBTOR means Teletrac, Inc., a Delaware corporation, the debtor in the
Chapter 11 Case.
1.27 DEBTOR IN POSSESSION means the Debtor in its capacity as debtor in
possession in the Chapter 11 Case under Sections 1107(a) and 1108 of the
Bankruptcy Code.
1.28 DGCL means the General Corporation Law of the State of Delaware, as
amended from time to time.
1.29 DIP LOANS means the Debtor in Possession loans pursuant to the interim
and final orders of the Bankruptcy Court dated June 10 and July 7, 1999,
respectively, pursuant to Section 364 of the Bankruptcy Code.
1.30 DISALLOWED means, when used with respect to a Claim or Equity
Interest, a Claim or Equity Interest that has been disallowed by Final Order.
1.31 DISBURSING AGENT means any entity in its capacity as a disbursing
agent under Section 7.2 hereof
1.32 DISCLOSURE STATEMENT means the disclosure document relating to the
Plan, including, without limitation, all exhibits and schedules thereto, as
approved by the Bankruptcy Court pursuant to Section 1125 of the Bankruptcy
Code.
1.33 DISPUTED means, with respect to a Claim or Equity Interest, any such
Claim or Equity Interest proof of which was filed with the Bankruptcy Court and
(a) which has been or hereafter is listed on the Schedules as unliquidated,
disputed or contingent, and which has not been resolved by written agreement of
the parties or an order of the Bankruptcy Court, or (b) as to which the Debtor
or any other party in interest has interposed a timely objection in accordance
with the Bankruptcy Code and the Bankruptcy Rules, which objection has not been
withdrawn or determined by a Final Order. Prior to (i) the time an objection has
been filed and (ii) the expiration of the time within which to object to such
Claim or Equity Interest set forth herein or otherwise established by order of
the Bankruptcy Court, a Claim or Equity Interest shall be considered a Disputed
Claim or Disputed Equity Interest to the extent that the amount of the Claim or
Equity Interest specified in a proof of Claim or Equity Interest exceeds the
amount of the Claim or Equity Interest scheduled by the Debtor as not disputed,
contingent or unliquidated.
4
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1.34 EFFECTIVE DATE means the tenth Business Day after all the conditions
precedent to the Effective Date specified in Section 10.1 hereof shall have been
satisfied or waived as provided in Section 10.2 hereof, PROVIDED, HOWEVER, that
if a stay of the Confirmation Order is in effect, the Effective Date shall be
the first Business Day after such stay is no longer in effect.
1.35 EMPLOYMENT AGREEMENTS means the employment agreements with each of the
Principal Officers which shall be described in the Disclosure Statement.
1.36 EQUITY INTEREST means the interest of any holder of equity securities
of the Debtor or Holdings represented by any issued and outstanding shares of
common stock, preferred stock, or other instrument evidencing a present
ownership interest in the Debtor or Holdings, whether or not transferable, or
any option, warrant or right, contractual or otherwise, to acquire or in
connection with any such interest.
1.37 FINAL ORDER means an order or judgment of the Bankruptcy Court entered
by the Clerk of the Bankruptcy Court on the docket in the Chapter 11 Case, which
has not been reversed, vacated or stayed and as to which (a) the time to appeal,
petition for certiorari or move for a new trial, reargument or rehearing has
expired and as to which no appeal, petition for certiorari or other proceedings
for a new trial, reargument or rehearing shall then be pending or (b) if an
appeal, writ of certiorari, new trial, reargument or rehearing thereof has been
sought, such order or judgment of the Bankruptcy Court shall have been affirmed
by the highest court to which such order was appealed, or certiorari shall have
been denied or a new trial, reargument or rehearing shall have been denied or
resulted in no modification of such order, and the time to take any further
appeal, petition for certiorari or move for a new trial, reargument or rehearing
shall have expired; PROVIDED, HOWEVER, that the possibility that a motion under
Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the
Bankruptcy Rules, may be filed relating to such order shall not cause such order
not to be a Final Order.
1.38 HOLDINGS means Teletrac Holdings, Inc., a Delaware corporation, which
owns 100% of the equity interests of the Debtor.
1.39 INCENTIVE OPTIONS means the options to purchase shares of New Common
Stock pursuant to the Stock Option Plan.
1.40 INDEMNITY CLAIM means a Claim of a director or officer of the Debtor
for any obligations of the Debtor to indemnify directors or officers against any
obligations pursuant to the Debtor's certificate of incorporation, bylaws,
contract, applicable state law, any combination of the foregoing, or otherwise.
1.41 LIEN means any charge against, encumbrance upon or other interest
in property, the purpose of which is to secure payment of a debt or performance
of an obligation.
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1.42 MISCELLANEOUS UNSECURED CLAIM means any Unsecured Claim other than an
Old Note Unsecured Claim, a Category A or Category B Convenience Claim or an
Indemnity Claim, and includes, among other things, (i) any claim for goods,
materials, or services provided to the Debtor or rendered to the Debtor prior to
the Petition Date, other than a Category A or Category B Convenience Claim; and
(ii) any Claim against the Debtor arising out of the rejection of any executory
contract or lease, including any Claim of any lessor for damages resulting from
the rejection of a lease of real property as calculated in accordance with
Section 502(b)(6) of the Bankruptcy Code or any Claim of an employee for damages
resulting from the rejection of an employment agreement as any such claim shall
be calculated in accordance with Section 502(b)(7) of the Bankruptcy Code, other
than a Category A or Category B Convenience Claim.
1.43 NEW COMMON STOCK means the shares of common stock of Reorganized
Teletrac to be authorized, issued or outstanding as of the Effective Date.
1.44 NEW NOTES means the Notes which are issued pursuant to this Plan and
the New Notes Indenture on substantially the terms set forth in Exhibit 2
hereto; such notes shall be dated as of the latter of October 1, 1999 or the
Effective Date and shall mature 5 years from such date, shall bear interest,
payable semi-annually, either in Cash at the rate of 9% per annum or in kind at
the rate of 12% per annum, and shall be unsecured and junior to New Senior
Secured Notes as described in the New Notes Indenture.
1.45 NEW NOTES INDENTURE means the Indenture governing the New Notes, which
shall be in substantially the form annexed hereto as Exhibit 2.
1.46 NEW SENIOR SECURED NOTES means the new Senior Secured Notes which are
issued in the aggregate principal amount of up to $3 million pursuant to the New
Senior Secured Note and Class A Warrant Agreement and Section 6.3 of this Plan
on substantially the terms set forth in Exhibit 3 hereto; such notes shall be
dated as of the Effective Date and shall mature one year from such date, shall
bear interest at the rate of 10% per annum payable quarterly, and shall be
secured by the Collateral described in the New Senior Secured Note and Class A
Warrant Agreement.
1.47 NEW SENIOR SECURED NOTE AND CLASS A WARRANT AGREEMENT means the Senior
Secured Note and Class A Warrant Agreement, together with each of the agreements
and documents annexed thereto, which shall be in substantially the form annexed
hereto as Exhibit 3.
1.48 NOTEHOLDER PLAN SUPPORT AGREEMENT means that Noteholder Plan Support
Agreement, dated as of May, 1999, between the Debtor and certain holders of the
Old Notes.
1.49 OLD NOTES means the 14% Senior Notes due August 1, 2007 issued by the
Debtor under the Old Notes Indenture.
1.50 OLD NOTE CLAIM means a Claim arising under or in connection with the
Old Notes and the Old Notes Indenture.
6
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1.51 OLD NOTES COLLATERAL means the cash, securities and proceeds held by
the Collateral Agent and pledged for the benefit of the holders of the Old Notes
pursuant to the Old Notes Pledge Agreement as security for obligations under the
Old Notes.
1.52 OLD NOTES COLLATERAL ACCOUNT means the Collateral Account held by the
Collateral Agent pursuant to the Old Notes Pledge Agreement.
1.53 OLD NOTES INDENTURE means that certain Indenture, dated as of August
6, 1997, between the Debtor and the Old Notes Indenture Trustee relating to the
Old Notes.
1.54 OLD NOTES INDENTURE TRUSTEE means NORWEST BANK, MINNESOTA, NATIONAL
ASSOCIATION.
1.55 OLD NOTES PLEDGE AGREEMENT means the Pledge Agreement dated August 6,
1997, between the Debtor and the Collateral Agent.
1.56 OLD NOTE SECURED CLAIM means that portion of the Old Note Claim which
is secured by the Old Notes Collateral.
1.57 OLD NOTE UNSECURED CLAIM means that portion of the Old Note Claim
which is unsecured.
1.58 PETITION DATE means June 9, 1999, the date on which the Debtor
commenced the Chapter 11 Case.
1.59 PLAN means this Debtor's Plan of Reorganization Under Chapter 11 of
the Bankruptcy Code dated as of August 4, 1999, including, without limitation,
the exhibits and schedules hereto, as the same may be amended or modified from
time to time in accordance with the provisions of the Bankruptcy Code and the
terms hereof.
1.60 PLAN DOCUMENTS means the documents to be executed by the Debtor in
connection with, and in implementation of, the Plan on or prior to the Effective
Date including, but not limited to, the New Notes Indenture and the New Senior
Secured Note and Class A Warrant Agreement.
1.61 PRINCIPAL OFFICERS means those persons who shall be identified in the
Disclosure Statement as the Principal Officers of Reorganized Teletrac.
1.62 PRIORITY NON-TAX CLAIM means any Claim other than an Administrative
Expense Claim or a Priority Tax Claim, entitled to priority in payment under
Section 507(a) of the Bankruptcy Code.
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1.63 PRIORITY TAX CLAIM means any Claim of a governmental unit of the kind
entitled to priority in payment as specified in Sections 502(i) and 507(a)(8) of
the Bankruptcy Code.
1.64 RATABLE PROPORTION means, with reference to any distribution on
account of any Claim in any Class, subclass, Classes, subclasses, or groups as
the case may be, a distribution equal in amount to the ratio (expressed as a
percentage) that the amount of such Claim bears to the aggregate amount of
Claims in the same Class, Subclass, Classes, subclasses, or groups, as
applicable.
1.65 REORGANIZED TELETRAC means the Debtor, as it will be reorganized as of
the Effective Date in accordance with the Plan.
1.66 SCHEDULES means the schedules of assets and liabilities and the
statement of financial affairs filed by the Debtor under Section 521 of the
Bankruptcy Code, Bankruptcy Rule 1007 and the Official Bankruptcy Forms of the
Bankruptcy Rules as such schedules and statements have been or may be
supplemented or amended through the Confirmation Date.
1.67 SECURED CLAIM means a Claim secured by a Lien on Collateral, including
an Old Note Secured Claim, to the extent of the value of such Collateral (i) as
set forth in the Plan, (ii) as agreed to by the holder of such Claim and the
Debtor or (iii) as determined by a Final Order in accordance with Section 506(a)
of the Bankruptcy Code or, in the event that such Claim is subject to setoff
under Section 553 of the Bankruptcy Code, to the extent of such setoff.
1.68 SECURITIES ACT means the Securities Act of 1933, as amended.
1.69 SHAREHOLDERS SUPPORT AGREEMENT means the Agreement, dated as of May,
1999, between the Debtor, Holdings, certain Shareholders of Holdings, and
certain holders of the Old Notes.
1.70 SPECIFIED PERCENTAGE means that percentage of the $3 million maximum
amount which Reorganized Teletrac elects on or prior to the Effective Date to
borrow in exchange for the New Senior Secured Notes and Class A Warrants
pursuant to Section 6.3 of this Plan and the New Senior Secured Note and Class A
Warrant Agreement.
1.71 STOCK OPTION PLAN means the 1999 Teletrac, Inc. Stock Option Plan,
which shall be in substantially the form annexed hereto as Exhibit 5.
1.72 SUBSCRIBING PARTIES means each of the persons who shall have agreed or
elected to purchase New Senior Secured Notes and Class A Warrants pursuant to
and in accordance with the New Senior Secured Note and Class A Warrant Agreement
and the provisions of Section 6.3 of this Plan; PROVIDED, HOWEVER, that each of
such persons must, in the Debtor's judgment, be an "accredited investor" as such
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term is defined in Rule 501 of Regulation D under the Securities Actand that the
issuance of such securities is exempt from the registration requirements of the
Securities Act.
1.73 TELETRAC LICENSE means Teletrac License, Inc., a Delaware corporation
and wholly-owned subsidiary of Teletrac.
1.74 TORT CLAIM means any Claim related to personal injury, property
damage, products liability or other similar Claims against the Debtor. A Tort
Claim shall constitute a Miscellaneous Unsecured Claim, except as otherwise
provided in Section 8.1(b) of the Plan.
1.75 UNSECURED CLAIM means Claim against the Debtor that is not an
Administrative Expense Claim, a Priority Non-Tax Claim, a Priority Tax Claim or
a Secured Claim.
B. INTERPRETATION; APPLICATION OF DEFINITIONS AND RULES OF CONSTRUCTION.
Unless otherwise specified, all Section, schedule or exhibit references in
the Plan are to the respective section in, article of, or schedule or exhibit
to, the Plan, as the same may be amended, waived or modified from time to time.
The words "herein," "hereof," "hereto," "hereunder" and other words of similar
import refer to the Plan as a whole and not to any particular Section,
Subsection or clause contained in the Plan. A term used herein that is not
defined herein shall have the meaning assigned to that term in the Bankruptcy
Code. The rules of construction contained in Section 102 of the Bankruptcy Code
shall apply to the construction of the Plan. The headings in the Plan are for
convenience of reference only and shall not limit or otherwise affect the
provisions hereof.
SECTION 2. PROVISIONS FOR PAYMENT OF ADMINISTRATIVE
EXPENSE CLAIMS AND PRIORITY CLAIMS
2.1 ADMINISTRATIVE EXPENSE CLAIMS.
On the Effective Date, except to the extent that a holder of an Allowed
Administrative Expense Claim agrees to a different treatment of such
Administrative Expense Claim, Reorganized Teletrac shall pay to each holder of
an Allowed Administrative Expense Claim Cash in an amount equal to such Allowed
Administrative Expense Claim; PROVIDED, HOWEVER, that Allowed Administrative
Expense Claims representing liabilities incurred in the ordinary course of
business by the Debtor in Possession or liabilities arising under loans or
advances to or other obligations incurred by the Debtor in Possession, whether
or not incurred in the ordinary course of business, shall be assumed and paid by
Reorganized Teletrac in the ordinary course of business, consistent with past
practice and in accordance and subject to the conditions of any agreements
governing, instruments evidencing documents relating to such transactions.
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2.2 PRIORITY TAX CLAIMS.
On the Effective Date, except to the extent that a holder of an Allowed
Priority Tax Claim agrees to a different treatment of such Allowed Priority Tax
Claim, Reorganized Teletrac shall, at its option, pay to each holder of an
Allowed Priority Tax Claim that is due and payable on or before the Effective
Date either (x) Cash in an amount equal to such Allowed Priority Tax Claim or
(y) deferred annual cash payments, over a period not exceeding six (6) years
after the date of assessment of such claim, of a value, as of the Effective
Date, equal to the allowed amount of such Claim. Allowed Priority Tax Claims
that are not due and payable on or before the Effective Date shall paid in the
ordinary course of business in accordance with the terms thereof or in
accordance with "y" above.
SECTION 3. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS
Claims against the Debtor and Equity Interests are divided into the
following Classes:
Class 1 -- Priority Non-Tax Claims
Class 2 -- Secured Claims, including Old Note Secured Claims
Class 3 -- Old Note Unsecured Claims and Miscellaneous Unsecured Claims
Class 4 -- Category A Convenience Claims
Class 5 -- Category B Convenience Claims
Class 6 -- Indemnity Claims
Class 7 -- Equity Interests
SECTION 4. PROVISIONS FOR TREATMENT OF CLAIMS AND
EQUITY INTERESTS
4.1 PRIORITY NON-TAX CLAIMS (CLASS 1).
On the Effective Date, except to the extent that a holder of an Allowed
Priority Non-Tax Claim agrees to a different treatment of such Allowed Priority
Non-Tax Claim or except to the extent that such Claim is not due and payable on
or before the Effective Date, each Allowed Priority Non-Tax Claim shall be paid
in full, in Cash, and shall be considered unimpaired in accordance with Section
1124 of the Bankruptcy Code. All Allowed Priority Non-Tax Claims which are not
due and payable on or before the Effective Date shall be paid in the ordinary
course of business in accordance with the terms thereof.
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4.2 SECURED CLAIMS (CLASS 2).
Each holder of an Old Note Claim shall be deemed to hold an Allowed Old
Note Secured Claim in the aggregate amount of such holder's Ratable Proportion
of the Old Notes Collateral held in the Old Notes Collateral Account.
On the Effective Date, each holder of record of an Allowed Old Note Secured
Claim (i.e., each record holder of an Old Note) as of the close of business of
the Confirmation Date shall receive, in full discharge of such Claim, its
Ratable Proportion of the Old Notes Collateral or the proceeds thereof, if such
collateral has not earlier been distributed to the holders of such Claims.
Unless the Old Notes Collateral has been earlier distributed to the holders of
Old Note Secured Claims, the Old Notes Collateral shall be distributed pro rata
to those holders of record of Old Notes as of the close of business on the
Confirmation Date.
On the Effective Date, except to the extent that a holder of a Secured
Claim agrees to a different treatment of such Allowed Secured Claim, each
Allowed Secured Claim other than an Allowed Old Note Secured Claim shall be
reinstated or rendered unimpaired in accordance with Section 1124 of the
Bankruptcy Code, notwithstanding any contractual provision or applicable
nonbankruptcy law that entitles the holder of an Allowed Secured Claim to demand
or receive payment of such Allowed Secured Claim prior to the stated maturity of
such Allowed Secured Claim from and after the occurrence of a default. All
Allowed Secured Claims which are not due and payable on or before the Effective
Date may be paid in the ordinary course of business in accordance with the terms
thereof.
4.3 OLD NOTE UNSECURED CLAIMS AND MISCELLANEOUS UNSECURED CLAIMS
(CLASS 3).
On the Effective Date, each holder of an Allowed Old Note Unsecured Claim
and each holder of an Allowed Miscellaneous Unsecured Claim (together with
holders of Category A Convenience Claims which shall make the election described
in Section 4.4(b) of the Plan) shall receive (subject, in the case of holders of
Allowed Old Note Unsecured Claims, to Section 4.7 of the Plan), in full
satisfaction of such Claim its Ratable Proportion of:
(a) 10,000,000 shares of New Common Stock;
(b) $15 million principal amount of New Notes;
(c) 800,000 Class B Warrants; and
(d) the right to purchase the New Senior Secured Notes and Class A
Warrants in accordance with Section 6.3 of the Plan; PROVIDED, HOWEVER, that
such holder is, in the judgment of the Debtor, an "accredited investor" as such
term is defined in Rule 501 of Regulation D under the Securities Act and the
issuance of such securities is exempt from the registration requirements of the
Securities Act.
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Distributions payable to holders of Old Note Unsecured Claims shall be made
to holders of record of Old Notes as of the close of business on the
Confirmation Date.
The holder of any Miscellaneous Unsecured Claim may elect to have his claim
converted into a Category A Convenience Claim (Class 4) as described in Section
4.4 of this Plan.
4.4 CATEGORY A CONVENIENCE CLAIMS (CLASS 4).
(a) Category A Convenience Claims consist of Unsecured Claims (other
than Old Note Unsecured Claims) which (A) are allowed in an amount in excess of
$1,000 but not more than $20,000, or (B) exceed $20,000 and which the holder
elects to have treated in its entirety as a Category A Convenience Claim either
(i) by electing to have his Claim treated as such on the Ballot sent to him for
voting on the Plan, or (ii) by exercising his election to have his Claim treated
as a Category A Convenience Claim by written notification delivered to the
Debtor within 15 days after the entry of a Final Order reducing the amount of
such Claim, or (iii) upon the written consent of the Debtor.
In the event that a Miscellaneous Unsecured Claim is converted into a
Category A Convenience Claim, such claim shall be deemed to be converted in its
entirety into a Category A Convenience Claim in the amount of the lesser of (x)
$20,000, or (y) the amount in which such Claim shall be Allowed for both
distribution purposes and for purposes of voting on the Plan.
Except to the extent that a holder of an Allowed Category A Convenience
Claim agrees to a different treatment of such Claim, or elects, in writing, as
described in this Section 4.4 to receive New Notes, New Common Stock, and Class
B Warrants of Reorganized Teletrac in lieu of a cash distribution, each Allowed
Category A Convenience Claim shall receive, in full satisfaction of such Claim,
the following payments:
(i) On the Effective Date, a payment in Cash in the amount
of 10% of the amount of such Allowed Category A Convenience
Claim; and
(ii) Not later than six (6) months following the Effective
Date, a payment in Cash in the amount of 5% of the amount of
such Allowed Category A Convenience Claim.
(b) In lieu of the foregoing Cash distributions, any holder of an
Allowed Category A Convenience Claim may elect to receive, together with the
holders of Old Note Unsecured Claims and Miscellaneous Unsecured Claims, its
Ratable Proportion of :
(i) 10,000,000 shares of New Common Stock;
(ii) $15 million principal amount of New Notes;
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(iii) 800,000 Class B Warrants; and
(iv) the right to purchase the New Senior Secured Notes and
Class A Warrants in accordance with Section 6.3 of the Plan;
provided that such holder is, in the judgment of the Debtor,
an "accredited investor" as such term is defined in Rule 501
of Regulation D under the Securities Act and that the
issuance of such securities is exempt from the registration
requirements of the Securities Act.
The holder of a Category A Convenience Claim wishing to make such an election
shall make such election by written notification executed by the holder of such
Claim and delivered to the Debtor (A) on or before the Confirmation Date or (B)
within 15 days after the entry of a Final Order reducing the amount of such
Claim.
(c) The holder of any Category A Convenience Claim in Class 4 may
elect to have his Claim converted into a Category B Convenience Claim (Class 5)
as described in Section 4.5 of this Plan.
4.5 CATEGORY B CONVENIENCE CLAIMS (CLASS 5).
Category B Convenience Claims consist of Unsecured Claims (other than Old
Note Unsecured Claims) (A) which are Allowed in an amount not in excess of
$1,000, or (B) which exceed $1,000 but which the holder elects to convert into a
Category B Convenience Claim either (i) by electing to have his Claim treated as
such on the Ballot sent to him for voting on the Plan, or (ii) by exercising his
election to have his Claim treated as a Category B Convenience Claim by written
notification delivered to the Debtor within 15 days after the entry of a Final
Order reducing the amount of such Claim, or (iii) upon the written consent of
the Debtor.
In the event that a Category A Convenience Claim is converted into a
Category B Convenience Claim, such Claim shall be deemed to be converted in its
entirety into a Category B Convenience Claim in the amount of the lesser of (x)
$1,000, or (y) the amount in which such claim shall be Allowed for both
distribution purposes and for purposes of voting on the Plan.
On the Effective Date, except to the extent that a holder of an Allowed
Category B Convenience Claim agrees to a different treatment of such Claim, each
Allowed Category B Convenience Claim shall be unimpaired in accordance with
Section 1124 of the Bankruptcy Code and shall be paid in full, in Cash (not to
exceed $1,000). All Allowed Category B Convenience Claims that are not due and
payable on or before the Effective Date shall be paid in the ordinary course of
business in accordance with the terms thereof, in an amount not to exceed
$1,000.
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4.6 INDEMNITY CLAIMS (CLASS 6).
Following the Effective Date, holders of Indemnity Claims will be entitled
to assert such Claims against the Debtor only to the extent of any available
coverage under the Debtor's corporate liability insurance. Indemnity Claims
shall receive no distributions under the Plan.
4.7 EQUITY INTERESTS (CLASS 7).
On the Effective Date, Equity Interests in the Debtor and in Holdings shall
be canceled. Holders of Equity Interests shall not receive any distribution
under the Plan from the Debtor. From the distribution otherwise payable to
holders of Old Note Unsecured Claims in Class 3 of the Plan, holders of Equity
Interests in Holdings shall receive, in accordance with the allocable
percentages set forth in Annex A hereto:
(a) 300,000 shares of New Common Stock;
(b) 700,000 Class B Warrants;
(c) the right to purchase 15% of the New Senior Secured Notes and
Class A Warrants in accordance with Section 6.3 of the Plan; provided that such
holder is, in the judgment of the Debtor, an "accredited investor" as such term
is defined in Rule 501 of Regulation D under the Securities Act and that the
issuance of such securities is exempt from the registration requirements of the
Securities Act.
4.8 ALTERNATIVE TREATMENT FOR HOLDERS OF ALLOWED CLAIMS.
Notwithstanding the treatment provided for holders of Allowed Claims in
this Section 4, Reorganized Teletrac and the holder of an Allowed Claim may
agree to other treatment of such Claim, including payment in Cash, provided that
such treatment shall not provide a return having a present value in excess of
the present value, as of the Effective Date, of the distribution that otherwise
would be made to such holder under Section 4 hereof.
SECTION 5. IDENTIFICATION OF CLASSES OF CLAIMS AND
INTERESTS IMPAIRED; ACCEPTANCE OR REJECTION
OF THE PLAN
5.1 HOLDERS OF CLAIMS AND EQUITY INTERESTS ENTITLED TO VOTE.
Each of Class 1 (Priority Non-Tax Claims), Class 2 (Secured Claims), and
Class 5 (Category B Convenience Claims) is unimpaired by the Plan and the
holders of Claims in each of such Classes are conclusively presumed to have
accepted the Plan and are not entitled to vote to accept or reject the Plan.
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Class 3 (Old Note Unsecured Claims and Miscellaneous Unsecured Claims) and
Class 4 (Category A Convenience Claims) are impaired by the Plan, and the
holders of Claims in each of Class 3 and Class 4 are entitled to vote to accept
or reject the Plan.
Each of Class 6 (Indemnity Claims) and Class 7 (Equity Interests) is
impaired under the Plan, but will receive no distribution from the Debtor under
the Plan and is therefore conclusively deemed to have rejected the Plan and is
not entitled to vote.
SECTION 6. MEANS OF IMPLEMENTATION
6.1 DISTRIBUTIONS.
On the Effective Date, Reorganized Teletrac shall make or cause to be made
to the holders of Allowed Claims the distributions of New Common Stock, New
Notes, Class B Warrants, and Cash as provided in Section 4 hereof, and shall
issue New Senior Secured Notes, Class A Warrants, and Incentive Options as
provided herein. Disputed Claims shall be resolved in accordance with Section 8
hereof, and, if a Disputed Claim becomes an Allowed Claim by Final Order,
distributions shall be made on account of such Claim in accordance with Section
8.3 hereof. Distributions payable to holders of Old Note Unsecured Claims shall
be made to holders of record of Old Notes as of the close of business on the
Confirmation Date.
6.2 AUTHORIZATION OF NEW SECURITIES.
The issuance of the following securities by Reorganized Teletrac is hereby
authorized without further act or action under applicable law, regulation, order
or rule: (a) up to $15 million principal amount of New Notes, (b) up to $3
million principal amount of New Senior Secured Notes, (c) up to 20 million
shares of New Common Stock, (d) up to 3 million Class A Warrants, (e) up to
800,000 Class B Warrants, and (f) the Incentive Options.
6.3 SENIOR SECURED NOTE FACILITY.
On or immediately after the Effective Date, Reorganized Teletrac shall
execute the New Senior Secured Note and Class A Warrant Agreement. Pursuant
thereto, Reorganized Teletrac shall be authorized to borrow up to $3 million
(the "Maximum Amount") and shall be authorized to issue up to $3 million
principal amount of New Senior Secured Notes and up to 3 million Class A
Warrants. At least five (5) business days prior to the Effective Date, the
Debtor shall notify each of the Subscribing Parties, in writing, of the
Specified Percentage of the Maximum Amount which it elects to borrow pursuant to
the Agreement. Participation in the Senior Secured Note Facility and the right
to purchase New Senior Secured Notes and Class A Warrants pursuant to this
Section 6.3 of the Plan shall be limited to Subscribing Parties who shall hold
Claims or equity interests in Holdings as of the close of business on the
Confirmation Date and, in the case of holders of Old Note Claims, shall be
limited to holders of Old Notes as of the close of business on the Confirmation
Date.
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On or immediately after the Effective Date, in accordance with the New
Senior Secured Note and Class A Warrant Agreement, Reorganized Teletrac shall
issue New Senior Secured Notes in the aggregate principal amount of the
Specified Percentage of $3 million and Class A Warrants in the aggregate amount
of the Specified Percentage of 3 million. Pursuant to the New Senior Secured
Note and Class A Warrant Agreement, Reorganized Teletrac shall issue to each
Subscribing Party, for each $1,000 of the Specified Percentage of its Commitment
Amount, $1,000 principal amount of New Senior Secured Notes and 1,000 Class A
Warrants, in exchange for payment by each of such Subscribing Parties of the
Specified Percentage of its Commitment Amount. The Subscribing Parties shall pay
for such New Senior Secured Notes and Class A Warrants either (x) in Cash or (y)
in the case of Subscribing Parties which are lenders of DIP Loans, by conversion
of their participation in such loans and accrued interest thereon into the New
Senior Secured Notes and Class A Warrants and payment of any balance of the
Specified Percentage of their Commitment Amount in Cash.
The Subscribing Parties, and the Commitment Amount of each Subscribing
Party, shall be determined as follows:
(A) On or before the date of the Confirmation Hearing, each holder of
an Old Note Unsecured Claim or a Miscellaneous Unsecured Claim, each
holder of a Category A Convenience Claim who shall have made the
election described in Section 4.4(b) of this Plan, and each holder of
an equity interest in Holdings which shall desire to participate in
the purchase of the Senior Secured Notes and Class A Warrants shall
(i) advise the Debtor, in writing, that it desires to participate in
the purchase of such securities, (ii) advise the Debtor, in writing,
of the maximum amount, in dollars, which it is willing to commit as
its Commitment Amount (hereafter, such creditor's "Maximum Commitment
Amount"), which shall not for any such creditor exceed $3 million or
for any holder of an equity interest in Holdings exceed $450,000, and
(iii) shall provide the Debtor with all information and documentation
required to be provided to the Debtor pursuant to the New Senior
Secured Note and Class A Warrant Agreement to enable the Debtor to
determine if such person or entity is an "accredited investor" within
the meaning of Rule 501 of Regulation D under the Securities Act and
that the issuance of such securities is exempt from the registration
requirements of the Securities Act and to evidence such party's
commitment to purchase New Senior Secured Notes and Class A Warrants.
(B) The Commitment Amount of the holder of any equity interests in
Holdings shall be the Maximum Commitment Amount, if any, specified by
such holder (which shall not, in any event, exceed $450,000), or, if
the aggregate of the Maximum Commitment Amounts of all such holders
shall exceed $450,000, shall be determined by multiplying $450,000 by
the ratio which such holder's Maximum Commitment Amount shall bear to
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the Maximum Commitment Amounts of all holders of equity interests in
Holdings. The aggregate of the Commitment Amounts of all holders of
equity interests in Holdings shall not exceed $450,000.
(C) The Commitment Amount of the holder of an Old Note Claim, a
Miscellaneous Unsecured Claim, or a Category A Convenience Claim shall
be the Maximum Commitment Amount, if any, specified by such holder
(which amount shall not, for any such holder, exceed $3 million), or,
if the aggregate of the Maximum Commitment Amounts of all such holders
shall exceed $3 million, shall be determined by multiplying $3 million
by the ratio of (i) the Allowed amount of such holder's Claim (or in
the event such Claim is subject to dispute or objection, the estimated
amount of such Claim as agreed upon between the Debtor and such holder
or as may be fixed by the Bankruptcy Court) to (ii) the aggregate of
the Allowed amounts (or similarly estimated or agreed amounts) of the
Claims of such Subscribing Parties; provided, however, that the
Commitment Amounts of holders of Old Note Claims as calculated
pursuant to this Subsection (C) shall be further reduced by
substracting from each such holder's Commitment Amount the amount
determined by multiplying (x) the ratio of such holder's Commitment
Amount to the aggregate of the Commitment Amounts of all holders of
Old Note Claims by (y) the aggregate of the Commitment Amounts of all
holders of equity interests in Holdings.
6.4 ADOPTION OF STOCK OPTION PLAN.
On the Effective Date, Reorganized Teletrac will adopt the Stock Option
Plan. Shares of New Common Stock and Incentive Options not issued pursuant to
the Stock Option Plan on the Effective Date shall be reserved for issuance
thereafter pursuant to the Stock Option Plan by Reorganized Teletrac on terms
and conditions consistent with the Stock Option Plan.
6.5 EMPLOYMENT AGREEMENTS.
On the Effective Date, the Employment Agreements with each of the Principal
Officers shall become effective between such Principal Officers and Reorganized
Teletrac.
6.6 CANCELLATION OF EXISTING SECURITIES AND AGREEMENTS.
On the Effective Date, the Old Notes and the Equity Interests or
commitments, contractual or otherwise, obligating the Debtor to issue, transfer
or sell Equity Interests or any other capital stock of the Debtor shall (a) be
canceled and (b) have no effect other than the right to participate in the
distributions provided under the Plan. Except for purposes of effectuating the
distributions under the Plan on the Effective Date, the Old Notes Indenture
shall be canceled. Nothing in this Plan shall be deemed to affect the lien, if
any, of the Old Notes Indenture Trustee on any distributions in respect of the
Old Notes.
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6.7 CORPORATE ACTION.
(a) BOARD OF DIRECTORS OF REORGANIZED TELETRAC. On the Effective Date,
the operation of Reorganized Teletrac shall become the general responsibility of
its Board of Directors, subject to, and in accordance with, the Charter and
by-laws. The initial Board of Directors of Reorganized Teletrac shall consist of
five members, at least one of whom shall be a member of the management of
Reorganized Teletrac. Subject to the immediately preceding sentence, the initial
members or the manner of selection of the Board of Directors of Reorganized
Teletrac shall be disclosed in the Disclosure Statement or an amendment or
supplement to the Disclosure Statement or such other filing as may be made with
the Bankruptcy Court. The directors of the Debtor immediately prior to the
Effective Date shall resign as of the Effective Date and shall be replaced by
the Board of Directors of Reorganized Teletrac.
(b) OFFICERS OF REORGANIZED TELETRAC. The initial officers of
Reorganized Teletrac are or shall be disclosed in the Disclosure Statement or an
amendment to the Disclosure Statement or such other filing as may be made with
the Court. The selection of officers of Reorganized Teletrac after the Effective
Date shall be as provided in its Charter and by-laws.
6.8 RESTATED CERTIFICATE OF INCORPORATION.
On the Effective Date, Reorganized Teletrac shall file with the Secretary
of State of the State of Delaware, in accordance with the DGCL, the Charter. On
the Effective Date, the Charter shall automatically become effective, and all
other matters provided under this Plan involving the corporate structure of
Reorganized Teletrac, or corporate action by it, shall be deemed to have
occurred and shall be in effect from and after the Effective Date pursuant to
Section 303 of the DGCL without any requirement of further action by the
stockholders or the directors of Reorganized Teletrac.
SECTION 7. PROVISIONS GOVERNING DISTRIBUTIONS
7.1 DATE OF DISTRIBUTIONS.
Unless otherwise provided herein, any distributions and deliveries to be
made hereunder shall be made on the Effective Date or as soon as practicable
thereafter and deemed made on the Effective Date. In the event that any payment
or act under the Plan is required to be made or performed on a date that is not
a Business Day, then the making of such payment or the performance of such act
may be completed on the next succeeding Business Day, but shall be deemed to
have been completed as of the required date.
7.2 DISBURSING AGENT.
All distributions under the Plan shall be made by Reorganized Teletrac as
Disbursing Agent or such other entity designated by Reorganized Teletrac as a
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Disbursing Agent on the Effective Date. A Disbursing Agent shall not be required
to give any bond or surety or other security for the performance of its duties
unless otherwise ordered, and all costs and expenses of procuring any such bond
or surety shall be borne by Reorganized Teletrac.
7.3 SURRENDER OF INSTRUMENTS.
As a condition to receiving any distribution under the Plan each holder of
an Old Note in certificated form must surrender any certificate constituting
such Old Note to Reorganized Teletrac or its designee. Any such holder of an Old
Note that fails to (a) surrender such instrument, if any, or (b) execute and
deliver an affidavit of loss and/or indemnity reasonably satisfactory to
Reorganized Teletrac before the first anniversary of the Effective Date shall be
deemed to have forfeited all rights and claims and may not participate in any
distribution under the Plan.
7.4 COMPENSATION OF PROFESSIONALS.
Each person retained or requesting compensation in the Chapter 11 Case
pursuant to Section 330 or 503(b) of the Bankruptcy Code shall be required to
file an application for allowance of final compensation and reimbursement of
expenses in the Chapter 11 Case on or before a date to be determined by the
Bankruptcy Court in the Confirmation Order or any other order of the Bankruptcy
Court. Objections to any application made under this Section 7.4 shall be filed
on or before a date to be fixed and determined by the Bankruptcy Court in the
Confirmation Order or such other order.
7.5 DELIVERY OF DISTRIBUTIONS.
Subject to Bankruptcy Rule 9010, all distributions to any holder of an
Allowed Claim shall be to the address of such holder as set forth on the
Schedules filed with the Bankruptcy Court, or the books of the Debtor or its
agents, unless the Debtor or Reorganized Teletrac, as applicable, has been
notified in writing of a change of address, including, without limitation, by
filing of a proof of claim by such holder that contains an address for such
holder different from the address reflected on such Schedules for such holder.
In the event that any distribution to any holder is returned as undeliverable,
the Disbursing Agent shall use reasonable efforts to determine the current
address of such holder, but no distribution to such holder shall be made unless
and until the Disbursing Agent has determined the then current address of such
holder, at which time such distribution shall be made to such holder without
interest; provided that such distributions shall be deemed unclaimed property
under Section 347(b) of the Bankruptcy Code at the expiration of one year from
the Effective Date. After such date, all unclaimed property or interest in
property shall revert to Reorganized Teletrac, and the claim of any other holder
to such property or interest in property shall be discharged and forever barred.
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7.6 MANNER OF PAYMENT UNDER THE PLAN.
At the option of the Disbursing Agent, any Cash payment to be made
hereunder may be made by a check or wire transfer or as otherwise required or
provided in applicable agreements.
7.7 FRACTIONAL SHARES.
No fractional shares of New Common Stock or Cash in lieu thereof shall be
distributed. For purposes of distribution, fractional shares of New Common Stock
shall be rounded down to the previous whole number.
7.8 SETOFFS AND RECOUPMENT.
The Debtor may, but shall not be required to, setoff against, or recoup
from, any Claim and the payments to be made pursuant to the Plan in respect of
such Claim, any claims of any nature whatsoever that the Debtor may have against
the claimant, but neither the failure to do so nor the allowance of any Claim
hereunder shall constitute a waiver or release by the Debtor of any such claim
it may have against such claimant.
7.9 DISTRIBUTIONS AFTER EFFECTIVE DATE.
Distributions made after the Effective Date to holders of Disputed Claims
that are not Allowed Claims as of the Effective Date but which later become
Allowed shall be deemed to have been made on the Effective Date.
7.10 RIGHTS AND POWERS OF DISBURSING AGENT.
(a) Powers of the Disbursing Agent. The Disbursing Agent shall be
empowered to (i) effect all actions and execute all documents necessary to
perform its duties under the Plan, (ii) make all distributions contemplated
hereby, (iii) employ professionals to represent it with respect to its
responsibilities, and (iv) exercise such other powers as may be vested in the
Disbursing Agent by order of the Bankruptcy Court, pursuant to the Plan, or as
deemed by the Disbursing Agent to be necessary and proper to implement the
provisions hereof.
(b) Expenses Incurred on or After the Effective Date. Except as
otherwise ordered by the Bankruptcy Court, the amount of any reasonable fees and
expenses incurred by the Disbursing Agent on or after the Effective Date
(including, without limitation, taxes) and any reasonable compensation and
expense reimbursement claims (including, without limitation, reasonable attorney
fees and expenses) made by the Disbursing Agent shall be paid in Cash by
Reorganized Teletrac.
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7.11 EXCULPATION.
(a) The Debtor, Reorganized Teletrac, the Creditors' Committee, the Ad
Hoc Committee, the Old Notes Indenture Trustee, the Disbursing Agent, and each
holder of Equity Interests, and their respective members, partners, officers,
directors, employees and agents (including any attorneys, financial advisors,
investment bankers and other professionals retained by such persons) shall have
no liability to any holder of any Claim or Equity Interest for any act or
omission in connection with, or arising out of, the filing of the Chapter 11
Petition, the Disclosure Statement, the Plan, the solicitation of votes for and
the pursuit of confirmation of the Plan, the consummation of the Plan, or the
administration of the Plan or the property to be distributed under the Plan,
except for willful misconduct or gross negligence as determined by a Final Order
of the Bankruptcy Court and, in all respects, shall be entitled to rely upon the
advice of counsel with respect to their duties and responsibilities under the
Plan.
SECTION 8. PROCEDURES FOR TREATING DISPUTED CLAIMS
UNDER THE PLAN
8.1 DISPUTED CLAIMS.
(a) Process. Except as to applications for allowances of compensation
and reimbursement of expenses under Section 330 and 503 of the Bankruptcy Code,
the Debtor or Reorganized Teletrac shall have the exclusive right to make and
file objections to Administrative Expense Claims, Claims and Equity Interests
subsequent to the Confirmation Date. All objections shall be litigated to Final
Order, PROVIDED, HOWEVER, that Reorganized Teletrac shall have the authority to
compromise, settle, otherwise resolve or withdraw any objections without
approval of the Bankruptcy Court. Unless otherwise ordered by the Bankruptcy
Court, the Debtor or Reorganized Teletrac shall file all objections to
Administrative Expense Claims that are the subject of proofs of claim or
requests for payment filed with the Bankruptcy Court (other than applications
for allowances of compensation and reimbursement of expenses), Claims and Equity
Interests and serve such objections upon the holder of the Administrative
Expense Claim, Claim or Equity Interest as to which the objection is made as
soon as is practicable, but in no event later than (a) ninety (90) days after
the Effective Date or the date on which a proof of claim or request for payment
is filed with the Bankruptcy Court or (b) such later date as may be approved by
the Bankruptcy Court.
(b) Tort Claims. All Tort Claims are Disputed claims. Notwithstanding
Section 8.1(a) above, after the Effective Date, any Tort Claim for personal
injury or wrongful death as to which a proof of claim was timely filed that is
not otherwise settled or consensually resolved shall be determined and
liquidated, at the election of Reorganized Teletrac, either in a United States
District Court in accordance with Section 157(b)(5), or in the administrative or
judicial tribunal in which it is pending on the Confirmation Date or, if no such
action was pending on the Confirmation Date, in any administrative or judicial
tribunal of appropriate jurisdiction. Any Tort Claim determined and liquidated
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pursuant to Section 8.1(a) or a judgment obtained in accordance with this
Subsection 8.1(b) and applicable non-bankruptcy law that is no longer subject to
appeal or other review shall, only to the extent there exists no available
coverage under the Debtor's liability insurance (including any self-insured
retention under such liability insurance), be deemed to be an Allowed
Miscellaneous Unsecured Claim in Class 3 of the Plan in such liquidated amount
and satisfied in accordance with the Plan; PROVIDED, HOWEVER, that such Allowed
Claim shall not include punitive or exemplary damages. Nothing contained in this
Subsection 8.1(b) shall constitute or be deemed a waiver of any claim, right or
cause of action that the Debtor or Reorganized Teletrac may have against any
person in connection with or arising out of any Tort Claim, including, without
limitation, any rights under Section 157(b) of title 28, United States Code.
8.2 NO DISTRIBUTIONS PENDING ALLOWANCE.
Notwithstanding any other provision hereof, if any portion of a Claim is a
Disputed Claim, no payment or distribution provided hereunder shall be made on
account of such Claim unless and until such Disputed Claim becomes an Allowed
Claim.
8.3 DISTRIBUTIONS AFTER ALLOWANCE.
To the extent that a Disputed Claim or Disputed Equity Interest ultimately
becomes an Allowed Claim or Allowed Equity Interest, a distribution shall be
made to the holder of such Allowed Claim or Allowed Equity Interest in
accordance with the provisions of the Plan. As soon as practicable after the
date that the order or judgment of the Bankruptcy Court allowing any Disputed
Claim or Disputed Equity Interest becomes a Final Order, the Disbursing Agent
shall provide to the holder of such Claim or Equity Interest the distribution to
which such holder is entitled under the Plan.
8.4 VOTING RIGHTS OF HOLDERS OF DISPUTED CLAIMS.
Pursuant to Bankruptcy Rule 3018(a), a Disputed Claim will not be counted
for purposes of voting on the Plan to the extent it is disputed, unless an order
of the Bankruptcy Court is entered after notice and a hearing temporarily
allowing the Disputed Claim for voting purposes under Bankruptcy Rule 3018(a).
Such disallowance for voting purposes is without prejudice to the claimant's
right to seek to have its Disputed Claim allowed for purposes of distribution
under the Plan.
SECTION 9. PROVISIONS GOVERNING EXECUTORY CONTRACTS
AND UNEXPIRED LEASES
9.1 ASSUMPTION OR REJECTION OF CONTRACTS AND LEASES.
This Plan constitutes a motion by the Debtor to assume, as of the Effective
Date, all executory contracts and unexpired leases to which the Debtor is a
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party, except for an executory contract or unexpired lease that (a) has been
assumed or rejected pursuant to Final Order of the Bankruptcy Court, (b) is
rejected on Schedule 9.1 hereto filed by the Debtor on or before the
commencement of the hearing on approval of the Disclosure Statement or such
later date as may be fixed by the Bankruptcy Court, (c) is the subject of a
separate motion filed under Section 365 of the Bankruptcy Code by the Debtor
prior to the Confirmation Date, or (d) is otherwise assumed hereunder. For
purposes hereof, each executory contract and unexpired lease listed or described
on Schedule 9.1 hereto shall include (i) modifications, amendments, supplements,
restatements, or other agreements made directly or indirectly by any agreement,
instrument, or other document that in any manner affects such executory contract
or unexpired lease, without regard to whether such agreement, instrument or
other document is listed or described on Schedule 9.1 hereto and (ii) executory
contracts or unexpired leases appurtenant to the premises listed on Schedule 9.1
hereto.
9.2 AMENDMENTS TO SCHEDULE; EFFECT OF AMENDMENTS.
The Debtor shall assume each of the executory contracts and unexpired
leases not listed on Schedule 9.1 hereto and not otherwise rejected by the
Debtor; PROVIDED, HOWEVER, that the Debtor may at any time on or before the
first Business Day before the date of the commencement of the Confirmation
Hearing amend Schedule 9.1 hereto to delete or add any executory contract or
unexpired lease thereto, in which event such executory contract or unexpired
lease shall be deemed to be, respectively, assumed and, if applicable, assigned
as provided therein, or rejected. The Debtor shall provide notice of any
amendments to Schedule 9.1 hereto to the parties to the executory contracts or
unexpired leases affected thereby. The fact that any contract or lease is
scheduled on Schedule 9.1 hereto shall not constitute or be construed to
constitute an admission by the Debtor that the Debtor has any liability
thereunder.
9.3 BAR TO REJECTION DAMAGE CLAIMS.
In the event that the rejection of an executory contract or unexpired lease
by the Debtor results in damages to the other party or parties to such contract
or lease, a Claim for such damages, if not heretofore evidenced by a filed proof
of claim, shall be forever barred and shall not be enforceable against the
Debtor, or its properties or interests in property as agents, successors, or
assigns, unless a proof of claim is filed with the Bankruptcy Court and served
upon counsel for the Debtor on or before 30 days after the earlier to occur of
(a) the giving of notice to such party under Section 9.1 or 9.2 hereof and (b)
the entry of an order by the Bankruptcy Court authorizing rejection of a
particular executory contract or lease.
