<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO ___________.
COMMISSION FILE NUMBER 333-78459
NEXTEL PARTNERS, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 91-1930918
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4500 CARILLON POINT,
KIRKLAND, WASHINGTON 98033,
(425) 828-1713
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, ZIP CODE AND TELEPHONE NUMBER,
INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO .
--- ---
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF ISSUER'S CLASSES OF COMMON
STOCK AS OF THE LATEST PRACTICABLE DATE:
OUTSTANDING TITLE OF CLASS NUMBER OF SHARES ON APRIL 30, 2000
CLASS A COMMON STOCK 162,452,974 SHARES
CLASS B COMMON STOCK 77,782,626 SHARES
<PAGE>
NEXTEL PARTNERS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE NO.
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
As of March 31, 2000 and December 31, 1999 3
Condensed Consolidated Statements of Operations
Three months ended March 31, 2000 and 1999 4
Condensed Consolidated Statement of Changes in Stockholders' Equity
Three months ended March 31, 2000 5
Condensed Consolidated Statements of Cash Flows
Three months ended March 31, 2000 and 1999 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations 12
Item 3. Quantitative and Qualitative Disclosures about Market Risk 24
PART II OTHER INFORMATION
Item 1. Legal Proceedings 26
Item 2. Changes in Securities and Use of Proceeds 26
Item 3. Defaults Upon Senior Securities 26
Item 4. Submission of Matters to a Vote of Security Holders 26
Item 5. Other Information 26
Item 6. Exhibits and Reports on Form 8-K 26
</TABLE>
2
<PAGE>
NEXTEL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
-------------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 872,056 $ 154,273
Short-term investments 323,744 239,456
Accounts receivable, net of allowance $346, and $1,193, respectively 11,767 7,172
Due from Nextel WIP 5,115 1,183
Subscriber equipment inventory 4,019 1,695
Other current assets 8,187 8,519
Restricted cash - 175,000
-------------- --------------
Total current assets 1,224,888 587,298
-------------- --------------
PROPERTY, PLANT AND EQUIPMENT, at cost 320,884 268,766
Less - accumulated depreciation 21,202 16,543
-------------- --------------
Property, plant and equipment, net 299,682 252,223
-------------- --------------
OTHER NON-CURRENT ASSETS:
FCC operating licenses, net of accumulated amortization of $1,001 and $718,
respectively 152,950 151,056
Debt issuance costs and other assets 27,352 22,550
Receivable from officer 2,200 2,200
-------------- --------------
Total non-current assets 182,502 175,806
-------------- --------------
TOTAL ASSETS $ 1,707,072 $ 1,015,327
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 33,169 $ 33,968
Accrued expenses 24,330 24,535
-------------- --------------
Total current liabilities 57,499 58,503
-------------- --------------
LONG-TERM OBLIGATIONS
Credit facility - term B and C 325,000 325,000
14% Senior discount notes due 2009 476,360 460,484
11% Senior notes due 2010 200,000 -
Other long-term liabilities 1,545 724
-------------- --------------
Total long-term obligations 1,002,905 786,208
-------------- --------------
Total liabilities 1,060,404 844,711
-------------- --------------
COMMITMENTS AND CONTINGENCIES (See Notes)
REDEEMABLE PREFERRED STOCK, Series B redeemable 2010, par value $.001 per share,
12% cumulative annual dividend; 13,110,000 shares issued
and outstanding 25,141 -
-------------- --------------
STOCKHOLDERS' EQUITY
Preferred stock, Series A convertible, par value $.001 per share,
125,834,646 shares issued and outstanding - 21
Preferred stock, Series B redeemable or convertible to Series C preferred
stock 2010, par value $.001 per share, 12% cumulative annual dividend;
13,110,000 shares issued and outstanding - 2
Preferred stock, Series C convertible, par value $.001 per share,
64,672,626 shares issued and outstanding - 11
Preferred stock, Series D convertible, par value at $.001 per share,
13,110,000 shares issued and outstanding - 2
Common stock, Class A, par value $.001 per share, 162,452,974, and 9,593,328
shares, respectively, issued and outstanding, and paid-in capital 863,464 145,420
Warrants outstanding 3,847 3,847
Common stock, Class B, par value $.001 per share convertible, 77,782,626 shares,
issued and outstanding, and paid-in-capital 127,051 -
Other paid-in capital - 357,028
Accumulated deficit (190,122) (134,966)
Subscriptions receivable from stockholders (83,048) (83,048)
Deferred compensation (99,665) (117,701)
-------------- --------------
Total stockholders' equity 621,527 170,616
-------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,707,072 $ 1,015,327
============== ==============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
NEXTEL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
-------------------------------------
2000 1999
------------- ------------
<S> <C> <C>
REVENUES:
Service revenues ($3,846 received from Nextel WIP in 2000) $ 14,983 $ 3,493
Equipment revenues 3,526 811
------------- ------------
Total revenues 18,509 4,304
------------- ------------
OPERATING EXPENSES:
Cost of service revenues ($2,185 paid to Nextel WIP in 2000) 11,208 3,106
Cost of equipment revenues 6,458 1,718
Selling, general and administrative (exclusive of stock based 19,831 5,231
compensation expense shown below) ($733 paid to Nextel WIP in 2000)
Stock based compensation 18,036 641
Depreciation and amortization 5,039 2,515
------------- ------------
Total operating expenses 60,572 13,211
------------- ------------
LOSS FROM OPERATIONS (42,063) (8,907)
Interest expense, net (21,614) (12,529)
Interest income 11,812 4,013
------------- ------------
LOSS BEFORE INCOME TAX PROVISION (51,865) (17,423)
Income tax provision - -
------------- ------------
NET LOSS (51,865) (17,423)
Manditorily redeemable preferred stock dividends (3,291) -
------------- ------------
LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (55,156) $ (17,423)
============= ============
LOSS PER SHARE
Basic and diluted loss per share $ (0.55) $ (6.06)
============= ============
Weighted average shares outstanding 101,002,064 2,874,348
============= ============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
NEXTEL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
CLASS A
COMMON STOCK AND
PREFERRED STOCK PAID-IN CAPITAL
------------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
BALANCE
January 1, 1999 - $ - 9,533,328 $ 1,604
Issuance of common stock 60,000 61
Issuance of Series A preferred stock 125,834,646 21 - -
Issuance of warrants - - - -
Subscriptions receivable from stockholders - - - -
Proceeds from stockholders
Reclass of other paid-in capital to Preferred
Series B, C, and D - - - -
Issuance of Series B preferred stock 13,110,000 2 - -
Issuance of Series C preferred stock 64,672,626 11 - -
Issuance of Series D preferred stock 13,110,000 2 - -
Return of capital to Nextel - - - -
Deferred compensation - - - 143,755
Vesting of deferred compensation - - - -
Net loss - - - -
Equity issuance costs - - - -
Motorola credit - - - -
-------------- --------------- ----------- -----------
BALANCE
December 31, 1999 216,727,272 36 9,593,328 145,420
Initial public offering conversion to common stock
Series A preferred stock (125,834,646) (21) 125,834,646 208,163
Series C preferred stock (64,672,626) (11) - -
Series D preferred stock (13,110,000) (2) - -
Series B preferred stock reclassed (13,110,000) (2) - -
Series B redeemable preferred stock dividend - - - -
Initial public offering stock issued - - 27,025,000 540,500
Net loss - - - -
Equity issuance costs - - - (30,619)
Vesting of deferred compensation - - - -
-------------- --------------- ------------ -----------
BALANCE
March 31, 2000 - $ - 162,452,974 $ 863,464
============== =============== ============ ===========
<CAPTION>
CLASS B
COMMON STOCK AND
PAID-IN-CAPITAL
--------------------------------- WARRANTS
SHARES AMOUNT OUTSTANDING
-------------- --------------- -------------
<S> <C> <C> <C>
BALANCE
January 1, 1999 - $ - $ -
Issuance of common stock - -
Issuance of Series A preferred stock - - -
Issuance of warrants - - 3,847
Subscriptions receivable from stockholders - - -
Proceeds from stockholders - -
Reclass of other paid-in capital to Preferred
Series B, C, and D - - -
Issuance of Series B preferred stock - - -
Issuance of Series C preferred stock - - -
Issuance of Series D preferred stock - - -
Return of capital to Nextel - - -
Deferred compensation - - -
Vesting of deferred compensation - - -
Net loss - - -
Equity issuance costs - - -
Motorola credit - - -
-------------- --------------- -------------
BALANCE
December 31, 1999 - - 3,847
Initial public offering conversion to common stock -
Series A preferred stock - -
Series C preferred stock 64,672,626 110,742 -
Series D preferred stock 13,110,000 22,266 -
Series B preferred stock reclassed - - -
Series B redeemable preferred stock dividend - - -
Initial public offering stock issued - - -
Net loss - - -
Equity issuance costs - (5,957) -
Vesting of deferred compensation - - -
BALANCE -------------- --------------- -------------
March 31, 2000 77,782,626 $ 127,051 $ 3,847
============== =============== =============
<CAPTION>
OTHER
PAID-IN ACCUMULATED SUBSCRIPTIONS
CAPITAL DEFICIT RECEIVABLE
-------------- --------------- -------------
<S> <C> <C> <C>
BALANCE
January 1, 1999 $ 260,761 $ (22,553) $ -
Issuance of common stock -
Issuance of Series A preferred stock 208,142 - -
Issuance of warrants - - -
Subscriptions receivable from stockholders - - (157,203)
Proceeds from stockholders 52,145
Reclass of other paid-in capital to Preferred
Series B, C, and D (133,180) - -
Issuance of Series B preferred stock 21,848 - -
Issuance of Series C preferred stock 110,731 - -
Issuance of Series D preferred stock 22,264 - -
Return of capital to Nextel (130,900) - -
Deferred compensation - - -
Vesting of deferred compensation - - -
Net loss - (112,413) -
Equity issuance costs (2,638) - -
Motorola credit - - 22,010
-------------- --------------- -------------
BALANCE
December 31, 1999 357,028 (134,966) (83,048)
Initial public offering conversion to common stock - - -
Series A preferred stock (208,142) - -
Series C preferred stock (110,731) - -
Series D preferred stock (22,264) - -
Series B preferred stock reclassed (21,848) - -
Series B redeemable preferred stock dividend - (3,291) -
Initial public offering stock issued - - -
Net loss - (51,865) -
Equity issuance costs 5,957 - -
Vesting of deferred compensation - - -
BALANCE -------------- --------------- -------------
March 31, 2000 $ - $ (190,122) $ (83,048)
============== =============== =============
<CAPTION>
DEFERRED
COMPENSATION TOTALS
-------------- ---------------
<S> <C> <C>
BALANCE
January 1, 1999 $ (1,141) $ 238,671
Issuance of common stock (61) -
Issuance of Series A preferred stock - 208,163
Issuance of warrants - 3,847
Subscriptions receivable from stockholders - (157,203)
Proceeds from stockholders 52,145
Reclass of other paid-in capital to Preferred
Series B, C, and D - (133,180)
Issuance of Series B preferred stock - 21,850
Issuance of Series C preferred stock - 110,742
Issuance of Series D preferred stock - 22,266
Return of capital to Nextel - (130,900)
Deferred compensation (143,755) -
Vesting of deferred compensation 27,256 27,256
Net loss - (112,413)
Equity issuance costs - (2,638)
Motorola credit 22,010
-------------- ---------------
BALANCE
December 31, 1999 (117,701) $ 170,616
Initial public offering conversion to common stock - -
Series A preferred stock - -
Series C preferred stock - -
Series D preferred stock - -
Series B preferred stock reclassed - (21,850)
Series B redeemable preferred stock dividend - (3,291)
Initial public offering stock issued - 540,500
Net loss - (51,865)
Equity issuance costs - (30,619)
Vesting of deferred compensation 18,036 18,036
BALANCE -------------- ---------------
March 31, 2000 $ (99,665) $ 621,527
============== ===============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
NEXTEL PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE-MONTHS ENDED
MARCH 31,
--------------------------------------
2000 1999
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (51,865) $ (17,423)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities
Depreciation and amortization 5,039 2,515
Amortization of debt issuance costs 696 356
Interest accretion for senior discount notes 12,624 9,802
Stock based compensation 18,036 641
Allowance for doubtful accounts (847) 92
Gain on deferred sale-leaseback (39) -
Change in current assets and liabilities:
Accounts receivable (3,748) (915)
Subscriber equipment inventory (2,324) 306
Other current assets 330 (2,654)
Accounts payable, accrued expenses and other liabilities (886) 3,512
Operating advances due from Nextel WIP (3,933) 9,495
------------ -------------
Net cash provided by (used in) operating activities (26,917) 5,727
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Loan to officer - (2,200)
Capital expenditures (55,036) (7,385)
Proceeds from sale of assets 5,503 -
FCC licenses (863) -
Purchase of short-term investments (84,288) -
------------ -------------
Net cash used in investing activities (134,684) (9,585)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock 540,500 -
Proceeds from borrowings 200,000 581,376
Restricted cash transfer 175,000 (175,000)
Proceeds from equity contributions - 52,144
Return of capital to Nextel WIP - (130,900)
Equity costs (30,618) (2,524)
Debt issuance costs (5,498) (20,442)
------------ -------------
Net cash provided by financing activities 879,384 304,654
------------ -------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 717,783 300,796
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 154,273 16
------------ -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 872,056 $ 300,812
============ =============
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS
Capitalized interest on accretion of senior discount notes $ 3,252 $ -
============ =============
Accretion of redeemable preferred stock dividends $ 3,291 $ -
============ =============
CASH PAID FOR INTEREST, NET OF CAPITALIZED AMOUNT $ 6,988 $ -
============ =============
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
6
<PAGE>
NEXTEL PARTNERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
Our interim financial statements for the three-month periods ended March 31,
2000 and 1999 have been prepared without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. These condensed consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements and notes contained in our Form S-1 Registration Statement
declared effective on February 22, 2000.
The financial information included herein reflects all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of management,
necessary for the fair presentation of the results of the interim periods. The
results of operations for the three-month period ended March 31, 2000 are not
necessarily indicative of the results to be expected for the full year.
NOTE 2 - CAPITALIZATION
INITIAL PUBLIC OFFERING CAPITALIZATION TRANSACTIONS
In January 1999, the Board of Directors of the Company authorized the filing of
a registration statement with the Securities and Exchange Commission (the "SEC")
that would permit the Company to sell shares of the Company's common stock in
connection with a proposed initial public offering ("IPO"). On January 27, 2000
the Company filed a registration statement with the SEC to sell 27,025,000
shares of Class A common stock which became effective February 22, 2000. With
the consummation of the IPO on February 25, 2000 all the outstanding shares of
the Company's Series A preferred stock converted into 125,834,646 shares of
Class A common stock and all the outstanding Company's Series C and D preferred
stock automatically converted into 77,782,626 shares of Class B common stock. In
addition, the Series B redeemable preferred stock held by Nextel WIP became
subject to mandatory cash redemption 375 days after February 1, 2009. The Series
B preferred stock, plus accrued dividends, was reclassified from stockholder's
equity to the section of the balance sheet between liabilities and stockholder's
equity. Simultaneously, an adjustment was made to the accumulated deficit
representing the 12% dividend accrued from the time of issuance to the closing
date of the IPO.
NOTE 3 - OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
DESCRIPTION OF BUSINESS
The Company provides a wide array of digital wireless communications services
throughout the United States, primarily to business users, utilizing frequencies
licensed by the FCC. The Company's operations are primarily conducted by OPCO, a
wholly owned subsidiary of the Company.
The Company's digital network ("Nextel digital mobile network") has been
developed with advanced mobile communication systems employing digital
technology with a multi-site configuration permitting frequency reuse
utilizing digital technology developed by Motorola (such technology is
referred to as the "integrated Digital Enhanced Network" or "iDEN"). The
Company's principal business objective is to offer high-capacity,
high-quality, advanced communication services in its territories throughout
the United States targeted towards mid-sized and smaller markets. Various
operating agreements entered into by subsidiaries of the Company and Nextel
WIP (see Note 6) provide for support services to be provided by Nextel WIP,
as required.
NET LOSS PER SHARE
In accordance with SFAS No. 128, "Computation of Earnings Per Share," basic
earnings per share is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during the period. Diluted earnings
per share is computed by dividing net loss by the weighted average number of
common and dilutive common equivalent shares outstanding during the period.
Common equivalent shares consist of shares of common stock issuable upon the
conversion of the convertible preferred stock (using the if-converted method)
and shares issuable upon the exercise of stock options and warrants (using the
treasury stock method); common equivalent shares are excluded from the
calculation, as their effects are antidilutive. The Company has not had any
issuances or grants for nominal consideration as defined under Staff Accounting
Bulletin 98. Diluted net loss per share for all periods shown does not include
the effects of the convertible preferred stock and shares issuable upon the
exercise of stock options, warrants and restricted stock as the effect of their
inclusion is antidilutive during each period.
7
<PAGE>
The basic and diluted net loss per share is computed based on the weighted
average number of shares of common stock issued for the IPO plus the common
stock outstanding that was automatically converted from the preferred stock
outstanding upon completion of the Company's initial public offering. The
weighted average number of shares for the three months ended March 31, 2000 does
not represent a complete reporting period since the IPO was consummated on
February 25, 2000. In addition, net loss available to common stockholders
increased by the amount of the accrued dividend on the Series B Redeemable
preferred stock.
RESTRICTED CASH
The restricted cash has been made available to use since the FCC approved the
transfer of control of the Initial Capitalization Transaction FCC licenses to
the Company from Nextel WIP.
DEBT ISSUANCE COSTS
In connection with the issuance of the 11% Senior Notes (the "Senior Notes")
discussed in Note 4, the Company has incurred a total of $5.5 million in
deferred financing costs of which $400,000 relates to amending the Amended
and Restated Credit Agreement for the Term B and C loans for these Senior
Notes. These debt issuance costs will be amortized over the terms of the
underlying obligation using the effective interest rate method.
PROCEEDS FROM SALE OF ASSETS
On October 13, 1999, the Company signed a Letter of Agreement by and among
Nextel and some of its subsidiaries and Spectrasite Holdings, Inc. and some
of its subsidiaries to transfer specified telecommunication towers and
related assets to Spectrasite for cash. The Company will then lease space on
the telecommunication towers from Spectrasite pursuant to a master lease
agreement. During the three-month period ending March 31, 2000, the Company
received proceeds of approximately $5.5 million in cash for the assets sold
to Spectrasite Holdings, Inc. These sale-leaseback transactions are accounted
for as real-estate lease agreements and normal sales-leasebacks.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
ACCOUNTING FOR DERIVATIVE INSTRUMENT AND HEDGING ACTIVITIES--In June 1998, the
Financial Accounting Standards Board ("FASB") issued SFAS No. 133,"Accounting
for Derivative Instruments and Hedging Activities" ("SFAS 133"), which
establishes accounting and reporting standards for derivative instruments and
for hedging activities by requiring that all derivatives be recognized in the
balance sheet and measured at fair value. SFAS 137 issued August 1999, postpones
for one year the mandatory effective date for SFAS 133 to January 1, 2001. The
Company has not evaluated the effects of this change on its financial position
or results of operations.
REVENUE RECOGNITION IN FINANCIAL STATEMENTS--In November of 1999, the SEC
released Staff Accounting Bulletin Number 101--Revenue Recognition in Financial
Statements. This bulletin will become effective for the Company for the quarter
ended June 30, 2000. This bulletin establishes more clearly defined revenue
recognition criteria than previously existing accounting pronouncements, and
specifically addresses revenue recognition requirements for nonrefundable fees,
such as activation fees, collected by a company upon entering into an
arrangement with a customer, such as an arrangement to provide telecommunication
services. The Company believes that the effects of this bulletin will not be
material to its financial position or the results of its operations.