9.4 INDEMNIFICATION OBLIGATIONS.
The obligations of the Debtor to indemnify its directors and officers that
were not directors or officers, respectively, on or after the Petition Date
pursuant to certificate of articles of incorporation, bylaws, contract,
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applicable state law or otherwise shall be deemed to be, and shall be treated as
though they are, executory contracts that are rejected under the Plan. Any
Claims arising from such rejection shall be treated as Indemnity Claims under
the Plan.
SECTION 10. CONDITIONS PRECEDENT TO EFFECTIVE DATE
10.1 CONDITIONS PRECEDENT TO EFFECTIVE DATE OF THE PLAN.
The occurrence of the Effective Date of the Plan is subject to satisfaction
of the following conditions precedent:
(a) Confirmation Order. The Confirmation Order, in form and substance
reasonably acceptable to the Debtor shall have been entered by the Clerk of the
Bankruptcy Court and there shall not be a stay or injunction in effect with
respect thereto.
(b) Administrative Expense Claims shall have become Allowed Claims,
Disallowed Claims or estimated for distribution purposes under the Plan by Final
Order(s) or by operation of law and the aggregate amount of all such Allowed
Administrative Expense Claim and estimated Administrative Expense Trade Claims,
if any, shall not exceed $600,000.
(c) Priority Tax Claims shall have become Allowed Claims, Disallowed
Claims or estimated for distribution purposes under the Plan by Final Order(s)
or by operation of law and the aggregate amount of all such Allowed Priority Tax
Claims and estimated Priority Tax Claims, if any, shall not exceed $100,000.
(d) Priority Non-Tax Claims shall have become Allowed Claims,
Disallowed Claims or estimated for distribution purposes under the Plan by Final
Order(s) or by operation of law and the aggregate amount of all such Allowed
Priority Non-Tax Claims and estimated Priority Non-Tax Claims not previously
paid, if any, shall not exceed $100,000.
(e) Secured Claims, excluding Old Note Secured Claims, shall have
become Allowed Claims, Disallowed Claims or estimated for distribution purposes
under the Plan by Final Order(s) or by operation of law and the aggregate amount
of all such Allowed Secured Claims and estimated Secured Claims, if any, shall
not exceed $3.048 million.
(f) Miscellaneous Unsecured Claims shall have become Allowed Claims,
Disallowed Claims or estimated for distribution purposes under the Plan by Final
Order(s) or by operation of law and the aggregate amount of all such Allowed
Miscellaneous Unsecured Claims and estimated Miscellaneous Unsecured Claims, if
any, shall not exceed $6.6 million.
(g) Category A Convenience Claims shall have become Allowed Claims,
Disallowed Claims or estimated for distribution purposes under the Plan by Final
Order(s) or by operation of law and the aggregate amount of all such Allowed
Category A Convenience Claims and estimated Category A Convenience Claims (other
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than Miscellaneous Unsecured Claims converted into Category A Convenience Claims
pursuant to Section 4.3 or 4.4 of this Plan), if any, shall not exceed $1
million.
(h) The Debtor shall have received approval from the Federal
Communications Commission ("FCC") for the transfer of all licenses held by
Teletrac Licenses to Teletrac Licenses as a wholly-owned subsidiary of
Reorganized Teletrac and for the change in control contemplated by the Plan.
(i) Execution and Delivery of Other Documents. All other actions and
all agreements, instruments or other documents necessary to implement the terms
and provisions hereof shall have been effected.
10.2 WAIVER OF CONDITIONS PRECEDENT.
Each of the conditions precedent in Section 10.1 hereof may be waived, in
whole or in part, by the Debtor only with the written consent of a Creditors'
Committee Majority. Any such waiver of a condition precedent in Section 10.1
hereof may be effected at any time, without notice, without leave or order of
the Bankruptcy Court and without any formal action (other than by the Debtor and
the Creditors' Committee).
SECTION 11. EFFECT OF CONFIRMATION
11.1 VESTING OF ASSETS.
On the Effective Date, the Debtor, its properties and interests in property
and its operations shall be released from the custody and jurisdiction of the
Bankruptcy Court, and the estate of the Debtor shall vest in Reorganized
Teletrac free and clear of any and all liens, charges, or encumbrances, except
as otherwise provided herein. From and after the Effective Date, Reorganized
Teletrac may operate its business and may use, acquire and dispose of property
free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules, subject
to the terms and conditions of the Plan. Notwithstanding the foregoing, on and
after the Effective Date, the Debtor shall retain all claims and causes of
action, and the Bankruptcy Court shall retain jurisdiction to hear and determine
all such claims or causes of action as described in Section 12 of this Plan.
11.2 BINDING EFFECT.
Except as otherwise provided in Section 1141(d)(3) of the Bankruptcy Code
and subject to the occurrence of the Effective Date, on and after the
Confirmation Date, the provisions of the Plan shall bind any holder of a Claim
or Equity Interest and such holder's respective successors and assigns, whether
or not the Claim or Equity Interest of such holder is impaired under the Plan
and whether or not such holder has accepted the Plan.
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11.3 DISCHARGE OF DEBTOR.
Except to the extent otherwise provided herein, the treatment of all Claims
and Equity Interests pursuant to the provisions of this Plan shall be in
exchange for and in complete satisfaction, discharge and release of all Claims
against or Equity Interests in the Debtor of any nature whatsoever, known or
unknown, including, without limitation, any interest accrued or expenses
incurred thereon from and after the Petition Date, or against its estate or
properties or interests in property. Except as otherwise provided herein, upon
the Effective Date, all Claims against and Equity Interests in the Debtor will
be satisfied, discharged and released in full exchange for the consideration
provided hereunder. Except as otherwise provided herein, all entities shall be
precluded from asserting against the Debtor or Reorganized Teletrac or their
respective properties or interests in property, any other Claims based upon
omission, transaction or other activity of any kind or nature that occurred
prior to the Effective Date.
11.4 TERM OF INJUNCTIONS OR STAYS.
Unless otherwise provided, all injunctions or stays arising under or
entered during the Chapter 11 Case under Section 105 or 362 of the Bankruptcy
Code, or otherwise, and in existence on the Confirmation Date, shall remain in
full force and effect until the Effective Date.
11.5 INDEMNIFICATION OBLIGATIONS.
Subject to the occurrence of the Effective Date, the obligations of the
Debtor, only to the extent permitted under the laws of the State of Delaware, to
indemnify, defend, reimburse or limit the liability of directors or officers who
were or are directors or officers of the Debtor at any time after the Petition
Date against any claims or causes of action as provided in the Debtor's
certificate of incorporation, bylaws, applicable state law or contract shall
survive confirmation of the Plan, remain unaffected thereby and not be
discharged except with respect to any such claims or causes of action arising
out of acts or omissions occurring, in whole or in part, before the Petition
Date where liability as finally adjudicated by a court of competent jurisdiction
is imposed (i) for any breach of duty of loyalty to the Debtor or its
stockholders, (ii) for acts or omissions not in good faith and not in a manner
such director of officer reasonably believed to be in or not opposed to the best
interests of the Debtor or which involve intentional misconduct, gross
negligence or a knowing violation of law or (iii) for any transaction from which
the director or officer derived any improper personal benefit.
11.6 RELEASE.
On the Effective Date, the Debtor, on behalf of itself and its non-debtor
subsidiary, hereby releases each of the holders of Equity Interests, officers
and directors of the Debtor and Holdings and their subsidiaries holding office
at any time, and each of their and the Debtor's and Holdings' respective agents,
employees, advisors (including any attorneys, financial advisors, investment
bankers and other professionals retained by such persons or entities),
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affiliates and representatives from any and all claims or liabilities,
including, without limitation, any claims or liabilities arising from or related
to actions taken or omissions occurring in connection with the Plan or any
actions or omissions at any time prior to the Effective Date in their capacity
as officers, directors, agents, members, employees, affiliates or advisors of
each of the foregoing, as applicable; PROVIDED, HOWEVER, that nothing herein
shall release any such parties from the obligations undertaken by such parties
in the Shareholders Support Agreement.
SECTION 12. RETENTION OF JURISDICTION
The Bankruptcy Court shall have and shall retain after the Effective Date
exclusive jurisdiction of all matters arising out of, or related to, the Chapter
11 Case or the Plan pursuant to, and for the purposes of, Sections 105(a) and
1142 of the Bankruptcy Code and for, among other things, the following purposes:
(a) To hear and determine pending applications for the assumption or
rejection of executory contracts or unexpired leases and the allowance of Claims
resulting therefrom.
(b) To determine any and all adversary proceedings, applications and
contested matters, including, without limitation, under Sections 544, 545, 547,
548, 549, 550, 551 and 553 of the Bankruptcy Code.
(c) To ensure that distributions to holders of Allowed Claims are
accomplished as provided herein.
(d) To hear and determine any timely objections to Administrative
Expense Claims or to proofs of claim, including, without limitation, any
objections to the classification of any Claim or Equity Interest, and to allow
or disallow any Disputed Claim or Disputed Equity Interest, in whole or in part.
(e) To enter and implement such orders as may be appropriate in the
event the Confirmation Order is for any reason stayed, revoked, modified or
vacated.
(f) To issue such orders in aid of execution of the Plan, to the
extent authorized by Section 1142 of the Bankruptcy Code.
(g) To consider any amendments to or modifications of the Plan, or to
cure any defect or omission, or reconcile any inconsistency, in any order of the
Bankruptcy Court, including, without limitation, the Confirmation Order.
(h) To hear and determine all applications under Sections 330, 331 and
503(b) of the Bankruptcy Code for awards of compensation for services rendered
and reimbursement of expenses incurred prior to the Confirmation Date.
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(i) To enforce, and to hear and determine disputes arising in
connection with the interpretation, implementation or enforcement of, the Plan,
the Confirmation Order, any transactions or payments contemplated hereby or any
agreement, instrument or other document governing or relating to any of the
foregoing, including, without limitation, the New Senior Secured Note and Class
A Warrant Agreement and the Noteholders Plan Support Agreement.
(j) To hear and determine matters concerning state, local and federal
taxes in accordance with Sections 346, 505 and 1146 of the Bankruptcy Code.
(k) To hear any other matter not inconsistent with the Bankruptcy
Code.
(l) To hear and determine all disputes involving the existence, scope
and nature of the discharges granted under Section 11.3 hereof.
(m) To issue injunctions and effect any other actions that may be
necessary or desirable to restrain interference by any entity with the
consummation or implementation of the Plan.
(n) To enter a final decree closing the Chapter 11 Case.
SECTION 13. MISCELLANEOUS PROVISIONS
13.1 PAYMENT OF STATUTORY FEES.
All fees payable under Section 1930, chapter 123, title 28, United States
Code, as determined by the Bankruptcy Court at the Confirmation Hearing, shall
be paid on the Effective Date. Any such fees accrued after the Effective Date
will constitute an Allowed Administrative Expense Claim and be treated in
accordance with Section 2.1 hereof
13.2 RETIREE BENEFITS.
On and after the Effective Date, pursuant to Section 1129(a)(13) of the
Bankruptcy Code, Reorganized Teletrac shall continue to pay any retiree benefits
(within the meaning of Section 1114 of the Bankruptcy Code), at the level
established in accordance with Section 1114 of the Bankruptcy Code for the
duration of the period for which the Debtor has obligated itself to provide such
benefits.
13.3 ADMINISTRATIVE EXPENSES INCURRED AFTER THE CONFIRMATION DATE.
Administrative expenses incurred by the Debtor or Reorganized Teletrac
after the Confirmation Date, including (without limitation) Claims for
professionals' fees and expenses, shall not be subject to application and may be
paid by the Debtor or Reorganized Teletrac, as the case may be, in the ordinary
course of business and without further Bankruptcy Court approval;
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PROVIDED, HOWEVER, that no Claims for professional fees and expenses incurred
after the Confirmation Date shall be paid until after the occurrence of the
Effective Date.
13.4 SECTION 1125(E) OF THE BANKRUPTCY CODE.
As of the Confirmation Date, the Debtor , the Ad Hoc Committee, and the
Creditors Committee shall be deemed to have solicited acceptances of the Plan in
good faith and in compliance with the applicable provisions of the Bankruptcy
Code. The Debtor and the Creditors Committee (and each of their respective
affiliates, agents, directors, officers, employees, investment bankers,
financial advisors, attorneys and other professionals) have, and shall be deemed
to have, participated in good faith and in compliance with the applicable
provisions of the Bankruptcy Code in the offer and issuance of the securities
under the Plan, and therefore are not, and on account of such offer, issuance
and solicitation will not be, liable at any time for the violation of any
applicable law, rule or regulation governing the solicitation of acceptances or
rejections of the Plan or the offer and issuance of securities under the Plan.
13.5 MODIFICATION OF PLAN DOCUMENTS.
The Plan Documents may be modified on and prior to the Effective Date
without further Order of the Bankruptcy Court and without further notice to any
party if such modification is agreed to in writing by a Committee Majority and
such modification does not violate Section 1127 of the Bankruptcy Code, except
that no such modification shall materially adversely affect the rights of
holders of equity interests in Holdings without the written consent of a
majority of such holders.
13.6 COMPLIANCE WITH TAX REQUIREMENTS.
In connection with the consummation of the Plan, the Debtor shall comply
with all withholding and reporting requirements imposed by any taxing authority,
and all distributions hereunder shall be subject to such withholding and
reporting requirements.
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13.7 NOTICES.
All notices, requests, and demands to or upon the Debtor to be effective
shall be in writing (including by facsimile transmission) and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
actually delivered or, in the case of notice by facsimile transmission, when
received and telephonically confirmed, addressed as follows:
Teletrac, Inc.
3220 Executive Ridge
Suite 100
Vista, California 92083
(Attention: Steve Scheiwe, Esq.)
Telephone: (760) 597-0510
Telecopier: (760) 597-9906
with a copy, which shall not constitute notice, to:
Reboul, MacMurray, Hewitt
Maynard & Kristol
45 Rockefeller Plaza
New York, New York 10111
(Attention: David S. Elkind, Esq.)
Telephone: (212) 841-0608
Telecopier: (212) 841-5725
- and -
Saul, Ewing, Remick & Saul LLP
222 Delaware Avenue
P.O. Box 1266
Wilmington, Delaware 19899
(Attention: Norman L. Pernick, Esq.)
Telephone: (302) 421-6824
Telecopier: (302) 421-5865
13.8 GOVERNING LAW.
Except to the extent that the Bankruptcy Code or other federal law is
applicable, or to the extent an Exhibit hereto provides otherwise, the rights,
duties and obligations arising under the Plan shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
without giving effect to the principles of conflict of laws thereof.
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13.9 BINDING EFFECT.
The Plan shall be binding upon and inure to the benefit of the Debtor, the
holders of Claims and Equity Interests, and their respective successors and
assigns, including, without limitation, Reorganized Teletrac.
Dated: August 4, 1999
Respectfully submitted,
Teletrac, Inc.
By
-------------------------------
Name:
Title:
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ANNEX A
Allocable Share
to Class
_______________
Holders of Series B Preferred 50%
Holders of Series A Preferred 30%
Holders of Common Stock 20%
<PAGE>
Schedule 9.1
Schedule of Additional Executory Contracts
Deemed Rejected
All contracts between the Debtor and any employee thereof dated or
entered into prior to the Petition Date.
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
TELETRAC, INC.
- --------------------------------------------------------------------------------
Teletrac, Inc., a corporation incorporated and existing under the laws
of the State of Delaware (the "Corporation"), hereby certifies as follows:
A. The name of the Corporation is Teletrac, Inc. The [original
Certificate of Incorporation of the Corporation] was filed with the Secretary of
State of the State of Delaware on August 24, 1995, and amended on December 4,
1996.
B. This Amended and Restated Certificate of Incorporation has been
duly adopted in accordance with Sections 242, 245 and 303 of the General
Corporation Law of the State of Delaware and, pursuant to such provisions, this
Amended and Restated Certificate of Incorporation amends and restates the
Certificate of Incorporation of the Corporation. Provision for the making of
this Amended and Restated Certificate of Incorporation is contained in an order,
entered _________, 1999, of the United States Bankruptcy Court for the District
of Delaware, having jurisdiction over a proceeding for the reorganization of the
Corporation commenced under Chapter 11 of the United States Bankruptcy Code.
C. The Certificate of Incorporation of the Corporation, as amended and
restated hereby, shall, upon the filing hereof with the Secretary of State of
the State of Delaware, read in its entirety as follows:
FIRST: The name of the Corporation is Teletrac, Inc.
SECOND: The registered office of the Corporation in the State of
Delaware is located at Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.
THIRD: The purpose for which the Corporation is organized is to engage
in any and all lawful acts and activity for which corporations may be organized
under the General Corporation Law of the State of Delaware (the "Delaware
General Corporation Law"). The Corporation will have perpetual existence.
<PAGE>
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is Twenty Million (20,000,000) shares of common
stock, par value $0.01 per share ("Common Stock"). No non-voting equity
securities of the Corporation shall be issued by the Corporation.
The designations and the powers, preferences, rights, qualifications,
limitations, and restrictions of the Common Stock are as follows:
1. Provisions Relating to the Common Stock.
(a) Each share of Common Stock of the Corporation shall have identical
rights and privileges in every respect. The holders of shares of Common Stock
shall be entitled to vote upon all matters submitted to a vote of the
stockholders of the Corporation and shall be entitled to one vote for each share
of Common Stock held.
(b) The holders of shares of the Common Stock shall be entitled to
receive such dividends (payable in cash, stock, or otherwise) as may be declared
thereon by the board of directors at any time and from time to time out of any
funds of the Corporation legally available therefor.
(c) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Corporation, the holders of shares of the
Common Stock shall be entitled to receive all of the remaining assets of the
Corporation available for distribution to its stockholders, ratably in
proportion to the number of shares of the Common Stock held by them. A
liquidation, dissolution, or winding-up of the Corporation, as such terms are
used in this Paragraph (c), shall not be deemed to be occasioned by or to
include any consolidation or merger of the Corporation with or into any other
corporation or corporations or other entity or a sale, lease, exchange, or
conveyance of all or a part of the assets of the Corporation.
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2. General.
(a) Subject to the foregoing provisions of this Certificate of
Incorporation, the Corporation may issue shares of its Common Stock from time to
time for such consideration (not less than the par value thereof) as may be
fixed by the board of directors of the Corporation, which is expressly
authorized to fix the same in its absolute and uncontrolled discretion subject
to the foregoing conditions. Shares so issued for which the consideration shall
have been paid or delivered to the Corporation shall be deemed fully paid stock
and shall not be liable to any further call or assessment thereon, and the
holders of such shares shall not be liable for any further payments in respect
of such shares.
(b) The Corporation shall have authority to create and issue rights
and options entitling their holders to purchase shares of the Corporation's
capital stock of any class or series or other securities of the Corporation, and
such rights and options shall be evidenced by instrument(s) approved by the
board of directors of the Corporation. The board of directors of the Corporation
shall be empowered to set the exercise price, duration, times for exercise, and
other terms of such options or rights; PROVIDED, HOWEVER, that the consideration
to be received for any shares of capital stock subject thereto shall not be less
than the par value thereof.
FIFTH: The Corporation expressly elects not to be governed by Section
203 of the Delaware General Corporation Law.
SIXTH: The number of directors shall be from time to time fixed in the
manner prescribed in the bylaws of the Corporation. Qualifications for the
directors, in any, shall be set out in the bylaws.
SEVENTH: Directors of the Corporation need not be elected by written
ballot unless the bylaws of the Corporation otherwise provide.
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EIGHTH: The directors of the Corporation shall have the power to
adopt, amend, and repeal the bylaws of the Corporation.
NINTH: No contract or transaction between the Corporation and one or
more of its directors, officers, or stockholders or between the Corporation and
any person (as used herein "person" means other corporation, partnership,
association, firm, trust, joint venture, political subdivision, or
instrumentality) or other organization in which one or more of its directors,
officers, or stockholders are directors, officers, or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee which authorizes the contract or transaction, or solely
because his, her, or their votes are counted for such purpose, if: (i) the
material facts as to his or her relationship or interest and as to the contract
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; or (ii) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved, or ratified by the board of directors, a committee thereof, or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
TENTH: The Corporation shall indemnify any person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by reason
of the fact that he or she (i) is or was a director or officer of the
Corporation or (ii) while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent, or similar functionary of
another foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
fullest extent permitted under the Delaware General Corporation Law, as the same
exists or may hereafter be amended. Such right shall be a contract right and as
such shall run to the benefit of any director or officer who is elected and
accepts the position of director or officer of the Corporation or elects to
continue to serve as a director or officer of the Corporation while this Article
Tenth is in effect. Any repeal or amendment of this Article Tenth shall be
prospective only and shall not limit the rights of any such director or officer
or the obligations of the Corporation with respect to any claim arising from or
related to the services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Article Tenth. Such
right shall include the right to be paid by the Corporation expenses incurred in
defending any such proceeding in advance of its final disposition to the maximum
extent permitted under the Delaware General Corporation Law, as the same exists
or may hereafter be amended. If a claim for indemnification or advancement of
expenses hereunder is not paid in full by the Corporation within sixty (60) days
after a written claim has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to recover the unpaid
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amount of the claim, and if successful in whole or in part, the claimant shall
also be entitled to be paid the expenses of prosecuting such claim. It shall be
a defense to any such action that such indemnification or advancement of costs
of defense are not permitted under the Delaware General Corporation Law, but the
burden of proving such defense shall be on the Corporation. Neither the failure
of the Corporation (including its board of directors or any committee thereof,
independent legal counsel, or stockholders) to have made its determination prior
to the commencement of such action that indemnification of, or advancement of
costs of defense to, the claimant is permissible in the circumstances nor an
actual determination by the Corporation (including its board of directors or any
committee thereof, independent legal counsel, or stockholders) that such
indemnification or advancement is not permissible shall be a defense to the
action or create a presumption that such indemnification or advancement is not
permissible. In the event of the death of any person having a right of
indemnification under the foregoing provisions, such right shall inure to the
benefit of his or her heirs, executors, administrators, and personal
representatives. The rights conferred above shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, bylaw,
resolution of stockholders or directors, agreement, or otherwise.
The Corporation may additionally indemnify any employee or agent of
the Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, arbitrative, or investigative, any appeal in such an action,
suit, or proceeding, and any inquiry or investigation that could lead to such an
action, suit, or proceeding.
ELEVENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. Any repeal or amendment of this Article Eleventh by
the stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation arising from an act or omission occurring prior to the time of such
repeal or amendment. In addition to the circumstances in which a director of the
Corporation is not personally liable as set forth in the foregoing provisions of
this Article Eleventh, a director shall not be liable to the Corporation or its
stockholders to such further extent as permitted by any law hereafter enacted,
including without limitation any subsequent amendment to the Delaware General
Corporation Law.
I, the undersigned duly elected, qualified and acting officer of the
Corporation, do make, file, and record this Amended and Restated Certificate of
Incorporation as of this ___ day of _______________, 1999.
____________________
[Authorized Officer]
5
BY-LAWS
OF
TELETRAC, INC.
Incorporated under the Laws of the
State of Delaware
Adopted as of
September 29, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I OFFICES....................................................1
ARTICLE II MEETINGS OF STOCKHOLDERS...................................1
Section 1. Place of Meetings..........................................1
Section 2. Annual Meeting.............................................1
Section 3. Special Meetings...........................................1
Section 4. Notice of Meetings.........................................2
Section 5. List of Stockholders.......................................2
Section 6. Quorum.....................................................2
Section 7. Voting.....................................................2
Section 8. Proxies....................................................3
Section 9. Action Without a Meeting...................................3
ARTICLE III BOARD OF DIRECTORS.........................................3
Section 1. Powers.....................................................3
Section 2. Election and Term..........................................3
Section 3. Number.....................................................4
Section 4. Quorum and Manner of Acting................................4
Section 5. Organization Meeting.......................................4
Section 6. Regular Meetings...........................................4
Section 7. Special Meetings; Notice...................................4
Section 8. Resignations...............................................5
Section 9. Vacancies..................................................5
Section 10. Compensation of Directors..................................5
Section 11. Action Without a Meeting...................................5
Section 12. Telephonic Participation in Meetings.......................5
Section 13. Board Committees...........................................5
Section 14. Powers of Board Committees.................................5
Section 15. Name of Committees.........................................6
Section 16. Minutes of Committee Meetings..............................6
ARTICLE IV OFFICERS...................................................6
Section 1. Principal Officers.........................................6
Section 2. Election and Term of Office................................6
Section 3. Other Officers.............................................6
Section 4. Removal....................................................7
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Page
Section 5. Resignations...............................................7
Section 6. Vacancies..................................................7
Section 7. Chairman of the Board......................................7
Section 8. Chief Executive Officer....................................7
Section 9. Executive Vice President...................................7
Section 10. Controller.................................................7
Section 11. Secretary..................................................8
Section 12. Salaries...................................................8
ARTICLE V INDEMNIFICATION OF OFFICERS AND DIRECTORS..................8
Section 1. Right of Indemnification...................................8
ARTICLE VI SHARES AND THEIR TRANSFER..................................8
Section 1. Certificate for Stock......................................8
Section 2. Stock Certificate Signature................................8
Section 3. Stock Ledger...............................................9
Section 4. Cancellation...............................................9
Section 5. Registrations of Transfers of Stock........................9
Section 6. Regulations................................................9
Section 7. Lost, Stolen, Destroyed or Mutilated Certificates..........9
Section 8. Record Dates..............................................10
ARTICLE VII MISCELLANEOUS PROVISIONS..................................10
Section 1. Corporate Seal............................................10
Section 2. Voting of Stocks Owned by the Corporation.................10
Section 3. Dividends.................................................10
ARTICLE VIII AMENDMENTS................................................10
ii
<PAGE>
BY-LAWS
OF
TELETRAC, INC.
(a Delaware corporation)
----------
ARTICLE I
OFFICES
The registered office of the Corporation in the State of Delaware
shall be located in the City of Wilmington, County of New Castle. The
Corporation may establish or discontinue, from time to time, such other offices
within or without the State of Delaware as may be deemed proper for the conduct
of the Corporation's business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of stockholders shall be
held at such place or places, within or without the State of Delaware, as may
from time to time be fixed by the Board of Directors, or as shall be specified
in the respective notices, or waivers of notice, thereof.
Section 2. Annual Meeting. The annual meeting of stockholders for the
election of Directors and the transaction of other business shall be held on
such date and at such place as may be designated by the Board of Directors. At
each annual meeting the stockholders entitled to vote shall elect a Board of
Directors and may transact such other proper business as may come before the
meeting.
Section 3. Special Meetings. A special meeting of the stockholders, or
of any class thereof entitled to vote, for any purpose or purposes, may be
called at any time by the Chairman of the Board, if any, or the Chief Executive
Officer or any Executive Vice President or by order of the Board of Directors
and shall be called by the Secretary upon the written request of stockholders
holding of record at least 75% of the outstanding shares of stock of the
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Corporation entitled to vote at such meeting. Such written request shall state
the purpose or purposes for which such meeting is to be called.
Section 4. Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of stockholders, whether annual or special,
stating the place, date and hour of the meeting shall be given not less than ten
days or more than sixty days before the date on which the meeting is to be held
to each stockholder of record entitled to vote thereat by delivering a notice
thereof to him personally or by mailing such notice in a postage prepaid
envelope directed to him at his address as it appears on the records of the
Corporation, unless he shall have filed with the Secretary of the Corporation a
written request that notices intended for him be directed to another address, in
which case such notice shall be directed to him at the address designated in
such request. Notice shall not be required to be given to any stockholder who
shall waive such notice in writing, whether prior to or after such meeting, or
who shall attend such meeting in person or by proxy unless such attendance is
for the express purpose of objecting, at the beginning of such meeting, to the
transactions of any business because the meeting is not lawfully called or
convened. Every notice of a special meeting of the stockholders, besides the
time and place of the meeting, shall state briefly the objects or purposes
thereof. Business transacted at any special meeting of the stockholders shall be
limited to the purpose or purposes stated in the notice.
Section 5. List of Stockholders. It shall be the duty of the Secretary
or other officer of the Corporation who shall have charge of the stock ledger to
prepare and make, at least ten days before every meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in his name. Such list shall be open to the examination of
any stock holder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall be kept and produced at the time
and place of the meeting during the whole time thereof and subject to the
inspection of any stockholder who may be present. The original or duplicate
ledger shall be the only evidence as to who are the stock holders entitled to
examine such list or the books of the Corporation or to vote in person or by
proxy at such meeting.
Section 6. Quorum. At each meeting of the stockholders, the holders of
record of a majority of the issued and outstanding stock of the Corporation
entitled to vote at such meeting, present in person or by proxy, shall
constitute a quorum for the transaction of business, except where otherwise
provided by law, the Certificate of Incorporation or these By-laws. In the
absence of a quorum, any officer entitled to preside at, or act as Secretary of,
such meeting shall have the power to adjourn the meeting from time to time until
a quorum shall be constituted.
Section 7. Voting. Every stockholder of record who is entitled to vote
shall at every meeting of the stockholders be entitled to one vote for each
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share of stock held by him on the record date. At all meetings of the
stockholders, a quorum being present, all matters shall be decided by majority
vote of the shares of stock entitled to vote held by stockholders present in
person or by proxy, except as otherwise required by law or the Certificate of
Incorporation. Unless demanded by a stockholder of the Corporation present in
person or by proxy at any meeting of the stockholders and entitled to vote
thereat or so directed by the chairman of the meeting or required by law, the
vote thereat on any question need not be by written ballot. On a vote by written
ballot, each ballot shall be signed by the stockholder voting, or in his name by
his proxy, if there be such proxy, and shall state the number of shares voted by
him and the number of votes to which each share is entitled.
Section 8. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent to corporate action in writing without a
meeting may authorize another person or persons to act for him by proxy. A proxy
acting for any stockholder shall be duly appointed by an instrument in writing
subscribed by such stockholder. No proxy shall be valid after the expiration of
three years from the date thereof unless the proxy provides for a longer period.
Section 9. Action Without a Meeting. Any action required to be taken
at any annual or special meeting of stockholders or any action which may be
taken at any annual or special meeting of stockholders 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 the 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 without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers. The business and affairs 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, these
Certificate of Incorporation or these By-laws directed or required to be
exercised or done by the stockholders.
Section 2. Election and Term. Except as otherwise provided by law,
Directors shall be elected at the annual meeting of stockholders and shall hold
office until the next annual meeting of stockholders and until their successors
are elected and qualify, or until they sooner die, resign or are removed. At
each annual meeting of stockholders, at which a quorum is present, the persons
receiving a plurality of the votes cast shall be the Directors. Acceptance of
the office of Director may be expressed orally or in writing, and attendance at
the organization meeting shall constitute such acceptance.
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Section 3. Number. The number of Directors shall be such number as
shall be determined from time to time by a resolution of the Board of Directors
but shall not be less than one nor more than seven and initially shall be five.
Section 4. Quorum and Manner of Acting. Unless otherwise provided by
law, the presence of 50% of the whole Board of Directors shall be necessary to
constitute a quorum for the transaction of business. In the absence of a quorum,
a majority of the Directors present may adjourn the meeting from time to time
until a quorum shall be present. Notice of any adjourned meeting need not be
given. At all meetings of Directors, a quorum being present, all matters shall
be decided by the affirmative vote of a majority of the Directors present,
except as otherwise required by law. The Board of Directors may hold its
meetings at such place or places within or without the State of Delaware as the
Board of Directors may from time to time determine or as shall be specified in
the respective notices, or waivers of notice, thereof.
Section 5. Organization Meeting. Immediately after each annual meeting
of stockholders for the election of Directors the Board of Directors shall meet
at the place of the annual meeting of stockholders for the purpose of
organization, the election of officers and the transaction of other business.
Notice of such meeting need not be given. If such meeting is held at any other
time or place, notice thereof must be given as hereinafter provided for special
meetings of the Board of Directors, subject to the execution of a waiver of the
notice thereof signed by, or the attendance at such meeting of, all Directors
who may not have received such notice.
Section 6. Regular Meetings. Regular meetings of the Board of
Directors may be held at such place, within or without the State of Delaware, as
shall from time to time be determined by the Board of Directors. After there has
been such determination, and notice thereof has been once given to each member
of the Board of Directors as hereinafter provided for special meetings, regular
meetings may be held without further notice being given.
Section 7. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the Chairman of the Board, if any,
the Chief Executive Officer or by a majority of the Directors. Notice of each
such meeting shall be mailed to each Director, addressed to him at his residence
or usual place of business, at least five days before the date on which the
meeting is to be held, or shall be sent to him at such place by telegraph,
cable, radio or wireless, or be delivered personally or by telephone, not later
than the day before the day on which such meeting is to be held. Each such
notice shall state the time and place of the meeting and, as may be required,
the purposes thereof. Notice of any meeting of the Board of Directors need not
be given to any Director if he shall sign a written waiver thereof either before
or after the time stated therein for such meeting, or if he shall be present at
the meeting. Unless limited by law, the Certificate of Incorporation, these
By-laws or the terms of the notice thereof, any and all business may be
transacted at any meeting without the notice thereof having specifically
identified the matters to be acted upon.
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Section 8. Resignations. Any Director of the Corporation may resign at
any time by giving written notice to the Chairman of the Board, if any, the
Chief Executive Officer, any Executive Vice President or the Secretary of the
Corporation. The resignation of any Director shall take effect upon receipt of
notice thereof or at such later time as shall be specified in such notice; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Section 9. Vacancies. Any newly created directorships and vacancies
occurring in the Board for any reason, may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. The Director so chosen shall hold office until the next meeting of
stockholders at which the election of Directors is in the regular order of
business, and until his successor has been elected and qualifies, unless sooner
displaced.
Section 10. Compensation of Directors. Directors, as such, by
resolution of the Board, may receive a stated salary for their services or a
specific sum fixed by the Board for attendance at each regular or special
meeting of the Board. In addition, expenses of Directors for attendance at Board
meetings shall be reimbursed. Nothing herein contained shall be construed to
preclude any Director from serving the Corporation or any parent or subsidiary
corporation thereof in any other capacity and receiving compensation therefrom.
Section 11. Action Without a Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting if a written consent thereto is signed by all members of the Board, and
such written consent is filed with the minutes or proceedings of the Board.
Section 12. Telephonic Participation in Meetings. Members of the Board
of Directors may participate in a meeting of the Board by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such participation shall
constitute presence in person at such meeting.
Section 13. Board Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each consisting of two or more directors of the corporation. The
Board may designate one or more directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee. In the absence or disqualification of a member of a committee, 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.
Section 14. Powers of Board Committees. Except as provided below, any
committee, to the extent provided in the resolutions of the Board of Directors
and in these Bylaws, shall have and may exercise all of the powers and authority
of the Board of Directors in the management of the business and affairs of the
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corporation, and may authorize the seal of the corporation to be affixed to all
papers that may require it. No committee, however, shall have the power or
authority to amend the Certificate of Incorporation; to adopt an agreement of
merger or consolidation; to recommend to the stockholders the sale, lease,
exchange or other disposition of all or substantially all of the corporation's
property and assets; to recommend to the stockholders a dissolution of the
corporation or a revocation of a dissolution; or to amend these Bylaws; further,
unless a resolution of the Board of Directors, these Bylaws, or the Certificate
of Incorporation expressly so provides, no committee shall have the power or
authority to declare a dividend, to authorize the issuance of stock, or to adopt
a certificate of ownership and merger.
Section 15. Name of Committees. A 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 16. Minutes of Committee Meetings. Each committee shall keep
regular minutes of its meetings and shall file them with the minutes of the
proceedings of the Board of Directors when required.
ARTICLE IV
OFFICERS
Section 1. Principal Officers. The officers of the corporation shall
be designated by the Board of Directors, and, unless otherwise required by the
General Corporation Law of the State of Delaware, may include a Chief Executive
Officer, a Chairman, a President, a Vice President, a Controller, a Secretary
and a Treasurer. Any number of officers may be held by the same person, unless
otherwise provided by statute, the Certificate of Incorporation of these Bylaws.
Section 2. Election and Term of Office. The principal officers of the
Corporation shall be elected annually by the Board of Directors at the
organization meeting thereof. Each such officer shall hold office until his
successor shall have been elected and shall qualify, or until his earlier death,
resignation or removal.
Section 3. Other Officers. In addition, the Board may elect, or the
Chairman of the Board, if any, or the Chief Executive Officer, may appoint, such
other officers as they deem fit. Any such other officers chosen by the Board of
Directors shall be subordinate officers and shall hold office for such period,
have such authority and perform such duties as the Board of Directors, the
Chairman of the Board, if any, any Vice President, or the Chief Executive
Officer may from time to time determine.
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Section 4. Removal. Any officer may be removed, either with or without
cause, at any time, by resolution adopted by the Board of Directors at any
regular meeting of the Board, or at any special meeting of the Board called for
that purpose, at which a quorum is present.
Section 5. Resignations. Any officer may resign at any time by giving
written notice to the Chairman of the Board, if any, the Chief Executive
Officer, the Secretary or the Board of Directors. Any such resignation shall
take effect upon receipt of such notice or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 6. Vacancies. A vacancy in any office may be filled for the
unexpired portion of the term in the manner prescribed in these By-laws for
election or appointment to such office for such term.
Section 7. Chairman of the Board. The Chairman of the Board of
Directors if one be elected, shall preside, if present, at all meetings of the
Board of Directors and he shall have and perform such other duties as from time
to time may be assigned to him by the Board of Directors.
Section 8. Chief Executive Officer. The Chief Executive Officer shall
have the general powers and duties of supervision and management usually vested
in the office of chief executive officer of a corporation. He shall preside at
all meetings of the stockholders if present thereat, and in the absence or
non-election of the Chairman of the Board of Directors, at all meetings of the
Board of Directors, and shall have general supervision, direction and control of
the business of the Corporation. Except as the Board of Directors shall
authorize the execution thereof in some other manner, he shall execute bonds,
mortgages, and other contracts on behalf of the Corporation, and shall cause the
seal to be affixed to any instrument requiring it and when so affixed the seal
shall be attested by the signature of the Secretary or the Controller.
Section 9. Executive Vice President. In the absence of the Chief
Executive Officer or in his inability or refusal to act, each Executive Vice
President, if any, shall have the general powers and duties of supervision and
management usually vested in the office of chief executive officer of a
corporation. Except as the Board of Directors shall authorize the execution
thereof in some other manner, any Vice President shall execute bonds, mortgages,
and other con tracts on behalf of the Corporation, and shall cause the seal to
be affixed to any instrument requiring it and when so affixed the seal shall be
attested by the signature of the Secretary or the Controller. Each Executive
Vice President shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 10. Controller. The Controller, if any, shall have charge and
custody of, and be responsible for, all funds and securities of the Corporation.
He shall exhibit at all reason able times his books of account and records to
any of the Directors of the Corporation upon application during business hours
at the office of the Corporation where such books and records shall be kept;
when requested by the Board of Directors, he shall render a statement of the
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condition of the finances of the Corporation at any meeting of the Board or at
the annual meeting of stockholders; he shall receive, and give receipt for,
moneys due and payable to the Corporation from any source whatsoever; in
general, he shall perform all the duties incident to the office of Controller
and such other duties as from time to time may be assigned to him by the
Chairman of the Board of Directors, the Chief Executive Officer or the Board of
Directors. The Controller shall give such bond, if any, for the faithful
discharge of his duties as the Board of Directors may require.
Section 11. Secretary. The Secretary, if present, shall act as
secretary at all meetings of the Board of Directors and of the stockholders and
keep the minutes thereof in a book or books to be provided for that purpose; he
shall see that all notices required to be given by the Corporation are duly
given and served; he shall have charge of the stock records of the Corporation;
he shall see that all reports, statements and other documents required by law
are properly kept and filed; and in general he shall perform all the duties
incident to the office of Secretary and such other duties as from time to time
may be assigned to him by the Chief Executive Officer or the Board of Directors.
Section 12. Salaries. The salaries of the principal officers shall be
fixed from time to time by the Board of Directors, and the salaries of any other
officers may be fixed by the Chief Executive Officer.
ARTICLE V
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. Right of Indemnification. Every person now or hereafter
serving as a Director or officer of the Corporation and every such Director or
officer serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, shall be indemnified by the Corporation in accordance with and
to the fullest extent permitted by the Certificate of Incorporation.
ARTICLE VI
SHARES AND THEIR TRANSFER
Section 1. Certificate for Stock. Every stockholder of the Corporation
shall be entitled to a certificate or certificates, to be in such form as the
Board of Directors shall prescribe, certifying the number of shares of the
capital stock of the Corporation owned by him. No certificate shall be issued
for partly paid shares.
Section 2. Stock Certificate Signature. The certificates for such
stock shall be numbered in the order in which they shall be issued and shall be
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signed by the Chairman of the Board, if any, or the Chief Executive Officer or
any Vice President and by the Secretary or an Assistant Secretary or the
Controller of the Corporation, and its seal shall be affixed thereto. If such
certificate is countersigned (1) by a transfer agent other than the Corporation
or its em ployee, or, (2) by a registrar other than the Corporation or its
employee, the signatures of such officers of the Corporation may be facsimiles.
In case any officer of the Corporation who has signed, or whose facsimile
signature has been placed upon, any such certificate shall have ceased to be
such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of
issue.
Section 3. Stock Ledger. A record shall be kept by the Secretary or by
any other officer, employee or agent designated by the Board of Directors of the
name of each person, firm or corporation holding capital stock of the
Corporation, the number of shares represented by, and the respective dates of,
each certificate for such capital stock, and in case of cancellation of any such
certificate, the respective dates of cancellation.
Section 4. Cancellation. Every certificate surrendered to the
Corporation for exchange or registration of transfer shall be canceled, and no
new certificate or certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so canceled, except,
subject to Section 7 of this Article VI, in cases provided for by applicable
law.
Section 5. Registrations of Transfers of Stock. Registrations of
transfers of shares of the capital stock of the Corporation shall be made on the
books of the Corporation by the registered holder thereof, or by his attorney
thereunto authorized by power of attorney duly executed and filed with the
Secretary of the Corporation or with a transfer clerk or a transfer agent
appointed as in Section 6 of this Article VI provided, and on surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes thereon. The person in whose name shares of stock stand on the books
of the Corporation shall be deemed the owner thereof for all purposes as regards
the Corporation; provided, however, that whenever any transfer of shares shall
be made for collateral security, and not absolutely, it shall be so expressed in
the entry of the transfer if, when the certificates are presented to the
Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.
Section 6. Regulations. The Board of Directors may make such rules and
regulations as it may deem expedient, not inconsistent with the Certificate of
Incorporation or these By- laws, concerning the issue, transfer and registration
of certificates for shares of the stock of the Corporation. It may appoint, or
authorize any principal officer or officers to appoint, one or more transfer
clerks or one or more transfer agents and one or more registrars, and may
require all certificates of stock to bear the signature or signatures of any of
them.
Section 7. Lost, Stolen, Destroyed or Mutilated Certificates. Before
any certificates for stock of the Corporation shall be issued in exchange for
certificates which shall become mutilated or shall be lost, stolen or destroyed,
proper evidence of such loss, theft, mutilation or destruction shall be procured
for the Board of Directors, if it so requires.
9
<PAGE>
Section 8. Record Dates. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a date as a
record date for any such determination of stockholders. Such record date shall
not be more than sixty or less than ten days before the date of such meeting, or
more than sixty days prior to any other action.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 1. Corporate Seal. The Board of Directors shall provide a
corporate seal, which shall be in such form as the Board of Directors shall
decide. The Secretary shall be the custodian of the seal. The Board of Directors
may authorize a duplicate seal to be kept and used by any other officer.
Section 2. Voting of Stocks Owned by the Corporation. The Board of
Directors may authorize any person on behalf of the Corporation to attend, vote
and grant proxies to be used at any meeting of stockholders of any corporation
(except the Corporation) in which the Corporation may hold stock.
Section 3. Dividends. Subject to the provisions of the Certificate of
Incorpora tion, the Board of Directors may, out of funds legally available
therefor, at any regular or special meeting declare dividends upon the capital
stock of the Corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the Corpora tion available
for dividends such sum or sums as the Directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem conducive to the interests of the Corporation.
ARTICLE VIII
AMENDMENTS
These By-laws of the Corporation may be altered, amended or repealed
by the Board of Directors at any regular or special meeting of the Board of
Directors or by the affirma tive vote of the holders of record of a majority of
the issued and outstanding stock of the Corporation (i) present in person or by
proxy at a meeting of holders of such stock and entitled to vote thereon, or
(ii) by a consent in writing in the manner contemplated in Section 9 of Article
II, provided, however, that notice of the proposed alteration, amendment or
repeal is contained in the notice of such meeting. By-laws, whether made or
10
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altered by the stockholders or by the Board ofDirectors, shall be subject to
alteration or repeal by the stockholders as in this Article VIII above provided.
* * * * *
11
DRAFT OF AUGUST 3, 1999
TELETRAC, INC.
$15,000,000
9% Notes
Due 2004
__________
Dated as of _________, 1999
[___________________________________],
as Trustee
<PAGE>
CROSS-REFERENCE TABLE
(This table shall not, for any purpose,
be deemed to be a part of this Indenture)
TIA SECTION INDENTURE SECTION
310(a)(1)................................................... 7.10
(a)(2)........................................... 7.10
(a)(3)........................................... N.A.
(a)(4)........................................... N.A.
(b).............................................. 7.08; 7.10; 11.02
(c).............................................. N.A.
311(a) ................................................. 7.11
(b).............................................. 7.11
(c).............................................. N.A.
312(a) ................................................. 2.05
(b).............................................. 11.03
(c).............................................. 11.03
313(a) ................................................. 7.06
(b)(1)........................................... N.A.
(b)(2)........................................... 7.06
(c).............................................. 11.02
(d).............................................. 7.06
314(a) ................................................. 4.03; 11.02
(b).............................................. N.A.
(c)(1)........................................... 11.04
(c)(2)........................................... 11.04
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 11.05
(f).............................................. N.A.
315(a) ................................................. 7.01(b)
(b).............................................. 7.05; 11.02
(c).............................................. 7.01(a)
(d).............................................. 7.01(c)
(e).............................................. 6.11
316(a) (last sentence)...................................... 2.09
(a)(1)(A)........................................ 6.05
(a)(1)(B)........................................ 6.04
(a)(2)........................................... N.A.
(b).............................................. 6.07
317(a)(1) ................................................. 6.08
(a)(2)........................................... 6.09
(i)
<PAGE>
(b).............................................. 2.04
318(a) ................................................. 11.01
- -------------
N.A. means Not Applicable.
(ii)
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE
Definitions and Incorporation by Reference....................................1
Section 1.01. Definitions..................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act...........15
Section 1.03. Rules of Construction.......................................16
ARTICLE TWO
The Notes....................................................................16
Section 2.01. Form and Dating.............................................16
Section 2.02. Execution and Authentication................................16
Section 2.03. Registrar and Paying Agent..................................17
Section 2.04. Paying Agent to Hold Money in Trust.........................18
Section 2.05. Noteholder Lists............................................18
Section 2.06. Transfer and Exchange.......................................18
Section 2.07. Replacement Notes...........................................19
Section 2.08. Outstanding Notes...........................................19
Section 2.09. Treasury Notes..............................................19
Section 2.10. Temporary Notes.............................................20
Section 2.11. Cancellation................................................20
Section 2.12. Defaulted Interest..........................................20
Section 2.13. CUSIP Number................................................21
Section 2.14. Deposit of Monies, Etc......................................21
Section 2.15. Certain Interest Payable in Deferred Interest Notes.........21
ARTICLE THREE
Redemption...................................................................22
Section 3.01. Notices to Trustee..........................................22
Section 3.02. Selection of Notes to Be Redeemed...........................23
Section 3.03. Notice of Redemption........................................23
Section 3.04. Effect of Notice of Redemption..............................24
Section 3.05. Deposit of Redemption Price.................................24
Section 3.06. Notes Redeemed in Part......................................24
(iii)
<PAGE>
ARTICLE FOUR
Covenants....................................................................25
Section 4.01. Payment of Notes............................................25
Section 4.02. Corporate Existence.........................................25
Section 4.03. Reports.....................................................25
Section 4.04. Compliance Certificates.....................................25
Section 4.05. Maintenance of Office or Agency.............................26
Section 4.06. Notice of Defaults..........................................26
Section 4.07. Waiver of Stay, Extension or Usury Laws.....................27
Section 4.08. Restricted Payments.........................................27
Section 4.09. Dividend and Other Payment Restrictions Affecting
Subsidiaries..............................................29
Section 4.10. Incurrence of Indebtedness or Issuance of Disqualified
Stock.....................................................31
Section 4.11. Transactions with Affiliates................................32
Section 4.12. Liens.......................................................33
Section 4.13. Additional Guarantees.......................................33
Section 4.14. Offer to Purchase Upon Change of Control....................34
Section 4.15. Maintenance of Properties and Insurance.....................36
Section 4.16. Limitation on Issuances and Sales of Capital
Stock of Subsidiaries.....................................36
Section 4.17. Business Activities.........................................36
Section 4.18. Limitation on Sales of Assets and Subsidiary Interests......36
ARTICLE FIVE
Successor Corporation..................................................... ..37
Section 5.01. When the Company May Merge, Etc.............................37
Section 5.02. Successor Corporation Substituted...........................38
ARTICLE SIX
Defaults and Remedies........................................................39
Section 6.01. Events of Default...........................................39
Section 6.02. Acceleration................................................41
Section 6.03. Other Remedies..............................................42
Section 6.04. Waiver of Existing Defaults.................................42
Section 6.05. Control by Majority.........................................42
(iv)
<PAGE>
Section 6.06. Limitation on Suits.........................................43
Section 6.07. Rights of Holders to Receive Payment........................43
Section 6.08. Collection Suit by Trustee..................................43
Section 6.09. Trustee May File Proofs of Claim............................44
Section 6.10. Priorities..................................................44
Section 6.11. Undertaking for Costs.......................................45
ARTICLE SEVEN
Trustee ....................................................................45
Section 7.01. Duties of Trustee...........................................45
Section 7.02. Rights of Trustee...........................................46
Section 7.03. Individual Rights of Trustee................................47
Section 7.04. Trustee's Disclaimer........................................47
Section 7.05. Notice of Defaults..........................................48
Section 7.06. Reports by Trustee to Holders of the Notes..................48
Section 7.07. Compensation and Indemnity..................................48
Section 7.08. Replacement of Trustee......................................49
Section 7.09. Successor Trustee by Merger, Etc............................50
Section 7.10. Eligibility; Disqualification...............................50
Section 7.11. Preferential Collection of Claims Against Company...........50
ARTICLE EIGHT
Discharge of Indenture.......................................................51
Section 8.01. Termination of Company's Obligations........................51
Section 8.02. Application of Trust Money..................................52
Section 8.03. Repayment to Company........................................52
Section 8.04. Reinstatement...............................................53
ARTICLE NINE
Amendments, Supplements and Waivers..........................................53
Section 9.01. Without Consent of Holders..................................53
Section 9.02. With Consent of Holders.....................................54
Section 9.03. Compliance with Trust Indenture Act.........................55
Section 9.04. Revocation and Effect of Consents...........................55
Section 9.05. Notation on or Exchange of Notes............................55
Section 9.06. Trustee to Sign Amendments, Etc.............................56
(v)
<PAGE>
ARTICLE TEN
Subordination................................................................56
Section 10.01. Notes Subordinated to Senior Indebtedness..................56
Section 10.02. No Payment on Notes in Certain Circumstances...............56
Section 10.03. Notes Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization of the Company............................58
Section 10.04. Noteholders to Be Subrogated to Rights of Holders of Senior
Indebtedness.............................................59
Section 10.05. Obligation of Company Unconditional........................59
Section 10.06. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice........................................60
Section 10.07. Application by Trustee of Monies Deposited with It.........60
Section 10.08. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness.........61
Section 10.09. Noteholders Authorize Trustee to Effectuate Subordination
of Notes.................................................61
Section 10.10. Right of Trustee to Hold Senior Indebtedness...............61
Section 10.11. Article Ten Not to Prevent Events of Default...............62
Section 10.12. No Fiduciary Duty Created to Holders of Senior
Indebtedness.............................................62
Section 10.13. Limitation on Certain Remedies.............................62
Section 10.14. Miscellaneous..............................................62
ARTICLE ELEVEN
Miscellaneous................................................................64
Section 11.01. Trust Indenture Act Controls...............................64
Section 11.02. Notices....................................................64
Section 11.03. Communication by Holders with Other Holders................65
Section 11.04. Certificate and Opinion as to Conditions Precedent.........65
Section 11.05. Statements Required in Certificate or Opinion..............65
Section 11.06. Rules by Trustee and Agents................................66
Section 11.07. Legal Holidays.............................................66
Section 11.08. Governing Law..............................................66
Section 11.09. No Recourse Against Others.................................66
Section 11.10. Successors.................................................67
Section 11.11. Duplicate Originals........................................67
Section 11.12. No Interpretation of Other Agreements......................67
Section 11.13. Severability...............................................67
Section 11.14. Effect of Headings and Table of Contents...................67
(vi)
<PAGE>
INDENTURE, dated as of ____________, 1999, between TELETRAC, INC., a
Delaware corporation (the "Company") and [____________________], a corporation
(the "Trustee").
Pursuant to the plan of reorganization of the Company under Chapter 11
of the United States Bankruptcy Code, dated ___________, 1999, confirmed by the
United States Bankruptcy Court for the District of Delaware in Case No. 99-2250
(the "Plan"), the Company has been authorized to enter into this Indenture on
the later of (i) the Effective Date (as such term is defined in the Plan), or
(ii) October 1, 1999, and to issue up to $15 million in principal amount of the
Notes issued pursuant hereto.
Intending to be legally bound hereby, the Company and the Trustee, for
the benefit of each other and for the equal and ratable benefit of the holders
of the Company's Notes and Deferred Interest Notes (collectively, the "Notes"),
agree as follows:
ARTICLE ONE
Definitions and Incorporation by Reference
Section 1.01. DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging
with or into or becoming a Subsidiary of such specified Person; and
(ii) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"AFFILIATE" of a Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AFFILIATE TRANSACTION" has the meaning ascribed to it in Section 4.11
hereto.
"AGENT" means any Registrar or Paying Agent.
1
<PAGE>
"ASSET SALE" means:
(i) the sale, lease, conveyance or other disposition (collectively
"dispositions") of any assets (including, without limitation, byway of
a sale and leaseback) in one or a series of related transactions; and
(ii) the issuance by any of the Company's Subsidiaries of Equity
Interests or the disposition by the Company or any of its Subsidiaries
of Equity Interests of any of their Subsidiaries,
in the case of either clause (i) or (ii) above, whether in a single transaction
or a series of related transactions: (a) that have a Fair Market Value in excess
of $5 million; or (b) for net proceeds in excess of $5 million. Notwithstanding
the foregoing: (i) the sale of inventory in the ordinary course of business;
(ii) a disposition of assets by the Company to a wholly owned Subsidiary or by a
Subsidiary of the Company to the Company or to a wholly owned Subsidiary of the
Company; (iii) an issuance of Equity Interests by a Subsidiary of the Company to
the Company or to a wholly owned Subsidiary of the Company; (iv) a Restricted
Payment that is permitted by Section 4.08; (v) the sale of assets that have
become worn out, obsolete or damaged or otherwise unsuitable for use in
connection with the business of the Company; and (vi) any sales of assets to
Ituran Location and Control, Ltd. or any Affiliates of Ituran Location and
Control, Ltd. shall not be deemed to be Asset Sales.
"BANK AGENT" means _________________, as agent under the Senior Credit
Agreement.
"BANK OBLIGATIONS" means all obligations of the Company now or
hereafter existing under the Senior Credit Agreement or any Permitted Bank
Refinancing and the promissory notes issued thereunder, whether for principal,
interest, fees, expenses or otherwise and all obligations of the Company now or
hereafter existing under each other agreement or instrument delivered by the
Company in connection with the Senior Credit Agreement or any Permitted Bank
Refinancing or to provide collateral security for the Bank Obligations.
"BANKRUPTCY LAW" has the meaning assigned to it in Section 6.01
hereof.
"BOARD OF DIRECTORS" means the Board of Directors of the Company or
any authorized committee of the Board of Directors.
"BOARD RESOLUTION" means a resolution by the Board of Directors which
shall be certified as being duly adopted and in full force and effect by the
Secretary of the Company.
"BUSINESS DAY" means any day not a Legal Holiday.
2
<PAGE>
"CAPITAL LEASE" means, at the time any determination thereof is made,
any lease of property, real or personal, in respect of which the present value
of the minimum rental commitment would be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a Capital Lease
that would at such time be required to be capitalized on the balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means:
(i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, and any all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(iii) in the case of a partnership, partnership interests (whether
general or limited); and
(iv) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH CONSIDERATION" means any consideration received from an Asset
Sale in the form of cash or Cash Equivalents, in either case in U.S. dollars or
freely convertible into U.S. dollars.
"CASH EQUIVALENTS" means:
(i) U.S. dollars;
(ii) Government Securities;
(iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any Eligible Institution;
(iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and
(iii)above entered into with any Eligible Institution;
3
<PAGE>
(v) commercial paper having the highest rating obtainable from Moody's
or S&P and in each case maturing within six months after the date of
acquisition; and
(vi) shares of any mutual funds or other pooled investment vehicles,
in each case having assets of $500 million, investing solely in
investments of the types described in (i) through (v) above.
"CHANGE OF CONTROL" means:
(i) the sale, lease, transfer, conveyance or other disposition, in one
transaction or a series of related transactions, directly or
indirectly, including through a liquidation or dissolution, of all or
substantially all of the assets of the Company and its Subsidiaries to
any Person or group (as such term is used in Section 13 (d) of the
Exchange Act);
(ii) the adoption of a plan relating to the liquidation or dissolution
of the Company; or
(iii) any Person or group (as such term is used in Section 13(d) of
the Exchange Act), other than any of the EXISTING STOCKHOLDERS or
their respective Affiliates, becoming the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any
such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly
or indirectly, of more than 75% of the total voting power of the
VOTING EQUITY INTERESTS of the Company, including by way of merger,
consolidation or otherwise.
"CHANGE OF CONTROL DATE" has the meaning ascribed to such term in
Section 4.14 hereto.
"COMPANY" means the party named as such in this Indenture until a
successor (or successors) replaces it pursuant to this Indenture and thereafter
means such successor (or successors).
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period, plus, to the
extent deducted or otherwise excluded in computing such Consolidated Net Income;
(i) an amount equal to any extraordinary loss plus any net loss
realized in connection with a sale of assets;
4
<PAGE>
(ii) provision for taxes based on income or profits of such Person and
its Subsidiaries for such period;
(iii) Consolidated Interest Expense less consolidated interest income
of such Person and its Subsidiaries for such period; and
(iv) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents
an accrual of or cash charges in any future period or amortization of
a prepaid cash expense that was paid in a prior period) of such Person
and its Subsidiaries for such period;
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of a
Subsidiary shall be added to Consolidated Net Income to compute Consolidated
Cash Flow only to the extent (and in the same proportion) that the Net Income of
such Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be distributed by dividend to such Person by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Subsidiary or
its stockholders.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the consolidated interest expense of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of original issue discount noncash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commission, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financing, and net payments (if any) pursuant
to Hedging Obligations).
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, that:
(i) the Net Income of any Person that is accounted for by the equity
method of accounting shall be included, but only to the extent of the
amount of dividends or distributions actually paid in cash to the
relevant Person or a wholly owned Subsidiary thereof;
5
<PAGE>
(ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions
by such Subsidiary of such Net Income is not at the date of
determination permitted without any prior governmental approval (which
has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
Subsidiary or its stockholders;
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall
be excluded;
(iv) the cumulative effect of a change in accounting principles shall
be excluded; and
(v) the Net Income of any Subsidiary shall be included only to the
extent of the amount of dividends or distributions actually paid in
cash to the relevant Person or a Subsidiary thereof.
"CORPORATE TRUST OFFICE" means the corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which on the date hereof is _________________.
"CUSTODIAN" has the meaning assigned to it in Section 6.01 hereof.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DEFERRED INTEREST ELECTION" has the meaning assigned to it in Section
2.15(a) hereof.
"DEFERRED INTEREST PAYMENT DATE" has the meaning assigned to it in
Section 2.15(a) hereof.
"DEFERRED INTEREST NOTES" means the Company's 12% Senior Subordinated
Deferred Interest Notes due 2004, as amended or supplemented from time to time,
that are issued under this Indenture.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event:
6
<PAGE>
(i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise; or
(ii) is redeemable or is convertible or exchangeable for Indebtedness
at the option of the Holder thereof, in whole or in part, on or prior
to the date on which the Notes mature.
"ELIGIBLE INSTITUTION" means a domestic commercial banking institution
that has combined capital and surplus of not less than $500 million or its
equivalent in foreign currency, whose debt is rated "A" or higher according to
S&P or Moody's at the time as of which any investment or rollover therein is
made.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" has the meaning assigned to it in Section 6.01
hereof.
"EXISTING INDEBTEDNESS" means the Indebtedness of the Company in
existence on the Issue Date until such amounts are repaid.
"EXISTING STOCKHOLDERS" means any stockholder of the Company who or
which beneficially owns more than 5.0% of the Equity Interest of the Company on
a fully diluted basis, as of the date of this Indenture.
"FAIR MARKET VALUE" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction; provided that the Fair Market Value of
any such asset or assets shall be determined by the Board of Directors of the
Company, acting in good faith, and which determination shall be evidenced by an
Officers' Certificate delivered to the Trustee.
"FCC" means the Federal Communications Commission.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession and which are in effect on the Issue Date.
7
<PAGE>
"GOVERNMENT SECURITIES" means direct 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.
"GUARANTEE" or "GUARANTEE" means a guarantee (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under:
(i) interest rate swap agreements;
(ii) foreign currency hedge obligations; and
(iii) other agreements or arrangements designed to protect such Person
against fluctuations in interest and foreign currency rates.
"HOLDER" or "NOTEHOLDER" means the person in whose name a Note is
registered on the Registrar's books.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable to
the extent that any such accrued expense or trade payable is not more than 90
days overdue or is otherwise being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, if and to the extent
any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person and, in the event such indebtedness is not assumed by,
and is otherwise non-recourse to, such Person, the amount of such indebtedness
shall be deemed to equal the greater of the book value or Fair Market Value of
such asset).
"INDEBTEDNESS TO CASH FLOW RATIO" means, with respect to any Person as
of any date of determination, the ratio of:
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(i) total Indebtedness of such Person and its Subsidiaries as of such
date to;
(ii) four times Consolidated Cash Flow of such Person and its
Subsidiaries for the most recently ended fiscal quarter for which
financial statements of such Person are available (the "Measurement
Period");
provided, however, that: (a) in making such computation, the total Indebtedness
of such Person and its Subsidiaries shall include the total amount of funds
outstanding and available under any credit facilities; and (b) in the event such
Person or any of its Subsidiaries consummates a material acquisition or sale of
assets subsequent to the commencement of the Measurement Period, then the
Indebtedness to Cash Flow Ratio shall be calculated giving PRO FORMA effect to
such material acquisition or sale of assets as if the same had occurred at the
beginning of the Measurement Period.
"INDENTURE" means this Indenture, as further amended or supplemented
from time to time.
"INTEREST PAYMENT DATE" has the meaning ascribed to it in the form of
Senior Subordinated Note attached hereto as Exhibit A and in the form of
Deferred Interest Note attached hereto as Exhibit B.
"ISSUE DATE" means the date on which the Notes are first authenticated
and delivered under this Indenture.
"LEGAL HOLIDAY" has the meaning assigned to it in Section 11.07
hereof.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"MOODY'S" means Moody's Investors Service, Inc.
"NET INCOME" means, with respect to any Person, the net income (or
loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(i) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with: (a)
any sale of assets (including,
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without limitation, dispositions pursuant to sale and leaseback
transactions); or (b) the disposition of any securities by such Person
or any of its Subsidiaries or the extinguishment of any Indebtedness
of such Person or any of its Subsidiaries; and
(ii) any extraordinary or nonrecurring gain (but not loss), together
with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"NET PROCEEDS" means the aggregate cash consideration received by the
Company or any of its Subsidiaries in respect of any Asset Sale in the form of
cash or Cash Equivalents (including, without limitation, any cash received upon
the sale or other disposition of any noncash consideration received in any Asset
Sale), net of the direct costs relating to such Asset sale (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred, as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements, and provided that any
such amount not so required to be paid for taxes shall be deemed to constitute
Net Proceeds at the time such amount is not retained for such purpose), amounts
required to be applied to the repayment of Indebtedness secured by a Lien on the
asset or assets (including Equity Interests) that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or asset (including Equity Interests) established in accordance with GAAP
(provided that the amount of any such reserve shall be deemed to constitute Net
Proceeds at the time such reserve shall have been released or is not otherwise
required to be retained for such purpose).
"NON-RECOURSE DEBT" means Indebtedness:
(i) as to which neither the Company nor any of its Subsidiaries: (a)
provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness); (b) is
directly or indirectly liable (as a guarantor or otherwise); or (c)
constitutes the lender;
(ii) no default with respect to which would permit (upon notice, lapse
of time or both) any holder of any other Indebtedness of the Company
or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of the Company or
any of its Subsidiaries.
"NOTES" means, collectively, the Company's 9% Notes due 2004, as
amended or supplemented from time to time and are issued under this Indenture,
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and the Deferred Interest Notes, or, if the context so requires in provisions
relating to the transfer, exchange or replacement of Notes, means Notes
corresponding to such Notes so transferred, exchanged or replaced.
"OBLIGATIONS" means the principal of and interest (including any
additional interest payable in accordance with the terms of the Notes and the
Indenture) on such Note and all other amounts due and payable under this
Indenture and the Notes (including, without limitation, amounts payable to
acquire any Notes in connection with the redemption provisions of this
Indenture).
"OFFICER" means the Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Secretary or the Controller of the
Company.
"OFFICERS' CERTIFICATE" means a certificate signed (a) by the Chairman
or Vice Chairman of the Board of Directors, President or a Vice President, and
(b) by the Treasurer, Secretary, or an Assistant Treasurer or an Assistant
Secretary of the Company and delivered to the Trustee as required by the terms
of this Indenture; provided that, in the event an Officer of the Company holds a
position set forth in both (a) and (b), such Officer may sign an Officers'
Certificate only in his capacity as an Officer under Clause (a) or Clause (b),
but not both.
"OPINION OF COUNSEL" means a written opinion from legal counsel, who
may be counsel to the Company, who is reasonably acceptable to the Trustee.
"PAYING AGENT" has the meaning assigned to it in Section 2.03 hereof.
"PAYMENT BLOCKAGE PERIOD" has the meaning assigned to it in Section
10.02 hereof.
"PERMITTED BANK REFINANCING" means (a) any refinancing, renewal,
extension, refunding or amendment of the Senior Credit Agreement (or any prior
such refinancing, renewal, extension, refunding or amendment) which does not
increase, or thereafter permit the increase of, the aggregate principal amount
of such Indebtedness beyond the maximum aggregate principal amount of
Indebtedness then outstanding or permitted to be incurred under the Senior
Credit Agreement (or such prior refinancing, renewal, extension or refunding
thereof or amendment thereto), and (b) any other Indebtedness of the Company or
any Subsidiary of the Company, to banks and/or other financial institutions, up
to an aggregate principal amount at any time outstanding of $20 million and
where the proceeds of such Indebtedness are used to pay, prepay or redeem all
(but not less than all) of the principal and interest outstanding on the Notes.
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"PERMITTED INVESTMENT" means:
(i) any Investment in the Company or in any wholly owned Subsidiary of
the Company;
(ii) any Investment in Cash Equivalents;
(iii) Investments by the Company or any of its Subsidiaries in a
Person if, as a result of such Investment: (a) such Person becomes a
wholly owned Subsidiary of the Company; (b) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company
or any wholly owned Subsidiary of the Company;
(iv) any Investments made solely as a result of the receipt of
non-Cash Consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.18; and
(v) any Investment made by the Company or any of its Subsidiaries in a
Related Business;
provided that, at any time any such Investment is made, such Investment will not
cause the aggregate amount of Investments at any one time outstanding under this
clause (v) to exceed $6 million.
"PERMITTED LIENS" means:
(i) Liens securing the Notes;
(ii) Liens in favor of the Company;
(iii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Company or any of its
Subsidiaries, provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with
the Company or such Subsidiary;
(iv) Liens on property existing at the time of acquisition thereof by
the Company or any of its Subsidiaries, provided that such Liens were
in existence prior to the contemplation of such acquisition;
(v) Liens to secure the performance of statutory obligations, surety,
appeal or performance bonds or other obligations of a like nature or
mechanics' or purchase money Liens incurred in the ordinary course of
business;
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(vi) Liens existing on the Issue Date;
(vii) Liens on inventory or accounts receivable securing Indebtedness
incurred in accordance with Section 4.10(vi) hereof or securing
Permitted Refinancing Indebtedness incurred pursuant hereto to
refinance Indebtedness in accordance with Section 4.10(vi) hereof;
(viii) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(ix) Liens on assets of Subsidiaries that secure Non-Recourse Debt of
Subsidiaries;
(x) Liens securing Indebtedness under the Senior Credit Agreement;
(xi) Liens securing Indebtedness incurred pursuant to Section
4.10(viii) hereof; and
(xii) Liens securing Indebtedness described in Section 4.09 (iv)(h) or
Section 4.10(ix) hereof.
"PERMITTED REFINANCING INDEBTEDNESS" has the meaning set forth in
Section 4.10 hereof.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity of
any kind.
"PLAN" has the meaning assigned to it in the fourth unnumbered
paragraph of this Indenture.
"PREFERRED EQUITY INTEREST" in any Person, means an Equity Interest of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over Equity
Interests of any other class in such Person.
"PRINCIPAL" of a debt security means the amount stated as principal on
the face of the security plus, when appropriate, the premium, if any, on the
security.
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"QUARTER" means a fiscal quarter of any Person.
"REFINANCED INDEBTEDNESS" has the meaning assigned to it in Section
4.10 hereof.
"REGISTRAR" has the meaning assigned to it in Section 2.03 hereof.
"RELATED ASSETS" means all assets used in connection with the design,
development, procurement, installation, operation or marketing of location or
related two-way messaging systems and any activities or assets ancillary
thereto.
"RELATED BUSINESS" means any business relating to the design,
procurement, installation and operation of location, fleet management or related
two-way messaging systems and business and reasonably related extensions
thereof.
"RESPONSIBLE OFFICER" when used with respect to the Trustee, means any
Officer within the Corporate Trust and Agency Division (or any successor group)
of the Trustee, including any Vice President, any Assistant Vice President, any
Assistant Secretary, or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of or
familiarity with the particular subject.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"RESTRICTED SECURITIES" means each Senior Subordinated Note issued
under this Indenture and each Deferred Interest Note issued pursuant to Section
2.15 hereof and Section 2(b) of the Note, until such time as (i) a registration
statement under the Securities Act covering such security has been declared
effective and such security has been disposed of pursuant to such effective
registration statement or (ii) if an exemption from such registration is
available.
"S&P" means Standard & Poors Ratings Group.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR CREDIT AGREEMENT" means the Senior Secured Note and Class A
Warrant Purchase Agreement among the Company and the several purchasers named in
Schedule I thereto.
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"SENIOR INDEBTEDNESS" means the Senior Secured Notes issued pursuant
to the Senior Credit Agreement.
"SUBSIDIARY" means, with respect to a Person, (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any other Person (other than a corporation) in which such
Person, one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries, directly or indirectly, at the date of determination thereof, has
at least a majority ownership interest.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, and as in effect on the date of this Indenture and
on the date on which this Indenture is qualified thereunder.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it and thereafter means the successor.
"U.S." OR "UNITED STATES" means the United States of America.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of the United
States for the payment of which the full faith and credit of the United States
is pledged.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying: (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
of such Indebtedness.
Section 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
(a) 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:
"Commission" means the SEC,
"indenture securities" means the Notes,
"indenture security holder" means a Holder or Noteholder,
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"indenture to be qualified" means this Indenture,
"indenture trustee" or "institutional trustee" means the Trustee, and
"obligor" on the indenture securities means the Company and any
successor obligor on the indenture securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.03. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) terms defined in this Indenture have the meanings assigned
to them herein;
(2) references to "generally accepted accounting principles" or
"GAAP" mean United States generally accepted accounting principles as
in effect on the date hereof, and an accounting term not otherwise
defined has the meaning assigned to it in accordance with such
generally accepted accounting principles;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not any particular Article, Section
or other subdivision.
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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 set forth in Exhibit A attached hereto, and in the
case of the Deferred Interest Notes, substantially in the form set forth in
Exhibit B attached hereto, the terms of each of which are incorporated in and
made a part of this Indenture. The Notes may have notations, legends or
endorsements approved as to form by the Company, and required by law, stock
exchange rule or usage.
Section 2.02. EXECUTION AND AUTHENTICATION.
The Notes shall be executed on behalf of the Company by two Officers
of the Company. If an Officer whose signature is on a Note no longer holds that
office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.
A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. The signature shall be conclusive
evidence that the Note has been authenticated under this Indenture. The Trustee
shall authenticate Notes (i) in the case of the Notes for original issue in the
aggregate principal amount of up to $15,000,000 and (ii) in the case of the
Deferred Interest Notes, as and when required pursuant to Section 2.15, in each
case upon a written order of the Company signed by two Officers of the Company
subject, in the case of the Deferred Interest Notes, to compliance with the
additional requirements of Section 2.15. The order shall specify the amount of
Notes to be authenticated and the date on which the original issue of such Notes
is to be authenticated. The aggregate principal amount of Notes outstanding at
any time shall not exceed $15,000,000 except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Notes, which authenticating agent shall be
compensated by the Company. 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 agent. An
authentication agent has the same rights as an Agent to deal with the Company or
any Affiliate of the Company.
The Notes shall be issuable only in registered form without coupons.
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Section 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange (a "Registrar") and an
office or agency where Notes may be presented for payment (a "Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may have one or more co-Registrars and one or more
additional Paying Agents. The term "Paying Agent" includes any additional Paying
Agent, and the term "Registrar" includes any co-Registrar. The Company may
change any Paying Agent, Registrar or co-Registrar without prior notice to any
Holder of a Note. The Company shall notify the Trustee and the Trustee shall
notify the Holders of the Notes of the name and address of any Agent not a party
to this Indenture. Neither the Company nor any Affiliate may act as Paying
Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. Each such agreement shall implement the provisions of this Indenture
that relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent, other than the Trustee,
to agree in writing that the Paying Agent shall (i) hold in trust for the
benefit of the Noteholders or the Trustee, as their interests may appear, all
monies or Deferred Interest Notes held by the Paying Agent for the payment of
principal of or interest on the Notes, (ii) notify the Trustee of any Default by
the Company in making any such payment or in delivering any such Deferred
Interest Notes and, (iii) during the continuance of any Event of Default, upon
written request of the Trustee, pay to the Trustee all monies or Deferred
Interest Notes held by it and account for any of the same disbursed or
delivered, as the case may be. The Company may at any time require a Paying
Agent to pay all monies held by it, and to deliver all Deferred Interest Notes
held by it, to the Trustee and account to the Trustee for any of the same
disbursed or delivered, as the case may be. Upon payment over to the Trustee of
all monies held by it, and delivery to the Trustee of all Deferred Interest
Notes held by it (and upon accounting for any of the same disbursed or
delivered, as the case may be) the Paying Agent shall have no further liability
for the monies so paid, and the Deferred Interest Notes so delivered, by it to
the Trustee.
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Section 2.05. NOTEHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least 10 days before each Interest Payment 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
Noteholders.
Section 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar or a co-Registrar with a
request to register a transfer or to exchange them for an equal principal amount
of Notes of other denominations, the Registrar shall register the transfer or
make the exchange as requested if its customary requirements for such
transactions are met. To permit registration of transfers and exchanges, the
Company will execute, and the Trustee shall authenticate, Notes at the
Registrar's request. Any exchange or transfer shall be without service charge,
except that the Company may require payment of a sum sufficient to cover any
transfer tax, stamp duty or similar governmental charge that may be imposed in
relation thereto (other than any such tax or charge payable upon exchanges
pursuant to Sections 2.10, 3.06 and 9.05).
The Registrar shall not be required to register the transfer of or
exchange any security (a) selected for redemption or (b) during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption and ending at the close of business on the day of such
mailing.
Section 2.07. REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue, and the Trustee shall authenticate, a replacement Note if
the Trustee's customary requirements are met. If required by the Trustee or the
Company, a Holder must furnish indemnity sufficient in the judgment of all to
protect the Company, the Trustee and any Agent from any loss which any of them
may suffer if a Note is replaced. The Company may charge for its reasonable
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company, and
shall be subject to all of the terms and provisions of this Indenture.
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Section 2.08. 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 as not outstanding.
A Note does not cease to be outstanding because the Company or an Affiliate of
the Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it 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 a redemption date or maturity date money sufficient to pay
Notes payable on that date and is not prohibited from paying such money to the
Holder of such Notes pursuant to the terms of this Indenture, then on and after
that date such Notes shall be deemed to be no longer outstanding and interest on
them shall cease to accrue.
Section 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company or any Affiliate of the Company shall be disregarded, except that for
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes which the Trustee knows are so
owned shall be so disregarded.
Section 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may prepare
and execute, and the Trustee shall authenticate, temporary Notes. Temporary
Notes shall be substantially in the form of definitive Notes but may have
variations that the Company considers appropriate for temporary Notes. Without
unreasonable delay, the Company shall prepare and execute, and the Trustee shall
authenticate, definitive Notes in exchange for temporary Notes.
Until such exchange, such temporary Notes shall be entitled to the
same rights, benefits and privileges as definitive Notes.
Section 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee and
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no one else shall cancel and destroy all Notes surrendered for transfer,
exchange, payment or cancellation and shall deliver a certificate of such
destruction to the Company unless the Company otherwise instructs the Trustee in
writing. The Company may not issue new Notes to replace Notes that it has paid
or delivered to the Trustee for cancellation.
Section 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest plus, to the extent permitted by applicable
law, any interest payable on the defaulted interest, to the persons who are
Noteholders on a subsequent special record date. Such special record date shall
be the fifteenth day next preceding the date fixed by the Company for payment of
such defaulted interest, whether or not a Business Day. The Company shall notify
the Trustee in writing of the amount of defaulted interest, plus interest
payable on the defaulted interest, if any, proposed to be paid on each Note and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest, plus interest payable on the
defaulted interest, if any, or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such defaulted interest, plus interest payable on the defaulted interest, if
any. At least 15 days before the special record date, the Company shall mail or
cause to be mailed to each Noteholder a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
Section 2.13. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number, and if so,
the Trustee shall use the CUSIP number provided to it by the Company in notices
of redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Notes, and that
reliance may be placed only on the other identification numbers printed on the
Notes.
Section 2.14. DEPOSIT OF MONIES, ETC.
At least one (1) Business Day prior to each payment date, the Company
shall deposit with the Paying Agent, in immediately available funds, monies
sufficient to make the payment of principal or interest due on such payment
date, PROVIDED, HOWEVER, that if the Company shall have made a Deferred Interest
Election pursuant to Section 2.15 in respect of all or a portion of the
installment of interest due on such payment date, the Company shall instead, in
respect of the interest due on such payment date, (i) deposit with the Paying
Agent, in immediately available funds, monies sufficient to make the payment of
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the portion (if any) of such interest to be paid in cash and (ii) deliver to the
Paying Agent (x) the Deferred Interest Notes issuable to the respective
Noteholders pursuant to Section 2.15(a)(i), duly executed by the Company and
authenticated by the Trustee, dated such payment date and registered in the
names of the respective Noteholders as of the record date for interest payable
on such payment date.
Section 2.15. CERTAIN INTEREST PAYABLE IN DEFERRED INTEREST NOTES.
(a) Subject to the provisions of paragraphs (b) and (c) below, the
Company may elect (a "Deferred Interest Election") to satisfy, in whole or in
part, its obligation to pay interest on the Notes (including without limitation
any Deferred Interest Notes theretofore issued under this Indenture) on each or
any of the ten Interest Payment Dates (collectively the "Deferred Interest
Payment Dates") commencing [March 15, 2000 and ending September 15, 2004] by the
issuance of Deferred Interest Notes as provided herein. The Company shall make
Deferred Interest Election pursuant to this paragraph (a) by delivering a
notice to the Trustee and the Paying Agent not less than 10 nor more than 45
days prior to the record date preceding the relevant Deferred Interest Payment
Date, which notice shall state that the Company elects to satisfy the obligation
to pay interest, in full or in part, by the issuance of Deferred Interest Notes
(ranking PARI PASSU with the Notes) and, if such obligation is to be so
satisfied only in part, the portion of such interest obligation to be so
satisfied. Upon the making of a Deferred Interest Election in respect of a
Deferred Interest Payment Date, in lieu of paying in cash the interest (or a
portion thereof) otherwise due and payable on the Notes (including without
limitation any Deferred Interest Notes theretofore issued under this Indenture)
on such Deferred Interest Payment Date the Company shall execute, and shall
require the Trustee to authenticate for each Noteholder as of the record date
(including without limitation each Holder of a Deferred Interest Note
theretofore issued under this Indenture), a Deferred Interest Note dated the
Interest Payment Date on which such interest was so due, registered in the name
of such Noteholder and in a principal amount equal to 6% of the principal amount
of the Note or Notes held by such Noteholder as of such Interest Payment Date
(or the portion thereof to be satisfied pursuant to this paragraph (a)), all in
sufficient time for delivery thereof to the Paying Agent as provided in Section
2.14. Such Deferred Interest Notes shall bear interest at a rate of 12% per
annum.
(b) It is expressly agreed that the Deferred Interest Notes shall be
entitled to the benefits of, and shall be subject to, the same provisions of
this Indenture as the Notes (except, as provided herein, with respect to
designation, maximum aggregate principal amount and interest rate).
(c) Any order to the Trustee to authenticate Deferred Interest Notes
pursuant to paragraph (a) above shall conform to the requirements of Section
2.02 and shall be accompanied by resolutions of the Board of Directors of the
Company authorizing the issuance of the appropriate principal amount of Deferred
Interest Notes. In the event that less than an entire interest payment otherwise
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payable on any Deferred Interest Payment Date on the outstanding Notes shall be
so satisfied, the portion thereof paid in cash shall be allocated ratably among
such Noteholders based on their relative principal amounts.
ARTICLE THREE
Redemption
Section 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to Section 5 of the
Notes, it shall deliver to the Trustee an Officers' Certificate certifying
compliance with Section 5 of the Notes, indicating the redemption date and the
principal amount of Notes to be redeemed. The notice shall be accompanied by an
Officer's Certificate and shall state that the redemption complies with the
provisions of this Indenture.
The Notes are not subject to any mandatory redemption or sinking fund
provisions.
The Company shall deliver the Officers' Certificate provided for in
this Section 3.01 in writing at least 60 days before the redemption date unless
a shorter notice period is satisfactory to the Trustee.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
selection of Notes for redemption will be made by the Trustee in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed, or if the Notes are not so listed on a PRO RATA basis, by
lot or in accordance with any other method the Trustee considers fair and
appropriate; provided that no Notes with a principal amount of $100 or less
shall be redeemed in part. Notices of redemption or repurchase shall be mailed
by first class mail at least 30 days but not more than 60 days before the
redemption or repurchase date to each Holder of Notes to be redeemed or
repurchased at its registered address. If any Note is to be redeemed or
repurchased in part only, the notice that relates to such Note shall state the
portion of the principal amount thereof to be redeemed or repurchased. A new
Note in principal amount equal to the unredeemed or unrepurchased portion will
be issued in the name of the Holder thereof upon cancellation of the original
Notes.
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Section 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed a notice of redemption by
first-class mail to each Holder of Notes to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price (including the amount of accrued
interest, if any, to be paid);
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price (including accrued
interest, if any);
(5) 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
Holder is to receive payment of the redemption price (plus accrued
interest, if any) upon surrender to the Paying Agent of the Notes;
(6) the Section of the Notes pursuant to which the Notes are to
be redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount 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
issued; and
(8) the CUSIP number, if any.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
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Section 3.04. 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
(including accrued interest, if any). Unless the Company defaults in making the
redemption payment, interest on the Notes called for redemption ceases to accrue
on and after the redemption date. Upon surrender to the Paying Agent, such Notes
shall be paid at the redemption price, plus accrued interest to the redemption
date, but interest payments coming due on an Interest Payment Date prior to such
redemption date will be payable to the Holders of record at the close of
business on the relevant record dates referred to in Section 2 of the Notes.
However, if a redemption date is on or before an Interest Payment Date and on or
after the related record date, any accrued interest will be paid to the person
in whose name the Note is registered at the close of business on such record
date and the only remaining right of the Holder is to receive payment of the
redemption price upon surrender to the Paying Agent of the Notes.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
At least one (1) Business Day prior to any redemption date, the
Company shall deposit with the Paying Agent money in immediately available funds
sufficient to pay the redemption price of and accrued interest, if any, on all
Notes to be redeemed on that date.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue, and the Trustee shall authenticate for the Holder, a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
ARTICLE FOUR
Covenants
Section 4.01. PAYMENT OF NOTES.
(a) The Company shall pay the principal of and interest on the Notes
on the dates and in the manner provided in the Notes. An installment of
principal or interest shall be considered paid on the date it is due if the
Trustee or the Paying Agent holds on that date (i) money and/or (ii) if then
permitted pursuant to Section 2.15 in the case of interest to be paid by
delivery of Deferred Interest Notes upon a Deferred Interest Election as
provided in Section 2.15(a), Deferred Interest Notes as to which all conditions
to the issuance and delivery thereof have been satisfied, in either case
designated for and sufficient to pay or satisfy such installment and is not
prohibited from paying such money or issuing such Deferred Interest Notes to the
Holders of the Notes pursuant to the terms of this Indenture.
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(b) The Company shall pay interest on overdue principal at the rate
then borne by the Notes; it shall pay interest on overdue installments of
interest as to each of the Notes at the same rate to the extent lawful.
Section 4.02. CORPORATE EXISTENCE.
Subject to the provisions of Article Five, the Company shall preserve
and keep in full force and effect its corporate existence and the corporate
existence of each of its Subsidiaries in accordance with the respective
organizational documents of each and their respective rights (charter and
statutory), licenses and franchises, PROVIDED THAT the Company shall not be
required to preserve any such right, license or franchise, or the corporate
existence of any Subsidiary, if the loss thereof, in the good faith judgment of
the Board of Directors of the Company is not, and will not be, adverse in any
material respect to the Holders.
Section 4.03. REPORTS
So long as any Notes are outstanding, the Company will furnish to the
Holders of Notes all periodic reports required to be filed by the rules and
regulations of the Commission.
Section 4.04. COMPLIANCE CERTIFICATES.
(a) The Company shall deliver to the Trustee, within 45 days after
the end of each of the first three Quarters of each fiscal year of the Company
and within 90 days after the end of each fiscal year of the Company, an
Officers' Certificate stating whether or not the signers know of any Default or
Event of Default by the Company. If they do know of such a Default or Event of
Default, the certificate shall describe such Default or Event of Default and the
status thereof, if known. The first such Officers' Certificate to be delivered
by the Company pursuant to this Section 4.04 shall be for the fiscal year ending
December 31, 1999. The Company shall also promptly deliver an Officers'
Certificate to the Trustee upon becoming aware of any Default or Event of
Default, which certificate shall specify the Default or Event of Default.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.03 shall be accompanied by a written
statement of the Company's independent public accountants (who shall be a firm
of established national reputation) that in making the examination necessary for
certification of such annual financial statements nothing has come to their
attention which would lead them to believe that a Default or Event of Default
has occurred, or if any such Default or Event of Default has occurred,
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specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any person for
any failure to obtain knowledge of any Default or Event of Default that would
not be disclosed in the course of an audit examination conducted in accordance
with GAAP.
Section 4.05. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency (which may be an office
of the Trustee or an Affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company shall 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
Corporate Trust Office of the Trustee. 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, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency for such purposes. The Company shall 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 designates the Corporate
Trust Office of the Trustee as one such office or agency of the Company in
accordance with Section 2.03.
Section 4.06. NOTICE OF DEFAULTS.
In the event that any Indebtedness of the Company or any of its
Subsidiaries has been declared due and payable before its maturity because of
the occurrence of any default (or any event which, with notice or the lapse of
time, or both, shall constitute such default) under such Indebtedness, the
Company shall give prompt written notice thereof to the Trustee within 5 days of
such declaration.
Section 4.07. 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, which would prohibit or forgive the Company from paying all or any
portion of the principal of and/or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
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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 4.08. RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any of its
Subsidiaries, to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on
account of any Equity Interests of the Company (including, without
limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Subsidiaries), other than
dividends or distributions payable (a) in Equity Interests (other than
Disqualified Stock) of the Company or (b) to the Company or to any
Subsidiary of the Company;
(ii) purchase, redeem, defease, retire or otherwise acquire or
retire for value any Equity Interests of the Company or any Affiliate
of the Company, other than any such Equity Interests owned by the
Company or any Subsidiary of the Company;
(iii) voluntarily purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is expressly subordinated in
right of payment to the Notes, except in accordance with the scheduled
mandatory redemption or repayment provisions set forth in the original
documentation governing such Indebtedness; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively
referred to as"Restricted Payments"), unless, at the time of and after
giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(2) the Company would, at the time of such Restricted Payment and
after giving PRO FORMA effect thereto as if such Restricted
Payment had been made at the beginning of the immediately
preceding fiscal quarter, have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Indebtedness to
Cash Flow Ratio test set forth in the first paragraph of Section
4.10 hereof; and
(3) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its
Subsidiaries after the Issue Date (excluding Restricted Payments
permitted by clause (iii) of the next succeeding paragraph), is
less than the sum (without duplication) of:
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(A) 50% of the Consolidated Net Income of the Company (taken
as one accounting period) from the beginning of the first
fiscal quarter commencing after the Issue Date to the end of
the Company's most recently ended fiscal quarter for which
financial statements are available at the time of such
Restricted Payment (or, if such aggregate Consolidated Net
Income for such period is a deficit, less 100% of such
deficit); plus
(B) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale, since the Issue Date, of
Equity Interests of the Company or of debt securities of the
Company that have been converted into such Equity Interests
(other than (x) Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company and (y)
Disqualified Stock or debt securities that have been
converted into Disqualified Stock; plus
(C) to the extent that any Restricted Investment that was
made after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (x) the cash
return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (y) the initial
amount of such Restricted Investment.
(b) The provisions set forth in paragraph (a) above shall not
prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement or other acquisition
of any Equity Interests of the Company in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Equity Interests of the Company
(other than any Disqualified Stock); provided that the amount of any
such proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (3)(B)
of paragraph (a) above;
(iii) the repayment, defeasance, redemption or repurchase of
Intercompany Indebtedness or Indebtedness with the net cash proceeds
from an incurrence of Permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Subsidiary of the
Company) of Equity Interests of the Company (other than Disqualified
Stock); provided that the amount of any such net cash proceeds that
are utilized for any such repayment, defeasance, redemption or
repurchase shall be excluded from clause (3)(B) of paragraph (a)
above; and
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(iv) the purchase of employee stock or incentive options, or
capital stock issued pursuant to the exercise of employee stock or
incentive options or pursuant to employee restricted stock purchase
plans in an aggregate amount not to exceed $500,000 in any calendar
year and in an aggregate amount not to exceed $2.0 million since the
date of this Indenture, provided, however, that at the time of, and
after giving effect to, any Restricted Payment permitted under clauses
(i), (ii) and (iv), no Default or Event of Default shall have occurred
and be continuing.
(c) The amount of all Restricted Payments, if not made in cash, shall
be the Fair Market Value on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or such Subsidiary, as the case may
be, pursuant to the Restricted Payment. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers's
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this covenant were computed,
which calculations may be based upon the latest available financial statements
of the Company.
Section 4.09. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to:
(i) pay dividends or make any other distributions to the Company
or any of its Subsidiaries on its Capital Stock or with respect to any
other interest or participation in, or measured by, its profits;
(ii) pay any Indebtedness owed to the Company or any of its
Subsidiaries;
(iii) make loans or advances to the Company or any of its
Subsidiaries; or
(iv) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of:
(a) this Indenture and the Notes;
(b) Existing Indebtedness;
(c) applicable law;
(d) any instrument governing Indebtedness or Capital Stock
of a Person acquired by the Company or any of its
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Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other
than the Person, or the property or assets of the Person, so
acquired;
(e) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with
past practice;
(f) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the
nature described in clause (iv) above on the property so
acquired;
(g) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive
than those contained in the agreements governing the
Refinanced Indebtedness;
(h) Indebtedness of a Subsidiary of the Company representing
loans or Indebtedness which is (A) incurred on the basis of
a pledge of accounts receivable due for the sale or lease of
equipment, air time or maintenance services to customers and
(B) is without recourse to the assets of the Company or such
Subsidiary except those assets set forth in subsection (A);
or
(i) in the case of clause (a), (b), (d), (e), (f), (g) and
(h) above, any amendments, modifications, restatements,
renewals, increases, supplements, modifications,
restatements or refinancings thereof, provided that such
amendments, modifications, restatements or refinancings are
not materially more restrictive with respect to such
dividend and other payment restrictions than those contained
in such instruments as in effect on the date of their
incurrence.
Section 4.10. INCURRENCE OF INDEBTEDNESS OR ISSUANCE OF DISQUALIFIED
STOCK.