8
<PAGE>
NOTE 4 - LONG-TERM DEBT (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
14% Senior Redeemable Discount Notes due 2009, net of
unamortized discount of $323.6 million at March 31, 2000...................... $476,360 $460,484
11% Senior Notes due 2010, interest payable semiannually in cash and
in arrears................................................................... 200,000 ---
Bank Credit Facility--Term B Loan, interest at Company's option, calculated on
Administrative Agent's alternate base rate or reserve adjusted London
Interbank Offered Rate ("LIBOR").............................................. 175,000 175,000
Bank Credit Facility--Term C Loan, interest at Company's
option, calculated on Administrative Agent's alternate
base rate or reserve adjusted LIBOR......................................... 150,000 150,000
------- -------
Total Long-term Debt $1,001,360 $785,484
========== ========
</TABLE>
11% SENIOR NOTES
On February 29, 2000, the Company issued $200.0 million in aggregate principal
amount 11% Senior Notes due 2010 (the "Senior Notes"). Interest will accrue at
the rate of 11% per annum, payable semiannually in cash in arrears on March 15
and September 15 of each year, commencing September 15, 2000.
The Senior Notes represent senior unsecured obligations of the Company, and
rank equally in right of payment to all existing and future senior unsecured
indebtedness of the Company and senior in right of payment to all existing
and future subordinated indebtedness of the Company. The Senior Notes are
effectively subordinated to (i) all secured obligations of the Company,
including borrowings under the bank credit facility, to the extent of assets
securing such obligations and (ii) all indebtedness including borrowings
under the bank credit facility and trade payables of OPCO.
The indenture contains certain covenants that limit, among other things, the
ability of the Company to: (i) pay dividends, redeem capital stock or make
certain other restricted payments or investments, (ii) incur additional
indebtedness or issue preferred equity interests, (iii) merge, consolidate or
sell all or substantially all of its assets, (iv) create liens on assets, and
(v) enter into certain transactions with affiliates or related persons.
The Senior Notes are redeemable at the option of the Company, in whole or in
part, any time on or after March 15, 2005 in cash at the redemption price on
that date, plus accrued and unpaid interest and liquidated damages if any, at
the date of liquidation. In addition, prior to March 15, 2003, the Company may
on one or more occasions redeem up to 35% of the aggregate principal amount at
maturity of the Senior Notes originally issued at a redemption price equal to
111% of the principal amount of the notes redeemed, plus accrued and unpaid
interest and liquidated damages if any, with the net cash proceeds of one or
more public equity offerings; provided that at least 65% of the Senior Notes
originally issued remains outstanding immediately after the occurrence of such
redemption.
NOTE 5 - COMMITMENTS AND CONTINGENCIES:
REGULATORY MATTERS
The FCC granted approval to transfer ownership of the Initial Capitalization
Transaction licenses on January 21, 2000 from Nextel WIP to the Company.
Pursuant to this event the cash collateral account (restricted cash)
established by the Company to maintain a balance equal to the amounts
outstanding under the term B credit facility was made available.
On March 20, 2000 the FCC granted approval to transfer ownership of the Option
Territory licenses from Nextel WIP to the Company.
9
<PAGE>
NOTE 6 - RELATED PARTY TRANSACTIONS
MOTOROLA PURCHASE AGREEMENTS
Pursuant to the equipment purchase agreements between the Company and Motorola,
and prior to the Capitalization Transactions, pursuant to purchase agreements
between Nextel WIP and Motorola, Motorola provided the iDEN infrastructure and
subscriber handset equipment to the Company throughout its markets (such
equipment purchase agreements, are referred to herein as the "Equipment
Purchase Agreements"). The Company expects to rely on Motorola for the
manufacture of a substantial portion of the equipment necessary to construct
its portion of the Nextel digital mobile network and handset equipment for the
foreseeable future. The Equipment Purchase Agreements govern the Company's
rights and obligations regarding purchases of system infrastructure equipment
manufactured by Motorola and others.
For the three-months ended March 31, 2000 and 1999, the Company purchased
approximately $25.5 million and $1.7 million, respectively, of infrastructure
and other equipment, handsets, warranties and services from Motorola.
THE JOINT VENTURE AGREEMENT
The Company, OPCO and Nextel WIP entered into a joint venture agreement (the
"Joint Venture Agreement") dated January 29, 1999. Summarized below are several
of the important terms of the Joint Venture Agreement.
BACK OFFICE/MIS SERVICES--Nextel WIP provides the Company access to certain back
office and information systems platforms on an ongoing basis, as more fully
described in the Joint Venture Agreement. The Company pays to Nextel a fee,
based on Nextel's cost, for these services. For the three-months ended March 31,
2000 and 1999, the Company was charged approximately $206,000 and $45,000 for
these services, respectively.
ROAMING AGREEMENT--Pursuant to a roaming agreement (the "Roaming Agreement")
entered into between Nextel WIP and OPCO, Nextel WIP and OPCO provide ESMR
service to subscribers of the other (in either case, the "Home Service
Provider") while such subscribers are out of the Home Service Provider's
territory and roaming in the territory of the other (in either case, the "Remote
Service Provider"). Under the Roaming Agreement, each Home Service Provider is
responsible for billing its own subscribers and designated users for roaming
usage in accordance with its own subscriber plans and service agreements. The
Roaming Agreement provides that each party pays the others monthly roaming fees
in an amount based on the actual system minutes generated by the respective
subscribers of each Home Service Provider operating as authorized roamers in the
Remote Service Provider's territory. For the three-months ended March 31, 2000
and 1999, the Company earned approximately $3.8 million and $7,500, respectively
from Nextel customers roaming on the Company's system and was charged
approximately $618,000 and $3,300 for the same period, for the Company's
customers roaming on Nextel's system.
MASTER SITE LEASE AGREEMENT--OPCO leases from Nextel WIP, under a master site
lease agreement entered into between them (the "Master Site Lease"),
telecommunications towers and sites and space on telecommunications towers,
which are owned or leased by affiliates of Nextel WIP in the Territory. Pursuant
to the Master Site Lease, as the network build-out progresses, additional sites
may become subject to the Master Site Lease. OPCO pays Nextel WIP monthly
rental payments based on the number of telecommunication towers leased by OPCO.
For the three-months ended March 31, 2000 and 1999, the Company was charged
approximately $178,000 and $94,000, respectively, by Nextel WIP under these
arrangements.
TRANSITION SERVICES AGREEMENT--Nextel WIP, through its affiliates, provides
certain services to OPCO under a transition services agreement entered into
between OPCO and Nextel WIP (the "Transition Services Agreement"). Under the
Transition Services Agreement, certain accounting, payroll, customer care,
purchasing, human resources and billing functions are made available to OPCO.
In return for the services received through Nextel WIP, OPCO pays monthly
fees to Nextel WIP based on Nextel WIP's cost. For the three-months ended
March 31, 2000, the Company was charged approximately $743,000 for the
transition services still required relating mostly to Nextel telemarketing
and customer care, fulfillment, activations and billing for the national
accounts. For the same period ended March 31, 1999, the Company was charged
approximately $327,000.
SWITCH SHARING AGREEMENT--Nextel WIP provides certain telecommunications
switching services to OPCO pursuant to a switch sharing agreement entered into
between Nextel WIP and OPCO (the "Switch Sharing Agreement"). The Switch Sharing
Agreement permits OPCO to link cell sites to and electronically access certain
switching equipment used and maintained by affiliates of Nextel WIP in the
operation of the Nextel digital mobile network, which facilitates OPCO provision
of ESMR service to the Company's subscribers. Under the Switch Sharing
Agreement, OPCO pays Nextel WIP monthly switching fees based on a pricing
formula agreed to by the parties based on Nextel's cost of providing such
services in the year 2001. For the three-months
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ended March 31, 2000 and 1999, the Company was charged approximately $1.2
million and $224,000, respectively, for these services.
NOTE 7 - SUBSEQUENT EVENTS
On April 6, 2000 the Company entered into an interest rate swap agreement
with the Bank of Montreal for $50 million to partially hedge interest rate
exposure. The hedge transaction was locked in at a three-month LIBOR rate of
6.7325%. It is a five-year swap transaction, with a one-time cancellation
option by the Bank of Montreal at the end of three years.
On April 18, 2000 the Company redeemed 35% of its 14% Senior Discount notes
for approximately $191 million, net a loss of approximately $23 million. The
redemption was made with the proceeds received by the Company from its
initial public offering.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Some statements and information contained in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" are not historical
facts, but are forward-looking statements. For a discussion of important
factors, including but not limited to the build-out of our portion of the Nextel
digital mobile network, actions of regulatory authorities and competitors, and
other factors that could cause results to differ materially from the
forward-looking statements, see "Risk Factors."
Please read the following discussion of our condensed consolidated financial
condition and results of operations for the three-month periods ended March 31,
2000 and 1999 together with our Form S-1 Registration Statement declared
effective on February 22, 2000.
Our historical results discussed in this section and throughout this Form 10-Q
include the operations we acquired from Nextel WIP on January 29, 1999 in
connection with our Initial and Expansion Territory Capitalization
transactions, which operations had previously been managed by Nextel.
OVERVIEW
We hold or have the right to use broadband wireless frequencies that cover 40
million persons, or Pops in 46 markets. We also have the option to acquire from
Nextel WIP frequencies that cover an additional 13 million Pops, of which we
currently intend to acquire frequencies covering 2.3 million Pops. As of March
31, 2000, we had commercial operations in markets with total Pops of 13.9
million and the ability to offer service to, or cover approximately 11.0 million
Pops. These operational markets are in Hawaii, New York, Texas, Pennsylvania,
Kentucky, and Florida.
As of March 31, 2000, we had approximately 75,000 digital subscribers. Compared
to March 31, 1999 with an ending subscriber count of approximately 15,000, our
subscriber base grew 390%. In the three-month period ended March 31, 2000, we
added (net of deactivations) approximately 29,000 subscriber units.
Due to the continued development, build-out and enhancement of our portion of
the Nextel digital mobile network, we expect to continue to experience negative
operating margins. In addition, we anticipate costs such as site rentals,
telecommunications expenses, network equipment and other capital items to
increase. Sales and marketing expenses and general and administrative costs are
also expected to increase with the commercialization of service in new markets.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1999
REVENUES
Our primary sources of revenues are service revenues and equipment revenues. Our
service revenues consist of charges for airtime usage and monthly network access
fees from providing integrated wireless services within our territory,
particularly mobile telephone and two-way radio dispatch services. Service
revenues also include roaming revenues related to the use by Nextel subscribers
of our portion of the Nextel digital mobile network.
Our equipment revenues consist of revenues received for wireless telephones
purchased by our subscribers. Certain of our digital equipment sales are made
through independent distributors under agreements allowing rights of return on
merchandise unsold by the distributors. We defer recognition of such sales until
the merchandise is sold by the distributors.
Total revenues increased 330% to $18.5 million during the first quarter of 2000,
from $4.3 million in the same period in 1999. The growth in revenues was due to
launching new markets along with increased revenues from the existing markets.
The following table sets forth those markets launched during the first quarter
of 2000 and our previously launched markets:
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<TABLE>
<CAPTION>
MARKETS MARKET LAUNCH
------- -------------
<S> <C>
Harrisburg/York/Lancaster, PA 1st Quarter 2000
Wilkes-Barre/Scranton, PA 1st Quarter 2000
Kentucky (Lexington-Fayette, Louisville) 1st Quarter 2000
Tallahassee, FL 1st Quarter 2000
Bryan/College Station, TX 1st Quarter 2000
Temple/Killeen/Waco, TX 4th Quarter 1999
Erie, PA 4th Quarter 1999
Hawaii (all islands) 3rd Quarter 1998
Rochester, NY 3rd Quarter 1998
Buffalo, NY 3rd Quarter 1998
Syracuse/Utica-Rome/Binghamton/Elmira, NY 3rd Quarter 1998
Albany/Glen Falls, NY 3rd Quarter 1998
</TABLE>
Average revenue per unit, or ARPU, is an industry term that measures total
service revenues per month from our subscribers divided by the average number of
digital subscriber units in commercial service for that month. Our ARPU
increased from $64 to $65 for the three-month period ended March 31, 2000. For
second quarter 2000, we believe that ARPU may decline due to additional markets
launching during this period. The following table sets forth our recent revenues
and ARPU:
<TABLE>
<CAPTION>
REVENUES
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT FOR AVERAGE REVENUE PER UNIT)
FOR THE THREE FOR THE THREE
MONTHS ENDED % OF CONSOLIDATED MONTHS ENDED % OF CONSOLIDATED
MARCH 31, 2000 REVENUES MARCH 31, 1999 REVENUES
-------------- -------- -------------- --------
<S> <C> <C> <C> <C>
Service and roaming revenues $14,983 81% $3,493 81%
Equipment revenues 3,526 19% 811 19%
------- ------- ------- -------
Total revenues $18,509 100% $4,304 100%
======= ==== ====== ====
ARPU (1) $65 $64
=== ===
</TABLE>
(1) ARPU does not include roaming revenues generated from the use by Nextel
subscribers of our portion of the Nextel digital mobile network.
COST OF SERVICE REVENUES
Cost of service revenues consists primarily of network operating costs composed
of site and switch rent, utilities, maintenance and interconnect charges. It
also includes the amounts we must pay Nextel WIP when our customers roam onto
Nextel's portion of the Nextel digital mobile network. These expenses depend
mainly on the number of operating cell sites, total minutes of use and mix of
minutes of use between interconnect and Nextel Direct Connect services.
For the three-months ended March 31, 2000 our cost of service revenues was
$11.2 million compared to $3.1 million for the same period in 1999. The
increase in costs is primarily the result of bringing on-air approximately
585 sites during the period from March 31, 1999 to March 31, 2000 for a total
of 803 operating cell sites, as well as increases in airtime usage. Increased
airtime usage resulted from the growth in number of subscribers along with
the increased interconnect minutes of use per subscriber. We expect cost of
service revenues to increase as we place more cell sites in service and the
usage of minutes increases as our subscriber base grows.
COST OF EQUIPMENT REVENUES
Cost of equipment revenues includes the cost of the subscriber wireless
telephones and accessories sold by us. For the three-months ended March 31, 2000
our cost of equipment revenues was $6.5 million compared to $1.7 million for the
same period in 1999. The increase in costs is related mostly to the growth in
volume of subscribers. As part of our business plan, we often offer our
equipment at a discount or as part of a promotion. As a result, the difference
between equipment revenues and cost of equipment revenues was ($2.9) million and
($900,000) for the three-months ended March 31, 2000 and 1999, respectively. We
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expect to continue to employ these discounts and promotions in an effort to grow
our number of subscribers. Therefore, for the foreseeable future, we expect that
cost of equipment revenues will exceed our equipment revenues.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses consist of sales and marketing
expenses, customer care services and general and administrative costs. For the
three-months ended March 31, 2000 these costs were $19.8 million compared to
$5.2 million for the same period ended March 31, 1999.
Sales and marketing expenses relate to salaries for sales representatives and
sales support personnel, and costs associated with indirect distribution
channels, marketing and advertising programs. These expenses increased as a
result of:
- - increased sales and marketing activities to grow our subscriber base;
- - our hiring of additional sales and marketing employees to accommodate the
growth in new and existing markets; and
- - higher expenses related to higher sales from the indirect distribution
channel.
We anticipate that our cost per additional customer will be relatively high
during our first several years of operation, but will decline as sales
representatives become more efficient, we expand our indirect distribution
channels and the cost of our sales infrastructure is distributed over a greater
base of customer additions.
General and administrative costs relate to corporate overhead personnel
including tax, legal, planning, human resources, information technology,
treasury, accounting and our customer care center operations. The three-month
period ended March 31, 1999 was a transition period during which Nextel WIP
made many of the above services available to us. By March 31, 2000, we
transferred the majority of these services to our employees and systems.
Therefore, our general and administrative costs increased as a result of our:
- - hiring employees to set-up functional departments and offices to support
the growth of the new and existing markets;
- - staffing and operating our own customer care and fulfillment service center
in Las Vegas, NV to support the growing subscriber base; and
- - hiring employees to maintain and support systems that were in development
during 1999.
STOCK BASED COMPENSATION EXPENSE
For the three-month periods ended March 31, 2000 and 1999, we recorded stock
based compensation expense associated with our restricted stock purchase plan
and employee stock options granted during 1999 of $18.0 million and $641,000,
respectively. This expense is a non-cash expense. These grants are considered
compensatory and we account for their deferred compensation expenses on a basis
similar to that used for stock appreciation rights.
DEPRECIATION AND AMORTIZATION EXPENSE
For the three-months ended March 31, 2000, our depreciation and amortization
expense was $5.0 million compared to $2.5 million for the same period in 1999.
The $2.5 million increase relates primarily to depreciating the wireless network
assets for the 585 additional cell sites placed in service and amortizing
additional FCC licensed radio spectrum associated with the new markets launched.
NET LOSS
For the three-months ended March 31, 2000 we reported a net loss attributable
to common shareholders of approximately ($55.2) million. This represents an
increase of ($37.8) million from our loss of ($17.4) million for the same
period in 1999. Expenses increased in all categories as we have added
subscriber usage to the network, hired staff, set up functional departments
and offices, and increased marketing and sales activities for the new launch
markets. We anticipate reporting net losses for the foreseeable future as we
grow and expand to meet the requirements of the business.
LIQUIDITY AND CAPITAL RESOURCES
Our primary liquidity needs arise from the capital requirements necessary to
complete the build-out of our portion of the Nextel digital mobile network,
including the future acquisitions of additional frequencies and the introduction
of new services. We expect capital expenditures to include, among other things,
switches, base radios, transmission towers, antennae, radio frequency
engineering, cell site construction, and additional FCC licenses. Currently, we
estimate that capital requirements to build out our portion of the Nextel
digital mobile network, including build-out of the two markets that we intend to
exercise our option to purchase, and operating losses and working capital for
the period from inception through the end of 2003, will total approximately $1.7
billion, including the in-kind contributions we have received or expect to
receive from Nextel WIP and Motorola.
For the first three months of 2000, we used $26.9 million in cash for operating
activities, compared to providing cash of $5.7 million for the same period in
1999. The increased use of funds for operating activities was primarily due to
expenses relating to hiring employees, setting-up functional departments and
offices, network operating costs for additional sites placed in service and
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increased marketing and sales activities. In addition, during the first three
months of 2000, we invested $57.0 million in capital expenditures, including
$1.9 of non-cash capitalized interest, spent primarily to build out the Nextel
digital mobile network in the upstate New York, Hawaii, Pennsylvania, Kentucky,
Iowa, Florida and Texas markets. During the same period in 1999, we invested
$7.4 million in capital expenditures, which was primarily for the Hawaii and
upstate New York markets. We also invested $84.3 million in short-term
investments for the three-month period ended March 31, 2000.
In addition, as of March 31, 2000 we had approximately $20.1 million in
commitments for additional frequency purchases.
SOURCES OF FUNDING
To date, third-party financing activities have provided all of our funding. As
of December 31, 1999 these financings totaled $851.1 million and included:
- - proceeds from cash equity contributions of $119.7 million;
- - the offering of our 14% senior discount notes for $406.4 million; and
- - term loans incurred by our operating subsidiary of $325.0 million.
For the year ended December 31, 1999, we also received:
- - the contribution by Nextel WIP of FCC licenses valued at $142 million, in
exchange for preferred stock; and
- - the contribution by Motorola of a $22.0 million credit to use against our
purchases of Motorola manufactured infrastructure equipment in exchange for
preferred stock, all of which had been used by December 31, 1999.