The Company shall not, and the Company shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guaranty
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness including, without
limitation, Acquired Debt) and the Company and its Subsidiaries shall not, issue
any Disqualified Stock and will not permit any of their respective Subsidiaries
to issue any shares of Preferred Equity Interest; provided, however, that, the
Company may incur Indebtedness (including, without limitation, Acquired Debt) or
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issue Disqualified Stock if, after giving PRO FORMA effect to the incurrence of
such Indebtedness or the issuance of such Disqualified Stock and the use of
proceeds thereof, the aggregate Indebtedness to Cash Flow Ratio of the Company
does not exceed 5.0 to 1. The foregoing limitations will not apply to:
(i) Indebtedness represented by the Notes and this Indenture;
(ii) Existing Indebtedness;
(iii) Indebtedness incurred by the Company under (A) Hedging
Obligations, provided that (1) the notional principal amount of any
interest rate protection agreement does not significantly exceed the
principal amount of the Indebtedness to which such interest rate
protection agreement relates and (2) any agreements related to
fluctuations in currency rates do not increase the outstanding
Indebtedness other than as a result of fluctuations in foreign
currency exchange rates, and (B) performance, surety and workers'
compensation bonds or other obligations of a like nature incurred in
the ordinary course of business consistent with past practice;
(iv) Indebtedness of the Company owed to and held by any of its
Subsidiaries and Indebtedness of any Subsidiaries of the Company owed
to and held by the Company or any of its Subsidiaries (the
Indebtedness incurred pursuant to this clause (iv) being hereafter
referred to as "Intercompany Indebtedness"); provided that an
incurrence of Indebtedness shall be deemed to have occurred upon any
sale or other disposition of Intercompany Indebtedness to a Person
other than the Company or any of its Subsidiaries;
(v) Non-Recourse Debt by the Company incurred to finance purchase
money obligations;
(vi) Indebtedness incurred by the Company under the Senior Credit
Agreement, provided that the aggregate principal amount at any time
outstanding under this clause (vi) does not exceed $3.0 million less
the amount of any such Indebtedness retired with the Net Cash Proceeds
from any Asset Sale (or less the permanent reduction of any
commitments under the Senior Credit Agreement), and less the aggregate
principal amount of Indebtedness under this clause (vi) which is
refinanced under clause (vii) below;
(vii) Indebtedness incurred by the Company ("Permitted
Refinancing Indebtedness") incurred to refinance, replace or refund
Indebtedness ("Refinanced Indebtedness") incurred pursuant to the
Indebtedness to Cash Flow Ratio test set forth in the first paragraph
of this covenant or pursuant to clauses (i), (ii) or (vi) of this
covenant; provided that:
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(a) the aggregate principal amount of such Permitted
Refinancing Indebtedness does not exceed the aggregate principal
amount of the Refinanced Indebtedness (including accrued and
unpaid interest thereon) plus the amount of fees and reasonable
expenses incurred in connection therewith;
(b) such Permitted Refinancing Indebtedness shall have final
maturity equal to or later than, and a Weighted Average Life to
Maturity equal to or greater than, the final maturity and
Weighted Average Life to Maturity of the Refinanced Indebtedness,
respectively; and
(c) such Permitted Refinancing Indebtedness shall rank no
higher relative to the Notes than the Refinanced Indebtedness and
in no event may any Indebtedness of the Company be refinanced
with Indebtedness of any Subsidiary under this clause (vii);
(viii) any Indebtedness of the Company in an aggregate principal
amount (including the amounts outstanding as described to subparagraph
(vi) hereto) not to exceed $10.0 million at any one time outstanding;
(ix) Indebtedness of a Subsidiary of the Company representing
loans or Indebtedness which is (A) incurred on the basis of a pledge
of accounts receivable due for the sale or lease of equipment, air
time or maintenance services to customers and (B) is without recourse
to the assets of the Company or such Subsidiary except those assets
set forth in subsection (A); or
Section 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, sell, lease, license, transfer or otherwise dispose
of any of its properties or assets to, or purchase any property or assets from,
or enter into or make any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless: (i) such Affiliate Transaction is on terms
that are no less favorable to the Company or such Subsidiary than those that
would have been obtained in a comparable arm's length transaction by the Company
or such Subsidiary with an unrelated Person; and (ii) the Company delivers to
the Trustee: (a) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $2.0 million, a resolution of the Board of Directors
of the Company set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above and such Affiliate
Transaction is approved by a majority of the disinterested members of the Board
of Directors; and (b) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $5.0 million, an opinion as to the fairness
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of such Affiliate Transaction to the Company or Subsidiary involved in such
Affiliate Transaction from a financial point of view issued by an Independent
Financial Advisor or, with respect to communications-related matters, a
recognized expert in the communications industry; provided, that the following
shall be deemed not to be Affiliate Transactions: (1) any reasonable employment
agreement or stock option agreement entered into by the Company or any of its
Subsidiaries with any of their respective employees in the ordinary course of
business; (2) transactions between or among the Company and its Subsidiaries;
(3) Restricted Payments permitted by clauses (i) and (ii) of the second
paragraph of Section 4.08 hereof and Permitted Investments of a type referred to
in clauses (i) and (iii) of the definition of Permitted Investments; (4) the
payment of reasonable fees to directors of the Company or any of its
Subsidiaries; and (5) Affiliate Transactions pursuant to agreements in effect on
the date of this Indenture and described in the Disclosure Statement and
renewals and extensions of such agreements on terms no less favorable to the
Holders than the terms of such original agreements and transactions.
Notwithstanding the foregoing, no transactions with, or for the benefit of the
Holders, shall be deemed an Affiliate Transaction pursuant to this Section 4.11.
Section 4.12. LIENS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired, or any income or profits therefrom,
or assign or convey any right to receive income therefrom, except Permitted
Liens.
Section 4.13. ADDITIONAL GUARANTEES.
The Company will not permit any Subsidiary, directly or indirectly, to
Guarantee any Indebtedness (other than Permitted Indebtedness) of the Company
("Guaranteed Indebtedness"), unless (i) such Subsidiary simultaneously executes
and delivers to the Trustee a supplemental indenture to this Indenture providing
for a Guarantee ("Subsidiary Guarantee") of payment by such Subsidiary of all of
the Company's obligations under the Notes and this Indenture on the terms set
forth in this indenture and (ii) such 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 Subsidiary as a result of any payment by such Subsidiary under its
Subsidiary Guarantee; provided that this paragraph shall not be applicable to
any Guarantee of any Subsidiary that existed at the time such Person became a
Subsidiary and was not incurred in connection with, or in contemplation of, such
Person becoming a 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
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foregoing, any Subsidiary Guarantee by a 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 Subsidiary's Capital Stock in, all or
substantially all the assets of, such Subsidiary (which sale, exchange or
transfer is not prohibited under the terms of this Indenture) or (ii) the
release or discharge of the Guarantee that resulted in the creation of such
Subsidiary guarantee, except a discharge or release by or as a result of payment
under such Guarantee.
Section 4.14. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder shall have
a right to require the Company to repurchase all or any part of such Holder's
Notes pursuant to the offer described below (the "Change of Control Offer") at
an offer price in cash equal to 100% of the aggregate principal amount thereof,
plus accrued and unpaid interest thereon to the date of purchase (the"Change of
Control Payment"). Within 20 days following the date upon which the Change of
Control occurred (the "Change of Control Date"), the Company shall send, by
first class mail, a notice to each Holder, with a copy to the Trustee, which
notice shall govern the terms of the Change of Control Offer. The notice to the
Holders shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Change of Control Offer. Such notice
shall state:
(i) that the Change of Control Offer is being made pursuant to
this Section 4.14 and that all Notes tendered and not withdrawn shall
be accepted for payment;
(ii) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier than 30
days nor later than 45 days from the date such notice is mailed, other
than as may be required by law) (the "Change of Control Payment
Date");
(iii) that any Note not tendered will continue to accrue
interest;
(iv) that, unless the Company defaults in making payment
therefor, any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(v) that Holders electing to have a Note purchased pursuant to a
Change of Control Offer will be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the third Business Day
prior to the Change of Control Payment Date;
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(vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than five Business Days prior to
the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a
statement that such Holder is withdrawing such Holder's election to
have such Notes purchased;
(vii) that Holders whose Notes are purchased only in part will be
issued new Notes in a principal amount equal to the unpurchased
portion of the Notes surrendered; and
(viii) the circumstances and relevant facts regarding such Change
of Control.
(b) On or before the Change of Control Payment Date, the Company shall
to the extent lawful (i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent in U.S. dollars, an amount equal to the Change of Control Payment
in respect of all Notes or portions thereof so tendered and (iii) deliver or
cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to each Holder of Notes so accepted the Change of Control Payment for such
Notes, and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to such Holders a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered. Any Notes not so accepted
shall be promptly mailed by the Company to the Holder thereof. For purposes of
this Section 4.14, the Trustee shall act as the Paying Agent. Any amounts
remaining after the purchase of Notes pursuant to a Change of Control Offer
shall be returned by the Trustee to the Company. The Company shall comply with
the requirements of 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 connection with the repurchase of Notes pursuant to a Change of
Control Offer. To the extent the provisions of any securities laws or
regulations conflict with the provisions under this Section 4.14, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.14 by virtue
thereof. 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.
(c) The provisions of Subsections (a) and (b) above shall not apply if
a third party makes the Change of Control Offer in the manner, at the time and
otherwise in compliance with the requirements set forth in this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.
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Section 4.15. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company shall, and shall cause each of its Subsidiaries to,
maintain its properties in good working order and condition (subject to ordinary
wear and tear) and make all reasonably necessary repairs, renewals,
replacements, additions and improvements required for it to actively conduct and
carry on its business; PROVIDED, HOWEVER, that nothing in this Section 4.15
shall prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any of its properties if such discontinuance is, in
the good faith judgment of the Board of Directors or other governing body of the
Company desirable in the conduct of its businesses and is not disadvantageous in
any material respect to the Holders.
Section 4.16. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
SUBSIDIARIES.
The Company shall not, and shall not permit any Subsidiary to, issue,
transfer, convey, sell or otherwise dispose of any shares of Capital Stock of a
Subsidiary or securities convertible or exchangeable into, or options, warrants,
rights or any other interest with respect to, Capital Stock of a Subsidiary to
any person other than the Company or a Subsidiary except (i) in a transaction
consisting of a sale of all other Capital Stock of such Subsidiary and that
complies with the provisions of Section 4.18 hereof, to the extent such
provisions apply; (ii) if required, the issuance, transfer, conveyance, sale or
other disposition of directors' qualifying shares; (iii) in a transaction in
which, or in connection with which, the Company or a Subsidiary acquires at the
same time sufficient Capital Stock of such Subsidiary to at least maintain the
same percentage ownership it had prior to such transaction (and provided that
the terms of such Capital Stock, and under which such Capital Stock is held are
not more disadvantageous to the Company); or (iv) as may be made in connection
with a loan of the type described in Sections 4.09 (h) or 4.10(ix).
Section 4.17. BUSINESS ACTIVITIES.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business other than that which is related to the design,
development, procurement, installation, operation or marketing of location,
fleet management or related two-way messaging systems and businesses and
reasonably related extensions thereof.
Section 4.18. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY INTERESTS.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage in an Asset Sale unless
(i) the Company or such Subsidiary, as the case may be,
engaging in such Asset Sale receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the assets sold
or otherwise disposed of; and
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(ii) at least 80% of the consideration therefor received by the
Company or such Subsidiary is in the form of cash or Cash equivalents;
PROVIDED, HOWEVER, that any notes or similar obligations received by any of the
Company or such Subsidiaries from such transferees that are immediately
converted by the Company or such Subsidiaries into cash, shall be deemed to be
cash (to the extent of the net cash received) for purposes of this clause (ii).
Within 180 days after the receipt of any Net Proceeds, the Company may apply
such Net Proceeds to:
(i) repay, and thereby permanently reduce the commitments or
amounts available to be borrowed under the Senior Credit Agreement
pursuant to clause (vi) of the covenant set forth in Section 4.09
hereof, or
(ii) an investment in Related Assets or a Related Business.
Pending the final application of any such Net Proceeds, the Company
may temporarily invest such Net Proceeds in any manner that is not
prohibited by this Indenture.
ARTICLE FIVE
Successor Corporation
Section 5.01. WHEN THE COMPANY MAY MERGE, ETC.
So long as any Notes shall remain outstanding, the Company shall not
consolidate or merge with or into (whether or not the Company is the surviving
Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to, another Person unless:
(i) the Company is the surviving Person or the Person formed by
or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation
organized and existing under the laws of the United States, any state
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall
have been made assumes all the obligations of the Company under the
Notes and this Indenture pursuant to a supplemental indenture in form
reasonably satisfactory to the Trustee;
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(iii) immediately after such transaction, no Default or Event of
Default exists; and
(iv) the Company or person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, lease, conveyance or other disposition has
been made will, at the time of such transaction and, giving PRO FORMA
effect thereto as if such transaction had occurred at the beginning of
the immediately preceding first quarter, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Indebtedness to
Cash Flow Ratio test set forth in the first paragraph of Section 4.10
hereof.
In connection with any consolidation, merger, transfer or sale
contemplated by this Article 5, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer or sale and the supplemental indenture in
respect thereto comply with this Article and all conditions precedent, if any,
herein provided for relating to such transaction have been complied with.
Anything in this Section to the contrary notwithstanding, without the
written consent of the Holders of at least a majority in principal amount of the
outstanding Notes (unless such Notes and all accrued interest thereon shall be
paid in full at the closing of any such transactions), the Company shall not
consolidate or merge with or into or transfer (whether by sale, liquidation or
otherwise) all or substantially all its assets to another Person, other than
such a transaction in which the Company is the surviving corporation and the
holders of at least 51% of its outstanding voting Capital Stock, on a
fully-diluted basis, immediately prior to such transaction, hold directly or
indirectly, at least 51% of such voting Capital Stock, on a fully-diluted basis,
immediately after such transaction.
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any sale, conveyance, transfer,
lease or other disposition or assignment by the Company in accordance with
Section 5.01, unless the principal and interest on the Notes shall have been
paid in full upon consummation of such transaction, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, lease, conveyance, transfer or other disposition or assignment
is made shall succeed to, and be substituted for (so that from and after the
date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture and the Notes referring to the
Company shall refer instead to the successor corporation and not the Company),
and may exercise every right and power of the Company under this Indenture and
the Notes with the same effect as if such successor corporation had been named
as the Company herein and therein.
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ARTICLE SIX
Defaults and Remedies
Section 6.01. EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(1) there is a default in the payment of interest on any Note
when the same becomes due and payable and the default continues for a
period of 30 days, whether or not such payment shall be prohibited by
the provisions of Article Ten;
(2) there is a default in the payment of the principal of any
Note when the same becomes due and payable at maturity, upon
redemption or otherwise, whether or not such payment shall be
prohibited by the provisions of Article Ten;
(3) the Company fails to comply with any of its other covenants
or agreements contained in the Notes or this Indenture, other than a
failure to comply with Section 5.01, and the Trustee or the Holders of
at least 33 1/3% in principal amount of the outstanding Notes notify
the Company of the Default and the Company does not cure the Default
within 60 days after receipt of the notice. The notice must specify
the Default, demand that it be remedied and state that the notice is a
"Notice of Default." If the Holders of 33 1/3% in principal amount of
the outstanding Notes request the Trustee to give such notice on their
behalf, the Trustee shall do so;
(4) there shall be a default under any Indebtedness of the
Company or any Subsidiary of the Company, which default is not cured
or waived and extends beyond any period of grace provided with respect
thereto and which default relates to (i) the obligation to pay the
full outstanding principal of any such Indebtedness on final maturity
or (ii) an obligation other than the obligation to pay the full
outstanding principal of any such Indebtedness on final maturity and
the effect of such default is to cause such Indebtedness to become due
prior to its stated maturity; PROVIDED, HOWEVER, (A) that no default
under clause (4)(i) or (ii) shall exist if such default does not
relate to such Indebtedness in excess of $2 million;
(5) there shall have been rendered against the Company or any of
its Subsidiaries final non-appealable judgments for the payment of
money, individually or in the aggregate, in an amount of $2 million or
more by a court or courts of competent jurisdiction, which shall
remain undischarged or in respect of which funds shall not have been
set aside for payment for a period (during which execution thereof
shall not be effectively stayed) of 60 days after the date on which
any period for appeal has expired;
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(6) the Company or any of its Subsidiaries, pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a Custodian for it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
(7) a court of competent jurisdiction enters an order or decree
in respect of the Company or any of its Subsidiaries in an involuntary
case or proceeding under any Bankruptcy Law that:
(A) approves as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect
of the Company or such Subsidiary,
(B) appoints a Custodian therefor or for all or
substantially all of their respective properties, or
(C) orders the liquidation of the Company or any of its
Subsidiaries,
and, in each case, the order or decree remains unstayed and in effect
for a period of 60 consecutive days.
The term "Bankruptcy Law" means Title 11, United States Code or
any similar federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law; or
(8) the Company fails to comply with Section 5.01.
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(9) termination or loss, for any reason, of any material FCC
License or permit necessary for the operation of the Company's
business in the manner conducted pursuant to the Plan (unless (i) the
Company or any of its Subsidiaries is contesting in good faith the
loss of such license or permit at the FCC and has not exhausted its
remedies at the FCC; and (ii) the Company (together with any
Subsidiary) continues to have the right to use such license or permit
if previously obtained);
Section 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 6.01(3), (6), (7) or (8)) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 33 1/3% in principal amount of
the then outstanding Notes, by notice to the Company and the Trustee, may, and
the Trustee at the request of such Holders shall, declare the principal of and
accrued interest on all the Notes to be due and payable immediately, PROVIDED,
HOWEVER, that the Trustee shall make no such declaration unless and until the
Trustee shall have delivered to the Bank Agent prior written notice of its
intent to make such declaration. Upon such declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.01(3), (6), (7) or (8) occurs with respect to the Company, or any
of its Subsidiaries, all unpaid principal and accrued interest on the Notes then
outstanding shall IPSO FACTO become and be immediately due and payable without
declaration or other act on the part of the Trustee or any Noteholder. The
Holders of a majority in principal amount of the outstanding Notes by notice to
the Trustee may rescind an acceleration and its consequences if (i) all existing
Events of Default have been cured or waived (except nonpayment of principal of
or interest on the Notes that has become due solely because of the acceleration)
and (ii) if the rescission would not conflict with any judgment or decree of a
court of competent jurisdiction. No such rescission shall affect any subsequent
default or impair any right consequent thereto.
In addition, if an Event of Default shall have occurred as the result
of the prohibition of any payment under the terms of Section 10.02, if on or
before the end of the Payment Blockage Period the Company shall pay or deposit
with the Trustee a sum sufficient to pay in accordance with the provisions
hereof and of the Notes all matured installments of interest and principal upon
all the Notes which shall have become due other than as a result of any
acceleration of the Notes as a result of such Event of Default (with interest on
overdue installments of interest, to the extent that payment of such interest is
permitted under applicable law, and on overdue principal at the rate borne by
the Notes), then in such case such Event of Default and any such acceleration
arising from the prohibition of such payment shall be deemed rescinded and
annulled; but no such rescission or annulment shall extend to or shall affect
any subsequent or other default or impair any right consequent thereon.
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Section 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may, with
prior written notice to the Bank Agent in each case, pursue any available remedy
by proceeding at law or in equity to collect the payment of principal of or
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.04. WAIVER OF EXISTING DEFAULTS.
Subject to Section 6.07 and 9.02, the Holders of 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 in
payment of principal of or interest on any Note as specified in clauses (1) and
(2) of Section 6.01. When a Default or Event of Default is waived, it is cured
and it ceases; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the outstanding Notes
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee; PROVIDED, HOWEVER,
(1) such direction shall not be in conflict with any rule or law
or with this Indenture,
(2) the Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel, determines
that the action so directed may not lawfully be taken or if the
Trustee in good faith shall, by a Responsible Officer, determine that
the proceedings so directed would involve it in personal liability or
be unduly prejudicial to the Holders not taking part in such
direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
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Section 6.06. LIMITATION ON SUITS.
A Noteholder may not pursue any remedy with respect to this Indenture
or the Notes unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 33 1/3% of the aggregate principal
amount of the outstanding Notes make a written request to the Trustee
to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(5) the Holders of a majority in principal amount of the then
outstanding Notes do not give the Trustee a direction inconsistent
with such request.
The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal or interest (if any) on
such Note on or after the respective due dates set forth in such Note (including
upon acceleration thereof) or the institution of any proceeding with respect to
this Indenture or any remedy hereunder, including, without limitation,
acceleration, by the Holders of a 331/3% in principal amount of outstanding
Notes, provided that upon institution of any proceeding or exercise of any
remedy, such Holders provide the Trustee with prompt notice thereof. A
Noteholder may not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.
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 and interest on the
Note, on or after the respective due dates expressed in the 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 the Holder.
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Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of interest or principal specified
in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of principal and interest remaining unpaid, together with
interest on the overdue principal and, to the extent lawful, interest on overdue
installments of interest, in each case at the rate PER ANNUM then borne by 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 the
Noteholders allowed in any judicial proceedings relative to the Company, its
creditors or its property and shall (subject to the provisions of Article Ten
hereof) be empowered and entitled to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Noteholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept to adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such proceeding.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to the holders of Senior Indebtedness to the extent
required by Article Ten;
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Third: to Noteholders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section.
Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, 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 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in principal
amount of the outstanding Notes.
ARTICLE SEVEN
Trustee
Section 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a),(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders of Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to the Trustee against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
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liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to the Trustee against loss, liability, or
expense that might be incurred by it in compliance with such request or
direction.
(g) Except with respect to Section 4.04, the Trustee shall have no
duty to inquire as to the performance of the Company's covenants in Article 4.
In addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
4.01, 4.03 and 4.04 or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.
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 any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as Trustee (if any of the Notes are registered pursuant
to the Securities Act), or resign. Any Agent may do the same with like rights
and duties. The Trustee is also subject to Sections 7.10 and 7.11.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
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paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to a Responsible Officer of the Trustee, the Trustee shall mail to Holders
of Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each December 31, beginning with the December 31
following the date of this Indenture, the Trustee shall, to the extent that any
of the events described in TIA Section 313(a) occurred within the previous
twelve months, but not otherwise, mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c). A copy of each
report at the time of its mailing to the Holders of Notes shall be mailed to the
Company and filed with the SEC and each stock exchange on which any Notes are
listed. The Company shall promptly notify the Trustee when any Notes are listed
on any stock exchange.
Section 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel. The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture, except
any such loss, liability or expense as may be attributable to the gross
negligence, willful misconduct or bad faith of the Trustee. 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
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its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. 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. The obligations of the Company under this Section
7.07 shall survive the satisfaction and discharge of this Indenture. To secure
the Company's payment obligations in this Section, the Trustee shall have a Lien
prior to the Notes on all money or property held or collected by the Trustee,
except that held in trust to pay principal and interest on particular Notes.
Such Lien shall survive the satisfaction and discharge of this Indenture. When
the Trustee incurs expenses or renders services after an Event of Default
specified in Section 6.01(6) or 6.01(7) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
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. The Trustee may resign in writing at
any time and be discharged from the trust hereby created by so notifying the
Company and obtaining the prior written approval of the FCC, if so required by
the Communications Act, including Section 310(d) and the rules and regulations
promulgated thereunder. The Holders of at least a majority in principal amount
of the then outstanding Notes may remove the Trustee by so notifying the Trustee
and the Company in writing. The Company may remove the Trustee (subject to the
prior written approval of the FCC, if required by the Communications Act,
including Section 310(d), and the rules and regulations promulgated thereunder)
if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) the Trustee is no longer in compliance with the foreign ownership
provisions of Section 310 of the Communications Act and the rules and
regulations promulgated thereunder;
(d) a Custodian or public officer takes charge of the Trustee or its
property; or
(e) 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 then outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company. If a successor Trustee does not take
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office within 60 days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company, or the Holders of Notes of at least 10% in
principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee. If the
Trustee after written request by any Holder of a Note who has been a Holder of a
Note for at least six months fails to comply with Section 7.10, such Holder of a
Note may petition any court of competent jurisdiction for the removal of the
Trustee and 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. Thereupon, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. The successor Trustee shall mail
a notice of its succession to Holders of the Notes. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under Section
7.07 shall continue for the benefit of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trustee power, shall be subject to supervision or examination by federal or
state authority and shall have a combined capital and surplus of at least $25
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE EIGHT
Discharge of Indenture
Section 8.01. TERMINATION OF COMPANY'S OBLIGATIONS.
The Company may terminate its obligations under the Notes and this
Indenture, except those obligations referred to in the immediately succeeding
paragraph, if all Notes previously authenticated and delivered (other than
mutilated, destroyed, lost or stolen Notes which have been replaced or paid or
Notes for whose payment money or securities have theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 8.03) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder, or if, not more than one year prior to the date of
maturity of the Notes, the Company has irrevocably deposited or caused to be
deposited with the Trustee or a Paying Agent, under the terms of an irrevocable
trust agreement in form and substance satisfactory to the Trustee and any such
Paying Agent, as trust funds in trust solely for the benefit of the Holders for
that purpose, money or non-callable U.S. Government Obligations maturing as to
principal and interest in such amounts and at such times as are sufficient
without consideration of any reinvestment of such interest (in the opinion of a
nationally recognized accounting firm of independent certified public
accountants expressed in written certification thereof delivered to the
Trustee), to pay principal of and interest on the outstanding Notes to maturity
or redemption, as the case may be, provided that the Trustee or such Paying
Agent shall have been irrevocably instructed to apply such money or the proceeds
of such U.S. Government Obligations to the payment of said principal and
interest with respect to the Notes and provided, further, that the Company shall
have delivered to the Trustee (i) either an Opinion of Counsel with no material
qualifications in form and substance satisfactory to the Trustee to the effect
that Holders of the Notes (A) will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit (and the defeasance
contemplated in connection therewith) and (B) will be subject to Federal income
tax on the same amounts and in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred, or an
applicable favorable ruling to that effect received from or published by the
Internal Revenue Service; (ii) an Opinion of Counsel with no material
qualifications to the effect that the funds so deposited will not be subject to
the rights of holders of Senior Indebtedness; (iii) an Opinion of Counsel with
no material qualifications to the effect that after the passage of 90 days
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, except that the Opinion of Counsel may contain a
qualification that if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company, no opinion is
given as to the effect of such laws on the trust funds except the following: (x)
assuming such trust funds remained in the Trustee's possession prior to such
court ruling to the extent not paid to the Holders, a valid and perfected
security interest in such trust funds would exist that is not avoidable in
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bankruptcy or otherwise, (y) the Holders will be entitled to receive adequate
protection of their interests in such trust funds if such trust funds are used,
and (z) no property, rights in property or other interests granted to the
Trustee or the holders of the Notes in exchange for or with respect to any such
trust funds will be subject to any prior rights of holders of Senior
Indebtedness, including without limitation those arising under Article Ten of
this Indenture; and (iv) an Officers' Certificate stating that such deposit with
the Trustee will not constitute a default under any Senior Indebtedness. The
Company may make an irrevocable deposit pursuant to this Section 8.01 only if
at such time it is not prohibited from doing so under the provisions of Article
Ten and the Company shall have delivered to the Trustee and any such Paying
Agent an Officers' Certificate to that effect.
Notwithstanding any such termination, however, the obligations in
Section 11 of the Notes and in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01,
7.07, 7.08, 8.03 and 8.04 hereof shall survive until the Notes are no longer
outstanding. Thereafter, the obligations in Section 11 of the Notes and in
Sections 7.07 and 8.03 hereof shall survive.
After 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. APPLICATION OF TRUST MONEY.
The Trustee or Paying Agent shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to Section 8.01 hereof and
shall apply the deposited money and the money from U.S. Government Obligations
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Notes. Money and securities so held in trust
are not subject to the provisions of Article Ten.
Section 8.03. REPAYMENT TO COMPANY.
Subject to Section 8.01, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or U.S. Government
Obligations held by them at any time. The Trustee and the Paying Agent shall pay
to the Company upon request any money or U.S. Government Obligations held by
them under Section 8.01 for the payment of principal of or interest on the Notes
that remains unclaimed for two years; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent before being required to make any payment may at the expense
of the Company cause to be published once in THE NEW YORK TIMES and THE WALL
STREET JOURNAL (national edition), or mail to each Holder entitled to such
money, notice that such money remains unclaimed and that, after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company. After payment to the Company, Noteholders entitled to money must
look to the Company for payment as general creditors unless applicable law
designates another person.
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Section 8.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 8.01; PROVIDED, HOWEVER, that
if the Company has made any payment of interest on or principal of any Notes
because of the reinstatement of its obligations, the Company or such Guarantor
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 resolutions of its Board of Directors,
and the Trustee may amend or supplement this Indenture or the Notes without
notice to or consent of any Noteholders:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to
certificated Notes;
(4) to make any change that does not adversely affect the rights
of any Noteholder;
(5) to add to the covenants of the Company for the benefit of the
Holders of the Notes, or to surrender any right or power herein
conferred upon the Company; or
(6) to comply with any requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA, as
contemplated by Section 9.03 hereof or otherwise.
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Notwithstanding the above, the Trustee and the Company may not make any change
that adversely affects the legal rights of any Holder hereunder.
Section 9.02. WITH CONSENT OF HOLDERS.
Subject to Section 6.07, the Company, when authorized by resolutions
of its Board of Directors and the Trustee, may amend or supplement this
Indenture or the Notes without notice to any Noteholder but with the written
consent of the Holders of at least a majority in principal amount of the
outstanding Notes. Subject to Section 6.07, the Holders of a majority in
principal amount of the outstanding Notes may waive compliance by the Company
with any provision of this Indenture or the Notes without notice to any
Noteholder. Without the consent of each Noteholder affected, however, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not:
(1) reduce the amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest
on any Note;
(3) reduce the principal of, or alter the fixed maturity of, any
Note or alter the redemption provisions with respect thereto;
(4) make any Note payable in money other than that stated in the
Note;
(5) waive a default in the payment of principal of or interest on
or redemption payment with respect to any Note;
(6) make any change in this Section 9.02 or Section 6.04 or 6.07;
or
(7) modify the terms of payment of interest or principal in any
other way.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail, or cause to be mailed, to the Holders a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail or cause to be mailed such notice, or any defect therein,
shall not in any way impair or affect the validity of any amendment, supplement
or waiver.
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If shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
An amendment under Section 9.01 of this Section 9.02 may not make any
change that adversely affects the rights under Article Ten of any holder of an
issue of Senior Indebtedness unless the holders of that issue, pursuant to its
terms, consent to the change.
Section 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Upon the Indenture becoming qualified under the TIA, every amendment
to or supplement of this Indenture or the Notes shall comply with the TIA as
then in effect.
Section 9.04. REVOCATION AND EFFECT OF CONSENTS.
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 consenting
Holder's Note, 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 his Note or
portion of a Note. Such revocation shall be effective only if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective.
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 Noteholder, unless it makes a change described in any of clauses (1)
through (7) of Section 9.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note.
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Section 9.05. NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver the Note to the Trustee.
The Trustee may place an appropriate notation on the Note about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. The Trustee may
place an appropriate notation on all Notes thereafter authenticated.
Section 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, supplement or waiver if
requested by the Company, so long as the same complies with the requirements of
this Indenture and in doing so 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, is not inconsistent herewith and is
valid and binding on the Company in accordance with its terms. However, the
Trustee need not sign any amendment, supplement or waiver that adversely affects
its rights, duties, liabilities or immunities.
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ARTICLE TEN
Subordination
Section 10.01. NOTES SUBORDINATED TO SENIOR INDEBTEDNESS.
The Company, for itself and its successors, and each Holder, by his
acceptance of Notes, agrees that the payment of the Obligations is and shall be
subordinated in right of payment, to the extent and in the manner provided in
this Article Ten, to the prior payment in full of all Senior Indebtedness in
cash or Cash Equivalents (including any interest accruing subsequent to an event
specified in Sections 6.01(7) and 6.01(8); provided that interest accruing
during the pendency of any such proceeding is included only to the extent that
the holders of such Senior Indebtedness are determined in such proceeding to be
entitled to receive such interest from the Company).
This Article Ten shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are made obligees hereunder and any one
or more of them may enforce such provisions.
Section 10.02. NO PAYMENT ON NOTES IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise (unless waived), all Senior Indebtedness then due
shall first be paid in full, or such payment duly provided for to the reasonable
satisfaction of the Bank Agent in the case of the Bank Obligations or a trustee
on behalf of, or other representative of, other Senior Indebtedness, before any
payment is made on account of the Obligations.
(b) Upon the happening of an event of default in payment of any Senior
Indebtedness, as such event of default is defined therein or in the instrument
under which it is outstanding, then, unless and until such event of default
shall have been cured or waived in writing or shall have ceased to exist, no
payment shall be made by the Company with respect to Obligations.
(c) Upon receipt by the Company of notice of an event of default
(other than a payment default) under the Senior Credit Agreement or any
Permitted Bank Refinancing per mitting an acceleration thereof (and which notice
shall specify that it is a Payment Blockage Notice delivered pursuant to this
Section 10.02(c)), as such event of default is defined therein or in the
instrument under which it is outstanding, and such event of default shall not
have been cured or waived in writing or shall not have ceased to exist, no
payment shall be made by the Company with respect to the Obligations during the
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period (the "Payment Blockage Period") lasting until 180 days from the receipt
of such notice by the Company (except as hereinafter provided in this Section
10.02(c)). Any number of additional notices may be given to the Company during
the Payment Blockage Period (including during or following a period in which an
event of default upon which any prior notice or notices given during the Payment
Blockage Period are based shall have been cured or waived in writing or which
have ceased to exist), and during the Payment Blockage Period, the Company may
make payments with respect to the Obligations if each event of default upon
which any notice or notices are based shall have been cured or waived in writing
or shall have ceased to exist. Within any 360-day period, only one Payment
Blockage Period shall be commenced. Notwithstanding anything herein to the
contrary, no payment with respect to the Obligations may be blocked pursuant to
this Section 10.02(c) for a period in excess of 180 days from the date such
payment was due.
(d) In the event that notwithstanding the provisions of this Section
10.02 the Trustee or any Holder shall receive any payment on account of the
Obligations after the maturity of Senior Indebtedness as described in Section
10.02(a) above, after the happening of an event of default of the type specified
in Section 10.02(b) above or after the happening of an event of default and
during the Payment Blockage Period specified in Section 10.02(c) above, then,
unless and until such Senior Indebtedness shall have been paid in full, or
provision made therefor to the reasonable satisfaction of the Bank Agent in the
case of the Bank Obligations or a trustee on behalf of, or other representative
of, other Senior Indebtedness or such event of default shall have been cured or
waived in writing or shall have ceased to exist, such payment (subject to the
provisions of Sections 10.06 and 10.07) shall be received and held by the
Trustee or such Holder, as the case may be, in trust for the benefit of, and, if
the Senior Indebtedness shall have been declared immediately due and payable,
shall forthwith be paid over and delivered to, the holders of Senior
Indebtedness (PRO RATA as to each of such holders on the basis of the respective
amounts of Senior Indebtedness held by them) or their representative or the
trustee under the indenture or other agreement (if any) pursuant to which Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to (in the case of cash) or as collateral (which collateral shall be
reduced to cash in a commercially reasonable manner) for (in the case of any
non-cash payment or distribution) the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full,
after giving effect to any concurrent payment or distribution or provision
therefor to the holders of Senior Indebtedness. The Company shall give written
notice to the Trustee of any default, waiver of default or cure of default under
any Senior Indebtedness or under any agreement pursuant to which Senior
Indebtedness may have been issued, in each case promptly upon acquiring
knowledge thereof.
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Section 10.03. NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE COMPANY.
Upon any distribution of assets or securities of the Company of any
kind or character upon any dissolution, winding up, liquidation, reorganization,
arrangement, adjustment, protection, relief or composition of the Company or its
debts (whether voluntary or involuntary or in bankruptcy, liquidation,
insolvency, receivership, arrangement, reorganization, relief or other
proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of the Company or otherwise:
(a) all Senior Indebtedness (including any interest accruing
subsequent to an event specified in Sections 6.01(7) and 6.01(8);
provided that interest accruing during the pendency of any such
proceeding is included only to the extent that the holders of such
Senior Indebtedness are determined in such proceeding to be entitled
to receive such interest from the Company) shall first be paid in full
in cash or Cash Equivalents (or have such payment duly provided for to
the reasonable satisfaction of the Bank Agent in the case of the Bank
Obligations or a trustee on behalf of, or other representative of,
other Senior Indebtedness) before the Holders are entitled to receive
any payment on account of the Obligations;
(b) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which
the Holders or the Trustee on behalf of the Holders would be entitled
except for the provisions of this Article Ten, shall be paid or made
by the liquidating trustee or agent or other person making such
payment or distribution directly to the holders of Senior Indebtedness
or their representative, or to the trustee under any indenture under
which Senior Indebtedness may have been issued, for application to (in
the case of cash) or as collateral (which collateral shall be reduced
to cash in a commercially reasonable manner) for (in the case of any
non-cash payment or distribution) the payment of such Senior
Indebtedness, to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution or provision therefor to the
holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, shall be received by the
Trustee or the Holders on account of the Obligations before all Senior
Indebtedness is paid in full, or provision made for its payment to the
reasonable satisfaction of the Bank Agent in the case of the Bank
Obligations or a trustee on behalf of, or other representative of,
other Senior Indebtedness, such payment or distribution (subject to
the provisions of Sections 10.06 and 10.07) shall be received and held
in trust for and shall be paid over to the holders of the Senior
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Indebtedness remaining unpaid or unprovided for or their
representative, or to the trustee under any indenture under which such
Senior Indebtedness may have been issued, for application to (in the
case of cash) or as collateral (which collateral shall be reduced to
cash in a commercially reasonable manner) for (in the case of any
non-cash payment or distribution) the payment of such Senior
Indebtedness until all such Senior Indebtedness shall have been paid
in full, after giving effect to any concurrent payment or distribution
or provision therefor to the holders of such Senior Indebtedness.
The Company shall give prompt written notice to the Trustee of any
dissolution, winding up, liquidation or reorganization of the Company.
Section 10.04. NOTEHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF
SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness, the holders
of Obligations shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of assets of the Company
applicable to the Senior Indebtedness until all amounts owing in respect of the
Obligations shall be paid in full, and for the purpose of such subrogation no
such payments or distributions to the holders of Senior Indebtedness by or on
behalf of the Company or by or on behalf of the Holders by virtue of this
Article Ten which otherwise would have been made to the Holders shall, as among
the Company, its creditors other than the holders of Senior Indebtedness and the
Holders, be deemed to be payment by the Company to or on account of the Senior
Indebtedness, it being understood that the provisions of this Article Ten are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior Indebtedness, on the other
hand. Nothing contained in this Section 10.04 shall be deemed to create any
duty, obligation or liability on the part of any holder of Senior Indebtedness
to the Trustee or any holder of Obligations.
Section 10.05. OBLIGATION OF COMPANY UNCONDITIONAL.
Nothing contained in this Article Ten or elsewhere in this Indenture,
or in the Notes, is intended to or shall impair as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest on the Notes, as and when the same shall
become due and payable in accordance with their terms, or to affect the relative
rights of the Holders and other creditors of the Company other than the holders
of Senior Indebtedness, nor shall anything herein or therein prevent the Trustee
or any Holder from exercising all remedies otherwise permitted by applicable law
upon Default under this Indenture, subject to the provisions of Section 10.13
and the rights, if any, under this Article Ten of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company otherwise
payable or delivered to such holders upon the exercise of any such remedy. Upon
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any distribution of assets of the Company referred to in this Article Ten, the
Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders, for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article Ten (provided that such person or court shall have been apprised of the
provisions hereof).
Section 10.06. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee or the taking of any other action under this Article Ten by the
Trustee unless and until the Trustee shall have received at its Corporate Trust
Office written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any trustee or representative (duly authorized in
writing or by telex or telecopy promptly confirmed in writing) therefor and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Sections 7.01 and 7.02, shall be entitled in all respects
conclusively to assume that no such facts exist. Nothing contained in this
Section 10.06 shall limit the right of the holders of Senior Indebtedness to
recover payments as contemplated by Section 10.02.
Section 10.07. APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.
Money or securities deposited in trust with the Trustee pursuant to
and in accordance with Section 8.01 shall be for the sole benefit of Noteholders
and, to the extent allocated for the payment of Obligations, shall not be
subject to the subordination provisions of this Article Ten. Otherwise, any
deposit of monies by the Company with the Trustee or any Paying Agent (whether
or not in trust) for the payment of the principal of or interest on any Notes
shall be subject to the provisions of Sections 10.01, 10.02, 10.03 and 10.04
except that, if one Business Day prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including, without
limitation, the payment of either the principal of or the interest on any Note),
or, if later, one Business Day prior to the date such payment is actually made,
the Trustee shall not have received with respect to such monies the notice
provided for in Section 10.06, then the Trustee or the Paying Agent shall have
full power and authority to receive such monies and to apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it during or after such one Business Day.
This Section shall be construed solely for the benefit of the Trustee and the
Paying Agent and shall not otherwise affect the rights of holders of Senior
Indebtedness.
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Section 10.08. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF THE COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or be otherwise charged
with. The holders of Senior Indebtedness may extend, renew, waive a default or
event of default, modify or amend the terms of any instrument pursuant to which
the Senior Indebtedness is issued or any security therefor and release, sell or
exchange any security therefor and otherwise deal freely with the Company, all
without affecting the liabilities and obligations of the parties to the
Indenture or the Holders. No provision in any supplemental indenture which
affects the superior position of the holders of the Senior Indebtedness shall be
effective against the holders of the Senior Indebtedness who have not consented
thereto.
Section 10.09. NOTEHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF NOTES.
Each Holder by his acceptance of Notes authorizes and expressly
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Ten and
appoints the Trustee his attorney-in-fact for such purpose, including, without
limitation, in the event of any dissolution, winding up, liquidation or
bankruptcy reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon a general assignment for the benefit of
creditors or any other similar remedy or otherwise) tending towards liquidation
of the business and assets of the Company, the immediate filing of a claim for
the unpaid balance of his Obligations in the form required in said proceedings
and causing said claim to be approved. If the Trustee does not file a proper
claim or proof of debt in the form required in such proceeding prior to 30 days
before the expiration of the time to file such claim or claims, then the holders
of Senior Indebtedness are hereby authorized to have the right to file and are
hereby authorized to file an appropriate claim for and on behalf of the Holders.
Section 10.10. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.
The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article Ten in respect of any Senior Indebtedness
at any time held by it to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder. Nothing in this Article Ten shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07.
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Section 10.11. ARTICLE TEN NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment of Obligations on the Notes by reason of
any provision of this Article Ten shall not be construed as preventing the
occurrence of an Event of Default under Section 6.01.
Section 10.12. NO FIDUCIARY DUTY CREATED TO HOLDERS OF SENIOR
INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness by virtue of the provisions of this Article Ten,
other than the duties herein expressly provided.
Section 10.13. LIMITATION ON CERTAIN REMEDIES.
Notwithstanding the provisions hereof, during (x) a Payment Blockage
Period, until such time as the Bank Obligations shall have been paid in full or
all events of default upon which such Payment Blockage Period is based shall
have been cured or waived in writing or shall have ceased to exist, or (y) the
period lasting until 180 days following the happening of an event of default in
payment of any Senior Indebtedness, as such event of default is defined therein
or in the instrument under which it is outstanding, until such time as the Bank
Obligations shall have been paid in full or such event of default shall earlier
be cured or waived in writing or shall have ceased to exist, neither the Trustee
nor any Holder may levy, foreclose or otherwise attempt to realize upon any
asset or property of the Company.
Section 10.14. MISCELLANEOUS.
(a) The Holders, the Trustee and the Company each will, at the
Company's expense and at any time and from time to time, promptly execute and
deliver all further instruments and documents, and take all further action,
that the Bank Agent may deem reasonably necessary to protect any right or
interest granted or purported to be granted by the provisions of this Article
Ten or to enable the holders of the Bank Obligations or the Bank Agent to
exercise and enforce their rights and remedies hereunder.
(b) All rights and interests under this Article Ten of the holders of
the Bank Obligations or the Bank Agent and all agreements and obligations of the
Holders and the Trustee and the Company under this Article Ten shall remain in
full force and effect irrespective of:
(i) any change in the time, manner or place of payment of, or in any
other term of, or in the amount of, all or any of the Bank Obligations or
any Senior Indebtedness, or any other amendment or waiver of or any consent
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to departure from the Senior Credit Agreement, any Permitted Bank
Refinancing or any other agreement, or instrument relating thereto or to
any other Senior Indebtedness; or
(ii) any exchanges, release or non-perfection of any collateral or
security interests therein, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of the Bank
Obligations, or other Senior Indebtedness.
(c) The provisions of this Article Ten shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Senior Indebtedness is rescinded or must otherwise be returned by any holder of
Senior Indebtedness or any representative of such holder upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, all as though such
payment had not been made.
(d) The Holders, the Trustee and the Company each hereby waive
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Senior Indebtedness and this Article and any requirement that any
holder of Senior Indebtedness protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against the Company or any other person or entity or any collateral.
Nothing contained in this subsection 10.14(d) shall limit the right of the
Trustee to receive and rely upon notice from the Company as provided under
Section 10.02 or to act in accordance with Section 10.07.
(e) No failure on the part of any holder of Senior Indebtedness or any
representative of such holder to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
(f) The provisions of this Article Ten constitute a continuing
agreement and shall (i) remain in full force and effect until the Senior
Indebtedness shall have been paid in full in cash or Cash Equivalents (or such
payment shall have been duly provided for to the reasonable satisfaction of the
Bank Agent in the case of the Bank Obligations or a trustee on behalf of, or
other representative of, Senior Indebtedness, (ii) be binding upon the Holders,
the Trustee and the Company and each of their respective successors and assigns,
and (iii) inure to the benefit of and be enforceable by each holder of Senior
Indebtedness and their representatives, successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii), any holder of the
Bank Obligations may assign or otherwise transfer any note or other evidence of
indebtedness held by it, or grant any participation in any of its rights or
obligations under the Senior Credit Agreement, to any other person or entity,
and such other person or entity shall thereupon become vested with all the
rights in respect thereof granted to such holder herein or otherwise.
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ARTICLE ELEVEN
Miscellaneous
Section 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
Section 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
Teletrac, Inc.
3220 Executive Ridge
Suite 100
Vista, CA 92083
Telecopier No.: (760) 597-9906
Attention: General Counsel
With a copy to:
Reboul, MacMurray, Hewitt, Maynard & Kristol
45 Rockefeller Plaza
New York, NY 10111
Telecopier No.: (212) 841-5725
Attention: David S. Elkind, Esq.
If to the Trustee:
[TO COME]
The Company or the Trustee, by notice to the other may designate
additional or different addresses for subsequent notices or communications. All
notices and communications (other than those sent to Noteholders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
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delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery. Any notice or
communication to a Holder of a Note shall be mailed by first class mail,
certified or registered, return receipt requested, or by overnight air courier
guaranteeing next day delivery to its address shown on the register kept by the
Registrar. Any notice or communication shall also be so mailed to any Person
described in TIA Section 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder of a Note or any defect in it shall
not affect its sufficiency with respect to other Holders of Notes. If a notice
or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it. If the
Company mails a notice or communication to Holders of Notes, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 11.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or the Notes,
notwithstanding that this Indenture may not be qualified under the TIA at such
time. The Company, the Trustee, the Registrar and any other person shall have
the protection of TIA ss. 312(c), notwithstanding that this Indenture may not be
qualified under the TIA at such time.
Section 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to Section 314(a)(4) of the TIA) shall include:
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(1) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied; PROVIDED, HOWEVER, that with
respect to matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate or certificate of public officials.
Section 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by, or a meeting of,
Noteholders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 11.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday, or a day on which banking
institutions are not required to be open in the city of New York, State of New
York. If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, but
interest shall accrue on such payment for the intervening period.
Section 11.08. GOVERNING LAW.
The internal laws of the State of New York, without regard to
principles of conflict of laws, shall govern this Indenture and the Notes.
Section 11.09. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
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based on, in respect of, or by reason of, such obligations or their creation.
Each Noteholder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
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. NO INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or its Subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 11.13. SEVERABILITY.
In case any one or more of the provisions contained in this Indenture
or in the Notes shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of such Notes.
Section 11.14. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed and attested, all as of the date first above written.
TELETRAC, INC.
By:
Name:
Title:
Attest:
_________________________
[--------------------],
as Trustee
By:
Name:
Title:
Attest:
_________________________
70
EXHIBIT A
FORM OF NOTE
EXHIBIT A to Note Indenture
FORM OF NOTE
(Face of Note)
TELETRAC, INC.
9% Note Due 2004
No.________ $___________
TELETRAC, INC., a Delaware corporation (the "Company", which term includes any
successor corporation or corporations under the Indenture hereinafter referred
to), promises to pay to___________ or registered assigns the principal sum
of Dollars ($__________) on ___________________, 2004.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Note set forth on
the reverse side hereof, which provisions shall for all purposes have the same
effect as if set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers and a facsimile of its
corporate seal to be affixed hereto or imprinted hereon.
Dated: TELETRAC, INC.
By:______________________________
Attest:
_________________________
Secretary
Certificate of Authentication:
This is one of the 9% Notes Due 2004 referred to in the within-mentioned
Indenture.
[NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION]
By:________________________________
Authorized Officer
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TELETRAC, INC.
9% NOTE DUE 2004
1. INTEREST. TELETRAC, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note until the
principal hereof is paid or made available for payment in accordance with the
terms of the Indenture (as defined below) at the rate per annum shown above or
at such greater rate PER ANNUM as is specified below in Section 2. The Company
will pay interest semi-annually in arrears on March 15 and September 15 of each
year, commencing [March 15, 2000] (each, an "Interest Payment Date"). Interest
on the Notes will accrue from the most recent date after ______________, 1999
through which interest has been paid or, if no interest has been paid, from
____________, 1999. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company will pay interest on overdue principal at the same rate
PER ANNUM borne by the Notes, and shall pay interest on overdue installments of
interest (without regard to grace periods) at the same rate to the extent
lawful. On each Interest Payment Date, accrued interest on this Note will be
paid in arrears.
2. METHOD OF PAYMENT; DEFERRED INTEREST. (a) The Company will pay
interest on the Notes (except defaulted interest) to the persons who are
registered holders of Notes at the close of business on the March 1 or September
1, as the case may be, next preceding the Interest Payment Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. The Company
will pay principal and, subject to the provisions of Section 2(b) hereof,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company may, however, pay
principal and (except for interest payable in Deferred Interest Notes as
hereinafter provided) interest by its check payable in such money. The Company
may mail an interest check or such Deferred Interest Notes to a Holder's
registered address.
(b) As and to the extent provided in Section 2.15 of the Indenture,
the Company may elect (a "Deferred Interest Election") to satisfy, in whole or
in part, its obligation to pay interest on this Note on each of the ten Interest
Payment Dates (collectively the "Deferred Interest Payment Dates") commencing
March 15, 2000, as contemplated by the Indenture and ending __________, 2004 by
the issuance of its 12% Deferred Interest Notes due 2004 ("Deferred Interest
Notes") in a principal amount equal to 6% of the principal amount of the Note or
Notes held by such Noteholder on such Interest Payment Date. The Deferred
Interest Note issued pursuant to the Deferred Interest Election shall bear
interest at a rate of 12% per annum.
3. PAYING AGENT AND REGISTRAR. Initially, [Norwest Bank Minnesota,
National Association] (the "Trustee") will act as Registrar and Paying Agent.
The Company may change any Paying Agent, Registrar or co-Registrar without
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notice, except as specified in the Indenture. Neither the Company nor any of its
Affiliates may act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE. This Note is one of the Notes (the "Notes") issued under
an Indenture dated as of ______________, 1999 (the "Indenture") between the
Company and the Trustee. The terms of the Notes include those stated in the
Indenture and from and after the date of the qualification of the Indenture
under the TIA, those made part of the Indenture by reference to the TIA as in
effect on the date of the Indenture and the date on which the Indenture is
qualified under the TIA. The Notes are subject to all such terms, and Holders of
the Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured obligations of the Company limited to $15,000,000
principal amount (except for Notes issued in substitution for mutilated,
destroyed, lost or stolen Notes) and designated as the 9% Notes due 2004. Terms
used in this Note which are defined in the Indenture and not otherwise defined
herein have the meanings assigned to them in the Indenture.
5. OPTIONAL REDEMPTION. The Company may optionally redeem the Notes at
any time, as a whole or from time to time in part, at a redemption price of 100%
of the principal amount thereof, together with interest accrued thereon to the
redemption date.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of
Notes to be redeemed at his registered address. The selection of Notes for any
redemption will be made by the Trustee pursuant to the Indenture. On and after
the redemption date, unless the Company defaults in making the redemption
payment, interest ceases to accrue on Notes or portions of them called for
redemption and for which funds have been delivered to the Trustee or the Paying
Agent.
7. SUBORDINATION. The Notes are subordinated to in right of payment,
in the manner and to the extent set forth in the Indenture, to the prior payment
in full of all Senior Indebtedness, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed. Any Holder of
a Note by accepting this Note agrees to the subordination and authorizes the
Trustee to give it effect.
8. TRANSFER, EXCHANGE. The Notes are in registered form without
coupons. A Holder of a Note may transfer or exchange Notes in accordance with
the Indenture. The Registrar may require a Holder of a Note, among other things,
to furnish appropriate endorsements and transfer documents and to pay any taxes
and fees permitted by the Indenture. The Registrar need not transfer or exchange
any Note or portion of a Note selected for redemption, or transfer or exchange
any Notes for a period of 15 days before a selection of Notes to be redeemed.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as the owner of it for all purposes.
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<PAGE>
10. UNCLAIMED MONEY, ETC. If money or Deferred Interest Notes for the
payment of principal of or interest on the Notes remains unclaimed for two
years, the Trustee or Paying Agent will deliver such money or Deferred Interest
Notes back to the Company at its request. After such delivery, Holders of Notes
entitled to such money or Deferred Interest Notes must look to the Company for
payment unless applicable law designates another Person.
11. AMENDMENT, SUPPLEMENT, WAIVER. Subject to certain exceptions
requiring the consent of each Holder of a Note to be affected, 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 outstanding Notes, and any past
default or compliance with certain provisions may be waived with the consent of
the holders of a majority in principal amount of the outstanding Notes. Without
the consent of any Holder of a Note, the Company may amend or supplement the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
to provide for assumption of obligations to Holders of Notes upon certain
mergers and consolidations, to provide for uncertificated Notes in addition to
certificated Notes, to comply with the requirements of the TIA, to add
additional covenants of the Company, to surrender rights of the Company or to
make any change that does not adversely affect the rights of any Holder of a
Note.
12. SUCCESSOR CORPORATION. When a successor corporation assumes all
the obligations of its predecessor under the Notes and the Indenture, and upon
the satisfaction of certain other conditions provided in the Indenture, the
predecessor corporation will be released from those obligations.
13. DEFAULTS AND REMEDIES. Events of Default under the Indenture are
defined in Section 6.01 of the Indenture. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 33 1/3% in principal amount
of the outstanding Notes may declare all the Notes to be due and payable
immediately. Holders of Notes 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 a majority in principal amount of the outstanding Notes
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing default (except a
default in payment of principal or interest) if it determines that withholding
notice is in their interests. The Company is required to file quarterly reports
with the Trustee as to the absence or existence of defaults.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to (including loans which
constitute Senior Indebtedness), accept deposits from, and perform services for
the Company or any Affiliates of the Company, and may otherwise deal with the
Company or any Affiliates of the Company, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
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<PAGE>
based on, in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
16. AUTHENTICATION. This Note shall not be valid until the Trustee
signs the certificate of authentication on the other side of this Note.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder of a Note or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to:
Teletrac, Inc.
3220 Executive Ridge, Suite 100
Vista, CA 92083
Attention: General Counsel
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ASSIGNMENT FORM
Assignment of this Note requires completion of the form below and obtaining of a
signature guarantee.
I or we assign and transfer this Note to_________________________
________________________________________________________________________________
(Insert assignee's social security or TAX ID number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________________
(Agent)
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:____________ Your signature:______________________________
(Sign exactly as your name appears on
the other side of this Note)
Signature Guarantee:_____________________________________________
IMPORTANT NOTICE: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Agent," this Note becomes fully
negotiable, similar to a check endorsed in blank. Therefore, to safeguard a
signed Note, it is recommended that you either (i) fill in the name of the new
owner in the "Assignee" blank, or (ii) if you are sending the signed Note to
your bank or broker, fill in the name of the bank or broker in the "Agent"
blank. Alternatively, instead of using this Assignment Form, you may sign a
separate "power of attorney" form and then mail the unsigned Note and the signed
"power of attorney" in separate envelopes. For added protection, use certified
or registered mail for a Note.
A-7
EXHIBIT B
FORM OF DEFERRED
INTEREST NOTE
EXHIBIT B to
Note Indenture
FORM OF DEFERRED INTEREST NOTE
(Face of Note)
12% Deferred
Interest Note Due 2004
No. DR- $_______
TELETRAC, INC., a Delaware corporation (the "Company", which term includes any
successor corporation or corporations under the Indenture hereinafter referred
to), promises to pay to ______________________________________________ or
registered assigns the principal sum of _______________________________________
Dollars ($___________) on _________, 2004.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Deferred Interest
Note set forth on the reverse side hereof, which provisions shall for all
purposes have the same effect as if set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Deferred Interest Note
to be signed manually or by facsimile by its duly authorized officers and a
facsimile of its corporate seal to be affixed hereto or imprinted hereon.
Dated: TELETRAC, INC.
By:______________________________
Attest:
______________________
Secretary
Certificate of Authentication:
This is one of the 12% Deferred Interest Notes Due 2004 referred to in the
within-mentioned Indenture.
[NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION]
By:______________________________________
Authorized Officer
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<PAGE>
TELETRAC, INC.
12% DEFERRED INTEREST NOTE DUE 2004
1. INTEREST. TELETRAC, INC., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Deferred Interest Note
until the principal hereof is paid or made available for payment in accordance
with the terms of the Indenture (as defined below) at the rate PER ANNUM shown
above. The Company will pay interest semi-annually in arrears on March 15 and
September 15 of each year, commencing on the March 15 or September 15 following
the date of original issue of this Deferred Interest Note (each, an "Interest
Payment Date"). Interest on the Deferred Interest Notes will accrue from the
most recent date through which interest has been paid or, if no interest has
been paid, from the date of issuance. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
The Company will pay interest on overdue principal at the same rate
PER ANNUM borne by the Deferred Interest Notes, and shall pay interest on
overdue installments of interest (without regard to grace periods) at the same
rate to the extent lawful. On each Interest Payment Date, accrued interest on
this Deferred Interest Note will be paid in arrears.
2. METHOD OF PAYMENT; DEFERRED INTEREST. (a) The Company will pay
interest on the Deferred Interest Notes (except defaulted interest) to the
persons who are registered holders of Deferred Interest Notes at the close of
business on the March 1 or September 1, as the case may be, next preceding the
Interest Payment Date. Holders must surrender Deferred Interest Notes to a
Paying Agent to collect principal payments. The Company will pay principal and,
subject to the provisions of Section 2(b) hereof, interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. The Company may, however, pay principal and (except for
interest payable in additional Deferred Interest Notes as hereinafter provided)
interest by its check payable in such money. The Company may mail an interest
check or such additional Deferred Interest Notes to a Holder's registered
address.
(b) As and to the extent provided in Section 2.15 of the Indenture,
the Company may elect (a "Deferred Interest Election") to satisfy, in whole or
in part, its obligation to pay interest on this Deferred Interest Note on any of
the Interest Payment Dates (the "Deferred Interest Payment Dates"), as
contemplated by the Indenture by the issuance of additional Deferred Interest
Notes in a principal amount equal to 6% of the principal amount of the Deferred
Interest Note. The additional Deferred Interest Notes payable pursuant to the
Deferred Interest Election shall bear interest at a rate of 12% per annum.
3. PAYING AGENT AND REGISTRAR. Initially, [Norwest Bank Minnesota,
National Association] (the "Trustee") will act as Registrar and Paying Agent.
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<PAGE>
The Company may change any Paying Agent, Registrar or co-Registrar without
notice, except as specified in the Indenture. Neither the Company nor any of its
Affiliates may act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE. This Deferred Interest Note is one of the Deferred
Interest Notes (the "Deferred Interest Notes") issuable under an Indenture dated
as of [_______] 15, 1999 (the "Indenture") among the Company and the Trustee.
Pursuant to the Indenture, the Deferred Interest Notes are issuable in
satisfaction of the Company's obligation to pay interest on (i) the outstanding
Notes Due 2004 of the Company in the original principal amount of $15,000,000
originally issued under the Indenture and (ii) other Deferred Interest Notes
theretofore issued under the Indenture. The terms of the Deferred Interest Notes
include those stated in the Indenture and from and after the date of the
qualification of the Indenture under the TIA, those made part of the Indenture
by reference to the TIA as in effect on the date of the Indenture and the date
on which the Indenture is qualified under the TIA. The Deferred Interest Notes
are subject to all such terms, and Holders of the Deferred Interest Notes are
referred to the Indenture and the TIA for a statement of them. The Deferred
Interest Notes are general unsecured obligations of the Company and designated
as the 12% Deferred Interest Notes due 2004. Terms used in this Deferred
Interest Note which are defined in the Indenture and not otherwise defined
herein have the meanings assigned to them in the Indenture.
5. OPTIONAL REDEMPTION. The Company may optionally redeem the Deferred
Interest Notes at any time, as a whole or from time to time in part, at a
redemption price of 100% of the principal amount thereof, together with interest
thereon accrued to the redemption date.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each holder of
Deferred Interest Notes to be redeemed at his registered address. The selection
of Deferred Interest Notes for any redemption will be made by the Trustee
pursuant to the Indenture. On and after the redemption date, unless the Company
defaults in making the redemption payment, interest ceases to accrue on Deferred
Interest Notes or portions of them called for redemption and for which funds
have been delivered to the Trustee or the Paying Agent.
7. SUBORDINATION. The Deferred Interest Notes are subordinated to in
right of payment, in the manner and to the extent set forth in the Indenture, to
the prior payment in full of all Senior Indebtedness, whether outstanding on the
date of the Indenture or thereafter created, incurred, assumed or guaranteed.
Any Holder of a Deferred Interest Note by accepting this Deferred Interest Note
agrees to the subordination and authorizes the Trustee to give it effect.
8. TRANSFER, EXCHANGE. The Deferred Interest Notes are in registered
form without coupons. A Holder of a Deferred Interest Note may transfer or
exchange Deferred Interest Notes in accordance with the Indenture. The Registrar
may require a Holder of a Deferred Interest Note, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
permitted by the Indenture. The Registrar need not transfer or exchange any
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<PAGE>
Deferred Interest Note or portion of a Deferred Interest Note selected for
redemption, or transfer or exchange any Deferred Interest Notes for a period of
15 days before a selection of Deferred Interest Notes to be redeemed.
9. PERSONS DEEMED OWNERS. The registered Holder of a Deferred Interest
Note may be treated as the owner of it for all purposes.
10. UNCLAIMED MONEY, ETC. If money or Deferred Interest Notes for the
payment of principal of or interest on the Deferred Interest Notes remains
unclaimed for two years, the Trustee or the Paying Agent will deliver such money
or Deferred Interest Notes back to the Company at its request. After such
delivery, Holders of Deferred Interest Notes entitled to such money or Deferred
Interest Notes must look to the Company for payment unless applicable law
designates another Person.
11. AMENDMENT, SUPPLEMENT, WAIVER. Subject to certain exceptions
requiring the consent of each Holder of a Deferred Interest Note to be affected,
the Indenture or the Deferred Interest Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
outstanding Notes, and any past default or compliance with certain provisions
may be waived with the consent of the holders of a majority in principal amount
of the outstanding Notes. Without the consent of any Holder of a Deferred
Interest Note, the Company may amend or supplement the Indenture or the Deferred
Interest Notes to cure any ambiguity, omission, defect or inconsistency, to
provide for assumption of obligations to Holders of Deferred Interest Notes upon
certain mergers and consolidations, to provide for uncertificated Deferred
Interest Notes in addition to certificated Deferred Interest Notes, to comply
with the requirements of the TIA, to add additional covenants of the Company, to
surrender rights of the Company or to make any change that does not adversely
affect the rights of any Holder of a Deferred Interest Note.
12. SUCCESSOR CORPORATION. When a successor corporation assumes all
the obligations of its predecessor under the Deferred Interest Notes and the
Indenture, and upon the satisfaction of certain other conditions provided in the
Indenture, the predecessor corporation will be released from those obligations.
13. DEFAULTS AND REMEDIES. Events of Default under the Indenture are
defined in Section 6.01 of the Indenture. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 33 1/3% in principal amount
of the outstanding Notes may declare all the Deferred Interest Notes to be due
and payable immediately. Holders of Deferred Interest Notes may not enforce the
Indenture or the Deferred Interest Notes except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Deferred Interest Notes. Subject to certain limitations,
Holders of a majority in principal amount of the outstanding Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Deferred Interest Notes notice of any continuing default (except a
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<PAGE>
default in payment of principal or interest) if it determines that withholding
notice is in their interests. The Company is required to file quarterly reports
with the Trustee as to the absence or existence of defaults.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may make loans to (including loans which
constitute Senior Indebtedness), accept deposits from, and perform services for
the Company, or any Affiliates of the Company and may otherwise deal with the
Company or any Affiliates of the Company, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Deferred Interest Notes or the Indenture or
for any claim based on, in respect of or by reason of, such obligations or their
creation. Each Noteholder by accepting a Deferred Interest Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Deferred Interest Notes.
16. AUTHENTICATION. This Deferred Interest Note shall not be valid
until the Trustee signs the certificate of authentication on the other side of
this Deferred Interest Note.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder of a Deferred Interest Note or an assignee, such as: TEN COM (= tenants
in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with
right of survivorship and not as tenants in common), CUST (= custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
The Company will furnish to any Holder of a Deferred Interest Note
Note upon written request and without charge a copy of the Indenture. Requests
may be made to:
Teletrac, Inc.
3220 Executive Ridge, Suite 100
Vista, CA 92083
Attention: General Counsel
B-6
<PAGE>
ASSIGNMENT FORM
Assignment of this Deferred Interest Note requires completion of the form below
and obtaining of a signature guarantee.
I or we assign and transfer this Deferred Interest Note to _____________________
________________________________________________________________________________
(Insert assignee's social security or TAX ID number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
(Agent)
agent to transfer this Deferred Interest Note on the books of the Company. The
agent may substitute another to act for him.
Date: _____________ Your signature:___________________________________
Sign exactly as your name appears
on the other side of this Deferred Interest Note)
Signature Guarantee: ___________________________________________________________
IMPORTANT NOTICE: When you sign your name to this Assignment Form without
filling in the name of your "Assignee" or "Agent," this Deferred Interest Note
becomes fully negotiable, similar to a check endorsed in blank. Therefore, to
safeguard a signed Deferred Interest Note, it is recommended that you either
(i) fill in the name of the new owner in the "Assignee" blank, or (ii) if you
are sending the signed Deferred Interest Note to your bank or broker, fill in
the name of the bank or broker in the "Agent" blank. Alternatively, instead of
using this Assignment Form, you may sign a separate "power of attorney" form and
then mail the unsigned Deferred Interest Note and the signed "power of attorney"
in separate envelopes. For added protection, use certified or registered mail
for a Deferred Interest Note.
B-7
SENIOR SECURED NOTE AND CLASS A WARRANT
PURCHASE AGREEMENT
among
TELETRAC, INC.
and
THE SEVERAL PURCHASERS NAMED IN SCHEDULE I HERETO
Dated as of [__], 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.....................2
SECTION 1.1 Definitions..................................................2
ARTICLE II. PURCHASE AND SALE OF THE SECURITIES...........................13
SECTION 2.1 Purchase and Sale of Securities.............................13
SECTION 2.2 Closing Dates...............................................13
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................13
SECTION 3.1 Organization, Qualifications and Corporate Power............13
SECTION 3.2 Authorization of Agreements, Etc............................14
SECTION 3.3 Validity....................................................14
SECTION 3.4 Post-Restructuring Authorized Capital Stock.................14
SECTION 3.5 Government Approvals........................................15
SECTION 3.6 Offering of the Securities..................................15
SECTION 3.7 Brokers.....................................................15
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS............16
SECTION 4.1 Validity....................................................16
SECTION 4.2 Investment Representations..................................16
SECTION 4.3 Brokers.....................................................16
ARTICLE V. CONDITIONS....................................................16
SECTION 5.1 Conditions to the Obligations of the Purchasers.............16
SECTION 5.2 Conditions to the Obligations of the Company and
Reorganized Teletrac......................................17
ARTICLE VI. COVENANTS.....................................................18
SECTION 6.1 Rights of Inspection........................................18
SECTION 6.2 Notice of Certain Events....................................18
SECTION 6.3 Use of Proceeds.............................................18
SECTION 6.4 Merger, Sale of Assets, Etc.................................18
SECTION 6.5 Retirement of Senior Secured Notes..........................18
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<PAGE>
PAGE
SECTION 6.6 Corporate Existence.........................................19
SECTION 6.7 Reports.....................................................19
SECTION 6.8 Waiver of Stay, Extension or Usury Laws.....................19
SECTION 6.9 Restricted Payments.........................................19
SECTION 6.10 Dividend and Other Payment Restrictions
Affecting Subsidiaries....................................21
SECTION 6.11 Incurrence of Indebtedness or Issuance of
Disqualified Stock........................................23
SECTION 6.12 Transactions with Affiliates................................24
SECTION 6.13 Liens.......................................................25
SECTION 6.14 Additional Guarantees.......................................25
SECTION 6.15 Offer to Purchase Upon Change of Control....................26
SECTION 6.16 Maintenance of Properties and Insurance.....................28
SECTION 6.17 Limitation on Issuances and Sales of Capital Stock
of Subsidiaries...........................................28
SECTION 6.18 Business Activities.........................................28
SECTION 6.19 Limitation on Sales of Assets and Subsidiary Interests......28
ARTICLE VII. PREPAYMENT OF SENIOR NOTES....................................29
SECTION 7.1 Optional Prepayments........................................29
SECTION 7.2 Notice of Prepayments.......................................29
SECTION 7.3 Allocation of Payments......................................30
SECTION 7.4 Notation of Partial Payments................................30
SECTION 7.5 Direct Payment..............................................30
ARTICLE VIII. EVENTS OF DEFAULT.............................................31
SECTION 8.1 Events of Default...........................................31
SECTION 8.2 Remedies on and Notices of Default..........................32
ARTICLE IX. EXCHANGE OF SENIOR SECURED NOTES..............................32
SECTION 9.1 New Senior Secured Notes....................................32
SECTION 9.2 Replacement of Senior Secured Notes.........................33
ARTICLE X. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION..................33
SECTION 10.1 Survival of Agreements.....................................33
SECTION 10.2 General Indemnity..........................................33
SECTION 10.3 Conditions of Indemnification..............................33
SECTION 10.4 Remedies Cumulative........................................34
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<PAGE>
PAGE
ARTICLE XI. MISCELLANEOUS.................................................35
SECTION 11.1 Expenses, Etc..............................................35
SECTION 11.2 Notices....................................................35
SECTION 11.3 Brokerage..................................................35
SECTION 11.4 Parties in Interest........................................36
SECTION 11.5 Entire Agreement; Waiver; Assignment.......................36
SECTION 11.6 Counterparts...............................................36
SECTION 11.7 Governing Law..............................................36
TESTIMONIUM...................................................................16
iii
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
Exhibit A Plan of Reorganization
Exhibit B Form of 10% Senior Secured Note due [____, 2000]
Exhibit C Form of Class A Warrant
Exhibit D Security Agreement
Exhibit E Subscription Agreement
Exhibit F Agency Agreement
iv
<PAGE>
SENIOR SECURED NOTE AND CLASS A WARRANT PURCHASE AGREEMENT, dated as
of ________, 1999, among TELETRAC, INC., a Delaware corporation (the "Company"),
and the several purchasers named in Schedule 1 hereto (the "Purchasers").
WHEREAS, each of the Purchasers is either (i) a holder of an Old Note
Claim (as such term is defined in the Plan of Reorganization annexed hereto as
Exhibit A (the "Plan"), (ii) a Miscellaneous Unsecured Claim (as such term is
defined in the Plan), (iii) a holder of a Category A Convenience Claim (as such
term is defined in the Plan), or (iv) the beneficial owner of shares of common
or preferred stock ("Stock") of Teletrac Holdings, Inc., a Delaware corporation
and the parent corporation of the Company;
WHEREAS, the Company and the Purchasers have engaged in negotiations
towards a consensual reorganization of the Company's financial affairs;
WHEREAS, the Company has filed a petition pursuant to Chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code"), 11 U.S.C. Sections
101 ET SEQ., commencing proceedings (the "Chapter 11 Proceedings") in a United
States Bankruptcy Court (the "Bankruptcy Court");
WHEREAS, the Company has filed, and is seeking confirmation pursuant
to Section 1129 of the Bankruptcy Code, 11 U.S.C. Section 1129, of a Plan;
WHEREAS, the Plan provides, among other things, that on the Effective
Date (as defined in the Plan) certain distributions will be made to creditors,
and the Company's business and assets immediately prior to such Effective Date
will vest in Reorganized Teletrac (as defined in the Plan) to be known as
Teletrac, Inc.;
WHEREAS, subject to and on the terms and conditions set forth herein,
the Purchasers wish to purchase from Reorganized Teletrac, and Reorganized
Teletrac shall issue and sell to the Purchasers, the 10% Senior Secured Notes to
be due one year from the Effective Date (the "Maturity Date") in an aggregate
principal amount of up to $3 million (the "Senior Secured Notes") in
substantially the form of Exhibit B hereto and (ii) up to 3 million Class A
Warrants (the "Class A Warrants") to purchase shares of new common stock
("Warrant Shares") to be issued by Reorganized Teletrac pursuant to the Plan
(the Senior Secured Notes and Class A Warrants being hereafter referred to
collectively as the "Securities");
WHEREAS, each of the Purchasers has previously executed and delivered
a Subscription Agreement annexed hereto as Exhibit E which sets forth their
Maximum Commitment (as such term is defined in the Plan);
WHEREAS, the Purchasers, severally and not jointly, wish to purchase
the Securities, all on the terms and subject to the conditions set forth herein;
<PAGE>
WHEREAS, the Purchasers, severally and jointly, wish to enter into an
Agency Agreement by and among the Purchasers and [_____________] (the "Agent")
in substantially the form of Exhibit F hereto, whereby the Agent will exercise
certain rights and satisfy certain obligations of the Purchasers;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"ACQUIRED DEBT" means, with respect to any specified Person:
(i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging
with or into or becoming a Subsidiary of such specified Person; and
(ii) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"AFFILIATE" of a Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AFFILIATE TRANSACTION" has the meaning ascribed to it in Section 6.12
hereto.
"AGENT" has the meaning ascribed to it in the recitals hereof.
"ASSET SALE" means:
(i) the sale, lease, conveyance or other disposition (collectively
"dispositions") of any assets (including, without limitation, byway of
a sale and leaseback) in one or a series of related transactions; and
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<PAGE>
(ii) the issuance by any of Reorganized Teletrac's Subsidiaries of
Equity Interests or the disposition by Reorganized Teletrac or any of
its Subsidiaries of Equity Interests of any of their Subsidiaries,
in the case of either clause (i) or (ii) above, whether in a single transaction
or a series of related transactions: (a) that have a Fair Market Value in excess
of $5 million; or (b) for net proceeds in excess of $5 million. Notwithstanding
the foregoing: (i) the sale of inventory in the ordinary course of business;
(ii) a disposition of assets by Reorganized Teletrac to a wholly owned
Subsidiary or by a Subsidiary of Reorganized Teletrac to Reorganized Teletrac or
to a wholly owned Subsidiary of Reorganized Teletrac; (iii) an issuance of
Equity Interests by a Subsidiary of Reorganized Teletrac to Reorganized Teletrac
or to a wholly owned Subsidiary of Reorganized Teletrac; (iv) a Restricted
Payment that is permitted by Section 6.09; (v) the sale of assets that have
become worn out, obsolete or damaged or otherwise unsuitable for use in
connection with the business of Reorganized Teletrac; and (vi) any sales of
assets to Ituran Location and Control, Ltd. or any Affiliates of Ituran Location
and Control, Ltd. shall not be deemed to be Asset Sales.
"BOARD OF DIRECTORS" means the Board of Directors of Reorganized
Teletrac or any authorized committee of the Board of Directors.
"BUSINESS DAY" means any day not a Legal Holiday.
"CAPITAL STOCK" means:
(i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, and any all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(iii) in the case of a partnership, partnership interests (whether
general or limited); and
(iv) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" means:
(i) U.S. dollars;
(ii) Government Securities;
(iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition,
3
<PAGE>
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any Eligible Institution;
(iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and
(iii)above entered into with any Eligible Institution;
(v) commercial paper having the highest rating obtainable from Moody's
or S&P and in each case maturing within six months after the date of
acquisition; and
(vi) shares of any mutual funds or other pooled investment vehicles,
in each case having assets of $500 million, investing solely in
investments of the types described in (i) through (v) above.
"CHANGE OF CONTROL" means:
(i) the sale, lease, transfer, conveyance or other disposition, in one
transaction or a series of related transactions, directly or
indirectly, including through a liquidation or dissolution, of all or
substantially all of the assets of Reorganized Teletrac and its
Subsidiaries to any Person or group (as such term is used in Section
13 (d) of the Exchange Act);
(ii) the adoption of a plan relating to the liquidation or dissolution
of Reorganized Teletrac; or
(iii) any Person or group (as such term is used in Section 13(d) of
the Exchange Act), other than any of the Existing Stockholders or
their respective Affiliates, becoming the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any
such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly
or indirectly, of more than 75% of the total voting power of the
Voting Equity Interests of Reorganized Teletrac, including by way of
merger, consolidation or otherwise.
"CHANGE OF CONTROL DATE" has the meaning ascribed to such term in
Section 6.15 hereto.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period, plus, to the
extent deducted or otherwise excluded in computing such Consolidated Net Income;
4
<PAGE>
(i) an amount equal to any extraordinary loss plus any net loss
realized in connection with a sale of assets;
(ii) provision for taxes based on income or profits of such Person and
its Subsidiaries for such period;
(iii) Consolidated Interest Expense less consolidated interest income
of such Person and its Subsidiaries for such period; and
(iv) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents
an accrual of or cash charges in any future period or amortization of
a prepaid cash expense that was paid in a prior period) of such Person
and its Subsidiaries for such period;
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of a
Subsidiary shall be added to Consolidated Net Income to compute Consolidated
Cash Flow only to the extent (and in the same proportion) that the Net Income of
such Subsidiary was included in calculating the Consolidated Net Income of such
Person and only if a corresponding amount would be permitted at the date of
determination to be distributed by dividend to such Person by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Subsidiary or
its stockholders.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for
any period, the consolidated interest expense of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of original issue discount noncash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commission, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financing, and net payments (if any) pursuant
to Hedging Obligations).
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided, that:
(i) the Net Income of any Person that is accounted for by the equity
method of accounting shall be included, but only to the extent of the
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amount of dividends or distributions actually paid in cash to the
relevant Person or a wholly owned Subsidiary thereof;
(ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions
by such Subsidiary of such Net Income is not at the date of
determination permitted without any prior governmental approval (which
has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
Subsidiary or its stockholders;
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall
be excluded;
(iv) the cumulative effect of a change in accounting principles shall
be excluded; and
(v) the Net Income of any Subsidiary shall be included only to the
extent of the amount of dividends or distributions actually paid in
cash to the relevant Person or a Subsidiary thereof.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DISQUALIFIED STOCK" means, with respect to any Person, any Capital
Stock that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event:
(i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise; or
(ii) is redeemable or is convertible or exchangeable for Indebtedness
at the option of the Purchaser thereof, in whole or in part, on or
prior to the date on which the Senior Secured Notes mature.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EVENT OF DEFAULT" has the meaning assigned to it in Section 8.1
hereof.
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"EXISTING INDEBTEDNESS" means the Indebtedness of Reorganized Teletrac
in existence on the Issue Date until such amounts are repaid.
"FAIR MARKET VALUE" means, with respect to any asset, the price (after
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction; provided that the Fair Market Value of
any such asset or assets shall be determined by the Board of Directors of
Reorganized Teletrac, acting in good faith, and which determination shall be
evidenced by an Officers' Certificate delivered to the Agent.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession and which are in effect on the Issue Date.
"GUARANTEE" or "GUARANTEE" means a guarantee (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under:
(i) interest rate swap agreements;
(ii) foreign currency hedge obligations; and
(iii) other agreements or arrangements designed to protect such Person
against fluctuations in interest and foreign currency rates.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable to
the extent that any such accrued expense or trade payable is not more than 90
days overdue or is otherwise being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted, if and to the extent
any of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
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prepared in accordance with GAAP, as well as all indebtedness of others secured
by a Lien on any asset of such Person (whether or not such indebtedness is
assumed by such Person and, in the event such indebtedness is not assumed by,
and is otherwise non-recourse to, such Person, the amount of such indebtedness
shall be deemed to equal the greater of the book value or Fair Market Value of
such asset).
"INDEBTEDNESS TO CASH FLOW RATIO" means, with respect to any Person as
of any date of determination, the ratio of:
(i) total Indebtedness of such Person and its Subsidiaries as of such
date to;
(ii) four times Consolidated Cash Flow of such Person and its
Subsidiaries for the most recently ended fiscal quarter for which
financial statements of such Person are available (the "Measurement
Period");
provided, however, that: (a) in making such computation, the total Indebtedness
of such Person and its Subsidiaries shall include the total amount of funds
outstanding and available under any credit facilities; and (b) in the event such
Person or any of its Subsidiaries consummates a material acquisition or sale of
assets subsequent to the commencement of the Measurement Period, then the
Indebtedness to Cash Flow Ratio shall be calculated giving PRO FORMA effect to
such material acquisition or sale of assets as if the same had occurred at the
beginning of the Measurement Period.
"ISSUE DATE" means the date on which the Senior Secured Notes are
first delivered under this Agreement.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"NET INCOME" means, with respect to any Person, the net income (or
loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(i) any gain (but not loss), together with any related provision for
taxes on such gain (but not loss), realized in connection with: (a)
any sale of assets (including, without limitation, dispositions
pursuant to sale and leaseback transactions); or (b) the disposition
of any securities by such Person or any of its Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its
Subsidiaries; and
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(ii) any extraordinary or nonrecurring gain (but not loss), together
with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"NET PROCEEDS" means the aggregate cash consideration received by
Reorganized Teletrac or any of its Subsidiaries in respect of any Asset Sale in
the form of cash or Cash Equivalents (including, without limitation, any cash
received upon the sale or other disposition of any noncash consideration
received in any Asset Sale), net of the direct costs relating to such Asset sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any relocation expenses incurred, as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
provided that any such amount not so required to be paid for taxes shall be
deemed to constitute Net Proceeds at the time such amount is not retained for
such purpose), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets (including Equity Interests) that were
the subject of such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or asset (including Equity Interests) established in
accordance with GAAP (provided that the amount of any such reserve shall be
deemed to constitute Net Proceeds at the time such reserve shall have been
released or is not otherwise required to be retained for such purpose).
"9% NOTE INDENTURE" means the Indenture, dated as of ____________
between Teletrac, Inc. and __________________ for $15,000,000 of the 9% Notes
Due 2004.
"NON-RECOURSE DEBT" means Indebtedness:
(i) as to which neither Reorganized Teletrac nor any of its
Subsidiaries: (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness); (b) is directly or indirectly liable (as a guarantor or
otherwise); or (c) constitutes the lender;
(ii) no default with respect to which would permit (upon notice, lapse
of time or both) any holder of any other Indebtedness of Reorganized
Teletrac or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of Reorganized
Teletrac or any of its Subsidiaries.
"OFFICER" means the Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Secretary or the Controller of Reorganized
Teletrac.
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"OFFICERS' CERTIFICATE" means a certificate signed (a) by the Chairman
or Vice Chairman of the Board of Directors, President or a Vice President, and
(b) by the Treasurer, Secretary, or an Assistant Treasurer or an Assistant
Secretary of Reorganized Teletrac and delivered to the Agent as required by the
terms of this Indenture; provided that, in the event an Officer of Reorganized
Teletrac holds a position set forth in both (a) and (b), such Officer may sign
an Officers' Certificate only in his capacity as an Officer under Clause (a) or
Clause (b), but not both.
"PERMITTED BANK REFINANCING" means (a) any refinancing, renewal,
extension, refunding or amendment of the Senior Credit Agreement (or any prior
such refinancing, renewal, extension, refunding or amendment) which does not
increase, or thereafter permit the increase of, the aggregate principal amount
of such Indebtedness beyond the maximum aggregate principal amount of
Indebtedness then outstanding or permitted to be incurred under the Senior
Credit Agreement (or such prior refinancing, renewal, extension or refunding
thereof or amendment thereto), and (b) any other Indebtedness of Reorganized
Teletrac or any Subsidiary of Reorganized Teletrac, to banks and/or other
financial institutions, up to an aggregate principal amount at any time
outstanding of $20 million and where the proceeds of such Indebtedness are used
to pay, prepay or redeem all (but not less than all) of the principal and
interest outstanding on the Senior Secured Notes.
"PERMITTED INVESTMENT" means:
(i) any Investment in Reorganized Teletrac or in any wholly owned
Subsidiary of Reorganized Teletrac;
(ii) any Investment in Cash Equivalents;
(iii) Investments by Reorganized Teletrac or any of its Subsidiaries
in a Person if, as a result of such Investment: (a) such Person
becomes a wholly owned Subsidiary of Reorganized Teletrac; (b) such
Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, Reorganized Teletrac or any wholly owned Subsidiary
of Reorganized Teletrac;
(iv) any Investments made solely as a result of the receipt of
non-Cash Consideration from an Asset Sale that was made pursuant to
and in compliance with Section 6.19; and
(v) any Investment made by Reorganized Teletrac or any of its
Subsidiaries in a Related Business;
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provided that, at any time any such Investment is made, such Investment will not
cause the aggregate amount of Investments at any one time outstanding under this
clause (v) to exceed $6 million.
"PERMITTED LIENS" means:
(i) Liens securing the Senior Secured Notes;
(ii) Liens in favor of Reorganized Teletrac;
(iii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with Reorganized Teletrac or any of its
Subsidiaries, provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with
Reorganized Teletrac or such Subsidiary;
(iv) Liens on property existing at the time of acquisition thereof by
Reorganized Teletrac or any of its Subsidiaries, provided that such
Liens were in existence prior to the contemplation of such
acquisition;
(v) Liens to secure the performance of statutory obligations, surety,
appeal or performance bonds or other obligations of a like nature or
mechanics' or purchase money Liens incurred in the ordinary course of
business;
(vi) Liens existing on the Issue Date;
(vii) Liens on inventory or accounts receivable securing Indebtedness
incurred in accordance with Section 6.11(vi) hereof or securing
Permitted Refinancing Indebtedness incurred pursuant hereto to
refinance Indebtedness in accordance with Section 6.11(vi) hereof;
(viii) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made
therefor;
(ix) Liens on assets of Subsidiaries that secure Non-Recourse Debt of
Subsidiaries;
(x) Liens securing Indebtedness under the Senior Credit Agreement;
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(xi) Liens securing Indebtedness incurred pursuant to Section
6.11(viii) hereof; and
(xii) Liens securing Indebtedness described in Section 6.10(iv)(h) or
Section 6.11(ix) hereof.
"PERMITTED REFINANCING INDEBTEDNESS" has the meaning set forth in
Section 6.11 hereof.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity of
any kind.
"PREFERRED EQUITY INTEREST" in any Person, means an Equity Interest of
any class or classes (however designated) which is preferred as to the payment
of dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over Equity
Interests of any other class in such Person.
"REFINANCED INDEBTEDNESS" has the meaning assigned to it in Section
6.11 hereof.
"RELATED ASSETS" means all assets used in connection with the design,
development, procurement, installation, operation or marketing of location or
related two-way messaging systems and any activities or assets ancillary
thereto.
"RELATED BUSINESS" means any business relating to the design,
procurement, installation and operation of location, fleet management or related
two-way messaging systems and business and reasonably related extensions
thereof.
"RESTRICTED INVESTMENT" means an Investment other than a Permitted
Investment.
"SUBSIDIARY" means, with respect to a Person, (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any other Person (other than a corporation) in which such
Person, one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries, directly or indirectly, at the date of determination thereof, has
at least a majority ownership interest.
"U.S." OR "UNITED STATES" means the United States of America.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
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of the products obtained by multiplying: (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
of such Indebtedness.
ARTICLE II.
PURCHASE AND SALE OF THE SECURITIES
SECTION 2.1 PURCHASE AND SALE OF SECURITIES. (a) Reorganized Teletrac
has notified each of the Purchasers, in writing, that it wishes to issue and
sell ___% (hereafter, the "Specified Percentage") of Senior Secured Notes and
Class A Warrants.
(b) On the Effective Date, (A) each Purchaser shall deliver payment,
to Reorganized Teletrac, by wire transfer of immediately available funds in
amounts equal to the Specified Percentage multiplied by the Commitment Amount
listed beside such Purchaser's name on Schedule 1 hereto (the "Commitment
Amount"), as determined in accordance with the Plan; and (B) in exchange for
payment by each Purchaser of the Specified Percentage of its Commitment Amount,
Reorganized Teletrac shall issue and sell to each Purchaser Senior Secured Notes
in the principal amount of its Commitment Amount (as set forth in Schedule 1)
multiplied by the Specified Percentage and Class A Warrants in the amount of its
Commitment Amount multiplied by the Specified Percentage.
(c) Notwithstanding anything in this Section 2.1 to the contrary, in
the event that any Purchaser shall have an outstanding loan to the Company
constituting a DIP Loan (as defined in the Plan), then, on the Effective Date,
Reorganized Teletrac shall apply the outstanding principal amount and any
accrued interest due to such Purchaser in respect of such loan to payment of the
amounts due from the Purchaser pursuant to Section 2.1(c) hereof, and Purchaser
shall, on the Closing Date, remit to Reorganized Teletrac the balance, if any,
of the amounts due by Purchaser hereunder in accordance with the provisions of
Section 2.1(c).
SECTION 2.2 CLOSING DATES. The Closing Date shall be subject to all of
the conditions specified in Article IV of this Agreement having been met and
shall occur on the Effective Date (as defined in the Plan).
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to and conditioned upon the Bankruptcy Court Approval (as
hereafter defined), the Company represents and warrants to each Purchaser, and
Reorganized Teletrac shall be deemed to have represented and warranted to each
Purchaser, that, as of the Effective Date:
SECTION 3.1 ORGANIZATION, QUALIFICATIONS AND CORPORATE POWER.
Reorganized Teletrac shall be a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware and is duly
licensed or qualified to do business as a foreign corporation in each
jurisdiction in which the nature of its business or the ownership of its
properties makes such licensing or qualification necessary and where the failure
to be so licensed or qualified would have a material adverse effect on the
business, operations or financial condition of the Company (a "Material Adverse
Effect"); shall have the corporate power and authority (i) to own and hold its
properties and to carry on its business as currently conducted, (ii) to execute,
deliver and perform this Agreement and the Security Agreement, substantially in
the form of Exhibit "D" attached hereto (the "Security Agreement"), (iii) to
issue, sell and deliver the Securities hereunder, and (iv) to issue and deliver
the shares of Common Stock issuable upon exercise of the Warrants (the "Warrant
Shares").
SECTION 3.2 AUTHORIZATION OF AGREEMENTS, ETC. (a) The execution and
delivery by the Company of this Agreement and the Security Agreement, the
performance by Reorganized Teletrac of its obligations hereunder and thereunder,
the issuance, sale and delivery of the Securities and the issuance and delivery
of the Warrant Shares upon exercise of the Warrants shall have been duly
authorized by all requisite corporate action and will not violate any provision
of law, any order of any court or other agency of government, the Articles of
Incorporation or By-laws of Reorganized Teletrac, or any provision of any
indenture, agreement or other instrument to which it is a party or by which any
of its properties or assets is bound, or conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of Reorganized Teletrac.
(b) The Warrant Shares shall have been duly reserved by Reorganized
Teletrac for issuance upon exercise of the Warrants, and, when so issued and
delivered, will be duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock of Reorganized Teletrac.
SECTION 3.3 VALIDITY. This Agreement shall have been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company and Reorganized Teletrac, enforceable against Reorganized
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Teletrac in accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency and similar laws and to moratorium laws from time to
time in effect). The Security Agreement, when executed and delivered in
accordance with this Agreement, will constitute a legal, valid and binding
obligation of Reorganized Teletrac, enforceable against Reorganized Teletrac in
accordance with its terms (subject as aforesaid).
SECTION 3.4 POST-RESTRUCTURING AUTHORIZED CAPITAL STOCK. (a) The
authorized capital stock of Reorganized Teletrac on the Effective Date shall
consist of 20,000,000 shares of Common Stock, $.01 par value.
(b) Except for the Class A Warrants issued pursuant to this Securities
Purchase Agreement, and the Class B Warrants and Incentive Options (each as
defined in the Plan), there shall be no subscription, warrant, option,
convertible security or other right (contingent or other) to purchase or acquire
any shares of any class of capital stock of Reorganized Teletrac, and, except as
contemplated by the Plan, there shall not be any commitment of Reorganized
Teletrac to issue any shares, warrants, options or other such rights or to
distribute to holders of any class of its capital stock any evidences of
indebtedness or assets, or any obligation on the part of Reorganized Teletrac
(contingent or other) to purchase, redeem or otherwise acquire any shares of its
capital stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof.
SECTION 3.5 GOVERNMENT APPROVALS. Except for the approvals of the
Bankruptcy Court, no registration or filing with, or consent or approval of, or
other action by, any federal, state or other governmental agency or
instrumentality is or will be necessary for (i) the valid execution, delivery
and performance of this Agreement or the Security Agreement, or (ii) the
issuance, sale and delivery of the Securities hereunder or the issuance and
delivery of the Warrant Shares upon exercise of the Class A Warrants.
SECTION 3.6 OFFERING OF THE SECURITIES. Neither the Company,
Reorganized Teletrac nor any person authorized or employed by the Company or
Reorganized Teletrac as agent, broker, dealer or otherwise in connection with
the offering or sale of the Senior Secured Notes, the Class A Warrants or any
similar securities of Reorganized Teletrac shall have offered any such
securities for sale to, or solicited any offers to buy any such securities from,
or otherwise approached or negotiated with respect thereto with any person or
persons under circumstances that involved the use of any form of general
advertising or solicitation as such terms are defined in Regulation D of the
Securities Act of 1933, as amended (the "Securities Act"), and neither the
Company, Reorganized Teletrac nor any person acting on the Company's or
Reorganized Teletrac's behalf shall have taken or will take any action
(including, without limitation, any offer, issuance, sale or delivery of any
securities of Reorganized Teletrac under circumstances which might require the
integration of such transactions with the placement of the Secured Senior Notes
or the Class A Warrants under the Securities Act or the rules and regulations of
the Securities and Exchange Commission thereunder) which might subject the
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offering, issuance, sale or delivery of the Senior Secured Notes or the Warrants
hereunder to the registration provisions of the Securities Act.
SECTION 3.7 BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by the Company
directly with the Purchasers, without the intervention of any other person on
behalf of the Company in such manner as to give rise to any valid claim by any
other person against the Purchasers for a finder's fee, brokerage commission or
similar payment.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser represents and warrants to the Company as follows:
SECTION 4.1 VALIDITY. This Agreement has been duly executed and
delivered by such Purchaser and constitutes the legal, valid and binding
obligation of such Purchaser, enforceable in accordance with its terms (subject
to applicable bankruptcy, reorganization, insolvency and similar laws and to
moratorium laws from time to time in effect).
SECTION 4.2 INVESTMENT REPRESENTATIONS. Such Purchaser is an
"accredited investor" as such term is defined in Regulation D under the
Securities Act and is acquiring the Securities, and, upon exercise of the
Warrants, will acquire the Warrant Shares, for his or its own account for the
purpose of investment and not with a view to or for sale in connection with any
distribution thereof. Each Purchaser further represents that he or it
understands that (i) the Senior Secured Notes, the Class A Warrants and the
Warrant Shares have not been registered under the Securities Act by reason of
their issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof, (ii) such securities must be
held indefinitely unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration, (iii) such securities
will bear a legend to such effect and (iv) Reorganized Teletrac will make a
notation on its transfer books to such effect. Each Purchaser further
understands that the exemption from registration afforded by Rule 144 under the
Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Senior Secured Notes, the
Class A Warrants and/or the Warrant Shares, as the case may be, in limited
amounts under certain conditions.