In addition, as of December 31, 1999, we had irrevocable commitments from our
current stockholders to contribute an additional $83.1 million. An installment
of $52.1 million was contributed in December 1999. The remaining commitments
will be paid in installments of $15.5 million in September of 2000, $52.1
million in December 2000, and $15.5 million in September 2001.
During the three-months ending March 31, 2000, additional third-party financing
provided $740.5 million of funding and included:
- - proceeds from the sale of common stock in our initial public offering of
$540.5 million; and
- - the offering of 11% senior notes for $200.0 million.
Our 14% senior discount notes due February 1, 2009 were sold in January 1999.
The notes were issued at a discount to their aggregate principal amount at
maturity and generated aggregate gross proceeds to us of approximately $406.4
million. In July 1999 these notes were exchanged by us for registered notes
having the same financial terms and covenants as the notes issued in January
1999. Cash interest will not accrue on the notes prior to February 1, 2004. As
of March 31, 2000, the accreted value of the outstanding senior discount notes
was approximately $476.4 million. On April 18, 2000, we redeemed approximately
$191 million of these outstanding notes with proceeds from our initial public
offering. The notes still outstanding will accrete in value representing the
amortization of original issue discount at a rate of 14%, compounded
semiannually, to an aggregate principal amount of $520 million by February 1,
2004.
Nextel Partners Operating Corp., one of our wholly owned subsidiaries, entered
into a credit facility in January 1999 with a syndicate of banks and other
financial institutions led by Donaldson, Lufkin & Jenrette Securities
Corporation, as arranger, DLJ Capital Funding, as syndication agent, and Bank of
Montreal, as administrative agent. This credit facility was amended and restated
in September 1999. The credit facility, as amended, includes a $175 million term
loan, a $150 million term loan and a $100 million reducing revolving credit
facility. Subject to Nextel Partners Operating Corp.'s right in the future to
seek an increase of up to $50 million, the credit facility may not exceed $425
million. The $175 million term loan matures on January 29, 2008 and the $150
million term loan matures on July 29, 2008. The revolving credit facility will
terminate on January 29, 2007.
On January 29, 1999, Nextel Partners Operating Corp. borrowed the full amount of
the $175 million term loan and on September 9, 1999, it borrowed the full amount
of the $150 million term loan. As of March 31, 2000, no amounts were outstanding
under the $100 million revolving credit facility.
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<PAGE>
The $175 million and the $150 million term loans both bear interest, at our
option, at the administrative agent's alternate base rate or reserve-adjusted
LIBOR plus, in each case, applicable margins. The applicable margin for the $175
million term loan is 4.75% over LIBOR and 3.75% over the base rate of the higher
of 0.5% per annum above the latest federal funds rate or the prime rate. The
applicable margin for the $150 million term loan is 4.25% over LIBOR and 3.25%
over the base rate. For the revolving credit facility, the initial applicable
margin is 4.25% over LIBOR and 3.25% over the base rate until consolidated
EBITDA, as adjusted, is positive, at which time the applicable margin will be
initially 4.0% over LIBOR and 3.0% over the base rate and thereafter will be
determined on the basis of the ratio of total debt to annualized EBITDA, as
adjusted, and will range between 2.25% and 3.75% over LIBOR and between 1.25%
and 2.75% over the base rate.
Borrowings under the term loans are secured by a first priority pledge of all
assets of our subsidiaries and a pledge of their capital stock. The credit
facility contains customary financial and other covenants for the wireless
industry. The credit facility also contains covenants requiring the
maintenance of certain defined financial ratios and meeting operational
targets including service revenues, subscriber units and network coverage. As
of March 31, 2000 we were in compliance with all covenants associated with
this credit facility.
On February 29, 2000, we issued $200 million of 11% Senior Notes due 2010. These
notes will be exchanged by us for registered notes having the same financial
terms and covenants within 120 days of the closing date of March 10, 2000.
Interest will accrue for these notes at the rate of 11% per annum, payable
semiannually in cash in arrears on March 15 and September 15 of each year,
commencing September 15, 2000.
We believe the net proceeds from the IPO offering and 11% Senior Notes, together
with the initial equity investments, the proceeds from the issuance of the
senior discount notes and borrowings under the credit facility, provide us with
funds sufficient to complete the build-out of our existing markets and the two
markets for which we intend to exercise our option to buildout, acquire
additional frequencies and provide us with the working capital necessary to
cover our debt service requirements and operating losses through 2003, which is
when we anticipate achieving positive operating cash flow for the full fiscal
year. As of March 31, 2000, our cash and cash equivalents and short-term
investments balance was approximately $1.2 billion. Although we estimate that we
will have sufficient funds through 2003, we cannot assure you that additional
funding will not be necessary. We could require additional financing in order to
complete our portion of the Nextel digital mobile network, to acquire additional
FCC licenses, to add capacity and to offer additional services, and such
additional financing might be expensive or impossible to obtain.
RISK FACTORS
RISK FACTORS RELATING TO OUR BUSINESS
WE HAVE A HISTORY OF OPERATING LOSSES, EXPECT TO CONTINUE TO INCUR SUBSTANTIAL
OPERATING LOSSES AND MAY NOT BE ABLE TO GENERATE THE EARNINGS NECESSARY TO FUND
OUR OPERATIONS, SUSTAIN THE CONTINUED GROWTH OF OUR BUSINESS OR REPAY OUR DEBT
OBLIGATIONS.
We did not commence commercial operations until January 29, 1999, and the
portion of the Nextel digital mobile network we acquired on that date only had a
few months of operating history. Since then, we have had a history of operating
losses and, as of March 31, 2000, we had incurred operating losses of
approximately $113.7 million. We expect to continue to incur substantial
operating losses and to generate negative cash flow from operating activities
through 2003. We cannot assure you that we will become profitable or sustain
profitability in the future. If we fail to complete the commercial launch of our
portion of the Nextel digital mobile network on schedule or if we fail to
achieve significant and sustained growth in our revenues and earnings from
operations, we will not have sufficient cash to fund our current operations,
sustain the continued growth of our business or repay our debt obligations. Our
failure to fund our operations or continued growth would have an adverse impact
on our financial condition and our failure to make any required payments would
result in defaults under all our debt agreements, which could result in the
cessation of our business.
WE MUST COMPLETE OUR PORTION OF THE NEXTEL DIGITAL MOBILE NETWORK BY SET
DEADLINES, OFFER CERTAIN SERVICES AND MEET PERFORMANCE REQUIREMENTS OR RISK
TERMINATION OF OUR AGREEMENTS WITH NEXTEL WIP, WHICH WOULD ELIMINATE OUR ABILITY
TO CARRY OUT OUR CURRENT BUSINESS PLAN AND STRATEGY.
Our operating agreements with Nextel WIP require us to construct our portion of
the Nextel digital mobile network to specific standards and by set deadlines,
offer certain services and meet performance requirements. Our failure to meet
any of these requirements could constitute a material default under the
operating agreements that would give Nextel WIP the right to terminate these
agreements, including the right to use the Nextel brand. The non-renewal or
termination of the Nextel WIP operating agreements would eliminate our ability
to carry out our current business plan and strategy and adversely affect our
financial condition. In addition, as described below, in certain circumstances,
upon termination of the agreements by Nextel WIP, Nextel WIP could acquire all
of our outstanding stock, including shares of Class A common stock.
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OUR SUCCESS IS DEPENDENT, IN PART, ON NEXTEL COMPLETING ITS PORTION OF THE
NEXTEL DIGITAL MOBILE NETWORK AND CONTINUING TO BUILD AND SUSTAIN CUSTOMER
SUPPORT OF ITS BRAND AND THE MOTOROLA IDEN TECHNOLOGY, AND IF NEXTEL EXPERIENCES
FINANCIAL OR OPERATIONAL DIFFICULTIES OUR BUSINESS WOULD BE ADVERSELY AFFECTED.
Our business plan depends, in part, on Nextel completing its portion of the
Nextel digital mobile network on schedule and continuing to build and sustain
customer support of its brand and the Motorola iDEN technology. If Nextel
encounters financial problems or operating difficulties relating to its portion
of the Nextel digital mobile network or experiences a significant decline in
customer acceptance of its products or the Motorola iDEN technology, our
affiliation with and dependence on Nextel may adversely affect our business,
including the quality of our services, the ability of our customers to roam
within the entire network and our ability to attract and retain new customers.
Additional information regarding Nextel and its domestic digital mobile network
business can be found in Nextel's Annual Report on Form 10-K for the year ended
December 31, 1999 and Nextel's other filings made under the Securities Act of
1933 and the Securities Exchange Act of 1934 under SEC file number 0-19656. You
should read these filings to more fully understand the risks presented by our
affiliation with Nextel.
OUR BUSINESS STRATEGY DEPENDS ON THE SUCCESSFUL AND CONTINUED INTEGRATION OF OUR
PORTION OF THE DIGITAL MOBILE NETWORK WITH NEXTEL'S PORTION.
Pursuant to our operating agreements with Nextel WIP, Nextel WIP provides us
with important services and assistance, including a license to use the Nextel
brand name and the sharing of switches that direct calls to their destinations.
These services are critical to the successful integration of our portion of the
Nextel digital mobile network with Nextel's portion, which is essential to the
overall success of our business.
Moreover, our business plan depends on our ability to implement an integrated
customer service, network management and billing system with Nextel's systems to
allow our respective portions of the Nextel digital mobile network to operate
together, and provide our and Nextel's customers with seamless service.
Integration requires that numerous and diverse computer hardware and software
systems work together. Any failure to integrate these information systems on
schedule may have an adverse effect on our results of operations.
DIFFICULTIES IN CONSTRUCTING AND OPERATING OUR PORTION OF THE NEXTEL DIGITAL
MOBILE NETWORK COULD INCREASE THE ESTIMATED COSTS AND DELAY THE SCHEDULED
COMPLETION OF THE NETWORK, THEREBY ADVERSELY AFFECTING OUR ABILITY TO GENERATE
REVENUE.
The development and operation of our portion of the Nextel digital mobile
network involves a high degree of risk. Before we are in a position to commence
operations in our undeveloped markets, we will need to:
- - select and acquire appropriate sites for our transmission equipment, or
cell sites;
- - purchase and install low-power transmitters, receivers and control
equipment, or base radio equipment;
- - build out the physical infrastructure;
- - obtain interconnection services from local telephone service carriers on a
timely basis; and
- - test the network.
Our ability to perform these necessary steps successfully may be hindered by,
among other things, any failure:
- - to lease or obtain rights to sites for the location of our base radio
equipment;
- - to obtain necessary zoning and other local approvals with respect to the
placement, construction and modification of our facilities;
- - to acquire additional necessary radio frequencies from third parties or to
exchange radio frequency licenses with Nextel WIP;
- - to commence and complete the construction of sites for our equipment in a
timely and satisfactory manner; and
- - to obtain necessary approvals, licenses and permits from federal, state and
local agencies, including land use regulatory approvals and approval from
the Federal Aviation Administration with respect to the transmission towers
that we will be using.
Before fully implementing our portion of the Nextel digital mobile network in a
new market area or expanding coverage in an existing market area, we must
complete systems design work, find appropriate sites and construct necessary
transmission structures, receive regulatory approvals, free up frequency
channels now devoted to non-digital transmissions and begin systems
optimization. These processes may take weeks or months to complete, and may be
hindered or delayed by many factors, including unavailability of antenna sites
at optimal locations, land use and zoning controversies and limitations of
available frequencies. In addition, we may experience cost overruns and delays
not within our control caused by acts of governmental entities, design changes,
material and equipment shortages, delays in delivery and catastrophic
occurrences. Any failure to construct our portion of the Nextel digital mobile
network on a timely basis may affect our ability to provide services in our
markets on a schedule consistent with our current business plan, and any
significant delays could have a material adverse effect on our business.
Moreover, if we fail to launch two or more markets in any year within 180 days
of the scheduled launch date, or if we fail to
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complete the build-out of two or more markets in any year within 180 days of the
scheduled build-out date, we could be in default of our operating agreements
with Nextel WIP, which would impede our ability to execute our business plan.
WE MAY BE REQUIRED TO IMPLEMENT MATERIAL CHANGES TO OUR BUSINESS OPERATIONS TO
THE EXTENT THESE CHANGES ARE ADOPTED BY NEXTEL, WHICH MAY NOT BE BENEFICIAL TO
OUR BUSINESS.
If Nextel adopts material changes to its operations, including the adoption of
new technology, our operating agreements with Nextel WIP give it the right to
require similar changes to our operations. The failure to implement required
changes could, under certain circumstances, trigger the ability of Nextel WIP to
terminate its operating agreements with us. Even if the required change is
beneficial to Nextel, the effect on our business may differ due to differences
in markets and customers. We cannot assure you that such changes would not
adversely affect our business plan and potentially give Nextel WIP the right to
purchase all of our outstanding stock for a price per share equal to 80% of the
average closing price of our stock for the 20 day trading days prior to the
default.
OUR HIGHLY LEVERAGED CAPITAL STRUCTURE LIMITS OUR ABILITY TO OBTAIN ADDITIONAL
FINANCING AND COULD ADVERSELY AFFECT OUR BUSINESS IN SEVERAL OTHER WAYS.
The level of our outstanding debt greatly exceeds the level of our revenues and
stockholders' equity. As of March 31, 2000, we had $1.0 billion of total
indebtedness outstanding, including $325 million outstanding under our credit
facility, $476.4 million of 14% senior discount notes outstanding at their
accreted value and $200 million of 11% senior notes. This indebtedness
represented approximately 61% of our total capitalization at that date. As of
March 31, 2000, we also had $25.1 million of mandatorily redeemable preferred
stock outstanding, including accrued dividends.
Our large amount of indebtedness could significantly impact our business for the
following reasons:
- - it limits our ability to obtain additional financing, if needed, to
complete the build-out of our portion of the Nextel digital mobile network,
to cover our cash flow deficit or for working capital, other capital
expenditures, debt service requirements or other purposes;
- - it means that we will need to dedicate a substantial portion of our
operating cash flow to fund interest expense on our credit facility and
other indebtedness, thereby reducing funds available for our build-out,
operations or other purposes;
- - it makes us vulnerable to interest rate fluctuations because our credit
facility term loan bears interest at variable rates;
- - it limits our ability to compete with competitors who are not as highly
leveraged, especially those who may be able to price their service packages
at levels below that which we can or are willing to match; and
- - it limits our ability to react to changing market conditions, changes in
our industry and economic downturns.
Despite current indebtedness levels, our subsidiaries and we may still be
able to incur substantially more debt. Our credit facility would permit
additional borrowing of up to $50 million and all of those borrowings would
be senior to our outstanding notes. The debt service requirements of any
additional indebtedness could make it very difficult for us to make payments
of cash interest on our outstanding notes.
WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH TO SERVICE OUR INDEBTEDNESS. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.
Our ability to make payments on our indebtedness, including our outstanding
notes, and to fund planned capital expenditures will depend on our ability to
generate cash in the future. This, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and other factors that
are beyond our control. These factors include, among other things, our ability
to: (a) successfully implement our business plan and related strategy, including
the construction and operation of our portion of the Nextel digital mobile
network; (b) obtain and retain a significant number of subscribers; and (c)
achieve significant and sustained growth in our revenues and earnings from
operations.
We cannot assure you, however, that our business will generate sufficient
cash flow from operations, that currently anticipated cost savings and
operating improvements will be realized on schedule or that future borrowings
will be available to us under our credit facility in an amount sufficient to
enable us to pay our indebtedness, including our outstanding notes, or to
fund our other liquidity needs.
IN THE FUTURE WE MAY NEED TO REFINANCE OUR INDEBTEDNESS AND OUR ABILITY TO
REFINANCE OUR INDEBTEDNESS WILL DEPEND ON MANY FACTORS, SOME OF WHICH ARE BEYOND
OUR CONTROL, AND WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO DO SO.
Our credit facility will mature prior to the maturity of our outstanding notes,
and our obligations thereunder are senior to the notes in right of payment and
are secured by liens on assets of our subsidiaries and a pledge of their capital
stock. We expect that we may be required to refinance our indebtedness under our
credit facility. Our ability to refinance our indebtedness will depend on, among
other factors, our financial condition at the time of the refinancing, the
restrictions contained in the instruments governing
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our other indebtedness then outstanding and other factors beyond our control,
including market conditions. If our indebtedness under our credit facility
cannot be repaid at maturity or refinanced, then we will be unable to meet our
obligations under our indentures and outstanding notes.
OUR OUTSTANDING DEBT INCLUDES RESTRICTIVE AND FINANCIAL COVENANTS THAT LIMIT OUR
OPERATING FLEXIBILITY.
The indentures governing our outstanding notes and our credit facility contain
covenants that, among other things, restrict our ability to take specific
actions even if we believe them to be in our best interest. These include
restrictions on our ability to:
- - incur additional debt;
- - pay dividends or distributions on, or redeem or repurchase, capital stock;
- - create liens on assets;
- - make investments, loans or advances;
- - issue or sell capital stock of certain of our subsidiaries;
- - enter into transactions with affiliates;
- - enter into a merger, consolidation or sale of assets; or
- - engage in any business other than telecommunications.
In addition, the credit facility imposes financial covenants which require our
principal subsidiary to comply with specified financial ratios and tests,
including minimum interest coverage ratios, maximum leverage ratios, minimum
service revenues, minimum subscriber units and covered Pops, minimum EBITDA
requirements and minimum fixed charge coverage ratios. We cannot assure you that
we will be able to meet these requirements or satisfy these covenants in the
future and if we fail to do so, our debts could become immediately payable at a
time when we are unable to pay them, which could adversely affect our ability to
carry out our business plan and would have a negative impact on our financial
condition.
IF AN EVENT CONSTITUTING A CHANGE OF CONTROL OCCURS, WE MAY BE REQUIRED TO
REDEEM ALL OF OUR OUTSTANDING NOTES EVEN IF OUR CREDIT FACILITY PROHIBITS SUCH
REDEMPTION OR WE LACK THE RESOURCES TO MAKE SUCH REDEMPTION.
Upon the occurrence of a defined change of control under the indentures
governing our outstanding notes, other than a change of control involving
certain of our existing stockholders, we could be required to redeem all
outstanding notes. Our credit facility prohibits us, except under certain
circumstances, from redeeming any of the notes before their stated maturity. In
the event we become subject to a change of control at a time when we are
prohibited from redeeming the notes our failure to redeem the tendered notes
would constitute an event of default under the respective indentures, which
would in turn result in a default under the credit facility. Any default under
our indentures or credit facility would harm our financial condition and could
adversely impact our ability to effectuate our business plan. Moreover, even if
we obtained consent under our credit facility, we cannot assure you that we
would have sufficient resources to redeem the notes and still have sufficient
funds available to successfully pursue our business plan.
OUR FUTURE PERFORMANCE WILL DEPEND ON OUR AND NEXTEL'S ABILITY TO SUCCEED IN THE
HIGHLY COMPETITIVE WIRELESS COMMUNICATIONS TRANSMISSION INDUSTRY.
Our ability to compete effectively with established and prospective wireless
communications service providers depends on many factors, including:
- - If the wireless communications technology used by Nextel and us does not
perform in a manner that meets customer expectations, we will be unable to
attract and retain customers, which would adversely our business. Customer
acceptance of the services we offer is and will continue to be affected by
technology-based differences and by the operational performance and
reliability of system transmissions on the Nextel digital mobile network.
If we are unable to address and resolve satisfactorily, performance or
other transmission quality issues as they arise, including transmission
quality issues on Nextel's portion of the Nextel digital mobile network, or
if these issues limit our ability to expand our network coverage or
capacity as currently planned, or place either Nextel or us at a
competitive disadvantage to other wireless service providers in our
markets, we may have difficulty attracting and retaining customers, which
would adversely affect our revenues.