SECTION 4.3 BROKERS. All negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by such Purchaser
directly with the Company, without the intervention of any other person on
behalf of such Purchaser in such manner as to give rise to any valid claim by
any other person against the Company for a finder's fee, brokerage commission or
similar payment.
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ARTICLE V.
CONDITIONS
SECTION 5.1 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS. The
obligation of each Purchaser to purchase and pay for the Securities being
purchased by such Purchaser on the Effective Date is, at the option of such
Purchaser, subject to the satisfaction, on or before such date, of each of the
following conditions:
(a) BANKRUPTCY APPROVAL. An order shall have been entered by the
Bankruptcy Court confirming the Plan of Reorganization pursuant to Section 1129
of the Bankruptcy Code, 11 U.S.C. Section 1129, and approving this Agreement and
the transactions contemplated hereby, and there shall not be a stay or
injunction in effect with respect thereto (hereinafter, the "Bankruptcy Court
Approval").
(b) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The
representations and warranties of the Company and Reorganized Teletrac contained
in Article III of this Agreement shall be true and correct on and as of the
Effective Date, with the same force and effect as though such representations
and warranties had been made on and as of such date, and the Company and
Reorganized Teletrac shall have certified to such effect to the Purchasers in
writing.
(c) PERFORMANCE. The Company and Reorganized Teletrac shall have
performed and complied with all agreements and conditions contained herein
required to be per formed or complied with by it prior to or at the Effective
Date, and the Company shall have certified to such effect to the Purchasers in
writing.
(d) SECURITY AGREEMENT. The Security Agreement shall have been
executed and delivered by the Company and Reorganized Teletrac and the security
interests granted thereby shall have been perfected.
SECTION 5.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND
REORGANIZED TELETRAC. The obligation of Reorganized Teletrac to issue, sell and
deliver the Securities on the Initial Closing Date is, at its option, subject to
the satisfaction, on or before such date, of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TO BE TRUE AND CORRECT. The repre
sentations and warranties of each Purchaser contained in Article IV of this
Agreement shall be true and correct on and as of the Effective Date, with the
same force and effect as though such representations and warranties had been
made on and as of such date.
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(b) PERFORMANCE. Each Purchaser shall have performed and complied with
all agreements and conditions contained herein required to be performed or
complied with by such Purchaser prior to or at the Effective Date.
(c) ALL PROCEEDINGS TO BE SATISFACTORY. All corporate, partnership or
other proceedings to be taken by any Purchaser in connection with the
transactions contemplated hereby and all documents incident thereto shall be
satisfactory in form and substance to the Company and Reorganized Teletrac and
its counsel.
ARTICLE VI.
COVENANTS
SECTION 6.1 RIGHTS OF INSPECTION. So long as any Senior Secured Notes
shall remain outstanding, Reorganized Teletrac Company shall permit authorized
representatives of any Purchaser to visit and inspect any of the properties of
Reorganized Teletrac and examine and make abstracts of any of its books and
records, upon reasonable notice, at any time during normal business hours and as
often as may be reasonably requested. Each Purchaser agrees that any such
inspection shall be conducted in a manner that does not unreasonably disrupt or
interfere with Reorganized Teletrac's operations and that such Purchaser will
keep confidential any confidential business information or trade secrets that
may be disclosed or provided to it by Reorganized Teletrac pursuant to this
Agreement.
SECTION 6.2 NOTICE OF CERTAIN EVENTS. So long as any Senior Secured
Notes shall remain outstanding, Reorganized Teletrac shall give the Purchasers
prompt notice of (i) any event of default under any agreement with respect to
indebtedness for borrowed money or a purchase money obligation, and any event
which, upon notice or lapse of time or both, would constitute such an event of
default, that would permit the holder of such indebtedness or obligation to
accelerate the maturity thereof, and (ii) any action, suit or proceeding at law
or in equity or by or before any governmental instrumentality or agency which,
if adversely determined, would materially impair the right of Reorganized
Teletrac to carry on its business substantially as now or then conducted, or
would have a Material Adverse Effect.
SECTION 6.3 USE OF PROCEEDS. Reorganized Teletrac shall apply the
proceeds from the sale of the Securities hereunder to fund (i) the payment of
any DIP Loan and (ii) other general corporate purposes.
SECTION 6.4 MERGER, SALE OF ASSETS, ETC. So long as any Senior Secured
Notes shall remain outstanding, Reorganized Teletrac shall not, and shall not
permit any of its subsidiaries to, (i) merge or consolidate with or into any
other corporation (other than the consolidation or merger of a wholly owned
subsidiary with or into the Company) or (ii) sell, lease or otherwise dispose of
all or a substantial portion of its assets and properties, without the
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consent, in writing, of holders of at least 75% in amount of the outstanding
principal amount of the Senior Secured Notes, unless such notes and all accrued
interest thereon shall be paid in full at the closing of any such transaction.
SECTION 6.5 RETIREMENT OF SENIOR SECURED NOTES. Upon the sale of the
Miami Business as such term is defined in and pursuant to the Asset Purchase and
Option Agreement dated as of June 9, 1999, among the Company, Teletrac
Licensing, Inc., Ituran U.S.A., Inc. and Ituran Location and Control Ltd.,
Reorganized Teletrac covenants and agrees that, it shall apply any proceeds
received from such sale to prepay the Senior Secured Notes as provided in
Article VII hereto.
SECTION 6.6 CORPORATE EXISTENCE. Subject to the provisions of Section
6.4, Reorganized Teletrac shall preserve and keep in full force and effect its
corporate existence and the corporate existence of each of its Subsidiaries in
accordance with the respective organizational documents of each and their
respective rights (charter and statutory), licenses and franchises, PROVIDED
THAT Reorganized Teletrac shall not be required to preserve any such right,
license or franchise, or the corporate existence of any Subsidiary, if the loss
thereof, in the good faith judgment of the Board of Directors of Reorganized
Teletrac is not, and will not be, adverse in any material respect to the
Purchasers.
SECTION 6.7 REPORTS. So long as any Senior Secured Notes are
outstanding, Reorganized Teletrac will furnish to the Purchasers of Senior
Secured Notes all periodic reports required to be filed by the rules and
regulations of the Securities and Exchange Commission.
SECTION 6.8 WAIVER OF STAY, EXTENSION OR USURY LAWS. Reorganized
Teletrac 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, which would prohibit or forgive Reorganized Teletrac from paying all or any
portion of the principal of and/or interest on the Senior Secured Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Agreement; and (to the
extent that it may lawfully do so) Reorganized Teletrac 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 Agent, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 6.9 RESTRICTED PAYMENTS. (a) Reorganized Teletrac shall not,
and shall not permit any of its Subsidiaries, to, directly or indirectly:
(i) declare or pay any dividend or make any distribution on
account of any Equity Interests of Reorganized Teletrac (including,
without limitation, any payment in connection with any merger or
consolidation involving Reorganized Teletrac or any of its
Subsidiaries), other than dividends or distributions payable (a) in
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Equity Interests (other than Disqualified Stock) of Reorganized
Teletrac or (b) to Reorganized Teletrac or to any Subsidiary of
Reorganized Teletrac;
(ii) purchase, redeem, defease, retire or otherwise acquire or
retire for value any Equity Interests of Reorganized Teletrac or any
Affiliate of Reorganized Teletrac, other than any such Equity
Interests owned by Reorganized Teletrac or any Subsidiary of
Reorganized Teletrac;
(iii) voluntarily purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is expressly subordinated in
right of payment to the Senior Secured Notes, except in accordance
with the scheduled mandatory redemption or repayment provisions set
forth in the original documentation governing such Indebtedness; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively
referred to as"Restricted Payments"), unless, at the time of and after
giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(2) Reorganized Teletrac would, at the time of such Restricted
Payment and after giving PRO FORMA effect thereto as if such
Restricted Payment had been made at the beginning of the
immediately preceding fiscal quarter, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the
Indebtedness to Cash Flow Ratio test set forth in the first
paragraph of Section 6.11 hereof; and
(3) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by Reorganized Teletrac and its
Subsidiaries after the Issue Date (excluding Restricted Payments
permitted by clause (iii) of the next succeeding paragraph), is
less than the sum (without duplication) of:
(A) 50% of the Consolidated Net Income of Reorganized
Teletrac (taken as one accounting period) from the beginning
of the first fiscal quarter commencing after the Issue Date
to the end of Reorganized Teletrac's most recently ended
fiscal quarter for which financial statements are available
at the time of such Restricted Payment (or, if such
aggregate Consolidated Net Income for such period is a
deficit, less 100% of such deficit); plus
(B) 100% of the aggregate net cash proceeds received by
Reorganized Teletrac from the issue or sale, since the Issue
Date, of Equity Interests of Reorganized Teletrac or of debt
securities of Reorganized Teletrac that have been converted
into such Equity Interests (other than (x) Equity Interests
(or convertible debt securities) sold to a Subsidiary of
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Reorganized Teletrac and (y) Disqualified Stock or debt
securities that have been converted into Disqualified Stock;
plus
(C) to the extent that any Restricted Investment that was
made after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (x) the cash
return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (y) the initial
amount of such Restricted Investment.
(b) The provisions set forth in paragraph (a) above shall not
prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Agreement;
(ii) the redemption, repurchase, retirement or other acquisition
of any Equity Interests of Reorganized Teletrac in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than
to a Subsidiary of Reorganized Teletrac) of other Equity Interests of
Reorganized Teletrac (other than any Disqualified Stock); provided
that the amount of any such proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be
excluded from clause (3)(B) of paragraph (a) above;
(iii) the repayment, defeasance, redemption or repurchase of
Intercompany Indebtedness or Indebtedness with the net cash proceeds
from an incurrence of Permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Subsidiary of
Reorganized Teletrac) of Equity Interests of Reorganized Teletrac
(other than Disqualified Stock); provided that the amount of any such
net cash proceeds that are utilized for any such repayment,
defeasance, redemption or repurchase shall be excluded from clause
(3)(B) of paragraph (a) above; and
(iv) the purchase of employee stock or incentive options, or
capital stock issued pursuant to the exercise of employee stock or
incentive options or pursuant to employee restricted stock purchase
plans in an aggregate amount not to exceed $500,000 in any calendar
year and in an aggregate amount not to exceed $2.0 million since the
date of this Agreement, provided, however, that at the time of, and
after giving effect to, any Restricted Payment permitted under clauses
(i), (ii) and (iv), no Default or Event of Default shall have occurred
and be continuing.
(c) The amount of all Restricted Payments, if not made in cash, shall
be the Fair Market Value on the date of the Restricted Payment of the asset(s)
proposed to be transferred by Reorganized Teletrac or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than the date of
making any Restricted Payment, Reorganized Teletrac shall deliver to the Agent
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an Officers's Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this covenant
were computed, which calculations may be based upon the latest available
financial statements of Reorganized Teletrac.
SECTION 6.10 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. Reorganized Teletrac shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary to:
(i) pay dividends or make any other distributions to Reorganized
Teletrac or any of its Subsidiaries on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits;
(ii) pay any Indebtedness owed to Reorganized Teletrac or any of its
Subsidiaries;
(iii) make loans or advances to Reorganized Teletrac or any of its
Subsidiaries; or
(iv) transfer any of its properties or assets to Reorganized Teletrac
or any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of:
(a) this Agreement and the Senior Secured Notes;
(b) Existing Indebtedness;
(c) applicable law;
(d) any instrument governing Indebtedness or Capital Stock of a
Person acquired by Reorganized Teletrac or any of its
Subsidiaries as in effect at the time of such acquisition (except
to the extent such Indebtedness was incurred in connection with
or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or
assets of the Person, so acquired;
(e) customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past
practice;
(f) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the
nature described in clause (iv) above on the property so
acquired;
(g) Permitted Refinancing Indebtedness; provided that the
restrictions contained in the agreements governing such Permitted
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Refinancing Indebtedness are no more restrictive than those
contained in the agreements governing the Refinanced
Indebtedness;
(h) Indebtedness of a Subsidiary of Reorganized Teletrac
representing loans or Indebtedness which is (A) incurred on the
basis of a pledge of accounts receivable due for the sale or
lease of equipment, air time, or maintenance services to
customers and (B) is without recourse to the assets of the
Company or such Subsidiary except those assets set forth in
subsection (A); or
(i) in the case of clause (a), (b), (d), (e), (f), (g) and (h)
above, any amendments, modifications, restatements, renewals,
increases, supplements, modifications, restatements or
refinancings thereof, provided that such amendments,
modifications, restatements or refinancings are not materially
more restrictive with respect to such dividend and other payment
restrictions than those contained in such instruments as in
effect on the date of their incurrence.
SECTION 6.11 INCURRENCE OF INDEBTEDNESS OR ISSUANCE OF DISQUALIFIED
STOCK. Reorganized Teletrac shall not, and Reorganized Teletrac shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable, contingently
or otherwise, with respect to (collectively, "incur") any Indebtedness
(including, without limitation, Acquired Debt) and Reorganized Teletrac and its
Subsidiaries shall not, issue any Disqualified Stock and will not permit any of
their respective Subsidiaries to issue any shares of Preferred Equity Interest;
provided, however, that, Reorganized Teletrac may incur Indebtedness (including,
without limitation, Acquired Debt) or issue Disqualified Stock if, after giving
PRO FORMA effect to the incurrence of such Indebtedness or the issuance of such
Disqualified Stock and the use of proceeds thereof, the aggregate Indebtedness
to Cash Flow Ratio of Reorganized Teletrac does not exceed 5.0 to 1. The
foregoing limitations will not apply to:
(i) Indebtedness represented by the Senior Secured Notes and this
Agreement;
(ii) Existing Indebtedness;
(iii) Indebtedness incurred by Reorganized Teletrac under (A) Hedging
Obligations, provided that (1) the notional principal amount of any
interest rate protection agreement does not significantly exceed the
principal amount of the Indebtedness to which such interest rate protection
agreement relates and (2) any agreements related to fluctuations in
currency rates do not increase the outstanding Indebtedness other than as a
result of fluctuations in foreign currency exchange rates, and (B)
performance, surety and workers' compensation bonds or other obligations of
a like nature incurred in the ordinary course of business consistent with
past practice;
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(iv) Indebtedness of Reorganized Teletrac owed to and held by any of
its Subsidiaries and Indebtedness of any Subsidiaries of Reorganized
Teletrac owed to and held by Reorganized Teletrac or any of its
Subsidiaries (the Indebtedness incurred pursuant to this clause (iv) being
hereafter referred to as "Intercompany Indebtedness"); provided that an
incurrence of Indebtedness shall be deemed to have occurred upon any sale
or other disposition of Intercompany Indebtedness to a Person other than
Reorganized Teletrac or any of its Subsidiaries;
(v) Non-Recourse Debt by Reorganized Teletrac incurred to finance
purchase money obligations;
(vi) Indebtedness incurred by Reorganized Teletrac under the 9% Note
Indenture, provided that the aggregate principal amount at any time
outstanding under this clause (vi) does not exceed $15 million less the
amount of any such Indebtedness retired with the Net Cash Proceeds from any
Asset Sale (or less the permanent reduction of any commitments under the 9%
Note Indenture), and less the aggregate principal amount of Indebtedness
under this clause (vi) which is refinanced under clause (vii) below;
(vii) Indebtedness incurred by Reorganized Teletrac ("Permitted
Refinancing Indebtedness") incurred to refinance, replace or refund
Indebtedness ("Refinanced Indebtedness") incurred pursuant to the
Indebtedness to Cash Flow Ratio test set forth in the first paragraph of
this covenant or pursuant to clauses (i), (ii) or (vi) of this covenant
provided that:
(a) the aggregate principal amount of such Permitted Refinancing
Indebtedness does not exceed the aggregate principal amount of the
Refinanced Indebtedness (including accrued and unpaid interest
thereon) plus the amount of fees and reasonable expenses incurred in
connection therewith;
(b) such Permitted Refinancing Indebtedness shall have final
maturity equal to or greater than, and a Weighted Average Life to
Maturity equal to or greater than, the final maturity and Weighted
Average Life to Maturity of the Refinanced Indebtedness, respectively;
and
(c) such Permitted Refinancing Indebtedness shall rank no higher
relative to the Senior Secured Notes than the Refinanced Indebtedness
and in no event may any Indebtedness of Reorganized Teletrac be
refinanced with Indebtedness of any Subsidiary under this clause
(vii); and
(viii) any Indebtedness of Reorganized Teletrac in an aggregate
principal amount (including the amounts outstanding pursuant to this
Agreement not to exceed $10.0 million at any one time outstanding.
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(ix) Indebtedness of a Subsidiary of Reorganized Teletrac representing
loans or Indebtedness which is (A) incurred on the basis of a pledge of
accounts receivable due for the sale or lease of equipment, air time or
maintenance services to customers and (B) is without recourse to the assets
of the Company or such Subsidiary except those assets set forth in
subsection (A).
SECTION 6.12 TRANSACTIONS WITH AFFILIATES. Reorganized Teletrac shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
sell, lease, license, transfer or otherwise dispose of any of its properties or
assets to, or purchase any properly or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless: (i) such Affiliate Transaction is on terms that are no less favorable to
Reorganized Teletrac or such Subsidiary than those that would have been obtained
in a comparable arm's length transaction by Reorganized Teletrac or such
Subsidiary with an unrelated Person; and (ii) Reorganized Teletrac delivers to
the Agent: (a) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $2.0 million, a resolution of the Board of Directors
of Reorganized Teletrac set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (i) above and such Affiliate
Transaction is approved by a majority of the disinterested members of the Board
of Directors; and (b) with respect to any Affiliate Transaction involving
aggregate consideration in excess of $5.0 million, an opinion as to the fairness
of such Affiliate Transaction to Reorganized Teletrac or Subsidiary involved in
such Affiliate Transaction from a financial point of view issued by an
Independent Financial Advisor or, with respect to communications-related
matters, a recognized expert in the communications industry; provided, that the
following shall be deemed not to be Affiliate Transactions: (1) any reasonable
employment agreement or stock option agreement entered into by Reorganized
Teletrac or any of its Subsidiaries with any of their respective employees in
the ordinary course of business; (2) transactions between or among Reorganized
Teletrac and its Subsidiaries; (3) Restricted Payments permitted by clauses (i)
and (ii) of the second paragraph of Section 6.9 hereof and Permitted Investments
of a type referred to in clauses (i) and (iii) of the definition of Permitted
Investments; (4) the payment of reasonable fees to directors of Reorganized
Teletrac or any of its Subsidiaries; and (5) Affiliate Transactions pursuant to
agreements in effect on the date of this Indenture and described in the
Disclosure Statement and renewals and extensions of such agreements on terms no
less favorable to the Purchasers than the terms of such original agreements and
transactions. Notwithstanding the foregoing, no transactions with, or for the
benefit of the Purchasers, shall be deemed an Affiliate Transaction pursuant to
this Section 6.12.
SECTION 6.13 LIENS. Reorganized Teletrac shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom, or assign or convey any right to receive income
therefrom, except Permitted Liens. Notwithstanding the foregoing, Reorganized
Teletrac shall not, and shall not permit any of its Subsidiaries to directly or
indirectly create, incur, assume or suffer to exit any Liens or any of the
Collateral (as such term is defined in the Security Agreement) (other than the
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Liens incurred pursuant to this Agreement in favor of the Purchasers) and shall
not, and shall not permit any of its Subsidiaries directly or indirectly impair
the effectiveness of the Liens incurred pursuant to this Agreement in favor of
the Purchasers.
SECTION 6.14 ADDITIONAL GUARANTEES. Reorganized Teletrac will not
permit any Subsidiary, directly or indirectly, to Guarantee any Indebtedness
(other than Permitted Indebtedness) of Reorganized Teletrac ("Guaranteed
Indebtedness"), unless (i) such Subsidiary simultaneously executes and delivers
to the Agent an amendment to this Agreement pursuant to Section ____ hereto
providing for a Guarantee ("Subsidiary Guarantee") of payment by such Subsidiary
of all of Reorganized Teletrac's obligations under the Senior Secured Notes and
this Agreement on the terms set forth in this Agreement and (ii) such 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 Reorganized Teletrac or any other Subsidiary as a result of any
payment by such Subsidiary under its Subsidiary Guarantee; provided that this
paragraph shall not be applicable to any Guarantee of any Subsidiary that
existed at the time such Person became a Subsidiary and was not incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary. If
the Guaranteed Indebtedness is (a) PARI PASSU with the Senior Secured Notes,
then the Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Senior
Secured 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 Senior Secured 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 Reorganized Teletrac, of all of Reorganized
Teletrac's and each Subsidiary's Capital Stock in, or all or substantially all
the assets of, such Subsidiary (which sale, exchange or transfer is not
prohibited under the terms of this Agreement) or (ii) the release or discharge
of the Guarantee that resulted in the creation of such Subsidiary guarantee,
except a discharge or release by or as a result of payment under such Guarantee.
SECTION 6.15 OFFER TO PURCHASE UPON CHANGE OF CONTROL. (a) Upon the
occurrence of a Change of Control, each Purchaser shall have a right to require
Reorganized Teletrac to repurchase all or any part of such Purchaser's Senior
Secured Notes pursuant to the offer described below (the "Change of Control
Offer") at an offer price in cash equal to 100% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon to the date of purchase
(the"Change of Control Payment"). Within 20 days following the date upon which
the Change of Control occurred (the "Change of Control Date"), Reorganized
Teletrac shall send, by first class mail, a notice to each Purchaser, with a
copy to the Agent, which notice shall govern the terms of the Change of Control
Offer. The notice to the Purchasers shall contain all instructions and materials
necessary to enable such Purchasers to tender Senior Secured Notes pursuant to
the Change of Control Offer. Such notice shall state:
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(i) that the Change of Control Offer is being made pursuant to this
Section 6.15 and that all Senior Secured Notes tendered and not withdrawn
shall be accepted for payment;
(ii) the purchase price (including the amount of accrued interest) and
the purchase date (which shall be no earlier than 30 days nor later than 45
days from the date such notice is mailed, other than as may be required by
law) (the "Change of Control Payment Date");
(iii) that any Senior Secured Note not tendered will continue to
accrue interest;
(iv) that, unless Reorganized Teletrac defaults in making payment
therefor, any Senior Secured Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(v) that Purchasers electing to have a Senior Secured Note purchased
pursuant to a Change of Control Offer will be required to surrender the
Senior Secured Note, with the form entitled "Option of Purchaser to Elect
Purchase" on the reverse of the Senior Secured Note completed, to the Agent
at the address specified in the notice prior to the close of business on
the third Business Day prior to the Change of Control Payment Date;
(vi) that Purchasers will be entitled to withdraw their election if
the Agent receives, not later than five Business Days prior to the Change
of Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Purchaser, the principal amount of the
Senior Secured Notes the Purchaser delivered for purchase and a statement
that such Purchaser is withdrawing such Purchaser's election to have such
Senior Secured Notes purchased;
(vii) that Purchasers whose Senior Secured Notes are purchased only in
part will be issued new Senior Secured Notes in a principal amount equal to
the unpurchased portion of the Senior Secured Notes surrendered; and
(viii) the circumstances and relevant facts regarding such Change of
Control.
(b) On or before the Change of Control Payment Date, Reorganized
Teletrac shall to the extent lawful (i) accept for payment all Senior Secured
Notes or portions thereof property tendered pursuant to the Change of Control
Offer, (ii) deposit with the Agent in U.S. dollars, an amount equal to the
Change of Control Payment in respect of all Senior Secured Notes or portions
thereof so tendered and (iii) deliver or cause to be delivered to the Agent the
Senior Secured Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Senior Secured Notes or portions thereof being
purchased by Reorganized Teletrac. The Agent shall promptly mail to each
Purchaser of Senior Secured Notes so accepted the Change of Control Payment for
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such Senior Secured Notes, and the Agent shall promptly authenticate and mail
(or cause to be transferred by book entry) to such Purchasers a new Note equal
in principal amount to any unpurchased portion of the Senior Secured Notes
surrendered. Any Senior Secured Notes not so accepted shall be promptly mailed
by Reorganized Teletrac to the Purchaser thereof. Any amounts remaining after
the purchase of Senior Secured Notes pursuant to a Change of Control Offer shall
be returned by the Agent to Reorganized Teletrac. To the extent the provisions
of any securities laws or regulations conflict with the provisions under this
Section 6.15, Reorganized Teletrac shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 6.15 by virtue thereof.
(c) The provisions of Subsections (a) and (b) above shall not apply if
a third party makes the Change of Control Offer in the manner, at the time and
otherwise in compliance with the requirements set forth in this Agreement
applicable to a Change of Control Offer made by Reorganized Teletrac and
purchases all Senior Secured Notes validly tendered and not withdrawn under such
Change of Control Offer.
SECTION 6.16 MAINTENANCE OF PROPERTIES AND INSURANCE. Reorganized
Teletrac shall, and shall cause each of its Subsidiaries to, maintain its
properties in good working order and condition (subject to ordinary wear and
tear) and make all reasonably necessary repairs, renewals, replacements,
additions and improvements required for it to actively conduct and carry on its
business; PROVIDED, HOWEVER, that nothing in this Section 6.16 shall prevent
Reorganized Teletrac or any of its Subsidiaries from discontinuing the operation
and maintenance of any of its properties if such discontinuance is, in the good
faith judgment of the Board of Directors or other governing body of Reorganized
Teletrac desirable in the conduct of its businesses and is not disadvantageous
in any material respect to the Purchasers.
SECTION 6.17 LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
SUBSIDIARIES. Reorganized Teletrac shall not, and shall not permit any
Subsidiary to, issue, transfer, convey, sell or otherwise dispose of any shares
of Capital Stock of a Subsidiary or securities convertible or exchangeable into,
or options, warrants, rights or any other interest with respect to, Capital
Stock of a Subsidiary to any person other than Reorganized Teletrac or a
Subsidiary except (i) in a transaction consisting of a sale of all other Capital
Stock of such Subsidiary and that complies with the provisions of Section 6.19
hereof, to the extent such provisions apply; (ii) if required, the issuance,
transfer, conveyance, sale or other disposition of directors' qualifying shares;
and (iii) in a transaction in which, or in connection with which, Reorganized
Teletrac or a Subsidiary acquires at the same time sufficient Capital Stock of
such Subsidiary to at least maintain the same percentage ownership it had prior
to such transaction (and provided that the terms of such Capital Stock, and
under which such Capital Stock is held are not more disadvantageous to
Reorganized Teletrac); or (iv) as may be made in connection with a loan of the
type described in Sections 6.10 (h) and 6.11 (ix).
SECTION 6.18 BUSINESS ACTIVITIES. Reorganized Teletrac will not, and
will not permit any of its Subsidiaries to, engage in any business other than
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that which is related to the design, development, procurement, installation,
operation or marketing of location, fleet management or related two-way
messaging systems and businesses and reasonably related extensions thereof.
SECTION 6.19 LIMITATION ON SALES OF ASSETS AND SUBSIDIARY INTERESTS.
Reorganized Teletrac shall not, and shall not permit any of its Subsidiaries to,
engage in an Asset Sale unless:
(i) Reorganized Teletrac or such Subsidiary, as the case may be,
engaging in such Asset Sale receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the assets sold or
otherwise disposed of; and
(ii) at least 80% of the consideration therefor received by
Reorganized Teletrac or such Subsidiary is in the form of cash or Cash
Equivalents;
PROVIDED, HOWEVER, that any notes or similar obligations received by any of
Reorganized Teletrac or such Subsidiaries from such transferees that are
immediately converted by Reorganized Teletrac or such Subsidiaries into cash,
shall be deemed to be cash (to the extent of the net cash received) for purposes
of this clause (ii). Within 180 days after the receipt of any Net Proceeds,
Reorganized Teletrac may apply such Net Proceeds to:
(i) repay, and thereby permanently reduce the commitments or amounts
under this Agreement, or
(ii) repay, and thereby permanently reduce the commitments or amounts
available to be borrowed under the 9% Note Indenture pursuant to clause
(vi) of the covenant set forth in Section 6.11 hereof, or
(iii) an investment in Related Assets or a Related Business. Pending
the final application of any such Net Proceeds, Reorganized Teletrac may
temporarily invest such Net Proceeds in any manner that is not prohibited
by this Agreement.
ARTICLE VII.
PREPAYMENT OF SENIOR NOTES
SECTION 7.1 OPTIONAL PREPAYMENTS. The Senior Secured Notes shall be
subject to prepayment in a whole or in part at any time or from time to time in
part, at the option of Reorganized Teletrac, at the unpaid principal amount
thereof plus accrued interest thereon through the date fixed for prepayment,
without penalty or premium.
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SECTION 7.2 NOTICE OF PREPAYMENTS. Any call for prepayment of the
Senior Secured Notes pursuant to Section 7.1 shall be made by giving written
notice to the holders of the Senior Secured Notes to be prepaid not less than
five days prior to the date fixed for prepayment, which notice shall specify the
principal amount to be prepaid. If all the outstanding Senior Secured Notes are
to be prepaid, the notice of prepayment shall so state. If less than all the
Senior Secured Notes are to be prepaid, the notice of prepayment shall identify
the Senior Secured Notes to be prepaid. In case any Senior Secured Note is to be
prepaid in part only, the notice of prepayment shall state the portion of the
principal amount thereof to be prepaid and shall refer to the option available
under Section 7.4 hereof to the holder of a Senior Secured Note which is
partially prepaid. Notice of call for prepayment having been given as aforesaid,
the principal amount to be prepaid, together with interest thereon to the date
of prepayment, shall on the date designated in such notice become due and
payable. From and after the date fixed for prepayment, unless Reorganized
Teletrac shall default in payment of such principal amount when so due and
payable, together with interest as aforesaid, interest on such principal amount
shall cease to accrue.
SECTION 7.3 ALLOCATION OF PAYMENTS. In the case of the prepayment of
less than all the Senior Secured Notes at the time outstanding, the aggregate
principal amount to be prepaid shall be allocated among the holders of all the
Senior Secured Notes at the time outstanding in proportion, as nearly as
practicable to the nearest dollar, to the respective aggregate unpaid principal
amounts of the Senior Secured Notes (not theretofore called for prepayment) then
held by them, respectively.
SECTION 7.4 NOTATION OF PARTIAL PAYMENTS. Except as otherwise provided
in Section 7.5 hereof, upon any partial prepayment of any Senior Secured Note,
such Senior Secured Note shall be, at the option of the holder thereof, either
(i) surrendered to Reorganized Teletrac in exchange for a new Senior Secured
Note in a principal amount equal to the principal amount remaining unpaid on the
Senior Secured Note surrendered and otherwise having the same terms and
provisions as the Senior Secured Note surrendered or (ii) made available to
Reorganized Teletrac at its office herein provided for notation thereon of the
portion of the principal so prepaid.
SECTION 7.5 DIRECT PAYMENT. So long as any Purchaser shall hold any of
the Senior Secured Notes, Reorganized Teletrac shall pay to such Purchaser the
interest on such Senior Secured Note without any presentment thereof and without
notation of such payment being made thereon, notwithstanding any provision to
the contrary herein or in the Senior Secured Notes with respect to place of
payment, (i) by check in New York Clearing House funds duly mailed to such
Purchaser at the address designated in Schedule I hereto or in accordance with
any unrevoked written direction from such Purchaser to Reorganized Teletrac or
(ii) if a bank account is designated for such Purchaser on Schedule I hereto or
in any written notice to Reorganized Teletrac from such Purchaser, Reorganized
Teletrac shall make such payments to such bank account by wire transfer in
immediately available funds, marked for attention as indicated, or in such other
manner or to such other account of such Purchaser in any bank in the United
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States as such Purchaser may from time to time direct in writing. Each Purchaser
agrees that prior to the sale or transfer of any Senior Secured Note by it, it
shall either (i) surrender the same to Reorganized Teletrac in exchange for a
new Senior Secured Note in a principal amount equal to the principal amount
remaining unpaid on the Senior Secured Note surrendered and otherwise having the
same terms and provisions as the Senior Secured Note surrendered or (ii) make
the same available to Reorganized Teletrac, at its office designated as herein
provided, for notation thereon of the extent to which any payment has been made
on account of the principal thereof. Each Purchaser further agrees that it will,
at any time during regular business hours, permit Reorganized Teletrac to make
appropriate notation on any Senior Secured Note then held by it of the amount of
principal which has been paid thereon, if Reorganized Teletrac, at least seven
days prior to the date upon which such notation is to be made, shall have in
writing requested permission to make such notation, specifying the date when
the same is to be made.
ARTICLE VIII.
EVENTS OF DEFAULT
SECTION 8.1 EVENTS OF DEFAULT. If any of the following events (herein
called "Events of Default") shall occur:
(i) Reorganized Teletrac shall default in the payment of any part of
the principal of any Senior Secured Note when and the same shall be due and
payable and such default shall not have been remedied within five days of
written notice thereof to Reorganized Teletrac;
(ii) Reorganized Teletrac shall default in the payment of any
installment of interest on any Senior Secured Note for more than three days
after the same shall become due and payable and such default shall not have
been remedied within five days of written notice thereof to Reorganized
Teletrac;
(iii) Reorganized Teletrac or any subsidiary shall default (as
principal or guarantor or other surety) either in the payment of the
principal of, or premium, if any, or interest on any indebtedness for
borrowed money (other than the Senior Secured Notes) or with respect to any
of the provisions of any evidence of indebtedness for borrowed money (other
than the Senior Secured Notes) or which represents a purchase money
obligation, or any agreement relating to either thereof, and the effect of
such default is to accelerate the maturity of such indebtedness or the
holder thereof shall cause such indebtedness to become due prior to the
stated maturity thereof, or the Company or any subsidiary shall not pay
such indebtedness at maturity;
(iv) Reorganized Teletrac shall default in the performance of or
compliance with the provisions of Article V hereof and such default shall
not have been cured within 10 days of written notice thereof;
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(v) Reorganized Teletrac shall default in the performance of or
compliance with any agreement, condition or term contained herein (other
than those referred to above) or in the Security Agreement, and such
default shall not have been remedied within 20 days after written notice
thereof shall have been given to Reorganized Teletrac by the holder of any
Senior Secured Note;
(vi) any representation or warranty made to the Purchasers by or on
behalf of Reorganized Teletrac pursuant to Article II hereof shall prove to
have been false or incorrect in any material respect on the date as of
which made;
(vii) any final judgment for the payment of money shall be rendered
against the Company and the same shall remain undischarged for a period of
60 consecutive days during which (A) execution shall not be stayed or (B)
such liability shall not be bonded and the aggregate amount of such final
judgment for the payment of money shall exceed $200,000, net of any
insurance proceeds received by Reorganized Teletrac; or
(viii) Reorganized Teletrac shall default in the performance of or
compliance with the Security Agreement;
then and in any such event the holder of any Senior Secured Note may at any time
(unless all defaults theretofore or thereupon shall have been remedied) at its
option, by written notice to the Company, declare all the Senior Secured Notes
held by such holder to be due and payable, whereupon the same shall forthwith
mature and become due and payable without presentment, demand, protest or other
notice, all of which are hereby waived.
SECTION 8.2 REMEDIES ON AND NOTICES OF DEFAULT. In case any one or
more Events of Default shall occur, the holder of any Senior Secured Note at the
time outstanding may proceed to protect and enforce the rights of such holder by
a suit in equity, action at law or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in such Senior Secured
Note, or for an injunction against a violation of any of the terms or provisions
hereof or thereof, or in aid of the exercise of any power granted hereby or
thereby or by law. In case of a default under this Agreement or the Security
Agreement, Reorganized Teletrac shall pay to the holder of any Senior Secured
Note such further amount as shall be sufficient to cover the reasonable cost and
expense of enforcement, including, without limitation, reasonable attorneys'
fees. If the holder of any Senior Secured Note shall give any notice or take any
other action in respect of a claimed default, Reorganized Teletrac shall
forthwith give written notice thereof to all other holders of the Senior Secured
Notes at the time outstanding, describing the notice or action and the nature of
the claimed default. No course of dealing and no delay on the part of any holder
of any Senior Secured Note in exercising any right shall operate as a waiver
thereof or otherwise prejudice such holder's rights or the rights of the holder
of any other Senior Secured Note. No remedy conferred hereby or by any Senior
Secured Note upon any holder thereof shall be exclusive of any other remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise.
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ARTICLE IX.
EXCHANGE OF SENIOR SECURED NOTES
SECTION 9.1 NEW SENIOR SECURED NOTES. Reorganized Teletrac shall cause
to be kept at its principal office a register for the registration and transfer
of the Senior Secured Notes as hereinafter provided. Subject to the restrictions
on transfer under the Securities Act, Reorganized Teletrac will at any time, at
its expense, at the request of the holder of any Senior Secured Note, and upon
surrender of such Senior Secured Note for such purpose, issue new Senior Secured
Notes in exchange therefor, registered in the name of the holder or such person
or persons as may be designated by such holder, dated the date to which interest
has been paid on the surrendered Senior Secured Note, in an aggregate principal
amount equal to the unpaid principal amount of such Senior Secured Note and
substantially in the form of such Senior Secured Note with appropriate
variations.
SECTION 9.2 REPLACEMENT OF SENIOR SECURED NOTES. Upon receipt of
evidence satisfactory to Reorganized Teletrac of the loss, theft, destruction or
mutilation of any Senior Secured Note and, in the case of any such loss, theft
or destruction, upon delivery of indemnity satisfactory to Reorganized Teletrac,
or, in the case of any such mutilation, upon surrender and cancellation of such
Senior Secured Note, Reorganized Teletrac will issue a new Senior Secured Note,
of like tenor, in lieu of, and dated the date to which interest has been paid
on, such lost, stolen, destroyed or mutilated Senior Secured Note.
ARTICLE X.
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
SECTION 10.1 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
SECTION 10.2 GENERAL INDEMNITY. (a) Subject to the other terms and
conditions of this Article X, Reorganized Teletrac hereby agrees to and shall
indemnify, defend and hold the Purchasers harmless from and against all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses, including, without limitation, interest, penalties and the
reasonable fees and expenses of counsel (collectively, "Damages"), asserted
against, resulting to, imposed upon or incurred by Reorganized Teletrac or the
Purchasers by reason of or resulting from a breach of any representation,
warranty, covenant or agreement of the Reorganized Teletrac contained in or made
pursuant to this Agreement, or any facts or circumstances constituting such a
breach.
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(b) Subject to the terms and conditions of this Article X, the
Purchasers, severally and not jointly, agree to and shall indemnify, defend and
hold Reorganized Teletrac harmless from and against all Damages asserted
against, resulting to, imposed upon or incurred by the Reorganized Teletrac by
reason of or resulting from or arising out of a breach of any representation,
warranty, covenant or agreement of such Purchaser contained in or made pursuant
to this Agreement, or any facts or circumstances constituting such a breach.
SECTION 10.3 CONDITIONS OF INDEMNIFICATION. The respective obligations
and liabilities of Reorganized Teletrac, on the one hand, and the Purchasers, on
the other hand (herein sometimes called the "indemnifying party"), to the other
(herein sometimes called the "party to be indemnified") under Section 10.2
hereof with respect to claims resulting from the assertion of liability by third
parties shall be subject to the following terms and conditions:
(a) within 20 days after receipt of notice of commencement of any
action or the assertion in writing of any claim by a third party, the party
to be indemnified shall give the indemnifying party written notice thereof
together with a copy of such claim, process or other legal pleading
(PROVIDED, HOWEVER, that failure to give such notice shall not affect the
obligations of the indemnifying party under this Article X unless and to
the extent that such failure shall be prejudicial to the defense of such
claim by the indemnifying party), and the indemnifying party shall have the
right to undertake the defense thereof by representatives of its own
choosing;
(b) in the event that the indemnifying party, by the 30th day after
receipt of notice of any such claim (or, if earlier, by the tenth day
preceding the day on which an answer or other pleading must be served in
order to prevent judgment by default in favor of the person asserting such
claim), does not elect to defend against such claim, the party to be
indemnified will (upon further notice to the indemnifying party) have the
right to undertake the defense, compromise or settlement of such claim on
behalf of and for the account and risk of the indemnifying party, subject
to the right of the indemnifying party to assume the defense of such claim
at any time prior to settlement, compromise or final determination thereof,
provided that the indemnifying party shall be given at least 15 days prior
written notice of the effectiveness of any such proposed settlement or
compromise;
(c) anything in this Section 10.3 to the contrary notwithstanding, (i)
if there is a reasonable probability that a claim may materially and
adversely affect the indemnifying party other than as a result of money
damages or other money payments, the indemnifying party shall have the
right, at its own cost and expense, to compromise or settle such claim, but
(ii) the indemnifying party shall not, without the prior written consent of
the party to be indemnified, settle or compromise any claim or consent to
the entry of any judgment that does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the party to be
indemnified a release from all liability in respect of such claim; and
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(d) in connection with any such indemnification, the indemnified party
will cooperate in all reasonable requests of the indemnifying party.
SECTION 10.4 REMEDIES CUMULATIVE. The remedies provided herein shall
be cumulative and shall not preclude assertion by any party hereto of any other
rights or the seeking of any other remedies against the other parties hereto.
ARTICLE XI.
MISCELLANEOUS
SECTION 11.1 EXPENSES, ETC. The parties shall pay their own expenses
in connection with the transactions contemplated hereby.
SECTION 11.2 NOTICES. Any notice or other communications required or
permitted hereunder shall be deemed to be sufficient if contained in a written
instrument delivered in person or duly sent by national overnight courier
service or first class certified mail, postage prepaid, or by telecopy addressed
to such party at the address or telecopy number set forth below:
(1) if to the Company or Reorganized Teletrac, to it at:
Teletrac, Inc.
3220 Executive Ridge
Suite 100
Vista, CA 92083
Telecopy number: (760) 597-9906
Attention: General Counsel
with a copy to:
Reboul, MacMurray, Hewitt,
Maynard and Kristol
45 Rockefeller Plaza
11th Floor
New York, New York 10111
Telecopy number: (212) 841-5725
Attention: David Elkind, Esq.
(2) if to any Purchaser, to it at his or its address appearing on
Schedule I hereto;
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or, in any case, at such other address or addresses as shall have been furnished
in writing by such party to the other parties hereto. All such notices and other
communications shall be deemed to have been received (a) in the case of personal
delivery, on the date of such delivery, (b) in the case of national overnight
courier service, on the first business day following delivery to such service,
(c) in the case of mailing, on the fifth business day following the date of such
mailing and (d) in the case of telecopy, when received.
SECTION 11.3 BROKERAGE. Each party hereto shall indemnify and hold
harmless the others against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby, based in any way on agreements, arrangements or understandings made or
claimed to have been made by such party with any third party.
SECTION 11.4 PARTIES IN INTEREST. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not.
SECTION 11.5 ENTIRE AGREEMENT; WAIVER; ASSIGNMENT. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and may not be amended or modified nor any provisions waived
except in a writing signed by the parties hereto or, in the case of Article V or
Article VII hereof, by the holders of a majority of outstanding Senior Secured
Notes. This Agreement may not be assigned by any party without the prior written
consent of the others.
SECTION 11.6 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and each such counterpart hereof shall be deemed to be
an original instrument, but all such counterparts together shall constitute but
one agreement.
SECTION 11.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
TELETRAC, INC.
By_________________________
Name:
Title:
PURCHASERS:
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SCHEDULE I
PURCHASERS
NAME AND ADDRESS CLASS SENIOR SECURED NOTES
OF PURCHASER COMMITMENT AMOUNT A WARRANTS (PRINCIPAL AMOUNT)
EXHIBIT B
THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
IT HAS BEEN REGISTERED UNDER THAT ACT OR, IN
THE OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, AN EXEMPTION FROM REGISTRATION
IS AVAILABLE
TELETRAC, INC.
10% SENIOR SECURED NOTE
DUE ___, 2000
$ New York, New York
1999
FOR VALUE RECEIVED, the undersigned, TELETRAC, INC., a Delaware
corporation (the "Company"), hereby promises to pay to , or its registered
assigns, the principal sum of ($ ), on ,2000, with interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
principal amount hereof at the rate of 10% per annum from the date hereof,
payable quarterly on the last business day of [March], [June], [September] and
[December], commencing on the first such date after the date hereof, until the
principal amount hereof shall have become due and payable, whether at maturity
or by acceleration or otherwise; PROVIDED, HOWEVER, that in no event shall this
Note bear interest at a rate in excess of that permitted by any applicable usury
laws.
All payments of principal of and interest on this Note shall be in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for payment of public and private debts.
This Note is issued pursuant to, is entitled to the benefits of, and
is subject to the terms of, the Senior Secured Note and Class A Warrant Purchase
Agreement, dated as of __________, 1999 (the "Purchase Agreement"), among the
Company and the several Purchasers named in Schedule I thereto, providing for
the issuance of the 10% Senior Secured Notes due ____, 2000 of the Company, in
an aggregate principal amount of up to $3,000,000. As provided in the Purchase
Agreement, (i) this Note is subject to optional prepayment to the extent and in
the manner set forth in the Purchase Agreement, and (ii) the indebtedness
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evidenced by this Note is secured to the extent and in the manner set forth in a
certain Security Agreement referred to in the Purchase Agreement.
In case of an Event of Default (as defined in the Purchase Agreement)
shall occur and be continuing, the principal of this Note may be declared due
and payable in the manner and with the effect provided in the Purchase
Agreement.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
TELETRAC, INC.
By________________________
Senior Vice President
[Corporate Seal]
Attest:
______________________
Secretary
2
EXHIBIT C
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 NOR UNDER APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER
SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
, 1999
CLASS A STOCK PURCHASE WARRANT
To Subscribe for and Purchase Common Stock of
TELETRAC, INC.
VOID AFTER _____________, 2004
________
THIS CERTIFIES that, for value received, , or registered assigns,
is entitled, subject to the terms of Section 1 hereof, to subscribe for and
purchase from Teletrac, Inc., a Delaware corporation (the "Company"), at the
price of $.05 per share (the "Warrant Price"), up to fully paid,
nonassessable shares of Common Stock, par value $.01 per share, of the Company
("Common Stock"), subject, however, to the provisions and upon the terms and
conditions hereinafter set forth, including, without limitation, the provisions
of Section 3 hereof.
Section 1. EXERCISE OF WARRANT. The rights represented by this
Warrant shall vest and become exercisable at any time or from time to time after
the Effective Date (as such term is defined in the Senior Secured Note and Class
A Warrant Purchase Agreement dated as of ___________, 1999 (the "Purchase
Agreement")) among the Company and the purchasers named therein), and on or
prior to ___________, 2004.
As provided above, this Warrant shall terminate on ____, 2004
This Warrant may be exercised by the holder hereof, in whole or in
part (but not as to a fractional share of Common Stock), by the completion of
the subscription form attached hereto and by the surrender of this Warrant
(properly endorsed) at the principal executive offices of the Company (or at
such other agency or office of the Company in the United States as it may
designate by notice in writing to the holder hereof at the address of the holder
hereof appearing on the books of the Company), and by payment to the Company of
the Warrant Price, at the election of such holder, (i) in cash or by certified
or official bank check, for each share being purchased, or (ii) by receiving
from the Company the number of shares of Common Stock equal to the number of
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shares of Common Stock otherwise issuable upon such exercise less the number of
shares of Common Stock having a value on the date of exercise equal to the
Warrant Price applicable to the number of shares of Common Stock for which this
Warrant is being exercised.
(a) In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the shares of Common Stock so
purchased, registered in the name of the holder hereof, shall be delivered to
the holder hereof within a reasonable time, not exceeding three business days,
after the rights represented by this Warrant shall have been so exercised; and,
unless this Warrant has expired or been exercised in full, a new Warrant
representing the number of shares (except a remaining fractional share), if any,
with respect to which this Warrant shall not then have been exercised shall also
be issued to the holder hereof within such time. With respect to any such
exercise, the holder hereof shall for all purposes be deemed to have become the
holder of record of the number of shares of Common Stock evidenced by such
certificate or certificates from the date on which this Warrant was surrendered
and payment of the Warrant Price was made irrespective of the date of delivery
of such certificate, except that, if the date of such surrender and payment is a
date on which the stock transfer books of the Company are closed, such person
shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are open.
No fractional shares shall be issued upon exercise of this Warrant. If any
fractional interest in a share of Common Stock would, except for the provisions
of this Section 1, be delivered upon any such exercise, the Company, in lieu of
delivering the fractional share thereof, shall pay to the holder hereof an
amount in cash equal to the current fair market value of such fractional
interest.
(b) For purposes hereof, the fair market value of a share of Common
Stock on any date shall be equal to (A) the fair market value of the Company's
Common Stock determined on the basis of (1) the last sale price of shares of
Common Stock, regular way, on such date or, if no such sale takes place on such
date, the average of the closing bid and asked prices thereof on such date, in
each case as officially reported on the principal national securities exchange
on which the Common Stock is then listed or admitted to trading, or (2) if no
shares of Common Stock are then listed or admitted to trading on any national
securities exchange but the Common Stock is designated as a national market
system security by the National Association of Securities Dealers, the last
trading price of the Common Stock on such date, or (B) if shares of Common Stock
are not then listed or admitted to trading on any national exchange or
designated as a national market system security, the fair market value thereof
as determined by the Board of Directors of the Company in good faith.
Section 2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES.
(a) SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Warrant Price in effect immediately prior to such
subdivision shall be proportionately reduced, I.E., the holder shall be
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entitled to purchase after such subdivision, for the same consideration as
applicable prior to such subdivision, the same percentage of outstanding
Common Stock that such holder was entitled to purchase prior to such
subdivision, and conversely, in case the outstanding shares of Common Stock
of the Company shall be combined into a smaller number of shares, the
Warrant Price in effect immediately prior to such combination shall be
proportionately increased.
(b) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization or reclassification of the capital stock of
the Company or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all its assets to another
corporation shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities or assets with respect to or
in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate
provisions shall be made whereby each holder of the Warrants shall
thereafter have the right to receive upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock of
the Company immediately theretofore receivable upon the exercise of such
Warrant or Warrants, such shares of stock, securities or assets (including
cash) as may be issued or payable with respect to or in exchange for a
number of outstanding shares of Common Stock equal to the number of shares
of such stock immediately theretofore so receivable had such
reorganization, reclassification, consolidation, merger or sale not taken
place, and in any such case this Warrant shall become immediately
exercisable, notwithstanding any other provision contained herein, and
appropriate provision shall be made with respect to the rights and
interests of such holder to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Warrant Price) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise of
such Warrants (including an immediate adjustment, by reason of such
consolidation or merger, of the Warrant Price to the value for the Common
Stock reflected by the terms of such consolidation or merger if the value
so reflected is less than the Warrant Price in effect immediately prior to
such consolidation or merger). In the event of a merger or consolidation of
the Company as a result of which a greater or lesser number of shares of
common stock of the surviving corporation are issuable to holders of Common
Stock of the Company outstanding immediately prior to such merger or
consolidation, the Warrant Price in effect immediately prior to such merger
or consolidation shall be adjusted in the same manner as though there were
a subdivision or combination of the outstanding shares of Common Stock of
the Company. The Company will not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation
(if other than the Company) resulting from such consolidation or merger or
the corporation purchasing such assets shall assume, by written instrument
executed and mailed or delivered to each Warrantholder at the last address
of such holder appearing on the books of the Company, the obligation to
deliver to such holder such shares of stock, securities or assets as, in
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accordance with the foregoing provisions, such holder may be entitled to
receive upon exercise of such Warrants.
(c) NOTICE OF ADJUSTMENT. Upon any adjustment of the Warrant Price,
then and in each such case the Company shall give written notice thereof,
by first class mail, postage prepaid, addressed to each Warrantholder at
the address of such holder as shown on the books of the Company, which
notice shall state the Warrant Price resulting from such adjustment,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
(d) STOCK TO BE RESERVED. The Company shall at all times reserve and
keep available out of its authorized Common Stock or its treasury shares,
solely for the purpose of issuance upon the exercise of this Warrant as
herein provided, such number of shares of Common Stock as shall then be
issuable upon the exercise of this Warrant. The Company covenants that all
shares of Common Stock which shall be so issued shall be duly and validly
issued and fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Company covenants that it will from time
to time take all such action as may be requisite to assure that, in the
event that the Company designates a par value per share of Common Stock,
the par value per share of the Common Stock shall be at all times equal to
or less than the effective Warrant Price. The Company shall take all such
action as may be necessary to assure that all such shares of Common Stock
may be so issued without violation of any applicable law or regulation, or
of any requirements of any national securities exchange upon which the
Common Stock of the Company may be listed. The Company shall not take any
action which results in any adjustment of the Warrant Price if the total
number of shares of Common Stock issued and issuable after such action upon
exercise of this Warrant would exceed the total number of shares of Common
Stock then authorized by the Company's Articles of Incorporation. The
Company has not granted and will not grant any right of first refusal with
respect to shares issuable upon exercise of this Warrant, and there are no
preemptive rights associated with such shares.
(e) CERTAIN ISSUES OF COMMON STOCK EXCEPTED. Anything herein to the
contrary notwithstanding, the Company shall not be required to make any
adjustment in the Warrant Price in the case of (i) the issuance of Class B
Warrants as defined in the Plan of Reorganizing of Teletrac, Inc. dated
________, 1999 (the "Plan") or the issuance of shares of Common Stock upon
the exercise of any such Class B Warrants or (ii) the issuance of Incentive
Options (as defined in the Plan) in the issuance of any shares of Common
Stock upon exercise of such Incentive Options.
(f) ISSUE TAX. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the
holder hereof for any issuance tax in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in
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respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder hereof.
(g) CLOSING OF TRANSFER BOOKS. The Company will at no time close its
transfer books against the transfer of the shares of Common Stock issued or
issuable upon the exercise of this Warrant in any manner which interferes
with the timely exercise of this Warrant.
(h) DEFINITION OF COMMON STOCK. As used herein the term "Common
Stock" shall mean and include the Common Stock, $.01 par value, of the
Company as authorized on the Effective Date (as such term is defined in the
Purchase Agreement), or shares of any class or classes resulting from any
reclassification or reclassifications thereof and in case at any time there
shall be more than one such resulting class, the shares of each class then
so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to
the total number of shares of all such classes resulting from all such
reclassifications.
Section 3. NOTICES OF RECORD DATES. In the event of
(1) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any right to sell shares of stock of
any class or any other right; or
(2) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or consolidation or
merger of the Company with or into any other corporation or entity; or
(3) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then and in each such event the Company shall give notice to the holder of this
Warrant specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 20 days and not more than 90
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days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, and
applicable state securities laws, or (y) a favorable vote of stockholders, if
either is required.
Section 4. NO STOCKHOLDER RIGHTS OR LIABILITIES. (a) This warrant
shall not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision hereof, in the absence of affirmative
action by the holder hereof to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Warrant Price or as a stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
(b) If the Company, at any time while this Warrant is outstanding,
shall make a distribution to the holders of its Common Stock of its property or
assets as a dividend in liquida tion or partial liquidation or by way of return
of capital or any dividend payable out of funds legally available for dividends
under the laws of the State of Delaware the holder of this Warrant shall be
entitled to receive at the time of such distribution, without payment of any
consideration, a sum equal to the amount of such property or assets as would
have been payable to the holder hereof as an owner of the shares issuable upon
the exercise hereof had the holder hereof been the holder of record of such
shares on the record date for such distribution; and an appropriate provision
with respect to such payment to such holder as described in this paragraph (b)
shall be made a part of any such distribution.
Section 5. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion reasonably impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so
lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered hereunder shall be in writing,
and shall be delivered, or shall be sent by national overnight courier service
or by certified or registered mail, postage prepaid and addressed, if to the
holder, to such holder at the address shown on the records of the Company or at
such other address as shall have been furnished to the Company by notice from
such holder and, if to the Company, addressed to the Company at 3220 Executive
Ridge, Suite 100, Vista, CA 92083; Attention: General Counsel, or at such other
address as shall have been furnished to the holder by notice from the Company.
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IN WITNESS WHEREOF, TELETRAC, INC., has executed this Warrant on and
as of the day and year first above written.
TELETRAC, INC.
By ___________________
Name:
Title:
[Corporate Seal]
Attest:
_________________
Secretary
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SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date_________
To Teletrac, Inc.:
The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to subscribe for and purchase shares of Common Stock
covered by such Warrant, and herewith tenders $ in full payment of the purchase
price for such shares.
Name of Holder:
By ________________________________
Address __________________________
__________________________
8
EXHIBIT D
SECURITY AGREEMENT, dated as of [_______], 1999, among TELETRAC, INC.,
a Delaware corporation (the "Grantor"), and the several purchasers executing
this Security Agreement (the "Purchasers").
The Purchasers have agreed to purchase the Grantor's Senior Secured
Notes due [______], 2000 in an aggregate principal amount of up to $3,000,000
(the "Senior Secured Notes") and Class A Warrants (the "Warrants") to purchase
shares of Common Stock of the Grantor, pursuant to the Senior Secured Note and
Class A Warrant Purchase Agreement, dated as of [ ], 1999 (the "Purchase
Agreement"), among the Grantor and the Purchasers. The obligations of the
Purchasers to purchase the Senior Secured Notes and the Class A Warrants are
conditioned on, among other things, the execution and delivery by the Grantor of
a security agreement in the form hereof to secure (a) the due and punctual
payment of (i) the principal of and interest on the Senior Secured Notes when
and as due, whether at maturity, at a date fixed for prepayment, by acceleration
or otherwise, (ii) all other monetary obligations of the Grantor to the
Purchasers under the Purchase Agreement now or hereafter existing, and (iii) all
out-of-pocket costs and expenses (including reasonable costs and expenses of
counsel to the Purchasers) that may be incurred by the Purchasers in connection
with the administration and enforcement of the Purchase Agreement or this
Agreement or the realization on the security provided for hereby and (b) the due
and punctual performance of all other obligations of the Grantor under the
Purchase Agreement (collectively, the "Obligations").
Accordingly, the Grantor and the Purchasers hereby agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following meanings:
"ACCOUNTS" shall mean any and all rights of the Grantor to payment for
goods or services sold or leased, including any such right evidenced by chattel
paper, whether due or to become due, whether or not earned by performance and
whether now existing or hereafter acquired or arising in the future, including
accounts receivable from affiliates of the Grantor.
"ACCOUNT DEBTOR" shall mean any person who is or who may become
obligated to the Grantor under, with respect to, or on account of, an Account.
"ACCOUNTS RECEIVABLE" shall mean all Accounts and all rights of the
Grantor in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary.
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"AGENT" shall mean ___________________________.
"CASH" shall mean all cash, including, but not limited to, all deposit
accounts and instruments of the Grantor wherever such cash and instruments are
located.
"COLLATERAL" shall mean, now owed or hereafter acquired, all (i)
Accounts Receivable, (ii) Documents, (iii) Equipment, (iv) Inventory, (v)
Proceeds, (vi) Cash and (vii) all capital stock held by Grantor in any of its
Subsidiaries. Notwithstanding the foregoing, "Collateral" shall not include (x)
any Accounts Receivable, Documents, Equipment, Inventory, Proceeds or Cash
[described in] the Asset Purchase and Option Agreement by and among Grantor
Ituran Location and Control, Ltd., and the other parties thereto dated as of
June 9, 1999 and (y) Accounts Receivables as described in Sections 6.10(iv)(h)
and 6.11(ix) of the Purchase Agreement.
"DOCUMENTS" shall mean all instruments, files, records, ledger sheets
and documents covering or relating to any of the Accounts Receivable, Equipment
or Inventory.
"EQUIPMENT" shall mean all equipment, furniture, furnishings and
Fixtures, and all tangible personal property similar to any of the foregoing,
including tools, parts and supplies of every kind and description, and all
improvements, accessions or appurtenances thereto, which are now or hereafter
owned by the Grantor.
"FIXTURES" shall mean all items of Collateral, whether now owned or
hereafter acquired, of the Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"INVENTORY" shall mean all goods and merchandise of the Grantor,
whether now owned or hereafter acquired, held for sale or lease in the ordinary
course of business, or furnished or to be furnished by the Grantor under
contracts of service, or consumed in the Grantor's business, including raw
materials, work in process, finished goods, semi-finished inventory, scrap
inventory, manufacturing supplies, spare parts and all such property which has
been returned to, repossessed, or stopped in transit by or on behalf of the
Grantor. Notwithstanding the foregoing, "Inventory" shall not include sales (in
the ordinary course), financing or leases of vehicle location units to customers
of Grantor subscribing to Grantor's services.
"PROCEEDS" shall mean any consideration received from the sale,
exchange, lease or other disposition of any asset or property that constitutes
Collateral, any value received as a consequence of the possession of any
Collateral and any payment received from any insurer or other person or entity
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as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property that constitutes
Collateral.
"SECURITY INTEREST" shall have the meaning assigned to such term in
Section 2.1.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. SECURITY INTEREST; AGENT. As security for the payment or
performance, as the case may be, of the Obligations, the Grantor hereby creates
and grants to the Purchasers, their respective successors and assigns, a
security interest in the Collateral (the "Security Interest"), which, except for
the security interests described in Schedule I hereto, to which the security
interest granted hereby shall be subordinate, shall constitute a first and prior
security interest in the Collateral to all other security interests. Without
limiting the foregoing, each of the Purchasers is hereby authorized to file one
or more financing statements (including fixture filings), continuation
statements or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest without the signature
of the Grantor, naming the Grantor as debtor and the Purchasers as secured
parties.
Grantor and Purchasers hereby agree and acknowledge that the Agent
shall have all of the rights, power and obligations of the Purchasers hereto and
under the Purchase Agreement pursuant to the Agency Agreement, dated as of the
date hereof, by and among the Agent and the Purchaser (the "Agency Agreement").
The Grantor agrees at all times to keep accounting records that are
complete and accurate in all material respects with respect to the Collateral,
including a record of all payments and Proceeds received.
SECTION 2.2. FURTHER ASSURANCES. The Grantor agrees, at its expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as any of the Purchasers may
from time to time reasonably request for the better assuring and preserving of
the security interests and the rights and remedies created hereby, including the
payment of any fees and taxes required in connection with the execution and
delivery of this Agreement, the granting of the security interests created
hereby and the filing of any financing statements (including fixture filings) or
other documents in connection herewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument, such note or instrument shall be
immediately pledged and delivered to a representative or agent of the
Purchasers, duly endorsed in a manner satisfactory to the Purchasers.
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SECTION 2.3. INSPECTION AND VERIFICATION. Without limiting the scope
of Section 5.1 of the Purchase Agreement, each of the Purchasers and such
representatives as such Purchaser may reasonably designate shall have the right,
at all reasonable times and as often as reasonably requested, to inspect the
Collateral, all records related thereto (and to make extracts and copies from
such records), and the premises upon which any of the Collateral is located, to
discuss the Grantor's affairs with the officers of the Grantor and the Grantor's
independent accountants and to verify under reasonable procedures the validity,
amount, quality, quantity, value and condition of, or any other matter relating
to, the Collateral, including, in the case of Accounts or Collateral in the
possession of any third person, by contacting Account Debtors or the third
person possessing such Collateral for the purpose of making such a verification.
SECTION 2.4. TAXES; ENCUMBRANCES. At his or its option, any Purchaser
may discharge past due taxes, liens, security interests or other encumbrances at
any time levied or placed on the Collateral and not permitted hereby or under
the Purchase Agreement, and may pay for the maintenance and preservation of the
Collateral to the extent the Grantor fails to do so, and the Grantor agrees to
reimburse such Purchaser on demand for any payment made or any expense incurred
by him or it pursuant to the foregoing authorization; PROVIDED, HOWEVER, that
nothing in this Section 2.4 shall be interpreted as excusing the Grantor from
the performance of, or requiring the Purchaser to cure or perform, any covenants
or other promises of the Grantor with respect to taxes, liens, security
interests or other encumbrances or maintenance or other matters as set forth
herein or in the Purchase Agreement.
SECTION 2.5. ASSIGNMENT OF SECURITY INTEREST. If at any time the
Grantor shall take and perfect a security interest in any property of an Account
Debtor or any other person to secure payment and performance of an Account, the
Grantor shall promptly assign such security interest to the Purchasers. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other person granting the security interest.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantor represents and warrants to the Purchasers that:
SECTION 3.1. TITLE AND AUTHORITY. The Grantor has valid rights in and
good title to the Collateral and has full corporate power and authority to grant
to the Purchasers the Security Interest in the Collateral pursuant hereto and to
execute, deliver and perform its obligations in accordance with the terms of
this Agreement, without the consent or approval of any other person other than
any consent or approval which has been obtained.
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SECTION 3.2. FILINGS. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings containing a description of the Collateral shall be filed of record in
every governmental, municipal or other office in every jurisdiction in which
filings are necessary to publish notice of and protect the validity of and to
establish a valid and perfected security interest in favor of the Purchasers in
respect of the Collateral, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration will be necessary in any
such jurisdiction, except as provided under applicable law with respect to the
filing of continuation statements.
SECTION 3.3. VALIDITY OF SECURITY INTEREST. The Security Interest
constitutes a valid, legal and perfected security interest in all the Collateral
(other than (i) any licenses issued by the Federal Communications Commission
("FCC"), (ii) that Collateral in which a security interest may be perfected by
the filing of a security agreement with the United States Patent and Trademark
Office and/or the United States Copyright Office, (iii) that Collateral
consisting of instruments or securities that only can be perfected upon
possession of such instruments or securities and (iv) cash that is not
considered "identifiable cash proceeds" within the meaning of Section 9-306 of
the Uniform Commercial Code as in effect in the State of New York) securing the
payment and performance of the Obligations.
SECTION 3.4. ABSENCE OF OTHER LIENS. Except for the Security Interest
granted hereby, the liens described in Schedule I hereto and any liens permitted
under the Purchase Agreement, the Collateral is owned by the Grantor free and
clear of any claim, lien, security interest or encumbrance. The Grantor has not
filed or consented to the filing of a financing statement under the Uniform
Commercial Code covering any Collateral other than as contemplated hereby or as
permitted by the Purchase Agreement.
ARTICLE IV
COVENANTS
SECTION 4.1. LOCATION OF COLLATERAL; PLACE OF BUSINESS; RECORDS AND
SCHEDULES OF COLLATERAL. (a) The Grantor agrees promptly to notify the
Purchasers of any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its properties
or (ii) in the location of its chief executive office, its principal place of
business, any office in which it maintains records relating to Collateral owned
by it or the offices or facilities at which Collateral owned by it is located
(including the establishment of any such new office or facility). The Grantor
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings under the Uniform Commercial Code or otherwise which are
required in order for the Purchasers to continue at all times following such
change to have a valid and perfected security interest in all the Collateral,
subject to no liens other than as contemplated by Section 3.4, have been made
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(other than any security interest lapsing through the Purchasers' failure to
sign any continuation statement provided in a timely manner by the Grantor). The
Grantor agrees promptly to notify the Purchasers if any material portion of the
Collateral is damaged or destroyed.
(b) The Grantor shall keep or cause to be kept records of Accounts
that are accurate in all material respects.
(c) The Grantor agrees to maintain complete and accurate records in
all material respects with respect to the Collateral, in addition to those
records described in the foregoing paragraph (b), owned by it and, at such time
or times as any of the Purchasers may request, promptly to prepare and deliver
to such Purchaser a duly certified schedule or schedules in such form and detail
as the Purchasers may reasonably request, showing the identity, amount and
location of any and all such Collateral.
SECTION 4.2. PROTECTION OF SECURITY. The Grantor shall, at its own
cost and expense, take any and all actions necessary to defend title to the
Collateral against all persons and to defend the Security Interest of the
Purchasers in the Collateral and the priority thereof against any lien not
permitted hereby or under the Purchase Agreement.
SECTION 4.3. CONTINUING OBLIGATIONS OF THE GRANTOR. The Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to or constituting the Collateral, all in accordance with the terms and
conditions thereof, and shall indemnify and hold harmless the Purchaser against
liability for such performance.
SECTION 4.4. LIMITATION ON MODIFICATIONS OF ACCOUNTS. The Grantor
shall not, without the Purchasers' prior written consent, grant any extension of
the time of payment of any of the Accounts Receivable, compromise, compound or
settle the same for less than the full amount thereof, release, wholly or
partly, any person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business.
ARTICLE V
REMEDIES
SECTION 5.1. COLLECTIONS. Upon the occurrence and during the
continuation of an Event of Default (as defined in the Purchase Agreement), each
of the Purchasers shall have the right, as the true and lawful agent of the
Grantor, with power of substitution for the Grantor and in the Grantor's name,
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the Purchasers' name or otherwise, for the use and benefit of the Purchasers (a)
to receive, endorse, assign and/or deliver any and all notes, acceptances,
checks, drafts, money orders or other evidences of payment relating to the
Collateral or any part thereof; (b) to demand, collect, receive payment of, give
receipt for and give discharges and releases of all or any of the Collateral;
(c) to sign the name of the Grantor on any invoice or bill of lading relating to
any of the Collateral; (d) to send verifications of Accounts Receivable to any
Account Debtor; (e) to commence and prosecute any and all suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect or otherwise realize on all or any of the Collateral or to enforce any
rights in respect of any Collateral; (f) to settle, compromise, compound, adjust
or defend any actions, suits or proceedings relating to all or any of the
Collateral; (g) to notify, or to require the Grantor to notify, the Account
Debtors obligated on any of or all the Accounts Receivable to make payment
thereof directly to the Purchasers; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Purchasers
were the absolute owner of the Collateral for all purposes; PROVIDED, HOWEVER,
that nothing herein contained shall be construed as requiring or obligating any
Purchaser to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by such Purchaser, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken or omitted to be taken by such
Purchaser with respect to the Collateral or any part thereof shall give rise to
any defense, counterclaim or offset in favor of the Grantor or to any claim or
action against such Purchaser. It is understood and agreed that the appointment
of each of Purchasers as the agent of the Grantor for the purposes set forth
above is coupled with an interest and is irrevocable. The provisions of this
Section 5.1 shall in no event relieve the Grantor of any of its obligations
hereunder or under the Purchase Agreement with respect to the Collateral or any
part thereof or impose any obligation on any Purchaser to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by such Purchaser of any other or further right which it
may have on the date of this Agreement or hereafter, whether hereunder, under
the Purchase Agreement or by law or otherwise.
SECTION 5.2. OTHER REMEDIES UPON DEFAULT. Upon the occurrence and
during the continuance of an Event of Default (as defined in the Purchase
Agreement), the Grantor agrees to deliver each item of Collateral to the
Purchasers on demand, and it is agreed that any Purchaser shall have the right
to take any of or all the following actions at the same or different times: with
or without legal process and with or without previous notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral and, generally, to
exercise any and all rights afforded to a secured party under the Uniform
Commercial Code or other applicable law. Without limiting the generality of the
foregoing, the Grantor agrees that any Purchaser shall have the right to sell or
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otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery as such Purchaser shall deem appropriate. Each
Purchaser shall be authorized at any such sale (if it deems it advisable to do
so) to restrict the prospective bidders or purchasers to persons who will
represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or sale thereof
where the failure to obtain such a representation and agreement could result in
a violation of any applicable Federal or state securities laws, and upon
consummation of any such sale such Purchaser shall have the right to assign,
transfer and deliver to the purchaser or purchasers thereof the Collateral so
sold. Each such purchaser at any such sale shall hold the property sold
absolutely, free from any claim or right on the part of the Grantor, and the
Grantor hereby waives (to the extent permitted by law) all rights of redemption,
stay and appraisal which the Grantor now has or may at any time in the future
have under any rule of law or statute now existing or hereafter enacted.
The Purchasers shall give the Grantor 10 days' written notice (which
the Grantor agrees is reasonable notice within the meaning of Section 9-504(3)
of the Uniform Commercial Code as in effect in the State of New York or its
equivalent in other jurisdictions) of any Purchaser's intention to make any sale
of Collateral of the Grantor. Such notice, in the case of a public sale, shall
state the time and place for such sale and, in the case of a sale at a broker's
board or on a securities exchange, shall state the board or exchange at which
such sale is to be made and the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as any Purchaser may fix and state in the notice (if any) of
such sale. At any public or private sale, the Collateral, or portion thereof, to
be sold may be sold in one lot as an entirety or in separate parcels, as any
Purchaser may (in its sole and absolute discretion) determine. The Purchasers
shall not be obligated to make any sale of any Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of such Collateral
shall have been given. The Purchasers may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Purchasers until the sale price is paid by the purchaser or purchasers thereof,
but the Purchasers shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure, such Collateral may be sold again upon like notice. At any
public sale made pursuant to this Section 5.2, the Purchasers may bid for or
purchase, free (to the extent permitted by law) from any right of redemption,
stay, valuation or appraisal on the part of the Grantor (all said rights being
also hereby waived and released to the extent permitted by law), the Collateral
or any part thereof offered for sale and may make payment on account thereof by
using any claim then due and payable to them from the Grantor as a credit
against the purchase price, and they may, upon compliance with the terms of
sale, hold, retain and dispose of such property without further accountability
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to such Grantor therefor. For purposes hereof, a written agreement to purchase
the Collateral or any portion thereof shall be treated as a sale thereof; the
Purchasers shall be free to carry out such sale pursuant to such agreement and
the Grantor whose Collateral is being sold shall not be entitled to the return
of the Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Purchasers shall have entered into such an agreement all
Events of Default shall have been remedied and the Obligations paid in full. As
an alternative to exercising the power of sale herein conferred upon it, any
Purchaser may proceed by a suit or suits at law or in equity to foreclose this
Agreement and to sell the Collateral or any portion thereof pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
SECTION 5.3. APPLICATION OF PROCEEDS. As between the Grantor and the
Purchasers, the Purchasers shall have absolute discretion as to the manner and
time of application of any such proceeds, moneys or balances in accordance with
this Agreement. Upon any sale of the Collateral by any Purchaser (including,
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of such Purchaser or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to such Purchaser or
such officer or be answerable in any way for the misapplication thereof.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. PURCHASER APPOINTED ATTORNEY-IN-FACT. The Grantor hereby
appoints each of the Purchasers the attorney-in-fact of the Grantor for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing any instrument which such Purchaser may deem necessary or
advisable to accomplish the purposes hereof upon the occurrence and during the
continuation of an Event of Default (as defined in the Purchase Agreement),
which appointment is irrevocable and coupled with an interest.
SECTION 6.2. PURCHASERS' EXPENSES. The Grantor agrees to pay upon
demand to the Purchasers the amount of any and all reasonable expenses,
including the reasonable expenses of their counsel and of any experts or agents,
which the Purchasers may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from
or other realization upon any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Purchasers hereunder or (iv) the failure
of the Grantor to perform or observe any of the provisions hereof. Any such
amounts payable as provided hereunder shall be additional Obligations secured
hereby.
9
<PAGE>
SECTION 6.3. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by facsimile as follows:
(a) if to the Grantor, to: Teletrac, Inc., 3220 Executive Ridge, Suite
100, Vista, California 92083, (760) 597-9906 (Facsimile); Attention:
General Counsel; and
(b) if to any of the Purchasers, to such Purchaser at his or its
address specified therefor in the Purchase Agreement.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of transmission if delivered by hand or sent by facsimile, the first day
after delivery to an overnight national courier service if sent by such service
or on the date of receipt if sent by certified or registered mail, in each case
delivered, sent or mailed (properly addressed) to such party as provided in this
Section 6.3 or in accordance with the latest unrevoked direction from such party
given in accordance with this Section 6.3.
SECTION 6.4. SUCCESSORS AND ASSIGNS. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party, and the term "Purchaser" shall
include each successor and assignee of such Purchaser permitted under the
Purchase Agreement; and all covenants, promises and agreements by or on behalf
of the Grantor or the Purchasers that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and permitted assigns
referred to above.
(b) The Grantor shall not assign or delegate any of its rights and
duties hereunder.
SECTION 6.5. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF.
SECTION 6.6. WAIVERS; AMENDMENT. (a) No failure or delay of any
Purchaser in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other right or power. The rights and remedies of the Purchasers
hereunder are cumulative and exclusive of any rights or remedies which they
would otherwise have. No waiver of any provision of this Agreement or consent to
any departure by the Grantor therefrom shall in any event be effective unless
10
<PAGE>
the same shall be permitted by paragraph (b) below, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on the Grantor in any case shall entitle the
Grantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Grantor and the Purchasers. Notwithstanding the foregoing,
upon the written consent of holders of a majority of the outstanding principal
amount of the Senior Secured Notes, this Agreement may be amended to release the
Security Interest on Accounts Receivable (and Proceeds thereof) and to delete
Accounts Receivable (and Proceeds thereof) from the definition of Collateral, in
which event the Security Interest in Accounts Receivable and all Proceeds
thereof shall be deemed released. The Purchasers shall be bound by any
modification or amendment authorized by this Section regardless of whether the
Senior Secured Notes shall have been marked to make reference thereto, and any
consent by any holder of a Senior Secured Note pursuant to this Section shall
bind any person subsequently acquiring a Senior Secured Note from it, whether or
not such Senior Note shall have been so marked.
SECTION 6.7. ENTIRE AGREEMENT. This Agreement and the Purchase
Agreement constitute the entire contract between the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect to
the subject matter hereof is superseded by this Agreement and the Purchase
Agreement. Nothing in this Agreement or in the Purchase Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto or
thereto any rights, remedies, obligations or liabilities under or by reason of
this Agreement or the Purchase Agreement.
SECTION 6.8. SURVIVAL OF AGREEMENT. All covenants, agreements,
representations and warranties made by the Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Purchasers and shall survive the purchase by the Purchaser of the Senior Secured
Notes and the Warrants pursuant to the Purchase Agreement regardless of any
investigation made by any of the Purchasers, or on his or its behalf, and shall
continue in full force and effect as long as any Obligation is outstanding and
unpaid.
SECTION 6.9. TERMINATION. This Agreement and the Security Interest
shall terminate when all the Obligations have been paid in full, at which time
the Purchasers shall execute and deliver to the Grantor, at the Grantor's
expense, all Uniform Commercial Code termination statements and similar
documents which the Grantor shall reasonably request to evidence such
termination and release the Collateral hereunder.
11
<PAGE>
SECTION 6.10. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract.
SECTION 6.12. HEADINGS. Article and Section headings used herein are
for convenience of reference only are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
TELETRAC, INC.
By _______________________
Name:
Title:
[PURCHASERS]
13
<PAGE>
SCHEDULE I
14
EXHIBIT E
TELETRAC, INC.
Subscription Documents
Teletrac, Inc.
3220 Executive Ridge, Suite 100
Vista, CA 92083
Telecopier Number: (760) 597-9906
Attention: General Counsel
<PAGE>
TELETRAC, INC.
SUBSCRIPTION PROCEDURES
Prospective purchasers should complete the following steps on or before ________
_____, 1999:
(1) Complete the attached Subscription Agreement and send it by
telecopier to Teletrac, Inc. (the "Company") at the address
below, on or before , 1999, so that the Company may
determine whether the prospective purchaser is eligible to
subscribe for the 10% Senior Secured Notes and the Class A
Warrants (the "Securities").
Please send the Subscription Agreement and direct all questions
to:
Teletrac, Inc.
3220 Executive Ridge, Suite 100
Vista, CA 92083
Attn: General Counsel
Fax: (760) 597-9906
(2) The Company will notify the prospective purchaser whether it is
eligible to subscribe for the Securities, and will provide
notification of the date the Securities will be issued.
(3) You must designate the maximum amount of Securities you wish to
purchase ("Maximum Commitment") on page 1 of the Subscription
Agreement (while agreeing and acknowledging that the amount of
such Maximum Commitment will be modified in accordance with
Sections I and II of the Subscription Agreement).
(4) Upon acceptance of the subscription, a copy of the executed
Subscription Agreement, signed as accepted on behalf of the
Company, will be returned to the purchaser.
If requested by the Company, each prospective investor which is an entity must
provide evidence that its constitutional documents permit it to purchase the
Securities, that all appropriate action has been taken by the prospective
purchaser to authorize the purchase and that the person(s) executing the
Subscription Agreement has the authority to do so.
The Subscription Agreement must be received on or before __________ ____, 1999.
-1-
<PAGE>
TELETRAC, INC.
Dated as of September 15, 1999
SUBSCRIPTION AGREEMENT
Amount of Maximum Commitment*: $_____________
Teletrac, Inc.
3220 Executive Ridge, Suite 100
Vista, California 92083
Re: Teletrac, Inc. (the "Company")
Issuance of 10% Senior Secured Notes and Class A Warrants
(collectively, the "Securities")
________________________________________ Type of Purchaser - Please check one:
Name of Subscriber (Please Print or Type)
_____Individual
_____Partnership
Tax I.D. Number:________________________ _____Corporation
_____Trust
_____Foundation
(_______________________________________) _____Endowment
Name of Person exercising investment _____Employee Benefit Plan
discretion for subscriber _____Individual Retirement Plan
(trustee or fiduciary, etc.) _____Keogh Plan
_____Tenants in Common
_____Joint Tenants
_____Other - Specify:______________
If applicable, please indicate below the basis on which the intended purchaser
is exempt from U.S. federal income taxation and please attach to this
Subscription Agreement when submitted to the Company applicable written evidence
of the tax-exempt status for purposes of U.S. federal income taxation of the
intended purchaser.
____________________________________________________________________
If the intended purchaser is an employee benefit plan qualified under the
Employee Retirement Income Security Act of 1974:
(i) Is the plan both voluntary and contributory? Yes___ No___
(ii) Is the plan a participant-directed defined contribution plan? Yes___ No___
- ---------------
* Please note that the maximum commitment for a holder of an Old Note Claim,
Miscellaneous Unsecured Claim or a Category A Convenience Claim is limited
to $3 million.
SA-1
<PAGE>
Residence or Principal Place Mailing address if different:
of Business Address:
____________________________________ ____________________________________
Name Name
____________________________________ ____________________________________
Street Street
____________________________________ ____________________________________
City, State, Zip Code City, State, Zip Code
Attn:_______________________________ Attn:_______________________________
Telephone number: ( ) Telephone number: ( )
____________________ _________________
Telecopier number: ( ) Telecopier number: ( )
____________________ _________________
SA-2
<PAGE>
Ladies and Gentlemen:
The offer and sale of 10% Senior Secured Notes in an aggregate
principal amount of up to $3 million (the "Senior Secured Notes") and up to 3
million Class A Warrants (the "Class A Warrants") (the Senior Secured Notes and
the Class A Warrants being hereafter referred to collectively as the
"Securities") of Teletrac, Inc., a Delaware Corporation (the "Company"), to each
subscribing party (the "Subscribing Party") is not being registered under the
Securities Act of 1933, as amended (the "Securities Act"), but rather is being
made privately by the Company pursuant to the private placement exemption from
registration provided in Section 4(2) of the Securities Act and Rule 506 of
Regulation D ("Regulation D") promulgated thereunder by the Securities and
Exchange Commission (the "SEC").
The offer and sale of the Securities is being conducted pursuant to a
plan of reorganization of the Company under Chapter 11 of the United States
Bankruptcy Code, dated _____________, 1999, a copy of which is enclosed herewith
(the "Plan"). There will be a hearing on confirmation of the Plan and an order
(the "Confirmation Order") from the United States Bankruptcy Court for the
District of Delaware having jurisdiction over the Company's Chapter 11 case
filed under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy
Court") confirming the Plan. Once the Plan has been confirmed and the
Confirmation Order entered, and upon the Effective Date (as such term is defined
in the Plan) of the Plan, the Subscribing Parties will enter into a Securities
Purchase Agreement with the Company for the Securities in form and substance,
attached hereto as Exhibit B (the "Securities Purchase Agreement") and the
Securities will be issued on the Effective Date.
In executing this Subscription Agreement, the Subscribing Parties
agree to execute the Securities Purchase Agreement on the Effective Date and
further agree to subscribe and purchase the Securities as further described
below.
In addition, the information requested in this Subscription Agreement
is needed in order to ensure compliance with the appropriate regulations and to
determine (1) whether the purchase of the Securities by the Subscribing Party is
suitable in light of the Subscribing Party's financial position, and (2) whether
the Subscribing Party meets certain minimum net worth tests to be deemed an
"accredited investor" as defined in Regulation D and/or has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of the investment.
The Subscribing Party also understands and agrees that, although the
Company will use its best efforts to keep the information provided in the
answers to this Subscription Agreement strictly confidential, the Company may
present this Subscription Agreement and the information provided in answers to
it to such parties as it deems advisable, including the Bankruptcy Court or the
SEC, if called upon to establish the availability under any applicable law of an
exemption from registration of the Securities or if the contents thereof are
relevant to any issue in any action, suit, or proceeding to which the Company is
a party or by which it is or may be bound.
SA-3
<PAGE>
The Subscribing Party hereby agrees as follows:
I. SUBSCRIPTION FOR SECURITIES.
(A) The Subscribing Party subscribes for and agrees to purchase the Securities
on the terms provided for herein, in the Securities Purchase Agreement, and in
the Plan. The Subscribing Party agrees to execute the Securities Purchase
Agreement on or prior to the Effective Date (as such term is defined in the
Plan). The Subscribing Party agrees to and understands the terms and conditions
upon which the Securities are being offered, including, without limitation, the
fact that: (i) the Securities have not been registered and will not be
registered under the Securities Act of 1933, as amended, (ii) the Securities
must be held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration, (iii) the
Securities will bear a legend to such effect and (iv) the Company will make a
notation on its transfer books to such effect.
(B) The Subscribing Party agrees and acknowledges that the actual amount of
Securities such Subscribing Party is obligated to purchase (the "Actual
Commitment Amount") shall be calculated, in accordance with the Plan, as
follows:
(i) If the Subscribing Party is a holder of an Equity Interest (as
such term is defined in the Plan) in Teletrac Holdings, Inc., a Delaware
corporation (a "Holdings Equity Holder") and parent of the Company, then the
Actual Commitment Amount shall be the Maximum Commitment Amount specified by
such Subscribing Party on the front page of this Subscription Agreement (limited
to $450,000 for each such holder of an equity interest), or, if the Maximum
Commitment Amounts of all Holdings Equity Holders exceed $450,000, then the
Maximum Commitment Amount of such Subscribing Party shall be determined by
multiplying $450,000 by the ratio which such Subscribing Party's Maximum
Commitment Amount shall bear to the Maximum Commitment Amounts of all Holdings
Equity Holders.
(ii) The Actual Commitment Amount of the holders of an Old Note Claim,
a Miscellaneous Unsecured Claim, or a Category A Convenience Claim (as such
terms are defined in the Plan) (collectively the "Claim Holders") shall be the
Maximum Commitment Amount, if any, specified by such Claim Holder (PROVIDED
HOWEVER, that the Maximum Commitment Amount for any Claim Holder cannot exceed
$3 million) or, if the aggregate of the Maximum Commitment Amounts of all such
Claim Holders shall exceed $3 million, shall be determined by multiplying $3
million by the ratio of (i) the Allowed Amount of such Holder's Claim (or in the
event such claim is subject to dispute or objection, the estimated amount of
such Claim as agreed upon by the Debtor and such holder or as may be fixed by
the Bankruptcy Court) to (ii) the aggregate of the Allowed Amounts (or similarly
estimated or agreed-upon amounts) of the Claims of such Subscribing Parties;
PROVIDED, HOWEVER, that the Actual Commitment Amounts of holders of Old Note
Claims as calculated pursuant to this subsection (ii) shall be further reduced
by subtracting from each Old Note Claim holder's Actual Commitment Amount the
amount determined by multiplying (x) the ratio of the Actual Commitment Amount
of such holder to the aggregate of the Actual Commitment Amounts of all holders
of Old Note Claims by (y) the aggregate of the Actual Commitment Amounts of all
Holdings Equity Holders.
SA-4
<PAGE>
(C) The Subscribing Party understands and agrees that the Company reserves the
right to reject this subscription for any reason or no reason, in whole or in
part and at any time prior to acceptance thereof. In the event of rejection of
this subscription, this Subscription Agreement shall have no force or effect.
(D) The Subscribing Party hereby represents and warrants that he is the holder
of the following Claim or Old Notes (as defined in the Plan) as of the [Record
Date]:
----------------------------------------
II. PAYMENT BY THE SUBSCRIBING PARTY.
The Subscribing Party agrees and acknowledges that it shall be
required to and it shall pay the Actual Commitment Amount on the Effective Date
(as such term is defined in the Plan.
III. ELIGIBILITY REPRESENTATIONS OF THE INVESTOR.
(A) General:
(INITIAL ONE AND COMPLETE BLANKS)
________(1) if the Subscribing Party is an employee benefit plan, an endowment,
(INITIAL) a foundation, a corporation, partnership, trust or other legal
entity, it is:
|_| organized under the laws of: ______________________________
|_| and has its principal place
of business in: ______________________________
OR
________(2) if the Subscribing Party is an individual, or beneficial ownership
(INITIAL) of the Subscribing Party is held by an individual (for example, an
Individual Retirement Account or Keogh Plan), such individual is of
legal age and is:
|_| a resident of: __________________________________
Has the Subscribing Party ever purchased non-marketable or
restricted securities?
Yes______ No______
SA-5
<PAGE>
Indicate the frequency of the Subscribing Party's investments in
non-marketable securities: (circle appropriate answer)
Often Occasional Seldom
The individual(s) making the investment decision on behalf of the
Subscribing Party is:
_____________________________________________
PLEASE PROVIDE THE FOLLOWING INFORMATION REGARDING SUCH PERSON:
Employment Information:________________________________________________
Name and address of employer:__________________________________________
Telephone number of employer: ( )___________________________________
Describe the person's occupation and any other business connections
reflecting knowledge and experience of financial matters (service on boards
of directors, professional licenses, etc.):
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
Does such person have sufficient knowledge and experience in financial and
business matters to evaluate the merits and risks associated with
purchasing the Securities?
Yes______ No______
(B) ACCREDITED INVESTOR STATUS:
INITIAL ALL APPROPRIATE SPACES ON THE FOLLOWING PAGES INDICATING THE BASIS
UPON WHICH THE SUBSCRIBING PARTY QUALIFIES AS AN ACCREDITED INVESTOR UNDER
REGULATION D.
FOR INDIVIDUAL INVESTORS ONLY
________(1) I certify that I am an accredited investor because I have an
(INITIAL) individual net worth, or my spouse and I have a combined
net worth, in excess of $1,000,000. FOR PURPOSES OF THIS
QUESTIONNAIRE, "NET WORTH " MEANS THE EXCESS OF TOTAL ASSETS AT FAIR
MARKET VALUE, INCLUDING HOME *, HOME FURNISHINGS AND AUTOMOBILES,
OVER TOTAL LIABILITIES.
SA-6
<PAGE>
________(2) I certify that I am an accredited investor because I had individual
(INITIAL) income (exclusive of any income attributable to my spouse) of more
than $200,000 for the past two years or joint income with any spouse
in excess of $300,000 in each of those years and I reasonably expect
to reach the same income level in the current year.**
FOR CORPORATIONS, FOUNDATIONS, ENDOWMENTS, LIMITED LIABILITY COMPANIES
OR PARTNERSHIPS
________(3) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it has total assets in excess of $5,000,000 and was
not formed for the specific purpose of acquiring the Securities
offered.
________(4) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because all of its equity owners are accredited investors.
THE COMPANY, IN ITS SOLE DISCRETION MAY REQUEST INFORMATION
REGARDING THE BASIS ON WHICH SUCH EQUITY OWNERS ARE ACCREDITED.
- ---------------
* Notwithstanding anything to the contrary herein, for purposes of
determining "net worth," the principal residence owned by an individual
shall be valued either at (A) cost, including the cost of improvements, net
of current encumbrances upon the property, or (B) the appraised value of
the property as determined upon a written appraisal used by an
institutional lender making a loan to the individual secured by the
property, including the cost of subsequent improvements, net of current
encumbrances upon the property. "Institutional lender" means a bank,
savings and loan company, industrial loan company, credit union or personal
property broker or a company whose principal business is as a lender of
loans secured by real property and which has such loans receivable in the
amount of $2,000,000 or more.
** For purposes of this Subscription Agreement, individual income means
adjusted gross income, as reported for federal income tax purposes, less
any income attributable to a spouse or to property owned by a spouse,
increased by the following amounts (but not including any amounts
attributable to a spouse or to property owned by a spouse): (i) the amount
of any tax-exempt interest income under Section 103 of the Internal Revenue
Code of 1986, as amended (the "Code"), received, (ii) the amount of losses
claimed as a limited partner in a limited partnership as reported on
Schedule E of Form 1040, (iii) any deduction claimed for depletion under
Section 611 et seq. of the Code, (iv) amounts contributed to an Individual
Retirement Account (as defined in the Code) or Keogh retirement plan, (v)
alimony paid and (vi) any elective contributions to a cash or deferred
arrangement under Section 401 of the Code.
SA-7
<PAGE>
FOR EMPLOYEE BENEFIT PLANS
________(5) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is an employee benefit plan within the meaning
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the decision to purchase the Securities was made by
a plan fiduciary (as defined in Section 3(21) of ERISA), which is
either a bank, savings and loan association, insurance company or
registered investment adviser. The name of such plan fiduciary is:
(____________________________________________)
________(6) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is an employee benefit plan within the meaning
of ERISA and has total assets in excess of $5,000,000.
________(7) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is a plan established and maintained by a state,
its political subdivisions, or any agency or instrumentality of a
state or its political subdivisions for the benefit of its
employees, and has total assets in excess of $5,000,000.
FOR INDIVIDUAL RETIREMENT ACCOUNTS AND KEOGH PLANS
________(8) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is a self-directed plan (i.e., a tax-qualified
defined contribution plan in which a participant may exercise
control over the investment of assets credited to his or her
account) in which the participant(s) that are purchasing the
Securities are accredited investors because each such participant
has a net worth of at least $1,000,000 or has had an individual
income of at least $200,000 (or a joint income with spouse of at
least $300,000) in each of the last two years. THE COMPANY, IN ITS
SOLE DISCRETION, MAY REQUEST INFORMATION REGARDING THE BASIS ON
WHICH SUCH PARTICIPANTS ARE ACCREDITED.
FOR CHARITABLE TAX-EXEMPT ENTITIES
________(9) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is an organization described in Section 501(c)
(3) of the Internal Revenue Code of 1986, as amended (the "Internal
Revenue Code"), was not formed for the specific purpose of acquiring
the Securities offered, and has total assets in excess of
$5,000,000.
FOR TRUSTS
________(10) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it has total assets in excess of $5,000,000, was
not formed for the specific purpose of acquiring the Securities
offered and its purchase is directed by a sophisticated person.
AS USED IN THE FOREGOING SENTENCE, A "SOPHISTICATED PERSON" IS
ONE WHO HAS SUCH KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS
MATTERS THAT IT IS CAPABLE OF EVALUATING THE MERITS AND RISKS OF
THE PROSPECTIVE PURCHASE.
SA-8
<PAGE>
________(11) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is (i) a bank as defined in Section 3(a)(2) of
the Securities Act, savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities Act,
(ii) acting in a fiduciary capacity and (iii) subscribing for the
purchase of the Securities being offered on behalf of a trust
account or accounts.
________(12) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is a revocable trust which may be amended or
revoked at any time by the grantors thereof and all of the grantors
are accredited investors. THE COMPANY, IN ITS SOLE DISCRETION, MAY
REQUEST INFORMATION REGARDING THE BASIS ON WHICH SUCH EQUITY OWNERS
ARE ACCREDITED.
FOR BANKS, SAVINGS AND LOANS AND SIMILAR INSTITUTIONS
________(13) The Subscribing Party hereby certifies that it is an accredited
(INITIAL) investor because it is a bank as defined in Section 3(a)(2) of the
Securities Act acting in its individual capacity.