- - If Nextel or we cannot expand, provide and maintain our respective system
coverage on a nationwide basis in the United States, then our growth and
operations would be adversely affected. We will not be able to provide
roaming system coverage comparable to that currently available through
roaming arrangements from cellular and some personal communication services
operators, unless and until we and Nextel substantially complete a
nationwide digital mobile network. This places us at a competitive
disadvantage, as some other providers currently have roaming agreements
that provide coverage of each other's markets throughout the United States,
including areas where our portion and/or Nextel's portion of the Nextel
digital mobile network has not been or will not be built. In addition, some
of our competitors provide their customers with subscriber units with both
digital and analog capability, which expands their coverage, while Nextel
and we have only digital capability.
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We cannot assure you that we will be able to achieve sufficient system
coverage or that a sufficient number of customers or potential customers
will be willing to accept system coverage limitations as a trade-off for
the enhanced multi-function wireless communications package we provide on
our portion and Nextel's portion of the Nextel digital mobile network.
- - Neither Nextel nor we have the extensive direct and indirect channels of
distribution for the Nextel digital mobile network products and services
that are available to some of our competitors. The lack of this
distribution channel could adversely affect our operating results and have
a negative impact on our business. Many of our competitors have established
extensive networks of retail locations and multiple distribution channels,
and so enjoy a competitive advantage over us in these areas. We have
increased the proportion of our digital mobile network customers that we
obtain through our indirect distributor network, and we currently
anticipate that we will rely more heavily on indirect distribution channels
to achieve greater market penetration for our digital wireless service
offerings. However, as we expand our retail subscriber base through
increased reliance on indirect distribution channels and as price
competition in the wireless industry intensifies, our average revenue per
digital subscriber unit may decrease and our customer retention may be
adversely affected.
- - If we cannot offer pricing packages attractive to customers, our revenues
may be adversely affected, which could adversely affect our operating
results.
- - If our competitors provide two-way radio dispatch services, we will lose a
competitive advantage. Our two-way radio dispatch services are currently
not available through traditional cellular or personal communication
services providers; however, if either personal communication services or
cellular operators provide two-way radio dispatch or comparable services in
the future, our competitive advantage may be impaired, which could have an
adverse effect on our revenue.
WE MAY FACE PRESSURE TO REDUCE OUR PRICES, WHICH WOULD ADVERSELY AFFECT OUR
OPERATING RESULTS AND THE VALUE OF YOUR INVESTMENT.
We expect that as the number of wireless communications providers in our market
areas increases, including providers of both digital and analog services, our
competitors' prices in these markets will decrease. We may encounter further
market pressures to:
- - reduce our digital mobile network service offering prices;
- - restructure our digital mobile network service offering packages to offer
more value; or
- - respond to particular short-term, market-specific situations, for example,
special introductory pricing or packages that may be offered by new
providers launching their service in a particular market.
OUR EQUIPMENT IS MORE EXPENSIVE THAN THE EQUIPMENT OF SOME OF OUR COMPETITORS,
WHICH MAY ADVERSELY AFFECT OUR GROWTH AND OPERATING RESULTS.
We currently market multi-function digital wireless telephones, providing mobile
telephone and private and group dispatch service, in addition to paging and
alphanumeric short-text messaging. Our mobile telephones are, and are likely to
remain, significantly more expensive than mobile analog telephones and are, and
are likely to remain, somewhat more expensive than digital cellular or personal
communication services telephones that do not incorporate a comparable
multi-function capability. Although we believe that our multi-function wireless
telephones currently are competitively priced compared to multi-function digital
cellular and personal communication services telephones, the higher cost of our
equipment may make it more difficult or less profitable to attract customers who
do not place a high value on our unique multi-service offering. This may reduce
our growth opportunities or profitability and may adversely affect our operating
results.
OUR NETWORK MUST HAVE SUFFICIENT CAPACITY TO SUPPORT OUR ANTICIPATED CUSTOMER
GROWTH.
Our business plan depends on assuring that our portion of the Nextel digital
mobile network has adequate capacity to accommodate anticipated new customers
and the related increase in usage of our network. This plan relies on:
- - the ability to obtain additional radio spectrum when and where required;
- - the availability of wireless telephones of the appropriate model and type
to meet the demands and preferences of our customers; and
- - the ability to obtain additional cell sites and other infrastructure
equipment.
We cannot assure you that we will not experience unanticipated difficulties in
obtaining these items, which could adversely affect our ability to build our
network.
WE HAVE POTENTIAL SYSTEMS LIMITATIONS ON ADDING CUSTOMERS, WHICH MAY ADVERSELY
AFFECT OUR GROWTH AND PERFORMANCE.
Critical to our business plan is our success in attracting and retaining large
numbers of customers to our portion of the Nextel digital mobile network to
generate revenue. In order to do so, we must develop effective procedures for
customer activation, customer service, and billing and other support services.
Even if our system is functional on a technical basis, we may encounter other
factors that could adversely affect our ability to successfully add customers to
our portion of the Nextel digital mobile network, including:
- - inadequate or inefficient information systems, business processes and
related support functions, especially as related to customer service and
accounts receivable collection; and
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- - an inappropriately long length of time between a customer's order and
activation of service for that customer, especially since the current
activation time is longer than that of some of our competitors.
Customer reliance on our customer service functions may increase as we add new
customers. Our inability to timely and efficiently meet the demands for services
could decrease or postpone subscriber growth, or delay or otherwise impede
billing and collection of amounts owed, which would adversely affect our
revenues.
WE ARE DEPENDENT ON OUR CURRENT KEY PERSONNEL AND OUR SUCCESS DEPENDS UPON OUR
CONTINUED ABILITY TO ATTRACT, TRAIN AND RETAIN ADDITIONAL QUALIFIED PERSONNEL.
The loss of one or more key officers could impair our ability to successfully
build out and operate our portion of the Nextel digital mobile network. We
believe that our future success will also depend on our continued ability to
attract and retain highly qualified technical and management personnel. We
believe that there is and will continue to be intense competition for qualified
personnel in the wireless communications industry. We may not be successful in
retaining our key personnel or in attracting and retaining other highly
qualified technical and management personnel.
THE TRANSMISSION TECHNOLOGY USED IN THE NEXTEL DIGITAL MOBILE NETWORK IS
DIFFERENT FROM THAT USED BY MOST OTHER WIRELESS CARRIERS, AND, AS A RESULT, WE
MIGHT NOT BE ABLE TO KEEP PACE WITH INDUSTRY STANDARDS IF MORE WIDELY-USED
TECHNOLOGIES ADVANCE.
The Nextel digital mobile network uses scattered, non-contiguous radio spectrum
near the frequencies used by cellular carriers. Because of their fragmented
character, these frequencies traditionally were only usable for two-way radio
calls, such as those used to dispatch taxis and delivery vehicles. Nextel became
able to use these frequencies to provide a wireless telephone service
competitive with cellular carriers only when Motorola developed a proprietary
technology it calls "iDEN." Nextel and we are currently the only major U.S.
wireless service providers utilizing iDEN technology on a nationwide basis, and
iDEN phones are not currently designed to roam onto other wireless networks.
Our operating agreements with Nextel WIP require us to use the iDEN technology
in our system and prevent us from adopting any new communications technology
without Nextel WIP's consent. Future technological advancements may enable other
wireless technologies to equal or exceed our current levels of service, and
render iDEN technology obsolete. If Motorola is unable to upgrade or improve
iDEN technology or develop other technology to meet future advances in competing
technologies on a timely basis, or at an acceptable cost, because of the
restrictive provisions in our agreements, we will be less able to compete
effectively and could lose customers to our competitors.
WE ARE DEPENDENT ON MOTOROLA FOR TELECOMMUNICATIONS EQUIPMENT NECESSARY FOR THE
OPERATION OF OUR BUSINESS AND ANY FAILURE OF MOTOROLA TO PERFORM WOULD ADVERSELY
AFFECT OUR OPERATING RESULTS AND THE VALUE OF YOUR INVESTMENT.
Motorola is currently our sole-source supplier of transmitters used in our
network and wireless telephone equipment used by our customers and we rely, and
expect to continue to rely, on Motorola to manufacture a substantial portion of
the equipment necessary to construct our portion of the Nextel digital mobile
network. If Motorola becomes unable to deliver such equipment, or refuses to do
so on reasonable terms, then we may not be able to service our existing
subscribers or add new subscribers and our business would be adversely affected.
Motorola and its affiliates engage in wireless communications businesses and may
in the future engage in additional businesses that do or may compete with some
or all of the services we offer. We cannot assure you that any potential
conflict of interest between Motorola and us will not adversely affect our
ability to receive equipment in the future. In addition, the failure by Motorola
to deliver necessary technology improvements and enhancements and system
infrastructure and subscriber equipment on a timely, cost-effective basis would
have an adverse effect on our growth and operations and would adversely affect
your investment. We generally have been able to obtain adequate quantities of
base radios and other system infrastructure equipment from Motorola, and
adequate volumes and mix of wireless telephones and related accessories from
Motorola, to meet subscriber and system loading rates, but we cannot assure you
that quantities will be sufficient in the future. Additionally, in the event of
shortages of that equipment, our agreements with Nextel WIP provide that
available supplies of this equipment would be allocated proportionately among
Nextel and us.
RISK FACTORS RELATING TO OUR INDUSTRY
CONCERNS THAT THE USE OF WIRELESS TELEPHONES MAY POSE HEALTH AND SAFETY RISKS
MAY DISCOURAGE THE USE OF OUR WIRELESS TELEPHONES.
Media reports have suggested that, and studies are currently being undertaken to
determine whether, radio frequency emissions from enhanced specialized mobile
radio, or ESMR, cellular and personal communications service, or PCS, wireless
telephones may be linked with health risks, including cancer, and may interfere
with various electronic medical devices, including hearing aids and pacemakers.
The actual or perceived risk of portable telephones could adversely affect us
through a reduced subscriber
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growth rate, a reduction in subscribers, reduced network usage per subscriber or
through reduced financing available to the mobile communications industry.
Some state and local legislatures have passed or are considering legislation
that would restrict the use of wireless telephones while driving automobiles due
to safety concerns. The passage or proliferation of this type of legislation
could decrease demand for our services.
REGULATORY AUTHORITIES EXERCISE CONSIDERABLE POWER OVER OUR OPERATIONS, WHICH
COULD BE EXERCISED AGAINST OUR INTERESTS AND IMPOSE ADDITIONAL UNANTICIPATED
COSTS.
The FCC and state telecommunications authorities regulate our business to a
substantial degree. The regulation of the wireless telecommunications industry
is subject to constant change. New rules and regulations may be adopted pursuant
to the Communications Act of 1934, as amended. The Telecommunications Act of
1996 provided for significant deregulation of the U.S. telecommunications
industry and such legislation remains subject to judicial review and additional
FCC rulemaking. As a result, we cannot predict the effect that the legislation
and any FCC rulemaking may have on our future operations. We must comply with
all applicable regulations to conduct our business. Modifications of our
business plans or operations to comply with changing regulations or certain
action taken by regulatory authorities might increase our costs of providing
service and adversely affect our financial condition. We anticipate FCC
regulation or Congressional legislation that creates additional spectrum
allocations that may also have the effect of adding new entrants into the mobile
telecommunications market.
The FCC has the right to revoke licenses at any time for cause, including
failure to comply with the terms of the licenses, failure to continue to qualify
for the licenses, malfeasance or other misconduct. In addition, at the end of a
ten-year term, we will have to apply to the FCC for renewal of some of our
licenses to provide our core services, which combine wireless telephone service
with dispatch and paging features. We cannot assure you that these licenses will
be renewed.
RISK FACTORS RELATING TO OUR CAPITAL STRUCTURE
UNDER CERTAIN CIRCUMSTANCES, NEXTEL WIP HAS THE ABILITY TO PURCHASE, AND THE
MAJORITY OF OUR CLASS A STOCKHOLDERS CAN CAUSE NEXTEL WIP TO PURCHASE, ALL OF
OUR OUTSTANDING STOCK, INCLUDING THE CLASS A COMMON STOCK.
Under our restated certificate of incorporation and our operating agreements, in
certain circumstances and subject to certain limitations, Nextel WIP has the
ability to purchase, or to cause and fund a redemption by us, of all of the
outstanding shares of our Class A common stock. In addition, under the
provisions of our restated certificate of incorporation, upon the occurrence of
certain events, the holders of a majority of our outstanding Class A common
stock can require Nextel WIP to purchase, or to cause and fund a redemption by
us of, all of the outstanding share of our Class A common stock.
NEXTEL WIP HAS APPROVAL RIGHTS THAT ALLOW IT TO EXERT SIGNIFICANT INFLUENCE OVER
OUR OPERATIONS, AND IT CAN ACQUIRE ADDITIONAL SHARES OF OUR STOCK, WHICH COULD
ALLOW US TO PROMOTE INTERESTS THAT MAY CONFLICT WITH THOSE OF OUR CLASS A
STOCKHOLDERS.
Pursuant to our amended shareholders' agreement and operating agreements, the
approval of the director designated by Nextel WIP, and/or Nextel WIP itself, is
required in order for us to:
- - make a material change in our technology;
- - modify our business objectives in any way that is inconsistent with our
objectives under our material agreements, including our operating
agreements with Nextel WIP;
- - dispose of all or substantially all of our assets;
- - make a material change in or broaden the scope of our business beyond our
current business objectives; or
- - enter into any agreement the terms of which would be materially altered in
the event that Nextel WIP either exercises or declines to exercise its
rights to acquire additional shares of our stock under the terms of the
amended shareholders' agreement or our restated certificate of
incorporation.
These approval rights relate to significant transactions, and decisions by the
Nextel WIP-designated director could conflict with those of our other directors,
including our independent directors.
The amended shareholders' agreement does not prohibit Nextel WIP or any of our
other stockholders or any of their respective affiliates from purchasing shares
of our Class A common stock in the open market. Any such purchases would
increase the voting power and influence of the purchasing stockholder, and could
result in a change of control of us. Additionally, if we experience a change of
control, Nextel WIP could purchase all of our broadband licenses for $1.00,
provided that it enters into a royalty-free agreement with us to allow us to use
the licenses in our territory for as long as our operating agreements with
Nextel WIP remain in effect. Such an agreement would be subject to approval by
the Federal Communications Commission, or FCC.
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CERTAIN SIGNIFICANT STOCKHOLDERS REPRESENTED ON OUR BOARD OF DIRECTORS CAN EXERT
SIGNIFICANT INFLUENCE OVER US AND MAY HAVE INTERESTS THAT CONFLICT WITH THOSE OF
OUR NOTE HOLDERS, INCLUDING PURCHASERS IN THIS OFFERING.
Our officers, directors and greater than 5% stockholders together control
approximately 78.2% of our outstanding common stock. As a result, these
stockholders, if they act together, will be able to control the management and
affairs of our company and all matters requiring stockholder approval, including
the election of directors and approval of significant corporate transactions.
This concentration of ownership may have the effect of delaying or preventing a
change in control of our company.
In addition, under our amended shareholders' agreement, Nextel WIP, Madison
Dearborn Partners and Eagle River each have the right to designate a member to
our six-member board of directors. We cannot be certain that any conflicts that
arise between the interests of our company and those of these stockholders will
always be resolved in our favor. Moreover, as described above, Nextel WIP has
certain approval rights that allow it to exert significant influence over our
operations.
DLJ Merchant Banking, Madison Dearborn Partners and Eagle River each own
significant amounts of our capital stock and each currently has a representative
on our board of directors. Each of these entities or their affiliates has
significant investments in other telecommunications businesses, some of which
may compete with us currently or in the future. We do not have a noncompetition
agreement with any of our stockholders, and thus their or their affiliates'
current and future investments could create conflicts of interest.
ANTI-TAKEOVER PROVISIONS AFFECTING US COULD PREVENT OR DELAY A CHANGE OF CONTROL
THAT INVESTORS MAY FAVOR.
Provisions of our organizational documents, amended shareholders' agreement,
operating agreements and Delaware law may discourage, delay or prevent a merger
or other change of control that investors may consider favorable. We have
authorized the issuance of "blank check" preferred stock and have imposed
certain restrictions on the calling of special meetings of stockholders. If we
experience a change of control, Nextel WIP could purchase all of our broadband
licenses for $1.00, provided that it enters into a royalty-free agreement with
us to allow us to use the frequencies in our territory for as long as our
operating agreements remain in effect. Such an agreement would be subject to
approval by the FCC. Moreover, a change of control of us could trigger an event
of default under provisions in our credit facility, the indenture governing the
notes and the indenture with respect to our senior discount notes. These
provisions could have the effect of delaying, deferring or preventing a change
of control in our company, discourage bids for our Class A common stock at a
premium over the market price, lower the market price of, and the voting and
other rights of the holders of, our Class A common stock, or impede the ability
of the holders of our Class A common stock to change our management.
OUR RESTATED CERTIFICATE OF INCORPORATION CONTAINS PROVISIONS THAT ALLOW US TO
REDEEM SHARES OF OUR SECURITIES IN ORDER TO MAINTAIN COMPLIANCE WITH APPLICABLE
FEDERAL AND STATE TELECOMMUNICATIONS LAWS AND REGULATIONS.
Our business is subject to regulation by the FCC and state regulatory
commissions or similar state regulatory agencies in the states in which we
operate. This regulation may prevent some investors from owning our securities,
even if that ownership may be favorable to us. The FCC and some states have
statutes or regulations that would require an investor who acquires a specified
percentage of our securities or the securities of one of our subsidiaries to
obtain approval to own those securities from the FCC or the applicable state
commission. Moreover, our restated certificate of incorporation allows us to
redeem shares of our stock from any stockholder in order to maintain compliance
with applicable federal and state telecommunications laws and regulations.
OUR SERIES B PREFERRED STOCK HAS A PREFERENCE IN LIQUIDATION TO OUR COMMON
STOCK, CAN BE REDEEMED BY US AT ANY TIME AND MUST BE REDEEMED IN CASH IN 2010.
Upon liquidation of our company, holders of our Series B preferred stock would
be entitled to receive, prior to receipt of any funds by the holders of our
common stock, an aggregate liquidation preference equal to $21,850,000, plus
dividends accrued on such amount from the date of issuance up to the liquidation
date equal to 12% per year, compounded quarterly. As of March 31, 2000, we had
$25.1 million of Series B preferred stock outstanding, including accrued
dividends. In addition, we can redeem all of our Series B preferred stock at any
time upon payment of the accreted liquidation preference. We must redeem all
such shares in February 2010, and we cannot guarantee that we will have
sufficient cash from operations at that time to make such redemption.
OUR STOCK PRICE IS VOLATILE.
The market price of our Class A common stock is volatile and has and will likely
continue to be subject to wide fluctuations in response to factors such as the
following, some of which are beyond our control:
- - quarterly variations in our or Nextel's operating results;
- - variations in our or Nextel's operating results from the expectations of
securities analysts and investors;
- - changes in expectations as to our or Nextel's future financial performance,
including financial estimates by securities analysts and investors;
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- - changes in laws and regulations affecting the telecommunications industry;
- - announcements by third parties or us of significant claims or proceedings
against us;
- - changes in market valuations of Nextel or other telecommunications
companies;
- - announcements of technological innovations or new services by us, Nextel or
our competitors;
- - announcements by us, Nextel or our competitors of significant contracts,
acquisitions, strategic partnerships, joint ventures or capital
commitments;
- - additions or departures of key personnel;
- - future sales of our Class A common stock; and
- - stock market price and volume fluctuations.
FORWARD LOOKING STATEMENTS
OUR FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM CURRENT BELIEFS.
Some statements and information contained in this report are not historical
facts, but are forward-looking statements. They can be identified by the use
of forward-looking words such as "believes," "expects," "plans," "may,"
"will," "would," "could," "should" or "anticipates" or other comparable
words, or by discussions of strategy that involve risks and uncertainties. We
warn you that these forward-looking statements are only predictions, subject
to risks and uncertainties, including financial, regulatory environment,
industry growth and trend predictions. Actual events or results can differ
materially from those expressed or implied as a result of a variety of
factors, including those set forth under "Risk Factors." Such forward-looking
statements include, but are not limited to, statements with respect to the
following:
- - our plan for meeting our scheduled build-out for commercial launch of
markets within our portion of the Nextel digital mobile network;
- - our business plan, its advantages and our strategy for implementing our
plan;
- - general economic conditions in the geographic areas and occupational
markets that we are targeting in our portion of the Nextel digital mobile
network;
- - our expectation regarding the continued successful performance and market
acceptance of the technology we use;
- - our ability to attract and retain sufficient subscribers;
- - our anticipated capital expenditures and funding requirements, including
our ability to access sufficient debt or equity capital to meet operating
and financing needs;
- - the availability of adequate quantities of system infrastructure and
subscriber equipment and components to meet our service deployment,
marketing plans and customer demand;
- - the ability to achieve and maintain market penetration and average
subscriber revenue levels sufficient to provide financial viability;
- - our ability to timely and successfully accomplish required scale-up of our
billing, collection, customer care and similar back-office operations to
keep pace with customer growth, increased system usage rates and growth in
levels of accounts receivables;
- - the quality and price of similar or comparable wireless communications
services offered or to be offered by our competitors, including providers
of PCS and cellular services;
- - future legislation or regulatory actions relating to specialized mobile
radio services, other wireless communications services or
telecommunications services generally; and
- - other risks and uncertainties described from time to time in our reports
filed with the SEC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are subject to market risks arising from changes in interest rates. Our
primary interest rate exposure results from changes in LIBOR or the prime rate
which are used to determine the interest rate applicable to the term loans of
our subsidiary under its credit facility. In April 1999, we entered into an
interest rate swap agreement for $60 million of these borrowings to partially
hedge our interest rate exposure. Interest rate swaps have the effect of
converting the applicable variable rate obligations to fixed or other variable
rate obligations. Our potential loss over one year that would result from a
hypothetical, instantaneous and unfavorable change of 100 basis points in the
interest rate of all our variable rate obligations would be approximately $2.7
million.
We do not use financial instruments for trading or other speculative
purposes.
24
<PAGE>
In September 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133,"Accounting for Derivative Instruments and Hedging Activities"
("SFAS 133"),which establishes accounting and reporting standards for derivative
instruments and for hedging activities by requiring that all derivatives be
recognized in the balance sheet and measured at fair value. SFAS 137 issued
August 1999, postpones for one year the mandatory effective date for SFAS 133 to
January 1, 2001. We are still evaluating the effects of this change on its
financial position or results of operations.
25
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
We have pending only ordinary routine litigation that is incidental to
our business.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Nextel Partners filed a Registration Statement on Form S-1
(File No. 333-95473) which became effective on February 22, 2000,
whereby 27,025,000 shares of Class A common stock, $0.001 par value per
share, were sold in an initial public offering at a price of $20.00 per
share. The managing underwriters of the offering were Goldman, Sachs &
Company, Donaldson, Lufkin & Jenerette Securities Corporation, Credit
Suisse First Boston Corporation, Deutsche Bank Securities Inc., First
Union Securities, Inc. Morgan Stanley & Co. Incorporated, and
DLJDirect, Inc. Net proceeds to Nextel Partners from the offering
totaled approximately $509.9 million, after deducting underwriting
fees of approximately $29.7 million and approximately $900,000 for
other fees and expenses. In April 2000 we used approximately $191
million to redeem a portion of our 14% senior discount notes. We
intend to use substantially all of the remaining net proceeds from
the offering for expenditures relating to the build-out and
expansion of our portion of the Nextel digital mobile network,
including build-out for territories for which we have an option and
intend to acquire, future acquisition of additional frequencies and
introduction of new services, sales and marketing activities and
working capital.
With the consummation of the initial public offering all the
outstanding shares of the Company's Series A preferred stock converted
into 125,834,646 shares of Class A common stock and all the outstanding
Company's Series C and D preferred stock automatically converted into
77,782,626 shares of Class B common stock. In addition, the Series B
redeemable preferred stock held by Nextel WIP became subject to
mandatory cash redemption 375 days after February 1, 2009. The Series B
preferred stock, plus accrued dividends, was reclassified from
stockholder's equity to the section of the balance sheet between
liabilities and stockholder's equity. Simultaneously, an adjustment was
made to the accumulated deficit representing the 12% dividend accrued
from the time of issuance to the closing date of the offering.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FROM 8-K
(a) List of Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
-------- -------------------
<S> <C>
10.50 Registration Rights Agreement dated as of March 10,
2000 by and among Nextel Partners, Inc., and
Donaldson, Lufkin & Jenrette Securities Corporation.
10.51 Purchase Agreement for $200,000,000 11% Senior Notes
due 2010 dated February 28, 2000 by and between
Nextel Partners, Inc. and Donaldson, Lufkin &
Jenrette Securities Corporation.
10.52 Indenture dated as of March 10, 2000 by and between
Nextel Partners, Inc. and The Bank of New York, as
trustee, relating to the 11% Senior Notes due 2010.
26
<PAGE>
10.53 Amendment No. 1 to Credit Agreement and Parent
Guaranty and Pledge Agreement dated as of March 10,
2000 by and among Nextel Partners, Inc., Nextel
Partners Operating Corp., DLJ Capital Funding, Inc.,
The Bank of New York, Bank of Montreal and certain
other financial institutions.
27.1 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K.
(i) Current Report on Form 8-K dated January 27, 2000 and
filed January 31, 2000 with the Commission reporting
under Item 5 the announcement of Nextel Partners,
Inc. filing a registration statement with the
Securities and Exchange Commission for an initial
public offering of 23,500,000 shares of its class A
common stock.
(ii) Current Report on Form 8-K dated February 7, 2000 and
filed February 7, 2000 with the Commission under Item
5 the announcement of Nextel Partners, Inc. fourth
quarter results for 1999.
(iii) Current Report on Form 8-K dated February 22, 2000
and filed February 22, 2000 with the Commission
reporting under Item 5 the announcement of Nextel
Partners, Inc. filing Amendment No. 2 to Registration
Statement on Form S-1.
(iv) Current Report on Form 8-K dated February 28, 2000
and filed February 29, 2000 with the Commission
reporting under Item 5 the announcement that Nextel
Partners, Inc. entered into a purchase agreement to
sell $200 million of 11% Senior Notes due 2010 in a
private placement transaction. In addition, the
Company announced that it notified the trustee under
the indenture pursuant to its 14% Senior Discount
Notes due February 2009 that it intended to redeem
35% of the aggregate accreted value of such notes.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
NEXTEL PARTNERS, INC.
(Registrant)
Date: May 10, 2000 By: /s/ John D. Thompson
-----------------------
John D. Thompson
Chief Financial Officer and Treasurer
27
<PAGE>
NEXTEL PARTNERS, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
-------- -------------------
<S> <C>
10.50 Registration Rights Agreement dated as of March 10,
2000 by and among Nextel Partners Inc., and
Donaldson, Lufkin & Jenrette Securities Corporation.
10.51 Purchase Agreement for $200,000,000 11% Senior Notes
due 2010 dated February 28, 2000 by and between
Nextel Partners, Inc. and Donaldson, Lufkin &
Jenrette Securities Corporation.
10.52 Indenture dated as of March 10, 2000 by and between
Nextel Partners, Inc. and The Bank of New York, as
trustee, relating to the 11% Senior Notes due 2010.
10.53 Amendment No. 1 to Credit Agreement and Parent
Guaranty and Pledge Agreement dated as of March 10,
2000 by and between Nextel Partners, Inc., Nextel
Partners Operating Corp., DLJ Capital Funding, Inc.,
The Bank of New York, Bank of Montreal and certain
other financial institutions.
27.1 Financial Data Schedule.
</TABLE>
28
<PAGE>
- -------------------------------------------------------------------------------
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
DATED AS OF MARCH 10, 2000
BY AND AMONG
NEXTEL PARTNERS, INC.,
AND
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
- -------------------------------------------------------------------------------
<PAGE>
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of March 10, 2000, by and between Nextel Partners, Inc., a
Delaware corporation (the "COMPANY") and Donaldson, Lufkin & Jenrette
Securities Corporation,. (the "INITIAL PURCHASER"), who have agreed to purchase
the Company's 11% Senior Notes due 2010 (the "SERIES A NOTES") pursuant to the
Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
February 29, 2000, (the "PURCHASE AGREEMENT"), by and between the Company and
the Initial Purchaser. In order to induce the Initial Purchaser to purchase the
Series A Notes, the Company has agreed to provide the registration rights set
forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchaser set forth in Section 3 of
the Purchase Agreement. Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them the Indenture, dated March 10, 2000,
between the Company and The Bank of New York, as Trustee, relating to the Series
A Notes and the Series B Notes (the "INDENTURE").
The parties hereby agree as follows:
1 DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
ACT: The Securities Act of 1933, as amended.
AFFILIATE: As defined in Rule 144 of the Act.
BROKER-DEALER: Any broker or dealer registered under the Exchange Act.
CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture.
CLOSING DATE: The date hereof.
COMMISSION: The Securities and Exchange Commission.
CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (b) the
maintenance of such Exchange Offer Registration Statement continuously effective
and the keeping of the Exchange Offer open for a period not less than the period
required pursuant to Section 3(b) hereof and (c) the delivery by the Company to
the Registrar under the Indenture of Series B Notes in the same aggregate
principal amount as the aggregate principal amount of Series A Notes tendered by
Holders thereof pursuant to the Exchange Offer.
CONSUMMATION DEADLINE: As defined in Section 3(b) hereof.
EFFECTIVENESS DEADLINE: As defined in Section 3(a) and 4(a) hereof.
1
<PAGE>
EXCHANGE ACT : The Securities Exchange Act of 1934, as amended.
EXCHANGE OFFER: The exchange and issuance by the Company of a
principal amount of Series B Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal
amount of Series A Notes that are tendered by such Holders in connection with
such exchange and issuance.
EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
EXEMPT RESALES: The transactions in which the Initial Purchaser
proposes to sell the Series A Notes to certain "qualified institutional buyers,"
as such term is defined in Rule 144A under the Act.
FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof.
HOLDERS: As defined in Section 2 hereof.
PROSPECTUS: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all material incorporated by reference
into such Prospectus.
RECOMMENCEMENT DATE: As defined in Section 6(d) hereof.
REGISTRATION DEFAULT: As defined in Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
relating to (a) an offering of Series B Notes pursuant to an Exchange Offer or
(b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement, in each case, (i) that is filed pursuant to
the provisions of this Agreement and (ii) including the Prospectus included
therein, all amendments and supplements thereto (including post-effective
amendments) and all exhibits and material incorporated by reference therein.
RULE 144: Rule 144 promulgated under the Act.
SERIES B NOTES: The Company's [ %] Series B Senior Notes due 2010 to be
issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof.
SUSPENSION NOTICE: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
2
<PAGE>
TRANSFER RESTRICTED SECURITIES: Each (A) Series A Note, until the
earliest to occur of (i) the date on which such Series A Note is exchanged in
the Exchange Offer for a Series B Note which is entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Act, (ii) the date on which such Series A Note has been
disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued Series B Notes), or (iii) the date on
which such Series A Note is distributed to the public pursuant to Rule 144
under the Act and each (B) Series B Note held by a Broker Dealer until the
date on which such Series B Note is disposed of by a Broker-Dealer pursuant
to the "Plan of Distribution" contemplated by the Exchange Offer Registration
Statement (including the delivery of the Prospectus contained therein).
2 HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "HOLDER") whenever such Person owns Transfer Restricted Securities.
3 REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by applicable
federal law (after the procedures set forth in Section 6(a)(i) below have
been complied with), the Company shall (i) cause the Exchange Offer
Registration Statement to be filed with the Commission as soon as practicable
after the Closing Date, but in no event later than 120 days after the Closing
Date (such 120th day being the "FILING DEADLINE"), (ii) use all commercially
reasonable efforts to cause such Exchange Offer Registration Statement to
become effective at the earliest possible time, but in no event later than
180 days after the Closing Date (such 180th day being the "EFFECTIVENESS
DEADLINE" ), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may
be necessary in order to cause it to become effective, (B) file, if
applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary
filings, if any, in connection with the registration and qualification of the
Series B Notes to be made under the Blue Sky laws of such jurisdictions as
are necessary to permit Consummation of the Exchange Offer, and (iv) upon the
effectiveness of such Exchange Offer Registration Statement, commence and
Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate
form permitting (i) registration of the Series B Notes to be offered in
exchange for the Series A Notes that are Transfer Restricted Securities and
(ii) resales of Series B Notes by Broker-Dealers that tendered into the
Exchange Offer Series A Notes that such Broker-Dealer acquired for its own
account as a result of market making activities or other trading activities
(other than Series A Notes acquired directly from the Company or any of its
Affiliates) as contemplated by Section 3(c) below.
(b) The Company shall use all commercially reasonable efforts to cause
the Exchange Offer Registration Statement to be effective continuously, and
shall keep the Exchange Offer open for a period of not less than the minimum
period required under applicable federal and state securities laws to Consummate
the Exchange Offer; PROVIDED, HOWEVER, that in no event shall such period be
less than 20 Business Days. The Company shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other than
the Series B Notes
3
<PAGE>
shall be included in the Exchange Offer Registration Statement. The Company
shall use all commercially reasonable efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
business days thereafter (such 30th day being the "CONSUMMATION DEADLINE").
(c) The Company shall include a "Plan of Distribution" section in the
Prospectus contained in the Exchange Offer Registration Statement and indicate
therein that any Broker-Dealer who holds Transfer Restricted Securities that
were acquired for-the account of such Broker-Dealer as a result of market-making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any Affiliate of the Company), may exchange such
Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with respect to
such sales by such Broker-Dealers that the Commission may require in order to
permit such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the
Commission as a result of a change in policy, rules or regulations after the
date of this Agreement.
Because such Broker-Dealer may be deemed to be an "underwriter" within
the meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with its initial sale of any Series B
Notes received by such Broker-Dealer in the Exchange Offer, the Company shall
permit the use of the Prospectus contained in the Exchange Offer Registration
Statement by such Broker-Dealer to satisfy such prospectus delivery requirement.
To the extent necessary to ensure that the prospectus contained in the Exchange
Offer Registration Statement is available for sales of Series B Notes by
Broker-Dealers, the Company agrees to use all commercially reasonable efforts to
keep the Exchange Offer Registration Statement continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Section 6(a) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of one year from the Consummation
Deadline or such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold pursuant
thereto. The Company shall provide sufficient copies of the latest version of
such Prospectus to such Broker-Dealers, promptly upon request, and in no event
later than one day after such request, at any time during such period.
4 SHELF REGISTRATION
(a) SHELF REGISTRATION. If (i) the Exchange Offer is not permitted by
applicable law (after the Company has complied with the procedures set forth in
Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted Securities
shall notify the Company within 20 Business Days following the Consummation
Deadline that (A) such Holder was prohibited by law or Commission policy from
participating in the Exchange Offer or (B) such Holder may not resell the Series
B Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resales by such Holder or (C)
such Holder is a Broker-Dealer and holds Series A Notes acquired directly from
the Company or any of its Affiliates, then the Company shall:
4
<PAGE>
(x) cause to be filed, on or prior to 60 days after the earlier of (i)
the date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a)(ii) above,
(such earlier date, the "FILING DEADLINE"), a shelf registration statement
pursuant to Rule 415 the Act (which may be an amendment to the Exchange Offer
Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to all
Transfer Restricted Securities, and
(y) shall use all commercially reasonable efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after the
Filing Deadline for the Shelf Registration Statement (such 90th day the
"EFFECTIVENESS DEADLINE").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law (i.e.,
clause (a)(i) above), then the filing of the Exchange Offer Registration
Statement shall be deemed to satisfy the requirements of clause (x) above;
PROVIDED that, in such event, the Company shall remain obligated to meet the
Effectiveness Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration Statement
is available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 4(a) and the other securities required
to be registered therein pursuant to Section 6(b)(ii) hereof, the Company shall
use all commercially reasonable efforts to keep any Shelf Registration Statement
required by this Section 4(a) continuously effective, supplemented, amended and
current as required by and subject to the provisions of Sections 6(b) and (c)
hereof and in conformity with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for as long as the Initial Purchaser is deemed to be an affiliate of the
Company but in no event less than the shorter of (i) two years (as extended
pursuant to Section 6(c)(i)) following the Closing or (ii) the date on which all
Transfer Restricted Securities covered by such Shelf Registration Statement have
been sold pursuant thereto.
(b) PROVISION BY HOLDERS OF CERTAIN INFORMATION IN CONNECTION WITH THE
SHELF REGISTRATION STATEMENT. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 days after receipt of a request therefor, the
information specified in Item 507 or 508 of Regulation S-K, as applicable, of
the Act for use in connection with any Shelf Registration Statement or
Prospectus or preliminary Prospectus included therein. No Holder of Transfer
Restricted Securities shall be entitled to liquidated damages pursuant to
Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
5
<PAGE>
5 LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline, (ii)
any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline
or (iv) any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within 2 days by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself declared effective within 5 days of filing such
post-effective amendment to such Registration Statement (each such event
referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the
Company agrees to pay to each Holder of Transfer Restricted Securities affected
thereby liquidated damages in an amount equal to $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities held by such Holder for each
week or portion thereof that the Registration Default continues for the first
90-day period immediately following the occurrence of such Registration Default.
The amount of the liquidated damages shall increase by an additional $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of liquidated damages of $.50 per week per
$1,000 in principal amount of Transfer Restricted Securities; PROVIDED that the
Company shall in no event be required to pay liquidated damages for more than
one Registration Default at any given time. Notwithstanding anything to the
contrary set forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (i) above, (2) upon the effectiveness of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in the case
of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii)
above, or (4) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable in the case of (iv) above, the
liquidated damages payable with respect to the Transfer Restricted Securities as
a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the Indenture, on
each Interest Payment Date, as more fully set forth in the Indenture and the
Notes. Notwithstanding the fact that any securities for which liquidated damages
are due cease to be Transfer Restricted Securities, all obligations of the
Company to pay liquidated damages with respect to securities shall survive until
such time as such obligations with respect to such securities shall have been
satisfied in full.
6 REGISTRATION PROCEDURES
(a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with the
Exchange Offer, the Company shall (x) comply with all applicable provisions of
Section 6(c) below, (y) use all commercially reasonable efforts to effect such
exchange and to permit the resale of Series B Notes by Broker-Dealers that
tendered in the Exchange Offer Series A Notes that such Broker-Dealer acquired
for its own account as a result of its market making activities or other trading
activities
6
<PAGE>
(other than Series A Notes acquired directly from the Company or any of its
Affiliates) being sold in accordance with the intended method or methods of
distribution thereof, and (z) comply with all of the following provisions:
(i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as
the Exchange Offer, that in the reasonable opinion of counsel to the
Company raises a substantial question as to whether the Exchange Offer
is permitted by applicable federal law, the Company hereby agrees to
seek a no-action letter or other favorable decision from the Commission
allowing the Company to Consummate an Exchange Offer for such Transfer
Restricted Securities. The Company hereby agrees to pursue the issuance
of such a decision to the Commission staff level. In connection with
the foregoing, the Company hereby agrees to take all such other actions
as may be requested by the Commission or otherwise required in
connection with the issuance of such decision, including without
limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared
by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange
Offer, a written representation to the Company (which may be contained
in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate
of the Company, (B) it is not engaged in, and does not intend to engage
in, and has no arrangement or understanding with any person to
participate in, a distribution of the Series B Notes to be issued in
the Exchange Offer and (C) it is acquiring the Series B Notes in its
ordinary course of business. As a condition to its participation in the
Exchange Offer each Holder using the Exchange Offer to participate in a
distribution of the Series B Notes shall acknowledge and agree that, if
the resales are of Series B Notes obtained by such Holder in exchange
for Series A Notes acquired directly from the Company or an Affiliate
thereof, it (1) could not, under Commission policy as in effect on the
date of this Agreement, rely on the position of the Commission
enunciated in MORGAN STANLEY AND CO., INC. (available June 5, 1991) and
EXXON CAPITAL HOLDINGS CORPORATION (available May 13, 1988), as
interpreted in the Commission's letter to SHEARMAN & STERLING dated
July 2, 1993, and similar no-action letters (including, if applicable,
any no-action letter obtained pursuant to clause (i) above), and (2)
must comply with the registration and prospectus delivery requirements
of the Act in connection with a secondary resale transaction and that
such a secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
7
<PAGE>
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company shall provide a supplemental letter to the
Commission (A) stating that the Company is registering the Exchange
Offer in reliance on the position of the Commission enunciated in EXXON
CAPITAL HOLDING CORPORATION (available May, 13 1988), MORGAN STANLEY
AND CO., INC. (available June 5, 1991 ) as interpreted in the
Commission's letter to SHEARMAN & STERLING dated July 2, 1993, and, if
applicable, any no-action letter obtained pursuant to clause (i) above,
(B) including a representation that the Company has not entered into
any arrangement or understanding with any Person to distribute the
Series B Notes to be received in the Exchange Offer and that, to the
best of the Company's information and belief, each Holder participating
in the Exchange Offer is acquiring the Series B Notes in its ordinary
course of business and has no arrangement or understanding with any
Person to participate in the distribution of the Series B Notes
received in the Exchange Offer and (C) any other undertaking or
representation required by the Commission as set forth in any no-action
letter obtained pursuant to clause (i) above, if applicable.
(b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company shall:
(i) comply with all the provisions of Section 6(c) below and use
all commercially reasonable efforts to effect such registration to
permit the sale of the Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof
(as indicated in the information furnished to the Company pursuant to
Section 4(b) hereof), and pursuant thereto the Company will prepare and
file with the Commission a Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof
within the time periods and otherwise in accordance with the provisions
hereof, and
(ii) issue, upon the request of any Holder or purchaser of
Series A Notes covered by any Shelf Registration Statement contemplated
by this Agreement, Series B Notes having an aggregate principal amount
equal to the aggregate principal amount of Series A Notes sold pursuant
to the Shelf Registration Statement and surrendered to the Company for
cancellation; the Company shall register Series B Notes on the Shelf
Registration Statement for this purpose and issue the Series B Notes to
the purchaser(s) of securities subject to the Shelf Registration
Statement in the names as such purchaser(s) shall designate.
(c) GENERAL PROVISIONS. In connection with any Registration Statement
and any related Prospectus required by this Agreement, the Company shall:
(i) use all commercially reasonable efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for
8
<PAGE>
the period specified in Section 3 or 4 of this Agreement, as
applicable. Upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to
contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading
or (B) not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Company
shall file promptly an appropriate amendment to such Registration
Statement curing such defect, and, if Commission review is required,
use all commercially reasonable efforts to cause such amendment to be
declared effective as soon as practicable. Notwithstanding anything to
the contrary set forth in this Agreement, the Company's obligations to
use all commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended shall be
suspended in the event continued effectiveness of the Shelf
Registration Statement or its use by Holders would, in the opinion of
counsel to the Company, require the Company to disclose a material
financing, acquisition or other corporate transaction, and the Board of
Directors of the Company shall have determined in good faith that such
disclosure is not in the best interests of the Company, but in no event
will any such suspension, individually or in the aggregate, exceed 30
days within any twelve month period during which the Shelf Registration
Statement is otherwise required to be effective;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement
to the Prospectus;
(iii) advise each Holder and each Initial Purchaser who is
required to deliver a prospectus in connection with sales or market
making activities promptly and, if requested by such Person, confirm
such advice in writing, (A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with
respect to any applicable Registration Statement or any post-effective
amendment thereto, when the same has become effective (B) of any
request by the Commission for amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement under the Act or of the suspension by any state securities
commission of the qualification of the Transfer Restricted Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding
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for any of the preceding purposes, (D) of the existence of any fact or
the happening of any event that makes any statement of a material fact
made in the Registration Statement, the Prospectus, any amendment or
supplement thereto or any document incorporated by reference therein
untrue, or that requires the making of any additions to or changes in
the Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Company shall use all commercially reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to each Holder in connection with such exchange or
sale, if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and comment of such Persons in connection with
such sale, if any, for a period of at least five Business Days, and the
Company will not file any such Registration Statement or Prospectus or
any amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which such Persons shall reasonably object within five Business Days
after the receipt thereof. Such Person shall be deemed to have
reasonably objected to such filing if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not
misleading or fails to comply with the applicable requirements of the
Act;
(vi) promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to each Holder in
connection with such exchange or sale, if any, make the Company's
representatives as shall be reasonably requested by the
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Holders or their counsel available for discussion of such document and
other customary due diligence matters, and include such information in
such document prior to the filing thereof as such Persons may
reasonably request;
PROVIDED, HOWEVER, that such Persons shall first agree in writing with
the Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such
Persons, unless (i) disclosure of such information is required by court
or administrative order or is necessary to respond to inquires of
regulatory authorities, (ii) disclosure of such information is required
by law (including any disclosure requirements pursuant to federal
securities laws in connection with the filing of such Registration
Statement or the use of any Prospectus), (iii) such information becomes
generally available to the public other than as a result of a
disclosure or failure to safeguard such information by such Person or
(iv) such information becomes available to such Person from a source
other than the Company and its subsidiaries and such source is not
known, after due inquiry, by such Person to be bound by a
confidentiality agreement; PROVIDED FURTHER, that the foregoing
investigation shall be coordinated on behalf of such Persons by one
representative designated by and on behalf of such Persons and any such
confidential information shall be available from such representative to
such Persons so long as any Person agrees to be bound by such
confidentiality agreement;
(vii) make available, at reasonable times, for inspection by
each Holder and any attorney or accountant retained by such Persons,
all financial and other records, pertinent corporate documents of the
Company as may be reasonably requested and cause the Company's
officers, directors and employees to supply all information reasonably
requested by any such Persons, attorney or accountant in connection
with such Registration Statement or any post-effective amendment
thereto subsequent to the filing thereof and prior to its
effectiveness;
(viii) if requested by any Holders in connection with such
exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Persons may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities and the use of the Registration Statement or Prospectus for
market making activities; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(ix) furnish to each Holder in connection with such exchange
or sale, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, and, if requested all documents
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incorporated by reference therein and all exhibits (and, if requested
exhibits incorporated therein by reference);
(x) deliver to each Holder without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request;
the Company hereby consents to the use (in accordance with law) of the
Prospectus and any amendment or supplement thereto by each selling
Person in connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(xi) upon the request of any Holder, enter into such
agreements and make such representations and warranties and take all
such other actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities
pursuant to any applicable Registration Statement contemplated by this
Agreement as may be reasonably requested by any Holder in connection
with any sale or resale pursuant to any applicable Registration
Statement. In such connection, the Company shall:
(A) upon request of any Person, furnish (or in the case of
paragraphs (2) and (3), all commercially reasonable efforts to
cause to be furnished) to each Person, upon Consummation of the
Exchange Offer or upon the effectiveness of the Shelf
Registration Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf
of the Company by (x) the President or any Vice President and
(y) a principal financial or accounting officer of the
Company, confirming, as of the date thereof, the matters set
forth in Sections 9(a), 9(b) and 9(c) of the Purchase
Agreement and such other similar matters as such Person may
reasonably request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company covering matters similar to those set forth in
paragraph (e) of Section 9 of the Purchase Agreement and such
other matter as such Person may reasonably request. Without
limiting the foregoing, such counsel may state further that
such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in any Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the
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type customarily covered in comfort letters to underwriters in
connection with underwritten offerings, and affirming the
matters set forth in the comfort letters delivered pursuant to
Section 9(j) of the Purchase Agreement, and
(B) deliver such other documents and certificates as may be
reasonably requested by such Persons to evidence compliance with
the matters covered in clause (A) above and with any customary
conditions contained in the any agreement entered into by the
Company pursuant to this clause (xi);
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; PROVIDED, HOWEVER, that the
Company shall not be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xiii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at
least two Business Days prior to such sale of Transfer Restricted
Securities;
(xiv) use all commercially reasonable efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
govemmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xii) above;
(xv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with the
Depository Trust Company;
(xvi) otherwise use all commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and
make generally available to
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<PAGE>
its security holders with regard to any applicable Registration
Statement, as soon as practicable, a consolidated earnings statement
meeting the requirements of Rule 158 (which need not be audited)
covering a twelve-month period beginning after the effective date of
the Registration Statement (as such term is defined in paragraph (c) of
Rule 158 under the Act);
(xvii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate with
the Trustee and the Holders to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute and use all commercially
reasonable efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
(xviii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) RESTRICTIONS ON HOLDERS. Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of the notice referred to in
Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"SUSPENSION NOTICE"), such Person will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Person has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Person is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT
DATE"). Each Person receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Person's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Person's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
7 REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with Sections 3 and 4 of this Agreement will be borne by the Company, regardless
of whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all fees and
expenses of compliance with federal securities and state Blue
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Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the Series B Notes to be issued in the Exchange Offer and
printing of Prospectuses whether for exchanges, sales, market making or
otherwise), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and not more than one counsel for the
Holders of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing the Series B Notes on a national securities exchange
or automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the
Company (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
Each Holder shall pay all underwriters discounts and commissions.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities who are
tendering Series A Notes into in the Exchange Offer and/or selling or reselling
Series A Notes or Series B Notes pursuant to the "Plan of Distribution"
contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more
than one counsel, who shall be Latham & Watkins, unless another firm shall be
chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared.
8 INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Company to any Holder
or any prospective purchaser of Series B Notes or registered Series A Notes, or
caused by any untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to any of the Holders furnished
in writing to the Company by any of the Holders.
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<PAGE>
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Company, and its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Company, to the same extent
as the foregoing indemnity from the Company set forth in section (a) above, but
only with reference to information relating to such Holder furnished in writing
to the Company by such Holder expressly for use in any Registration Statement.
In no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all indemnified parties and all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by a majority of the
Holders, in the case of the parties indemnified pursuant to Section 8(a), and by
the Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than
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twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and
expenses of counsel (in any case where such fees and expenses are at the
expense of the indemnifying party) and, prior to the date of such settlement,
the indemnifying party shall have failed to comply with such reimbursement
request. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened action in
respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder by
the indemnified party, unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
on claims that are or could have been the subject matter of such action and
(ii) does not include a statement as to or an admission of fault, culpability
or a failure to act, by or on behalf of the indemnified party.
(d) To the extent that the indemnification provided for in this Section
8 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 8(d)(i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 8(d)(i) above but also the relative
fault of the Company, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand,
and of the Holder, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by the Holder, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and judgments referred to above shall be deemed to include, subject
to the limitations set forth in the second paragraph of Section 8(a), any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 8, no Holder, its
directors, its officers or any Person,
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<PAGE>
if any, who controls such Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the total received by
such Holder with respect to the sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such
Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Holders' obligations to
contribute pursuant to this Section 8(c) are several in proportion to the
respective principal amount of Transfer Restricted Securities held by each
Holder hereunder and not joint.
9 RULE 144A AND RULE 144
The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Company (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make
available, upon request of any Holder, to such Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of the
Exchange Act, to make all filings required thereby in a timely manner in order
to permit resales of such Transfer Restricted Securities pursuant to Rule 144.
10 MISCELLANEOUS
REMEDIES. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under Sections 3 and 4 hereof may
result in material irreparable injury to the Initial Purchaser or the Holders
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any
such failure, the Initial Purchaser or any Holder may obtain such relief as
may be required to specifically enforce the Company's obligations under
Sections 3 and 4 hereof. The Company further agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. The company
has not previously entered into any agreement granting any registration
rights with respect to its securities to any Person except as disclosed in
the Offering Memorandum, dated as of February 29, 2000, with respect to the
Series A Notes. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders
of the Company's securities under any agreement in effect on the date hereof.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may
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not be given unless (i) in the case of Section 5 hereof and this
Section 10(c)(i), the Company has obtained the written consent of Holders of
all outstanding Transfer Restricted Securities and (ii) in the case of all
other provisions hereof, the Company has obtained the written consent of
Holders of a majority of tile outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company or its Affiliates). Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to
the rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or
indirectly the rights of other Holders whose Transfer Restricted Securities
are not being tendered pursuant to such Exchange Offer, may be given by the
Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(d) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchaser, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect its rights or the rights of Holders
hereunder.
(e) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture;
With a copy to:
Latham & Watkins
885 Third Avenue
New York, NY 10022
Telecopier No.: (212)751-4864
Attention: Peter M. Labonski, Esq.
(ii) if to the Company:
Nextel Partners, Inc.
400 Carillon Point
Kirkland, WA 98033
Telecopier No.: (425) 828-8098
Attention: Donald Manning, Esq.
With copies to:
Summit Law Group, PLLC
1505 Westlake Avenue N., Suite 300
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<PAGE>
Seattle, WA 98109
Telecopier No.: (206)281-9882
Attention: Karen A. Andersen, Esq.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf
Registration Statement, as the case may be, notice shall be delivered to
Donaldson, Lufkin & Jenrette Securities Corporation, (in the form attached
hereto as Exhibit A) and shall be addressed to: Attention: Louise Guarneri
(Compliance Department), 277 Park Avenue, New York, New York 10172.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; PROVIDED, that nothing herein shall be deemed
to permit any assignment, transfer or other disposition of Transfer
Restricted Securities in violation of the terms hereof or of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Transfer Restricted Securities in any manner, whether by operation of law or
otherwise, such Transfer Restricted Securities shall be held subject to all
of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such Person shall be conclusively deemed to have agreed
to be bound by and to perform all of the terms and provisions of this
Agreement, including the restrictions on resale set forth in this Agreement
and, if applicable, the Purchase Agreement, and such Person shall be entitled
to receive the benefits hereof.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability
of any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
20
<PAGE>
(k) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred
to herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
subject matter.
21
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
Nextel Partners, Inc.
By: /s/ Donald J. Manning
-------------------------------------
Name: Donald J. Manning
Title: Vice President
Donaldson, Lufkin & Jenrette Securities Corporation
By: /s/ Colin R. Knudsen
----------------------------------------
Name: Colin R. Knudsen
Title: Managing Director
<PAGE>
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Louise Guarneri (Compliance Department)
Fax: (212) 892-7272
From: Nextel Partners, Inc.
11% Senior Notes due 2010
Date: ____,2000
For your information only (NO ACTION REQUIRED):
Today, ___________________, 2000, we filed
[an A/B Exchange Registration Statement/a Shelf Registration Statement] with
the Securities and Exchange Commission. We currently expect this registration
statement to be declared effective within ___ business days of the date
hereof.
23
<PAGE>
EXECUTION COPY
Nextel Partners, Inc.
to
The Bank of New York
Trustee
----------------
Indenture
Dated as of March 10, 2000
----------------
11% Senior Notes due 2010
<PAGE>
Nextel Partners, Inc.
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of March 10, 2000
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- ------------------ ---------------------
<S> <C>
Section 310(a)(1) ....................................... 6.09
(a)(2) ....................................... 6.09
(a)(3) ....................................... Not Applicable
(a)(4) ....................................... Not Applicable
(a)(5) ....................................... 6.09
(b) ....................................... 6.08, 6.10
Section 311(a) ....................................... 6.13
(b) ....................................... 6.13
(c) ....................................... 6.13
Section 312(a) ....................................... 7.01, 7.02
(b) ....................................... 7.02(b)
(c) ....................................... 7.02(c)
Section 313(a) ....................................... 7.03
(b) ....................................... 7.03
(c) ....................................... 7.03
(d) ....................................... 7.03(b)
Section 314(a)(1)-(3)....................................... 7.04
(a)(4) ....................................... 10.17
(b) ....................................... Not Applicable
(c)(1) ....................................... 1.02, 4.01, 12.04
(c)(2) ....................................... 1.02, 4.01, 12.04
(c)(3) ....................................... 12.04
(d) ....................................... Not Applicable
(e) ....................................... 1.02
Section 315(a) ....................................... 6.01, 6.03
(b) ....................................... 6.02
(c) ....................................... 6.01
(d) ....................................... 6.01
(e) ....................................... 5.14
Section 316(a)(1)(A) ....................................... 5.12
(a)(1)(B) ....................................... 5.13
(a)(2) ....................................... Not Applicable
(b) ....................................... 5.08
(c) ....................................... 1.04
Section 317(a)(1) ....................................... 5.03
(a)(2) ....................................... 5.04
(b) ....................................... 10.03
Section 318(a) ....................................... 1.07
</TABLE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ................. 1
Section 1.01. Definitions ................................................. 1
Section 1.02. Compliance Certificates and Opinions ........................ 27
Section 1.03. Form of Documents Delivered to Trustee ...................... 27
Section 1.04. Acts of Holders; Record Dates ............................... 28
Section 1.05. Notices, Etc., to Trustee and Company ....................... 30
Section 1.06. Notice to Holders; Waiver ................................... 30
Section 1.07. Conflict with Trust Indenture Act ........................... 31
Section 1.08. Effect of Headings and Table of Contents .................... 31
Section 1.09. Successors and Assigns ...................................... 31
Section 1.10. Separability Clause ......................................... 31
Section 1.11. Benefits of Indenture ....................................... 31
Section 1.12. Governing Law ............................................... 31
Section 1.13. Legal Holidays .............................................. 31
Section 1.14. No Recourse Against Others .................................. 32
ARTICLE 2. SECURITY FORMS .......................................................... 32
Section 2.01. Forms Generally ............................................. 32
Section 2.02. Form of Face of Security .................................... 33
Section 2.03. Form of Reverse of Security ................................. 35
Section 2.04. Form of Trustee's Certificate of Authentication ............. 41
Section 2.05. Restrictive Legends ......................................... 41
ARTICLE 3. THE SECURITIES........................................................... 43
Section 3.01. Title and Terms ............................................. 43
Section 3.02. Denominations ............................................... 44
Section 3.03. Execution, Authentication, Delivery and Dating .............. 44
Section 3.04. Temporary Securities ........................................ 44
Section 3.05. Registration, Registration of Transfer and Exchange ......... 45
Section 3.06. Book-Entry Provisions for Global Security ................... 46
Section 3.07. Special Transfer Provisions ................................. 48
Section 3.08. Mutilated, Destroyed, Lost and Stolen Securities ............ 50
Section 3.09. Payment of Interest; Interest Rights Preserved .............. 51
Section 3.10. Persons Deemed Owners ....................................... 52
Section 3.11. Cancellation ................................................ 52
Section 3.12. Computation of Interest ..................................... 53
Section 3.13. CUSIP, CINS and ISIN Numbers ................................ 53
ii
<PAGE>
ARTICLE 4. SATISFACTION AND DISCHARGE .............................................. 53
Section 4.01. Satisfaction and Discharge of Indenture ..................... 53
Section 4.02. Application of Trust Money .................................. 54
ARTICLE 5. REMEDIES ................................................................ 54
Section 5.01. Events of Default ........................................... 54
Section 5.02. Acceleration of Maturity; Rescission and Annulment .......... 56
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee ..................................................... 57
Section 5.04. Trustee May File Proofs of Claim ............................ 58
Section 5.05. Trustee May Enforce Claims Without Possession of
Securities .................................................. 59
Section 5.06. Application of Money Collected .............................. 59
Section 5.07. Limitation on Suits ......................................... 59
Section 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest ........................................ 60
Section 5.09. Restoration of Rights and Remedies .......................... 60
Section 5.10. Rights and Remedies Cumulative .............................. 60
Section 5.11. Delay or Omission Not Waiver ................................ 60
Section 5.12. Control by Holders .......................................... 61
Section 5.13. Waiver of Past Defaults ..................................... 61
Section 5.14. Undertaking for Costs ....................................... 61
Section 5.15. Wavier of Stay of Extension Laws ............................ 62
ARTICLE 6. THE TRUSTEE ............................................................. 62
Section 6.01. Certain Duties and Responsibilities ......................... 62
Section 6.02. Notice of Defaults .......................................... 62
Section 6.03. Certain Rights of Trustee ................................... 62
Section 6.04. Not Responsible for Recitals or Issuance of Securities ...... 64
Section 6.05. May Hold Securities ......................................... 64
Section 6.06. Money Held in Trust ......................................... 64
Section 6.07. Compensation and Reimbursement .............................. 64
Section 6.08. Conflicting Interests ....................................... 65
Section 6.09. Corporate Trustee Required; Eligibility ..................... 65
Section 6.10. Resignation and Removal; Appointment of Successor ........... 66
Section 6.11. Acceptance of Appointment by Successor ...................... 67
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business .................................................... 67
Section 6.13. Preferential Collection of Claims Against Company ........... 67
Section 6.14. Appointment of Authenticating Agent ......................... 68
ARTICLE 7. HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY ..................... 70
Section 7.01. Company to Furnish Trustee Names and Addresses of
Holders ..................................................... 70
Section 7.02. Preservation of Information; Communications to Holders ...... 70
iii
<PAGE>
Section 7.03. Reports by Trustee .......................................... 70
Section 7.04. Reports by Company .......................................... 71
ARTICLE 8. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE .................... 71
Section 8.01. Company May Consolidate, Etc. Only on Certain Terms ......... 71
Section 8.02. Successor Substituted ....................................... 72
ARTICLE 9. SUPPLEMENTAL INDENTURES.................................................. 73
Section 9.01. Supplemental Indentures Without Consent of Holders .......... 73
Section 9.02. Supplemental Indenture with Consent of Holders .............. 73
Section 9.03. Execution of Supplemental Indentures ........................ 74
Section 9.04. Effect of Supplemental Indentures ........................... 74
Section 9.05. Conformity with Trust Indenture Act ......................... 74
Section 9.06. Reference in Securities to Supplemental Indentures .......... 75
ARTICLE 10. COVENANTS............................................................... 75
Section 10.01. Payment of Principal, Premium and Interest ................. 75
Section 10.02. Maintenance of Office or Agency ............................ 75
Section 10.03. Money for Security Payments to be Held in Trust ............ 76
Section 10.04. Existence .................................................. 76
Section 10.05. Maintenance of Properties .................................. 77
Section 10.06. Payment of Taxes and Other Claims .......................... 77
Section 10.07. Maintenance of Insurance ................................... 77
Section 10.08. Limitation on Consolidated Debt ............................ 77
Section 10.09. Limitation on Restricted Payments .......................... 78
Section 10.10. Restricted Subsidiaries .................................... 81
Section 10.11. Transactions with Affiliates ............................... 82
Section 10.12. Liens ...................................................... 83
Section 10.13. Change of Control .......................................... 83
Section 10.14. Dividend and Other Payment Restrictions Affecting
Subsidiaries .............................................. 83
Section 10.15. Activities of the Company and Restricted Subsidiaries ...... 84
Section 10.16. Provision of Financial Information ......................... 84
Section 10.17. Statement by Officers as to Default: Compliance
Certificates .............................................. 85
Section 10.18. Waiver of Certain Covenants ................................ 85
Section 10.19. Limitation on Issuances and Sales of Equity Interests in
Wholly Owned Subsidiaries .................................. 85
Section 10.20. Payments for Consent ....................................... 86
Section 10.21. Asset Sales ................................................ 86
ARTICLE 11. REDEMPTION OF SECURITIES ............................................... 87
Section 11.01. Right of Redemption ........................................ 87
Section 11.02. Applicability of Article ................................... 88
Section 11.03. Election to Redeem; Notice to Trustee ...................... 88
iv
<PAGE>
Section 11.04. Selection by Trustee of Securities to Be Redeemed .......... 88
Section 11.05. Notice of Redemption ....................................... 88
Section 11.06. Deposit of Redemption Price ................................ 89
Section 11.07. Securities Payable on Redemption Date ...................... 89
Section 11.08. Securities Redeemed in Part ................................ 90
ARTICLE 12. DEFEASANCE AND COVENANT DEFEASANCE ..................................... 90
Section 12.01. Company's Option to Effect Defeasance or Covenant
Defeasance ................................................. 90
Section 12.02. Defeasance and Discharge.................................... 90
Section 12.03. Covenant Defeasance ........................................ 91
Section 12.04. Conditions to Defeasance or Covenant Defeasance............. 91
Section 12.05. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions .................... 93
Section 12.06. Reinstatement .............................................. 93
</TABLE>
EXHIBITS
EXHIBIT A Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S
EXHIBIT B Form of Certificate to Be Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
EXHIBIT C Form of Certificate to Be Delivered in Connection with
Transfers Pursuant to Regulation S
v
<PAGE>
INDENTURE, dated as of March 10, 2000, between Nextel
Partners, Inc., a Delaware corporation (herein called the "Company"), having
its principal office at 4500 Carillon Point, Kirkland, Washington 98033 and
The Bank of New York, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its Senior Notes due 2010 of substantially the tenor and amount hereinafter set
forth, and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture.
All things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE 1.
Definitions and Other Provisions
of General Application
Section 1.01. DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) whenever this Indenture requires that a particular ratio
or amount be calculated with respect to a specified period after giving
effect to certain transactions or events on a PRO FORMA basis, such
calculation will be made as if the transactions or events occurred on
the first day of such period, unless otherwise specified herein, and
all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles (whether or not such is indicated herein), and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted
<PAGE>
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case
may be, of this Indenture;
(5) the words "herein", "hereof' and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision; and
(6) each reference herein to a rule or form of the Commission
shall mean such rule or form and any rule or form successor thereto, in
each case as amended from time to time.
Certain terms, used principally in Article 6, are defined in
that Article.
Whenever this Indenture requires that a particular ratio or
amount be calculated with respect to a specified period after giving effect to
certain transactions or events on a PRO FORMA basis, such calculation shall be
made as if the transactions or events occurred on the first day of such period,
unless otherwise specified.
"Acquired Debt" means Debt of a Person (i) existing at the
time such Person becomes a Restricted Subsidiary or assumed by the
Company or a Restricted Subsidiary in connection with the acquisition
of assets from such Person and (ii) secured by a Lien encumbering any
asset of such specified Person.
"Act", when used with respect to any Holder, has the meaning
specified in Section 1.04.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person. "Affiliate" shall be deemed
to include, but only for purposes of Section 10.11 and without
limiting the application of the preceding sentence for the purpose of
such or any other Section, any Person owning, directly or indirectly,
(i) 10% or more of the Company's outstanding Common Stock or (ii)
securities having 10% or more of the total voting power of the
Company's Voting Stock. For the purposes of this definition, "control"
when used with respect to any specified 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. No individual shall be
deemed to be controlled by or under common control with any specified
Person solely by virtue of his or her status as an employee or officer
of such specified Person or of any other Person controlled by or under
common control with such specified Person.
"Agent Members" has the meaning provided in Section 3.06(a).
2
<PAGE>
"Annualized Operating Cash Flow" means, for any fiscal
quarter, the Operating Cash Flow for such fiscal quarter multiplied by
four.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by
way of a sale and leaseback) other than sales of inventory and obsolete
equipment in the ordinary Course of business (provided that the sale,
conveyance or other disposition of all or substantially all of the
assets of the Company and its Restricted Subsidiaries taken as a whole
will be governed by the provisions of Section 10.13 and/or the
provisions of Section 8.01 and not by the provisions of Section 10.21),
and (ii) the issue or sale by the Company or any of its Restricted
Subsidiaries of Capital Stock of any of the Company's Subsidiaries, in
the case of either clause (i) or (ii), whether in a single transaction
or a series of related transactions (a) that have a fair market
value in excess of $5.0 million or (b) for net proceeds in excess of
$5.0 million. Notwithstanding the foregoing, the following items shall
not be deemed to be Asset Sales: (i) a transfer of assets by the
Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned
Restricted Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary, (ii) an issuance of Capital Stock by a Wholly
Owned Restricted Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary, (iii) a Restricted Payment that is permitted by
Section 10.09, (iv) Permitted Joint Ventures and (v) any License
Exchange.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 6.14 hereof to act on behalf of the Trustee
to authenticate Securities.
"Average Life" means, at any date of determination with
respect to any Debt, the quotient obtained by dividing (i) the sum of
the products of (a) the number of years from such date of determination
to the dates of each successive scheduled principal payment of such
Debt and (b) the amount of such principal payment by (ii) the sum of
all such principal payments.
"Beneficial Owner" means a beneficial owner as defined in
Rules l3d-3 and 13d-5 under the Exchange Act (or any successor rules),
including the provision of such Rules that a person shall be deemed to
have beneficial ownership of all securities that such person has a
right to acquire within 60 days, PROVIDED that a person shall not be
deemed a beneficial owner of, or to own beneficially, any securities if
such beneficial ownership (1) arises solely as a result of a revocable
proxy delivered in response to a proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and the
applicable rules and regulations thereunder and (2) is not also then
reportable on Schedule 13D (or any successor schedule) under the
Exchange Act.
"Board of Directors" means the board of directors of the
Company.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors (unless the context specifically
requires that such resolution be adopted by a majority of
3
<PAGE>
the Disinterested Directors, in which case by a majority of such
directors) and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the
Borough of Manhattan, The City of New York are authorized or obligated
by law or executive order to close.
"Capital Lease Obligations" of any Person means the
obligations to pay rent or other amounts under lease of (or other Debt
arrangements conveying the right to use) real or personal property of
such Person which are required to be classified and accounted for as a
capital lease or a liability on the face of a balance sheet of such
Person determined in accordance with generally accepted accounting
principles and the amount of such obligations shall be the capitalized
amount thereof in accordance with generally accepted accounting
principles and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee
without payment of a penalty.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of
stock of, or other ownership interests in, such Person.
"Change of Control" means the occurrence of any of the
following events:
(a) any person or group of persons (as such term is used in
Section 13(d)(3) of the Exchange Act and the regulations thereunder)
other than a Permitted Holder is or becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the total Voting Stock or
Total Common Equity of the Company; PROVIDED that no Change of Control
shall be deemed to occur pursuant to this clause (a) if the person is a
corporation with outstanding debt securities having a maturity at
original issuance of at least one year and if such debt securities are
rated Investment Grade by S&P or Moody's for a period of at least 90
consecutive days, beginning on the date of such event (which period
will be extended up to 90 additional days for as long as the rating of
such debt securities is under publicly announced consideration for
possible downgrading by the applicable rating agency);
(b) the Company consolidates with, or merges with or into,
another Person other than a Permitted Holder or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person other than a Permitted
Holder, or any Person other than a Permitted Holder consolidates with,
or merges with or into, the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is
converted into or exchanged for cash, securities or other property,
other than any such transaction where (i) the outstanding Voting Stock
of the Company is converted into or exchanged for (1) Voting Stock
(other than redeemable stock) of the surviving or transferee Person or
(2) cash, securities and other property in an amount which
4
<PAGE>
could be paid by the Company as a Restricted Payment under this
Indenture and (ii) immediately after such transaction no person or
group of persons (as such term is used in Section 13(d)(3) of the
Exchange Act and the regulations thereunder) is the Beneficial Owner,
directly or indirectly, of more than 50% of the total Voting Stock or
Total Common Equity of the surviving or transferee Person; PROVIDED
that no Change of Control shall be deemed to occur pursuant to this
clause (b), if the surviving or transferee Person or the person
referred to in clause (b)(ii) is a corporation with outstanding debt
securities having a maturity at original issuance of at least one year
and if such debt securities are rated Investment Grade by S&P or
Moody's for a period of at least 90 consecutive days, beginning on the
date of such event (which period will be extended up to 90 additional
days for as long as the rating of such debt securities is under
publicly announced consideration for possible downgrading by the
applicable rating agency);
(c) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors
(together with (i) any directors who are members of the Board of
Directors on the date hereof, (ii) any new directors whose election by
such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of 66 2/3% of the
directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved, and (iii) any new directors appointed or
selected by a Permitted Holder, whether pursuant to a transaction of a
type described in either of the preceding paragraphs (a) and (b),
pursuant to a contractual right or pursuant to a right granted under
the Company's certificate of incorporation or by-laws) cease for any
reason to constitute a majority of the Board of Directors then in
office; or
(d) the adoption of a plan relating to the liquidation or
dissolution of the Company.
Any event that would constitute a Change of Control pursuant to
clause (a) or (b) above but for the proviso thereto shall not be deemed to be
a Change of Control until such time (if any) as the conditions described in
such proviso cease to have been met.
"Closing Date" means the date on which the Securities are originally
issued hereunder.
"Closing Price" on any Trading Day with respect to the per share
price of any shares of Capital Stock means the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either
case on the New York Stock Exchange or, if such shares of Capital Stock are
not listed or admitted to trading on such exchange, on the principal national
securities exchange on which such shares are listed or admitted to trading
or, if not listed or admitted to trading on any national securities exchange,
on the Nasdaq Stock
5
<PAGE>
Market or, if such shares are not listed or admitted to trading on any
national securities exchange or quoted on the Nasdaq Stock Market but the
issuer is a Foreign Issuer (as defined in Rule 3b-4(b) under the Exchange
Act) and the principal securities exchange on which such shares are listed
or admitted to trading is a Designated Offshore Securities Market (as defined
in Rule 902(a) under the Securities Act), the average of the reported closing
bid and asked prices regular way on such principal exchange, or, if such
shares are not listed or admitted to trading on any national securities
exchange or quoted on the Nasdaq Stock Market and the issuer and principal
securities exchange do not meet such requirements, the average of the closing
bid and asked prices in the over-the-counter market as furnished by any New
York Stock Exchange member firm of national standing that is selected from
time to time by the Company for that purpose.
"Code" means the Internal Revenue Code, as amended from time to
time, and the rules and regulations thereunder.
"Committed Capital Contribution" means the irrevocable cash
commitments pursuant to those certain Subscription and Contribution
Agreements by and among the Company, Nextel WIP Corp., Motorola and the Cash
Equity Investors (as defined therein) as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution
of assets upon any voluntary or involuntary liquidation, dissolution or
winding up of such Person, to shares of Capital Stock of any other class of
such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Debt" means the aggregate amount of Debt of the
Company and its Restricted Subsidiaries on a Consolidated basis, outstanding
at the date of determination.
"Consolidated Debt to Annualized Operating Cash Flow Ratio" means,
as at any date of determination, the ratio of (i) Consolidated Debt to (ii)
the Annualized Operating
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Cash Flow of the Company for the most recently completed fiscal quarter of
the Company for which financial statements are available.
"Consolidated Interest Expense" of any Person means, for any period,
(i) the aggregate interest expense and fees and other financing costs in
respect of Debt (including amortization of original issue discount and
non-cash interest payments and accruals), (ii) the interest component in
respect of Capital Lease Obligations and any deferred payment obligations of
such Person and its Restricted Subsidiaries, determined on a Consolidated
basis in accordance with generally accepted accounting principles, (iii) all
commissions, discounts, other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs (including
amortizations of discounts) associated with interest rate swap and similar
agreements and with foreign currency hedge, exchange and similar agreements
and (iv) the product of (a) all dividend payments, whether or not in cash, on
any series of Preferred Capital Stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Capital Stock payable solely in
Capital Stock of the Company (other than Redeemable Stock) or to the Company
or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a Consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Net Income" and "Consolidated Net Loss" mean, for any
period, the net income or net loss, as the case may be, of the Company and
its Restricted Subsidiaries for such period, all as determined on a
Consolidated basis in accordance with generally accepted accounting
principles, adjusted, to the extent included in calculating such net income
or net loss, as the case may be, by excluding without duplication (a) any
after-tax gain or loss attributable to the sale, conversion or other
disposition of assets other than in the ordinary course of business, (b) any
after-tax gains resulting from the write-up of assets and any loss resulting
from the write-down of assets, (c) any after-tax gain or loss on the
repurchase or redemption of any securities (including in connection with the
early retirement or defeasance of any Debt), (d) any foreign exchange gain or
loss, (e) all payments in respect of dividends on shares of Preferred Capital
Stock of the Company, (f) any other extraordinary, non-recurring or unusual
items incurred by the Company or any of its Restricted Subsidiaries, (g) the
net income (or loss) of any Person acquired by the Company or any Restricted
Subsidiary in a pooling-of-interests transaction for any period prior to the
date of such transaction, (h) all income or losses of Unrestricted
Subsidiaries and Persons (other than Subsidiaries) accounted for by the
Company using the equity method of accounting and (i) the net income (but not
net loss) of any Restricted Subsidiary which is subject to any judgment,
decree, order or governmental regulation which prevent the payment of
dividends or the making of distributions to the Company but only to the
extent of such restrictions.
"Consolidated Net Income (Loss)" means, for any period, the
Company's Consolidated Net Income or Consolidated Net Loss for such period,
as applicable.
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"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles, less amounts
attributable to Redeemable Stock of such Person; PROVIDED that, with respect
to the Company, no effect shall be given to adjustments following the Closing
Date to the accounting books and records of the Company in accordance with
Accounting Principles Board Opinions Nos. 16 and 17 (or successor opinions
thereto) or otherwise resulting from the acquisition of control of the
Company by another Person.
"Consolidation" means the consolidation of the accounts of each of
the Restricted Subsidiaries with those of the Company, if and to the extent
that the accounts of each such Restricted Subsidiary would normally be
consolidated with those of the Company in accordance with generally accepted
accounting principles; PROVIDED, HOWEVER, that "Consolidation" shall not
include consolidation of the accounts of any Unrestricted Subsidiary, but the
interest of the Company or any Restricted Subsidiary in any Unrestricted
Subsidiary shall be accounted for as an investment. The term "Consolidated"
has a correlative meaning.
"Corporate Trust Office" means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which address as of the Closing Date is located at 101 Barclay
Street, New York, New York 10286, Attention: Corporate Trust Administration.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 12.03.
"Credit Facility" means any credit facility (whether a term or
revolving type or both, including New Credit Facility) or letter of credit
facility of the type customarily entered into with banks or Hedging Agreement
(as defined), between the Company and/or any of its Restricted Subsidiaries,
on the one hand, and any banks or other lenders or affiliates thereof, on the
other hand (and any renewals, refundings, extensions or replacements of any
such credit facility), which credit facility is designated by the Company as
a "Credit Facility" for purposes of this Indenture and shall include all such
credit facilities in existence on the Closing Date whether or not so
designated.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed, including without limitation, in each case, premium, interest
(including interest accruing subsequent to the filing of, or which would have
accrued but for the filing of, a petition for bankruptcy, whether or not such
interest is an allowable claim in such bankruptcy proceeding), fees and
expenses relating thereto, (ii) every obligation of such Person evidenced by
bonds, debentures, notes or other similar instruments, including obligations
Incurred in connection with the acquisition of property, assets or
businesses, (iii) every reimbursement obligation of such Person with
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respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which are being
contested in good faith), (v) every Capital Lease Obligation of such Person,
(vi) the maximum fixed redemption or repurchase price of Redeemable Stock of
such Person at the time of determination plus accrued but unpaid dividends,
(vii) every obligation of such Person under interest rate swap or similar
agreements or foreign currency hedge, exchange or similar agreements of such
Person (collectively, "Hedging Agreements"), and (viii) every obligation of
the type referred to in clauses (i) through (vii) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has Guaranteed or is liable, directly or indirectly, as obligor, Guarantor or
otherwise. The amount of Debt of any Person issued with original issue
discount is the face amount of such Debt less the unamortized portion of the
original issue discount of such Debt at the time of its issuance as
determined in conformity with generally accepted accounting principles, and
money borrowed at the time of the Incurrence of any Debt in order to pre-fund
the payment of interest on such Debt shall be deemed not to be Debt. The
amount of Debt represented by an obligation under an agreement referred to in
clause (vii) shall be equal to (x) zero if such obligation has been Incurred
under clause (v)(B) of the definition of Permitted Debt and (y) the notional
amount of such obligation if it is not so Incurred.
"Default" means an event that is, or after notice or passage of
time, or both, would be, an Event of Default.
"Default Amount" has the meaning specified in Section 5.02.
"Defaulted Interest" has the meaning specified in Section 3.09.
"Defeasance" has the meaning specified in Section 12.02.
"Depository" shall mean The Depository Trust Company, as nominees
and their respective successors.
"Directed Investment" by the Company or any of its Restricted
Subsidiaries means any Investment for which the cash or property used for
such Investment is received by the Company from the issuance and sale (other
than to a Restricted Subsidiary) on or after February 24, 2000 of shares of
its Capital Stock (other than any of the Preferred Stock), or any options,
warrants or other rights to purchase such Capital Stock (other than any of
the Preferred Stock) designated by the Board of Directors as a "Directed
Investment" to be used for one or more specified investments in the
telecommunications business (including related activities and services) and
is so designated and used at any time within 365 days after the receipt
thereof; PROVIDED that the aggregate amount of any such Directed Investments
may not at any time exceed fifty percent (50%) of the aggregate amount of such
cash or property received by the Company on or after the date hereof from any
such issuance and sale or capital contribution; and
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PROVIDED FURTHER that any proceeds from any such issuance or sale may not be
used for such an Investment if such proceeds were, prior to being designated
for use as a Directed Investment, used to make a Restricted Payment.
"Disinterested Director" means, with respect to any proposed
transaction between the Company and an Affiliate thereof, a member of the
Board of Directors who is not an officer or employee of the Company, would
not be a party to, or have a financial interest in, such transaction and is
not an officer, director or employee of, and does not have a financial
interest in, such Affiliate. For purposes of this definition, no person would
be deemed not to be a Disinterested Director solely because such person holds
Capital Stock of the Company.
"DLJMB" means DLJ Merchant Banking Partners II, L.P. and its
Affiliates.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Securities" means the new securities of the Company
containing terms identical to the Securities initially issued hereunder
(except that such Securities shall have been registered under the Securities
Act) that are issued and exchanged for the Securities pursuant to the
Registration Rights Agreement.
"Exchange Act" refers to the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in the definition of
Offer to Purchase.
"Fair Market Value" means, for purposes of clause (i) of Section
10.08, the price that would be paid in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy, as determined in good faith by the
Board of Directors, whose determination shall be conclusive if evidenced by a
Board Resolution; PROVIDED that (x) the Fair Market Value of any security
registered under the Exchange Act shall be the average of the closing prices,
regular way, of such security for the 20 consecutive trading days immediately
preceding the sale of Capital Stock and (y) in the event the aggregate Fair
Market Value of any other property received by the Company exceeds $10
million, the Fair Market Value of such property shall be determined in good
faith by the Board of Directors, including a majority of the Disinterested
Directors who are then members of such Board of Directors, which
determination shall be conclusive if evidenced by a Board Resolution.
"FCC" means the Federal Communications Commission.
"Global Securities" has the meaning provided in Section 2.01.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt of any other Person (the
"primary obligor") in any
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manner, whether directly or indirectly, and including any obligation of such
Person, (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Debt, (ii) to purchase
property, securities or services for the purpose of assuring the holder of
such Debt of the payment of such Debt, or (iii) to maintain working capital,
equity capital or other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Debt (and
"Guaranteed", "Guaranteeing" and "Guarantor" shall have meanings correlative
to the foregoing); PROVIDED, HOWEVER, that the Guarantee by any Person shall
not include endorsements by such Person for collection or deposit, in either
case, in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise),
assume (pursuant to a merger, consolidation, acquisition or other
transaction), Guarantee or otherwise become liable in respect of such Debt or
other obligation or the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Debt or other obligation on
the balance sheet of such Person (and "Incurrence" and "Incurred" shall have
meanings correlative to the foregoing); PROVIDED, HOWEVER, that a change in
generally accepted accounting principles that results in an obligation of
such Person that exists at such time becoming Debt shall not be deemed an
Incurrence of such Debt; PROVIDED FURTHER, HOWEVER, that the accretion of
original issue discount on Debt shall not be deemed to be an Incurrence of
Debt. Debt otherwise Incurred by a Person before it becomes a Subsidiary of
the Company shall be deemed to have been Incurred at the time it becomes such
a Subsidiary.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Securities.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution to (by means of
transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise), or purchase or
acquisition of Capital Stock, bonds, notes, debentures or other securities or
evidence of Debt issued by, any other Person or the designation of a
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Subsidiary as an Unrestricted Subsidiary; PROVIDED that a transaction will
not be an Investment to the extent it involves (i) the issuance or sale by
the Company of its Capital Stock (other than Redeemable Stock), including
options, warrants or other rights to acquire such Capital Stock (other than
Redeemable Stock), (ii) a transfer, assignment or contribution by the Company
of shares of Capital Stock (or any options, warrants or rights to acquire
Capital Stock), or all or substantially all of the assets of, any
Unrestricted Subsidiary of the Company to another Unrestricted Subsidiary of
the Company or (iii) extensions of trade credit by the Company and its
Restricted Subsidiaries on commercially reasonable terms in the ordinary
course of business and consistent with their normal practice.
"Investment Grade" means a rating of at least BBB-, in the case of
S&P, or Baa3, in the case of Moody's.
"Itemized Executive" means any of the following individuals: (i)
John Chapple; (ii) John Thompson; (iii) David Thaler; (iv) David Aas; (v)
Perry Satterlee; and (vi) Mark Fanning
"License Exchange" means (A) any exchange of Licenses between the
Company and Nextel Communications, Inc. or any Affiliates of Nextel
Communications, Inc. which the Board of Directors of the Company determines
in good faith, on the date of such exchange, are, in the aggregate, of at
least equivalent value; PROVIDED, HOWEVER, that the aggregate value of all
such balances exchanged pursuant to this clause (A) shall not exceed $25.0
million, or (B) any transaction pursuant to which the Company transfers
certain of its Licenses to Nextel Communications, Inc. or any Affiliates of
Nextel Communications, Inc. in exchange for Licenses from a third party, the
purchase price for which was funded by Nextel or any Affiliates of Nextel
Communications, Inc.; PROVIDED, HOWEVER that the aggregate value of all such
Licenses exchanged pursuant to this clause (B) shall not exceed $25.0 million.
"Licenses" means SMR licenses granted by the FCC that entitle the
holder to use the radio channels covered thereby, subject to compliance with
FCC rules and regulations, in connection with its SMR business.
"Lien" means, with respect to any property or assets, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement, encumbrance, preference, priority
or other security agreement or preferential arrangement of any kind or nature
whatsoever on or with respect to such property or assets (including any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
"Liquidated Damages" means all liquidated damages then owing
pursuant to section 5 of the Registration Rights Agreement.
"Marketable Securities" means:
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(1) securities either issued directly or fully guaranteed or
insured by the government of the United States of America or any agency or
instrumentality thereof having maturities of not more than one year;
(2) time deposits and certificates of deposit, having
maturities of not more than six months from the date of deposit, of any
domestic commercial bank having capital and surplus in excess of $500 million
and having outstanding long-term debt rated A or better (or the equivalent
thereof) by S&P or Aaa or better (or the equivalent thereof) by Moody's;
(3) commercial paper rated A-1 or the equivalent thereof by S&P
or P-1 or the equivalent thereof by Moody's, and in each case maturing within
one year;
(4) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in clause (1) above; and
(5) investments in money market funds substantially all of
whose assets comprise securities of the types described in clauses (1)
through (4).
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, offer to purchase or otherwise.
"Memorandum" means the offering memorandum dated February 29, 2000
in connection with the offering of the Securities.
"Moody's" means Moody's Investors Service, Inc. or, if Moody's
Investors Service, Inc. shall cease rating debt securities having a maturity
at original issuance of at least one year and such ratings business shall
have been transferred to a successor Person, such successor Person; PROVIDED,
HOWEVER, that if Moody's Investors Service, Inc. ceases rating debt
securities having a maturity at original issuance of at least one year and
its ratings business with respect thereto shall not have been transferred to
any successor Person, then "Moody's" shall mean any other national recognized
rating agency (other than S&P) that rates debt securities having a maturity
at original issuance of at least one year and that shall have been designated
by the Company by a written notice given to the Trustee.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(a) the direct costs relating to such Asset Sale (including, without
limitation, legal, accounting, appraisal, investment banking fees, and sales
and brokerage commissions), (b) any relocation expenses incurred as a result
thereof, (c) taxes paid or payable as a result thereof, (d) amounts required
to be applied to the repayment of Debt secured by a Lien on the asset or
assets that were the subject of
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such Asset Sale, (e) amounts required to be paid in order to obtain a
necessary consent to such Asset Sale, (f) distributions made to minority
interest holders, based on their pro rata ownership, in Subsidiaries or
Permitted Joint Ventures of such Person as a result of an Asset Sale by such
Subsidiaries or Permitted Joint Ventures, and (g) appropriate amounts to be
provided by such Person or any Subsidiary thereof, as the case may be, as a
reserve in accordance with generally accepted accounting principles against
any liabilities associated with such assets that are subject thereof, as the
case may be, after such Asset Sale, including liabilities under any
indemnification obligations and severance and other employee termination
costs associated with such Asset Sale, in each case, as conclusively
determined by the board of directors of such Person.
"New Credit Facility" means that certain credit agreement, dated as
of January 29, 1999, as amended and restated in September 1999, by and among
a subsidiary of the Company and a syndicate of banks and other financial
institutions led by Donaldson, Lufkin & Jenrette Securities Corporation, as
arranger, DLJ Capital Funding, as syndication agent and the Bank of Montreal,
as administrative agent, governing a $175.0 million term loan facility, a
$150 million term loan facility and a $100.0 million revolving credit
facility, and Hedging Agreements with Persons that were lenders under the New
Credit Facility (or were affiliates of such lenders) at the time such Hedging
Agreements were entered into, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as such credit agreement, Hedging Agreements and/or related
documents may be amended, restated, supplemented, renewed, replaced or
otherwise modified from time to time whether or not with the same agent or
lenders and irrespective of any changes in the terms and conditions thereof.
"Non-U.S. Person" means a person who is not a "U.S. Person" (as
defined in Regulation S).
"Notice of Default" means a written notice of the kind specified in
Section 5.01(5).
"Offer" has the meaning specified in the definition of Offer to
Purchase.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his address
appearing in the Security Register on the date of the Offer offering to
purchase the Securities at the purchase price specified in such Offer (as
determined pursuant to this Indenture). Unless otherwise required by
applicable law, the Offer shall specify an expiration date (the "Expiration
Date") of the Offer to Purchase which shall be, subject to any contrary
requirements of applicable law, not less than 30 days or more than 45 days
after the date of such Offer and a settlement date (the "Purchase Date") for
purchase of Securities within five Business Days after the Expiration Date.
The Company shall notify the Trustee at least 15 days (or such shorter period
as is acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be
mailed by the
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Company or, at the Company's request, by the Trustee, in the name and at the
expense of the Company. The Offer shall contain information concerning the
business of the Company and its Subsidiaries which, at a minimum, shall
include (i) the most recent annual and quarterly financial statements and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained in the documents required to be filed with the Trustee
pursuant to this Indenture (which requirements may be satisfied by delivery
of such documents together with the Offer), (ii) a description of material
developments in the Company's business subsequent to the date of the latest
of such financial statements referred to in clause (i) (including a
description of the events requiring the Company to make the Offer to
Purchase), (iii) if required under applicable law, PRO FORMA financial
information concerning, among other things, the Offer to Purchase and the
events requiring the Company to make the Offer to Purchase and (iv) any
other information required by applicable law to be included therein. The
Offer shall contain all instructions and materials necessary to enable such
Holders to tender their Securities pursuant to the Offer to Purchase. The
Offer shall also state:
(1) the section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount at Stated Maturity of the
Outstanding Securities offered to be purchased by the Company pursuant to the
Offer to Purchase (the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
principal amount at Stated Maturity of Securities accepted for payment (as
specified pursuant to this Indenture) (the "Purchase Price");
(5) that the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of Securities
tendered must be tendered in an integral multiple of $1,000 of principal
amount at Stated Maturity;
(6) the place or places where the Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(7) that interest, if any, on any Securities not tendered or
tendered but not purchased by the Company pursuant to the Offer to Purchase
will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Security being accepted for payment pursuant to the Offer
to Purchase;
(9) that each Holder electing to tender Securities pursuant to the
Offer to Purchase will be required to surrender such Securities at the place
or places the Company or the Trustee so requires, duly endorsed by, or
accompanied by a written instrument of
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transfer in form satisfactory to the Company and the Trustee duly executed by
the Holder thereof or his attorney duly authorized in writing;
(10) that Holders will be entitled to withdraw all or any portion of
the Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the Expiration Date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount at Stated Maturity of the Securities the Holder tendered, the
certificate number of the Securities the Holder tendered and a statement that
such Holder is withdrawing all or a portion of his tender;
(11) that the Company shall purchase all such Securities duly
tendered and not withdrawn pursuant to the Offer to Purchase, and
(12) that in the case of any Holder whose Securities are purchased
only in part, the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Securities without service charge, new
Securities of any authorized denomination as requested by such Holder, in an
aggregate principal amount at Stated Maturity equal to and in exchange for
the unpurchased portion of the aggregate principal amount at Stated Maturity
of the Securities so tendered.
Any Offer to Purchase shall be governed by and effected in
accordance with the Offer for such Offer to Purchase.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 10.17 shall be the principal
executive, financial or accounting officer of the Company.
"Offshore Global Securities" has the meaning provided in Section
2.01.
"Offshore Physical Securities" has the meaning provided in Section
2.01.
"Operating Cash Flow" means, for any fiscal quarter, (i) the
Company's Consolidated Net Income (Loss) plus depreciation, amortization and
other non-cash charges in respect thereof for such fiscal quarter, plus (ii)
all amounts deducted in calculating Consolidated Net Income (Loss) for such
fiscal quarter in respect of Consolidated Interest Expense, and all income
taxes, whether or not deferred, applicable to such income period, all as
determined on a Consolidated basis in accordance with generally accepted
accounting principles. For purposes of calculating Operating Cash Flow for
the fiscal quarter most recently completed for which financial statements are
available prior to any date on which an action is taken that requires a
calculation of the Operating Cash Flow to Consolidated Interest Expense Ratio
or Consolidated Debt to Annualized Operating Cash Flow Ratio, (1) any Person
that is a Restricted Subsidiary on such date (or would become a Restricted
Subsidiary in connection with the transaction that requires the determination
of such ratio) will be deemed to have been a Restricted
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Subsidiary at all times during such fiscal quarter, (2) any Person that is
not a Restricted Subsidiary on such date (or would cease to be a Restricted
Subsidiary in connection with the transaction that requires the
determination of such ratio) will be deemed not to have been a Restricted
Subsidiary at any time during such fiscal quarter and (3) if the Company or
any Restricted Subsidiary shall have in any manner acquired (including
through commencement of activities constituting such operating business) or
disposed (including through termination or discontinuance of activities
constituting such operating business) of any operating business during or
subsequent to the most recently completed fiscal quarter, such calculation
will be made on a PRO FORMA basis on the assumption that such acquisition or
disposition had been completed on the first day of such completed fiscal
quarter and may give effect to projected quantifiable improvements in
operating results (on a annualized basis) due to cost reductions calculated
in accordance with Regulation S-X of the Securities Act and evidenced by (A)
in the case of cost reductions of less than $10.0 million, an Officers'
Certificate delivered to the Trustee and (B) in the case of cost reductions
of $10.0 million or more, a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; PROVIDED that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to Section 3.08
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands such Securities are valid obligations of the
Company; and
(iv) Securities as to which Defeasance has been effected
pursuant to Section 12.02;
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PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or
other action, only Securities which the a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"PARI PASSU", when used with respect to the ranking of any Debt of
any Person in relation to other Debt of such Person, means that each such
Debt (a) either (i) is not subordinated in right of payment to any other Debt
of such Person or (ii) is subordinate in right of payment to the same Debt of
such Person as is the other and is so subordinate to the same extent and (b)
is not subordinate in right of payment to the other or to any Debt of such
Person as to which the other is not so subordinate.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Permitted Debt" means:
(i) any Debt (including Guarantees thereof) outstanding on the
Closing Date (including the Securities) and any accretion of original
issue discount and accrual of interest with respect to such Debt;
(ii) any additional Debt outstanding under a Credit Facility
in aggregate principal amount at any one time outstanding under this
clause (ii) not to exceed $325.0 million in aggregate for all such
Credit Facilities, LESS permanent repayments of Debt under such Credit
Facilities made by the Company or any of its Restricted Subsidiaries
pursuant to Section 10.21;
(iii) any Vendor Financing Debt in an aggregate principal
amount outstanding at any time not to exceed $100.0 million;
(iv) Debt (A) to the Company or (B) to any Restricted
Subsidiary; PROVIDED that any event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or any
subsequent transfer of such Debt (other than to the Company or another
Restricted Subsidiary) shall be deemed, in each case, to constitute an
Incurrence of such Debt not permitted by this clause (iv);
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(v) Debt (A) in respect of performance, surety or appeal bonds
or bankers' acceptances provided in the ordinary course of business,
(B) under foreign currency hedge, foreign currency exchange, interest
rate swap or similar agreements; PROVIDED that such agreements (a) are
designed solely to protect the Company or its Restricted Subsidiaries
against fluctuations in foreign currency exchange rates or interest
rates and (b) do not increase the Debt of the obligor outstanding at
any time other than as a result of fluctuations in foreign currency
exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder; and (C) arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from Guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any
Restricted Subsidiary pursuant to such agreements, in any case Incurred
in connection with the disposition of any business, assets or
Restricted Subsidiary (other than Guarantees of Debt Incurred by any
Person acquiring, all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition),
in a principal amount not to exceed the gross proceeds actually
received by the Company or any Restricted Subsidiary in connection with
such disposition;
(vi) renewals, refundings or extensions of any Debt referred
to in clause (i) or (iii) above or (viii) below or Incurred pursuant to
clause (ii) of Section 10.08 and any renewals, refundings or extensions
thereof, plus (A) the amount of any premium reasonably determined by
the Company as necessary to accomplish such renewal, refunding or
extension and (B) such other fees and expenses of the Company
reasonably incurred in connection with the renewal, refunding or
extension, PROVIDED that such renewal, refunding or extension shall
constitute Permitted Debt only (a) to the extent that it does not
result in an increase in the aggregate principal amount (or, if such
Debt provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the maturity
thereof, in an amount not greater than such lesser amount) of such Debt
(except as permitted by clause (A) or (B) above), and (b) to the extent
such renewed, refunded or extended Debt does not have a mandatory
redemption date prior to the mandatory redemption date of the Debt
being renewed, refunded or extended or have an Average Life shorter
than the remaining Average