FOR INSURANCE COMPANIES
________(14) The Subscribing Party hereby certifies that it is an insurance
(INITIAL) company as defined in Section 2(13) of the Securities Act.
(C) NON-FOREIGN STATUS:
FOR INDIVIDUALS
________ (1) The Subscribing Party hereby certifies that it is not a
(INITIAL) nonresident alien for purposes of income taxation (as such term
is defined in the Internal Revenue Code and regulations ("Income
Tax Regulations") promulgated by the Internal Revenue Service
thereunder.
FOR ENTITIES
________ (2) The Subscribing Party hereby certifies that it is not a
(INITIAL) foreign corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations).
GENERAL
________ (3) The Subscribing Party hereby agrees that if any of
(INITIAL) information in this Item III(C) changes, the Subscribing Party
will notify the Company within 60 days thereof. The Subscribing
Party understands that the information contained in this
SA-9
<PAGE>
Item III(C) may be disclosed to the Internal Revenue Service by
the Company and that any false statement contained in this Item
III(C) could be punished by fine, imprisonment or both.
IV. REPRESENTATIONS AND COVENANTS OF THE INVESTOR.
(A) The Subscribing Party will not sell or otherwise transfer the Securities
without registration under the Securities Act or an exemption therefrom and
fully understands and agrees that it must bear the economic risk of its
investment for an indefinite period of time because, among other reasons, the
Securities have not been registered under the Securities Act or under the
securities laws of certain states and, therefore, cannot be resold, pledged,
assigned or otherwise disposed of unless it is subsequently registered under the
Securities Act and under applicable securities laws of such states or an
exemption from such registration is available. The undersigned understands that
the Company is under no obligation to register the Securities on its behalf or
to assist it in complying with any exemption from such registration under the
Securities Act. It further understands that the Company is not registered as an
investment company under the Investment Company Act, in reliance upon an
exemption from such registration.
(B) The Subscribing Party has received and read a copy of the Company's
Disclosure Statement filed with the Bankruptcy Court on June 28, 1999,
outlining, among other things, _________________________________________. The
Subscribing Party acknowledges that in making a decision to subscribe for the
Securities the Subscribing Party has relied solely upon the Disclosure Statement
and independent investigations made by the Subscribing Party. The Subscribing
Party's investment in the Securities is consistent with the investment purposes
and objectives and cash flow requirements of the Subscribing Party and will not
adversely affect the Subscribing Party's overall need for diversification and
liquidity.
(C) The Subscribing Party has such knowledge and experience in financial and
business matters that the Subscribing Party is capable of evaluating the merits
and risks of the Subscribing Party's investment in the Securities and is able to
bear such risks, and has obtained, in the Subscribing Party's judgment,
sufficient information from the Company or its authorized representatives to
evaluate the merits and risks of such investment. The Subscribing Party has
evaluated the risks of investing in the Securities and has determined that the
Securities are a suitable investment for the Subscribing Party. The Subscribing
Party has not utilized any other person as a purchaser representative in
connection with evaluating such merits and risks.
(D) The Subscribing Party can afford a complete loss of the investment in the
Securities and can afford to hold the investment in the Securities for an
indefinite period of time, and acknowledges that distributions, including,
without limitation, the proceeds of redemptions, may be paid in cash or in kind.
(E) The Subscribing Party is acquiring the Securities subscribed for herein for
its own account, for investment purposes only and not with a view to distribute
or resell such Securities in whole or in part.
(F) The Subscribing Party agrees and is aware that:
SA-10
<PAGE>
(1) the Company is presently in bankruptcy pursuant to Chapter 11 at
the United States Bankruptcy Code and is currently operating under the
jurisdiction of the Bankruptcy Court;
(2) no federal or state agency has passed upon the Securities or
made any findings or determination as to the fairness of this
investment; and
(3) there are substantial risks of loss of investment incidental to
the purchase of the Interest, including those summarized in the
Disclosure Statement; and
(G) The execution, delivery and performance by the Subscribing Party
of this Subscription Agreement are within the powers of the Subscribing Party,
have been duly authorized and will not constitute or result in a breach or
default under or conflict with any order, ruling or regulation of any court or
other tribunal or of any governmental commission or agency, or any agreement or
other undertaking, to which the Subscribing Party is a party or by which the
Subscribing Party is bound, and, if the Subscribing Party is not an individual,
will not violate any provisions of the incorporation papers, by-laws, indenture
of trust or partnership agreement, as may be applicable, of the Subscribing
Party. The signature on this agreement is genuine, and the signatory, if the
Subscribing Party is an individual, has legal competence and capacity to execute
the same, or, if the Subscribing Party is not an individual, the signatory has
been duly authorized to execute the same, and this Subscription Agreement
constitutes a legal, valid and binding obligation of the Subscribing Party,
enforceable in accordance with its terms.
V. COMMUNICATIONS TO INVESTOR
Please send confirmation of a subscription for the Securities, a copy
of this Subscription Agreement and any other communications (including
redemption checks and dividend checks) to:
(INITIAL ONE)
_________ residence or principal business address above;
(INITIAL)
_________ mailing address above.
(INITIAL)
VI. GENERAL
(A) The Subscribing Party agrees to indemnify and hold harmless the Company and
each person, if any, who controls or is controlled by the Company, within the
meaning of Section 15 of the Securities Act, against any and all loss,
liability, claim, damage and expense whatsoever (including, but not limited to,
any and all expenses whatsoever reasonably incurred in investigating, preparing
or defending against any litigation commenced or threatened or any claim
whatsoever) arising out of or based upon (a) any false representation or
warranty or breach or failure by the Subscribing Party to comply with any
covenant or agreement made by the Subscribing Party, in this Subscription
SA-11
<PAGE>
Agreement or in any other document furnished by the Subscribing Party to any of
the foregoing in connection with this transaction or (b) any action for
securities law violations instituted by the Subscribing Party which is finally
resolved by judgment against the Subscribing Party.
(B) If any provision of this Subscription Agreement is invalid or unenforceable
under any applicable law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform
with such applicable law. Any provision hereof which may be held invalid or
unenforceable under any applicable law shall not affect the validity or
enforceability of any other provisions hereof, and to this extent the provisions
hereof, shall be severable.
VII. TRUSTEE, AGENT, REPRESENTATIVE OR NOMINEE.
If the Subscribing Party is acting as trustee, agent, representative
or nominee for a subscriber (a "Beneficial Owner"), the Subscribing Party
understands and acknowledges that the representations, warranties and agreements
made herein are made by the Subscribing Party (A) with respect to the
Subscribing Party and (B) with respect to the Beneficial Owner of the Securities
subscribed for hereby. The Subscribing Party further represents and warrants
that he has all requisite power and authority from said Beneficial Owner to
execute and perform the obligations under this Subscription Agreement. The
Subscribing Party also agrees to indemnify the Company and its officers and
agents for any and all costs, fees and expenses (including legal fees and
disbursements) in connection with any damages resulting from the Subscribing
Party's or the Beneficial Owner's misrepresentation or misstatement contained
herein, or the assertion of the Subscribing Party's lack of proper authorization
from the Beneficial Owner of the Securities subscribed for hereby to enter into
this Subscription Agreement or perform the obligations hereunder.
VIII. ADDITIONAL INFORMATION AND SUBSEQUENT CHANGES IN THE
FOREGOING REPRESENTATIONS
The Company may request from the Subscribing Party such additional
information as it may deem necessary to evaluate the eligibility of the
Subscribing Party to acquire the Securities, and may request from time to time
such information as it may deem necessary to determine the eligibility of the
Subscribing Party to hold the Securities or to enable the Company to determine
the Company's compliance with applicable regulatory requirements or tax status,
and the Subscribing Party shall provide such information as may reasonably be
requested.
Each person acquiring the Securities must satisfy the foregoing both
at the time of subscription and at all times thereafter until such person ceases
to be a holder of the Securities. Accordingly, the Subscribing Party agrees to
notify the Company promptly if there is any change with respect to any of the
foregoing information or representations and to provide the Company with such
further information as the Company may reasonably require.
SA-12
<PAGE>
IN WITNESS WHEREOF, the Subscribing Party has executed this Subscription
Agreement as of the date set forth below, and with respect to the information
disclosed in Item III(D) of this Subscription Agreement, has executed this
Subscription Agreement under penalties of perjury.
Date:____________, 199__
For Individual Subscribers: For Subscribers other than Individuals:
_______________________________ ______________________________________
Signature (Please Type Name of Investor)
______________________________ By:___________________________________
(Please Type Name) Signature
___________________________________
(Please Type Name of Investor)
Title:________________________________
NAME OF TRUSTEES OR OTHER FIDUCIARIES EXERCISING INVESTMENT
DISCRETION WITH RESPECT TO BENEFIT PLAN OR TRUST
Signature Printed Name Title
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
_______________________ _______________________ _______________________
AGREEMENT OF CUSTODIAN OF INDIVIDUAL RETIREMENT ACCOUNT
The undersigned, being the custodian of the above named individual retirement
account, hereby accepts and agrees to this subscription.
By:__________________________________ _______________________________
Signature of Authorized Signatory Name of Custodian (Print)
_____________________________________
Name of Authorized Signatory (Print)
(Page 1 of 2)
<PAGE>
ACKNOWLEDGMENT
State of )
ss.:
County of )
On this _____ day of ________________, 199_, before me personally appeared
___________________________ who proved to me on the basis of satisfactory
evidence to be the person whose name is subscribed to or who executed the
foregoing instrument in his/her personal or authorized capacity, and who duly
acknowledged to me that execution of the same is his/her own free act and deed
and made with appropriate authority.
My Commission Expires: ____________________________________
Notary Public
[Seal]
NOTARY: PLEASE COMPLETE STATE, COUNTRY, DATE AND NAMES OF ALL PERSONS SIGNING
AND AFFIX NOTARIAL SEAL.
(Page 2 of 2)
TELETRAC, INC. AND ITS SUBSIDIARIES
1999 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
Section 1. PURPOSE. The purpose of the Teletrac, Inc. and its
Subsidiaries 1999 Stock Option and Restricted Stock Purchase Plan (the "Plan")
is to promote the interests of Teletrac, Inc., a Delaware corporation (the
"Company"), and any Subsidiary thereof and the interests of the Company's
stockholders by providing an opportunity to selected employees and officers of
the Company or any Subsidiary thereof as of the date of the adoption of the Plan
or at any time thereafter to purchase Common Stock of the Company. By
encouraging such stock ownership, the Company seeks to attract, retain and
motivate such employees and other persons and to encourage such employees and
other persons to devote their best efforts to the business and financial success
of the Company. It is intended that this purpose will be effected by the
granting of "non-qualified stock options" and/or "incentive stock options" to
acquire the Common Stock of the Company and/or by the granting of rights to
purchase the Common Stock of the Company on a "restricted stock" basis. Under
the Plan, the Committee (as hereinafter defined) shall have the authority (in
its sole discretion) to grant "incentive stock options" within the meaning of
Sec tion 422(b) of the Code, "non-qualified stock options" as described in
Treasury Regulation Section 1.83-7 or any successor regulation thereto, or
"restricted stock" awards.
No grant of "incentive stock options" shall be made under this Plan
unless such Plan is approved by the stockholders of the Company within 12 months
of the date of the adoption of such Plan.
Section 2. DEFINITIONS. For purposes of the Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context:
2.1. "AWARD" shall mean an award of the right to purchase Common Stock
granted under the provisions of Section 7 of the Plan.
2.2. "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
2.3. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.4. "COMMITTEE" shall mean the committee of the Board of Directors
referred to in Section 5 hereof; provided, that if no such committee is
appointed by the Board of Directors, the Board of Directors shall have all of
the authority and obligations of the Committee under the Plan.
2.5. "COMMON STOCK" shall mean the Common Stock. $.01 par value, of
the Company.
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2.6. "EMPLOYEE" shall mean (i) with respect to an ISO, any person,
including, without limitation, an officer of the Company, who, at the time an
ISO is granted to such person hereunder, is employed by the Company or any
Parent or Subsidiary of the Company, and (ii) with respect to a Non-Qualified
Option and/or an Award, any person employed by, or performing services for, the
Company or any Parent or Subsidiary of the Company, including, without
limitation, officers and directors.
2.7. "ISO" shall mean an Option granted to a Participant pursuant to
the Plan that constitutes and shall be treated as an "incentive stock option" as
defined in Section 422(b) of the Code.
2.8. "NON-QUALIFIED OPTION" shall mean an Option granted to a
Participant pursuant to the Plan that is intended to be, and qualifies as, a
"non-qualified stock option" as described in Treasury Regulation Section 1.83-7
or any successor regulation thereto and that shall not constitute or be treated
as an ISO.
2.9. "OPTION" shall mean any ISO or Non-Qualified Option granted to an
Employee pursuant to the Plan.
2.10. "PARTICIPANT" shall mean any Employee to whom an Award and/or an
Option is granted under the Plan.
2.11. "PARENT" of the Company shall have the meaning set forth in
Section 424(e) of the Code.
2.12. "SUBSIDIARY" of the Company shall have the meaning set forth in
Section 424(f) of the Code.
Section 3. ELIGIBILITY. Awards and/or Options may be granted to any
Employee. The Committee shall have the sole authority to select the persons to
whom Awards and/or Options are to be granted hereunder, and to determine whether
a person is to be granted a NonQualified Option, an ISO or an Award or any
combination thereof. No person shall have any right to participate in the Plan.
Any person selected by the Committee for participation during any one period
will not by virtue of such participation have the right to be selected as a
Participant for any other period.
Section 4. COMMON STOCK SUBJECT TO THE PLAN.
4.1. NUMBER OF SHARES. The total number of shares of Common Stock for
which Options and/or Awards may be granted under the Plan shall not exceed in
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<PAGE>
the aggregate One Million Five Hundred Thousand (1,500,000) shares of Common
Stock (subject to adjustment as provided in Section 8 hereof).
4.2. REISSUANCE. The shares of Common Stock that may be subject to
Options and/or Awards granted under the Plan may be either authorized and
unissued shares or shares reacquired at any time and now or hereafter held as
treasury stock as the Committee may determine. In the event that any outstanding
Option expires or is terminated for any reason, the shares allocable to the
unexercised portion of such Option may again be subject to an Option and/or
Award granted under the Plan. If any shares of Common Stock issued or sold
pursuant to an Award or the exercise of an Option shall have been repurchased by
the Company, then such shares may again be subject to an Option and/or Award
granted under the Plan.
4.3. SPECIAL ISO LIMITATIONS.
(a) The aggregate fair market value (determined as of the date an ISO
is granted) of the shares of Common Stock with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year (under
all incentive stock option plans of the Company or any Parent or Subsidiary of
the Company) shall not exceed $100,000.
(b) No ISO shall be granted to an Employee who, at the time the ISO is
granted, owns (actually or constructively under the provisions of Section 424(d)
of the Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company or any Parent or Subsidiary of the
Company, unless (i) the option price is at least 110% of the fair market value
(determined as of the time the ISO is granted) of the shares of Common Stock
subject to the ISO and (ii) the ISO by its terms is not exercisable more than
five years from the date it is granted.
4.4. LIMITATIONS NOT APPLICABLE TO NON-QUALIFIED OPTIONS OR AWARDS.
Notwithstanding any other provision of the Plan, the provisions of Sections
4.3(a) and (b) shall not apply, nor shall be construed to apply, to any
Non-Qualified Option or Award granted under the Plan.
Section 5. ADMINISTRATION OF THE PLAN.
5.1. ADMINISTRATION. Subject to the proviso in Section 2.4 hereof, the
Plan shall be administered by a committee of the Board of Directors (the
"Committee") established by the Board of Directors and consisting of two
persons, one of whom shall be the Chief Executive Officer of the Company. The
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board of Directors.
5.2. GRANT OF OPTIONS/AWARDS.
(a) OPTIONS. The Committee shall have the sole authority and
discretion under the Plan (i) to select the Employees who are to be granted
Options hereunder; (ii) to designate whether any Option to be granted hereunder
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<PAGE>
is to be an ISO or a Non-Qualified Option; (iii) to establish the number of
shares of Common Stock that may be subject to each Option; (iv) to determine the
time and the conditions subject to which Options may be exercised in whole or in
part; (v) to determine the amount (not less than the par value per share) and
the form of the consideration that may be used to purchase shares of Common
Stock upon exercise of any Option (including, without limitation, the
circumstances under which issued and outstanding shares of Common Stock owned by
a Participant may be used by the Participant to exercise an Option); (vi) to
impose restrictions and/or conditions with respect to shares of Common Stock
acquired upon exercise of an Option; (vii) to determine the circumstances under
which shares of Common Stock acquired upon exercise of any Option may be subject
to repurchase by the Company; (viii) to determine the circumstances and
conditions subject to which shares acquired upon exercise of an Option may be
sold or otherwise transferred, including, without limitation, the circumstances
and conditions subject to which a proposed sale of shares of Common Stock
acquired upon exercise of an Option may be subject to the Company's right of
first refusal (as well as the terms and conditions of any such right of first
refusal); (ix) to establish a vesting provision for any Option relating to the
time when (or the circumstances under which) the Option may be exercised by a
Participant, including, without limitation, vesting provisions that may be
contingent upon (A) the Company's meeting specified financial goals, (B) a
change of control of the Company or (C) the occurrence of other specified
events; (x) to accelerate the time when outstanding Options may be exercised,
PROVIDED, HOWEVER, that any ISOs shall be deemed "accelerated" within the
meaning of Section 424(h) of the Code; and (xi) to establish any other terms,
restrictions and/or conditions applicable to any Option not inconsistent with
the provisions of the Plan.
(b) AWARDS. The Committee shall have the sole authority and discretion
under the Plan (i) to select the Employees who are to be granted Awards
hereunder; (ii) to determine the amount to be paid by a Participant to acquire
shares of Common Stock pursuant to an Award, which amount may be equal to, more
than, or less than 100% of the fair market value of such shares on the date the
Award is granted (but in no event less than the par value of such shares); (iii)
to determine the time or times and the conditions subject to which Awards may be
made; (iv) to determine the time or times and the conditions subject to which
the shares of Common Stock subject to an Award are to become vested and no
longer subject to repurchase by the Company; (v) to establish transfer
restrictions and the terms and conditions on which any such transfer
restrictions with respect to shares of Common Stock acquired pursuant to an
Award shall lapse; (vi) to establish vesting provisions with respect to any
shares of Common Stock subject to an Award, including, without limitation,
vesting provisions which may be contingent upon (A) the Company's meeting
specified financial goals, (B) a change of control of the Company or (C) the
occurrence of other specified events; (vii) to determine the circumstances under
which shares of Common Stock acquired pursuant to an Award may be subject to
repurchase by the Company; (viii) to determine the circumstances and conditions
subject to which any shares of Common Stock acquired pursuant to an Award may be
sold or otherwise transferred, including, without limitation, the circumstances
and conditions subject to which a proposed sale of shares of Common Stock
acquired pursuant to an Award may be subject to the Company's right of first
refusal (as well as the terms and conditions of any such right of first
refusal); (ix) to determine the form of consideration that may be used to
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<PAGE>
used to purchase shares of Common Stock pursuant to an Award (including, without
limitation, the circumstances under which issued and outstanding shares of
Common Stock owned by a Participant may be used by the Participant to purchase
the Common Stock subject to an Award); (x) to accelerate the time at which any
or all restrictions imposed with respect to any shares of Common Stock subject
to an Award will lapse; and (xi) to establish any other terms, restrictions
and/or conditions applicable to any Award not inconsistent with the provisions
of the Plan.
5.3. INTERPRETATION. The Committee shall be authorized to interpret
the Plan and may, from time to time, adopt such rules and regulations, not
inconsistent with the provisions of the Plan, as it may deem advisable to carry
out the purposes of the Plan.
5.4. FINALITY. The interpretation and construction by the Committee of
any provision of the Plan, any Option and/or Award granted hereunder or any
agreement evidencing any such Option and/or Award shall be final and conclusive
upon all parties.
5.5. EXPENSES, ETC. All expenses and liabilities incurred by the
Committee in the administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons in
connection with the administration of the Plan. The Company, and its officers
and directors, shall be entitled to rely upon the advice, opinions or valuations
of any such persons. No member of the Committee shall be liable for any action,
determination or interpretation taken or made in good faith with respect to the
Plan or any Option and/or Award granted hereunder.
Section 6. TERMS AND CONDITIONS OF OPTIONS.
6.1. ISOs. The terms and conditions of each ISO granted under the Plan
shall be specified by the Committee and shall be set forth in an ISO agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each ISO shall be such that each ISO issued
hereunder shall constitute and shall be treated as an "incentive stock option"
as defined in Section 422(b) of the Code. The terms and conditions of any ISO
granted hereunder need not be identical to those of any other ISO granted
hereunder.
The terms and conditions of each ISO shall include the following:
(a) The option price shall be fixed by the Committee but shall in no
event be less than 100% (or 110% in the case of an Employee referred to in
Section 4.3(b) hereof) of the fair market value of the shares of Common Stock
subject to the ISO on the date the ISO is granted. For purposes of the Plan, the
fair market value per share of Common Stock as of any day shall mean the average
of the closing prices of sales of shares of Common Stock on all national
securities exchanges on which the Common Stock may at the time be listed or, if
there shall have been no sales on any such day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such day, or, if on
any day the Common Stock shall not be so listed, the average of the
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<PAGE>
representative bid and asked prices quoted in the NASDAQ system as of 3:30 p.m.,
New York time, on such day, or, if on any day the Common Stock shall not be
quoted in the NASDAQ system, the average of the high and low bid and asked
prices on such day in the over-the-counter market as reported by National
Quotation Bureau Incorporated, or any similar successor organization. If at any
time the Common Stock is not listed on any national securities exchange or
quoted in the NASDAQ system or the over-the-counter market, the fair market
value of the shares of Common Stock subject to an Option on the date the ISO is
granted shall be the fair market value thereof determined in good faith by the
Board of Directors.
(b) ISOs, by their terms, shall not be transferable otherwise than by
will or the laws of descent and distribution, and, during a Participant's
lifetime, an ISO shall be exercisable only by the Participant.
(c) The Committee shall fix the term of all ISOs granted pursuant to
the Plan (including, without limitation, the date on which such ISO shall expire
and terminate); PROVIDED, HOWEVER, that such term shall in no event exceed ten
years from the date on which such ISO is granted (or, in the case of an ISO
granted to an Employee referred to in Section 4.3(b) hereof, such term shall in
no event exceed five years from the date on which such ISO is granted). Each ISO
shall be exercisable in such amount or amounts, under such conditions and at
such times or intervals or in such installments as shall be determined by the
Committee in its sole discretion.
(d) To the extent that the Company or any Parent or Subsidiary of the
Company is required to withhold any Federal, state or local taxes in respect of
any compensation income realized by any Participant as a result of any
"disqualifying disposition" of any shares of Common Stock acquired upon exercise
of an ISO granted hereunder, the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld or, if such payments are
insufficient to satisfy such Federal, state or local taxes, such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the Board of
Directors, in its sole discretion.
(e) The terms and conditions of each ISO may include the following
provisions:
(i) In the event a Participant's employment on a full-time basis by
the Company or any Parent or Subsidiary of the Company shall be terminated
for cause or shall be terminated by the Participant for any reason
whatsoever other than as a result of the Participant's death or
"disability" (within the meaning of Section 22(e)(3) of the Code), the
unexercised portion of any ISO held by such Participant at that time may
only be exercised within one month after the date on which the Participant
ceased to be so employed, and only to the extent that the Participant could
have otherwise exercised such ISO as of the date on which he ceased to be
so employed.
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(ii) In the event a Participant's employment on a full-time basis by
the Company or any Parent or Subsidiary of the Company shall terminate for
any reason other than (x) a termination specified in clause (i) above or
(y) by reason of the Participant's death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any
ISO held by such Participant at that time may only be exercised within
three months after the date on which the Participant ceased to be so
employed, and only to the extent that the Participant could have otherwise
exercised such ISO as of the date on which he ceased to be so employed.
(iii) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis by
reason of his "disability" (within the meaning of Section 22(e)(3) of the
Code), the unexercised portion of any ISO held by such Participant at that
time may only be exercised within one year after the date on which the
Participant ceased to be so employed, and only to the extent that the
Participant could have otherwise exercised such ISO as of the date on which
he ceased to be so employed.
(iv) In the event a Participant shall die while in the employ of the
Company or a Parent or Subsidiary of the Company (or within a period of one
month after ceasing to be an Employee for any reason other than his
"disability" (within the meaning of Section 22(e)(3) of the Code) or within
a period of one year after ceasing to be an Employee by reason of such
"disability"), the unexercised portion of any ISO held by such Participant
at the time of his death may only be exercised within one year after the
date of such Participant's death, and only to the extent that the
Participant could have otherwise exercised such ISO at the time of his
death. In such event, such ISO may be exercised by the executor or
administrator of the Participant's estate or by any person or persons who
shall have acquired the ISO directly from the Participant by bequest or
inheritance.
6.2. NON-QUALIFIED OPTIONS. The terms and conditions of each
Non-Qualified Option granted under the Plan shall be specified by the Committee,
in its sole discretion, and shall be set forth in a written option agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each Non-Qualified Option will be such (and
each Non-Qualified Option agreement shall expressly so state) that each
Non-Qualified Option issued hereunder shall not constitute nor be treated as an
"incentive stock option" as defined in Section 422(b) of the Code, but will be a
"non-qualified stock option" for Federal, state and local income tax purposes.
The terms and conditions of any Non-Qualified Option granted hereunder need not
be identical to those of any other Non-Qualified Option granted hereunder.
The terms and conditions of each Non-Qualified Option Agreement shall
include the following:
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(a) The option (exercise) price shall be fixed by the Committee and
may be equal to, more than or less than 100% of the fair market value of the
shares of Common Stock subject to the Non-Qualified Option on the date such
Non-Qualified Option is granted as determined in good faith by the Committee.
(b) The Committee shall fix the term of all Non-Qualified Options
granted pursuant to the Plan (including, without limitation, the date on which
such Non-Qualified Option shall expire and terminate). Such term may be more
than ten years from the date on which such Non-Qualified Option is granted. Each
Non-Qualified Option shall be exercisable in such amount or amounts, under such
conditions (including, without limitation, provisions governing the rights to
exercise such Non-Qualified Option), and at such times or intervals or in such
installments as shall be determined by the Committee in its sole discretion;
PROVIDED, HOWEVER, that in no event shall any Non-Qualified Option granted to
any director or officer of the Company who is subject to Section 16 of the
Exchange Act become exercisable, in whole or in part, prior to the date that is
six months after the date such Non-Qualified Option is granted to such director
or officer.
(c) Non-Qualified Options shall not be transferable otherwise than by
will or the laws of descent and distribution, and during a Participant's
lifetime a Non-Qualified Option shall be exercisable only by the Participant.
(d) The terms and conditions of each Non-Qualified Option may include
the following provisions:
(i) In the event a Participant's employment on a full-time basis by
the Company or any Parent or Subsidiary of the Company shall be terminated
for cause or shall be terminated by the Participant for any reason
whatsoever other than as a result of the Participant's death or
"disability" (within the meaning of Section 22(e)(3) of the Code), the
unexercised portion of any Non-Qualified Option held by such Participant at
that time may only be exercised within one month after the date on which
the Participant ceased to be an Employee, and only to the extent that the
Participant could have otherwise exercised such Non-Qualified Option as of
the date on which he ceased to be an Employee.
(ii) In the event a Participant's employment on a full-time basis by
the Company or any Parent or Subsidiary of the Company shall terminate for
any reason other than (x) a termination specified in clause (i) above or
(y) by reason of the Participant's death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any
Non-Qualified Option held by such Participant at that time may only be
exercised within three months after the date on which the Participant
ceased to be an Employee, and only to the extent that the Participant could
have otherwise exercised such Non-Qualified Option as of the date on which
he ceased to be an Employee.
(iii) In the event a Participant shall cease to be an Employee of the
Company or any Parent or Subsidiary of the Company on a full-time basis by
reason of his "disability" (within the meaning of Section 22(e)(3) of the
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Code), the unexercised portion of any NonQualified Option held by such
Participant at that time may only be exercised within one year after the
date on which the Participant ceased to be an Employee, and only to the
extent that the Participant could have otherwise exercised such
Non-Qualified Option as of the date on which he ceased to be an Employee.
(iv) In the event a Participant shall die while an Employee of the
Company or a Parent or Subsidiary of the Company (or within a period of one
month after ceasing to be an Employee for any reason other than his
"disability" (within the meaning of Section 22(e)(3) of the Code) or within
a period of one year after ceasing to be an Employee by reason of such
"disability"), the unexercised portion of any Non-Qualified Option held by
such Participant at the time of his death may only be exercised within one
year after the date of such Participant's death, and only to the extent
that the Participant could have otherwise exercised such Non-Qualified
Option at the time of his death. In such event, such Non-Qualified Option
may be exercised by the executor or administrator of the Participant's
estate or by any person or persons who shall have acquired the
Non-Qualified Option directly from the Participant by bequest or
inheritance.
(e) To the extent that the Company is required to withhold any
Federal, state or local taxes in respect of any compensation income realized by
any Participant in respect of a Non-Qualified Option granted hereunder or in
respect of any shares of Common Stock acquired upon exercise of a Non-Qualified
Option, the Company shall deduct from any payments of any kind otherwise due to
such Participant the aggregate amount of such Federal, state or local taxes
required to be so withheld or, if such payments are insufficient to satisfy such
Federal, state or local taxes, or if no such payments are due or to become due
to such Participant, then, such Participant will be required to pay to the
Company, or make other arrangements satisfactory to the Company regarding
payment to the Company of, the aggregate amount of any such taxes. All matters
with respect to the total amount of taxes to be withheld in respect of any such
compensa tion income shall be determined by the Committee, in its sole
discretion.
7. TERMS AND CONDITIONS OF AWARDS. The terms and conditions of each
Award granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written agreement between the
Participant and the Company, in such form as the Committee shall approve. The
terms and provisions of any Award granted hereunder need not be identical to
those of any other Award granted hereunder.
The terms and conditions of each Award may include the following:
(a) The amount to be paid by a Participant to acquire the shares of
Common Stock pursuant to an Award shall be fixed by the Committee and may be
equal to, more than or less than 100% of the fair market value of the shares of
Common Stock subject to the Award on the date the Award is granted (but in no
event less than the par value of such shares).
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(b) Each Award shall contain such vesting provisions, such transfer
restrictions and such other restrictions and conditions as the Committee, in its
sole discretion, may determine, including, without limitation, the circumstances
under which the Company shall have the right and option to repurchase shares of
Common Stock acquired pursuant to an Award.
(c) Stock certificates representing Common Stock acquired pursuant to
an Award shall bear a legend referring to any restrictions imposed on such Stock
and such other matters as the Committee may determine.
(d) To the extent that the Company is required to withhold any
Federal, state or local taxes in respect of any compensation income realized by
the Participant in respect of an Award granted hereunder, in respect of any
shares acquired pursuant to an Award, or in respect of the vesting of any such
shares of Common Stock, then the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld, or if such payments are
insufficient to satisfy such Federal, state or local taxes, or if no such
payments are due or to become due to such Participant, then such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the Committee,
in its sole discretion.
Section 8. ADJUSTMENTS. (a) In the event that, after the adoption of
the Plan by the Board of Directors, the outstanding shares of the Company's
Common Stock shall be increased or decreased or changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or of another entity in each such case through reorganization, merger or
consolidation, recapitalization, reclassification, stock split, split-up,
combination or exchange of shares or declaration of any dividends payable in
Common Stock, the Committee in good faith shall, subject to the provisions of
Section 8(c) below if the circumstances therein specified are applicable,
appropriately adjust (i) the number of shares of Common Stock (and the option
price per share) subject to the unexercised portion of any outstanding Option
(to the nearest possible full share); PROVIDED, HOWEVER, that the limitations of
Section 424 of the Code shall apply with respect to adjustments made to ISOs,
(ii) the number of shares of Common Stock to be acquired pursuant to an Award
which have not become vested, and (iii) the number of shares of Common Stock for
which Options and/or Awards may be granted under the Plan, as set forth in
Section 4.1 hereof, and such adjustments shall be effective and binding for all
purposes of the Plan.
(b) If any capital reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the Company with another
entity, or the sale of all or substantially all its assets to another entity,
shall be effected in such a way that holders of Common Stock shall be entitled
to receive stock, securities or assets with respect to or in exchange for
Common Stock, then, subject to the provisions of Section 8(c) below if the
circumstances therein specified are applicable, each holder of an Option shall
thereafter have the right to purchase, upon the exercise of the Option in
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Option in accordance with the terms and conditions specified in the option
agreement governing such Option and in lieu of the shares of Common Stock
immediately theretofore receivable upon the exercise of such Option, such shares
of stock, securities or assets (including, without limitation, cash) as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such Common Stock
immediately theretofore so receivable had such reorganization, reclassification,
consolidation, merger or sale not taken place.
(c) Notwithstanding Sections 8(a) and 8(b) hereof, in the event of (i)
any offer to holders of the Company's Common Stock generally relating to the
acquisition of all or substantially all of their shares, including, without
limitation, through purchase, merger or otherwise, or (ii) any proposed
transaction generally relating to the acquisition of substantially all of the
assets or business of the Company (herein sometimes referred to as an
"Acquisition"), the Board of Directors may, in its sole discretion, cancel any
outstanding Options (PROVIDED, HOWEVER, that the limitations of Section 424 of
the Code shall apply with respect to adjustments made to ISO's) and pay or
deliver, or cause to be paid or delivered, to the holder thereof an amount in
cash or securities having a value (as determined by the Board of Directors
acting in good faith) equal to the product of (A) the number of shares of Common
Stock (the "Option Shares") that, as of the date of the consummation of such
Acquisition, the holder of such Option had become entitled to purchase (and had
not purchased) multiplied by (B) the amount, if any, by which (1) the formula or
fixed price per share paid to holders of shares of Common Stock pursuant to such
Acquisition exceeds (2) the option price applicable to such Option Shares.
Section 9. EFFECT OF THE PLAN ON EMPLOYMENT RELATIONSHIP. Neither the
Plan nor any Option and/or Award granted hereunder to a Participant shall be
construed as conferring upon such Participant any right to continue in the
employ of (or otherwise provide services to) the Company or any Subsidiary or
Parent thereof, or limit in any respect the right of the Company or any
Subsidiary or Parent thereof to terminate such Participant's employment or other
relationship with the Company or any Subsidiary or Parent, as the case may be,
at any time.
Section 10. AMENDMENT OF THE PLAN. The Board of Directors may amend
the Plan from time to time as it deems desirable; PROVIDED, HOWEVER, that,
without the approval of the holders of a majority of the outstanding capital
stock of the Company entitled to vote thereon or consent thereto, the Board of
Directors may not amend the Plan (i) to increase (except for increases due to
adjustments in accordance with Section 8 hereof) the aggregate number of shares
of Common Stock for which Options and/or Awards may be granted hereunder, (ii)
to decrease the minimum exercise price specified by the Plan in respect of ISOs
or (iii) to change the class of Employees eligible to receive ISOs under the
Plan.
Section 11. TERMINATION OF THE PLAN. The Board of Directors may
terminate the Plan at any time. Unless the Plan shall theretofore have been
terminated by the Board of Directors, the Plan shall terminate ten years after
the date of its initial adoption by the Board of Directors. No Option and/or
Award may be granted hereunder after termination of the Plan. The termination or
amendment of the Plan shall not alter or impair any rights or obligations under
any Option and/or Award theretofore granted under the Plan.
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Section 12. EFFECTIVE DATE OF THE PLAN. The Plan shall be effective as
of [ ], 1999, the date on which the Plan was adopted by the Board of
Directors and approved by the requisite holders of outstanding capital stock of
the Company.
* * * * *
12
, 1999
CLASS B STOCK PURCHASE WARRANT
To Subscribe for and Purchase Common Stock of
TELETRAC, INC.
VOID AFTER ___________, 2004
________
THIS CERTIFIES that, for value received, , or registered assigns,
is entitled, subject to the terms of Section 1 hereof, to subscribe for and
purchase from Teletrac, Inc., a Delaware corporation (the "Company"), at the
price of $7.40 per share (the "Warrant Price"), up to fully paid,
nonassessable shares of Common Stock, par value $.01 per share, of the Company
("Common Stock"), subject, however, to the provisions and upon the terms and
conditions hereinafter set forth, including, without limitation, the provisions
of Section 3 hereof.
Section 1. EXERCISE OF WARRANT. The rights represented by this Warrant
shall vest and become exercisable at any time or from time to time after the
Effective Date (as such term is defined in the Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code dated as of June 28, 1999 (the "Plan"), and on
or prior to the fifth anniversary of the Effective Date.
As provided above, this Warrant shall terminate on ____, 2004
This Warrant may be exercised by the holder hereof, in whole or in
part (but not as to a fractional share of Common Stock), by the completion of
the subscription form attached hereto and by the surrender of this Warrant
(properly endorsed) at the principal executive offices of the Company (or at
such other agency or office of the Company in the United States as it may
designate by notice in writing to the holder hereof at the address of the holder
hereof appearing on the books of the Company), and by payment to the Company of
the Warrant Price, at the election of such holder, (i) in cash or by certified
or official bank check, for each share being purchased, or (ii) by receiving
from the Company the number of shares of Common Stock equal to the number of
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shares of Common Stock otherwise issuable upon such exercise less the number of
shares of Common Stock having a value on the date of exercise equal to the
Warrant Price applicable to the number of shares of Common Stock for which this
Warrant is being exercised.
(a) In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the shares of Common Stock so
purchased, registered in the name of the holder hereof, shall be delivered to
the holder hereof within a reasonable time, not exceeding three business days,
after the rights represented by this Warrant shall have been so exercised; and,
unless this Warrant has expired or been exercised in full, a new Warrant
representing the number of shares (except a remaining fractional share), if any,
with respect to which this Warrant shall not then have been exercised shall also
be issued to the holder hereof within such time. With respect to any such
exercise, the holder hereof shall for all purposes be deemed to have become the
holder of record of the number of shares of Common Stock evidenced by such
certificate or certificates from the date on which this Warrant was surrendered
and payment of the Warrant Price was made irrespective of the date of delivery
of such certificate, except that, if the date of such surrender and payment is a
date on which the stock transfer books of the Company are closed, such person
shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the stock transfer books are open.
No fractional shares shall be issued upon exercise of this Warrant. If any
fractional interest in a share of Common Stock would, except for the provisions
of this Section 1, be delivered upon any such exercise, the Company, in lieu of
delivering the fractional share thereof, shall pay to the holder hereof an
amount in cash equal to the current fair market value of such fractional
interest.
(b) For purposes hereof, the fair market value of a share of Common
Stock on any date shall be equal to (A) the fair market value of the Company's
Common Stock determined on the basis of (1) the last sale price of shares of
Common Stock, regular way, on such date or, if no such sale takes place on such
date, the average of the closing bid and asked prices thereof on such date, in
each case as officially reported on the principal national securities exchange
on which the Common Stock is then listed or admitted to trading, or (2) if no
shares of Common Stock are then listed or admitted to trading on any national
securities exchange but the Common Stock is designated as a national market
system security by the National Association of Securities Dealers, the last
trading price of the Common Stock on such date, or (B) if shares of Common Stock
are not then listed or admitted to trading on any national exchange or
designated as a national market system security, the fair market value thereof
as determined by the Board of Directors of the Company in good faith.
Section 2. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES.
(a) SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Warrant Price in effect immediately prior to
such subdivision shall be proportionately reduced, I.E., the holder shall
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<PAGE>
be entitled to purchase after such subdivision, for the same consideration
as applicable prior to such subdivision, the same percentage of outstanding
Common Stock that such holder was entitled to purchase prior to such
subdivision, and conversely, in case the outstanding shares of Common Stock
of the Company shall be combined into a smaller number of shares, the
Warrant Price in effect immediately prior to such combination shall be
proportionately increased.
(b) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. If any capital reorganization or reclassification of the capital
stock of the Company or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all its assets to
another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities or assets with respect
to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby each holder of the Warrants shall
thereafter have the right to receive upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock of
the Company immediately theretofore receivable upon the exercise of such
Warrant or Warrants, such shares of stock, securities or assets (including
cash) as may be issued or payable with respect to or in exchange for a
number of outstanding shares of Common Stock equal to the number of shares
of such stock immediately theretofore so receivable had such
reorganization, reclassification, consolidation, merger or sale not taken
place, and in any such case this Warrant shall become immediately
exercisable, notwithstanding any other provision contained herein, and
appropriate provision shall be made with respect to the rights and
interests of such holder to the end that the provisions hereof (including,
without limitation, provisions for adjustments of the Warrant Price) shall
thereafter be applicable, as nearly as may be, in relation to any shares of
stock, securities or assets thereafter deliverable upon the exercise of
such Warrants (in cluding an immediate adjustment, by reason of such
consolidation or merger, of the Warrant Price to the value for the Common
Stock reflected by the terms of such consolidation or merger if the value
so reflected is less than the Warrant Price in effect immediately prior to
such consolidation or merger). In the event of a merger or consolidation of
the Company as a result of which a greater or lesser number of shares of
common stock of the surviving corporation are issuable to holders of Common
Stock of the Company outstanding immediately prior to such merger or
consolidation, the Warrant Price in effect immediately prior to such merger
or consolidation shall be adjusted in the same manner as though there were
a subdivision or combination of the outstanding shares of Common Stock of
the Company. The Company will not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation
(if other than the Company) resulting from such consolidation or merger or
the corporation purchasing such assets shall assume, by written instrument
executed and mailed or delivered to each Warrantholder at the last address
of such holder appearing on the books of the Company, the obligation to
deliver to such holder such shares of stock, securities or assets as, in
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accordance with the foregoing provisions, such holder may be entitled to
receive upon exercise of such Warrants.
(c) NOTICE OF ADJUSTMENT. Upon any adjustment of the Warrant
Price, then and in each such case the Company shall give written notice
thereof, by first class mail, postage prepaid, addressed to each
Warrantholder at the address of such holder as shown on the books of the
Company, which notice shall state the Warrant Price resulting from such
adjustment, setting forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
(d) STOCK TO BE RESERVED. The Company shall at all times reserve
and keep available out of its authorized Common Stock or its treasury
shares, solely for the purpose of issuance upon the exercise of this
Warrant as herein provided, such number of shares of Common Stock as shall
then be issuable upon the exercise of this Warrant. The Company covenants
that all shares of Common Stock which shall be so issued shall be duly and
validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, and, without limiting
the generality of the foregoing, the Company covenants that it will from
time to time take all such action as may be requisite to assure that, in
the event that the Company designates a par value per share of Common
Stock, the par value per share of the Common Stock shall be at all times
equal to or less than the effective Warrant Price. The Company shall take
all such action as may be necessary to assure that all such shares of
Common Stock may be so issued without violation of any applicable law or
regulation, or of any requirements of any national securities exchange upon
which the Common Stock of the Company may be listed. The Company shall not
take any action which results in any adjustment of the Warrant Price if the
total number of shares of Common Stock issued and issuable after such
action upon exercise of this Warrant would exceed the total number of
shares of Common Stock then authorized by the Company's Articles of
Incorporation. The Company has not granted and will not grant any right of
first refusal with respect to shares issuable upon exercise of this
Warrant, and there are no preemptive rights associated with such shares.
(e) CERTAIN ISSUES OF COMMON STOCK EXCEPTED. Anything herein to
the contrary notwithstanding, the Company shall not be required to make any
adjustment in the Warrant Price in the case of (i) the issuance of Class A
Warrants as defined in the Plan or the issuance of shares of Common Stock
upon the exercise of any such Class A Warrants or (ii) the issuance of
Incentive Options (as defined in the Plan) in the issuance of any shares of
Common Stock upon exercise of such Incentive Options.
(f) ISSUE TAX. The issuance of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the
holder hereof for any issuance tax in respect thereof, provided that the
Company shall not be required to pay any tax which may be payable in
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respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder hereof.
(g) CLOSING OF TRANSFER BOOKS. The Company will at no time close
its transfer books against the transfer of the shares of Common Stock
issued or issuable upon the exercise of this Warrant in any manner which
interferes with the timely exercise of this Warrant.
(h) DEFINITION OF COMMON STOCK. As used herein the term "Common
Stock" shall mean and include the Common Stock, $.01 par value, of the
Company as authorized on the Effective Date (as such term is defined in the
Plan), or shares of any class or classes resulting from any
reclassification or reclassifications thereof and in case at any time there
shall be more than one such resulting class, the shares of each class then
so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to
the total number of shares of all such classes resulting from all such
reclassifications.
Section 3. NOTICES OF RECORD DATES. In the event of
(1) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution (other than cash
dividends out of earned surplus), or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any right to sell shares of stock of
any class or any other right; or
(2) any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or
any transfer of all or substantially all the assets of the Company to or
consolidation or merger of the Company with or into any other corporation
or entity; or
(3) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then and in each such event the Company shall give notice to the holder of this
Warrant specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, and (ii) the date on which
any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of Common
Stock will be entitled to exchange their shares of Common Stock for securities
or other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be given at least 20 days and not more than 90
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days prior to the date therein specified, and such notice shall state that the
action in question or the record date is subject to (x) the effectiveness of a
registration statement under the Securities Act of 1933, as amended, and
applicable state securities laws, or (y) a favorable vote of stockholders, if
either is required.
Section 4. NO STOCKHOLDER RIGHTS OR LIABILITIES. (a) This warrant
shall not entitle the holder hereof to any voting rights or other rights as a
shareholder of the Company. No provision hereof, in the absence of affirmative
action by the holder hereof to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the holder hereof, shall give
rise to any liability of such holder for the Warrant Price or as a stockholder
of the Company, whether such liability is asserted by the Company or by
creditors of the Company.
(b) If the Company, at any time while this Warrant is outstanding,
shall make a distribution to the holders of its Common Stock of its property or
assets as a dividend in liquidation or partial liquidation or by way of return
of capital or any dividend payable out of funds legally available for dividends
under the laws of the State of Delaware the holder of this Warrant shall be
entitled to receive at the time of such distribution, without payment of any
consideration, a sum equal to the amount of such property or assets as would
have been payable to the holder hereof as an owner of the shares issuable upon
the exercise hereof had the holder hereof been the holder of record of such
shares on the record date for such distribution; and an appropriate provision
with respect to such payment to such holder as described in this paragraph (b)
shall be made a part of any such distribution.
Section 5. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this
Warrant is lost, stolen, mutilated or destroyed, the Company may, on such terms
as to indemnity or otherwise as it may in its discretion reasonably impose
(which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so
lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.
Section 6. NOTICES. All notices, requests and other communications
required or permitted to be given or delivered hereunder shall be in writing,
and shall be delivered, or shall be sent by national overnight courier service
or by certified or registered mail, postage prepaid and addressed, if to the
holder, to such holder at the address shown on the records of the Company or at
such other address as shall have been furnished to the Company by notice from
such holder and, if to the Company, addressed to the Company at 3220 Executive
Ridge, Suite 100, Vista, CA 92083; Attention: General Counsel, or at such other
address as shall have been furnished to the holder by notice from the Company.
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IN WITNESS WHEREOF, TELETRAC, INC., has executed this Warrant on and
as of the day and year first above written.
TELETRAC, INC.
By ___________________
Name:
Title:
[Corporate Seal]
Attest:
_________________
Secretary
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SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THE WARRANT
Date_________
To Teletrac, Inc.:
The undersigned, pursuant to the provisions set forth in the
within Warrant, hereby agrees to subscribe for and purchase shares of Common
Stock covered by such Warrant, and herewith tenders $ in full payment of
the purchase price for such shares.
Name of Holder:
By ________________________________
Address __________________________
__________________________
8
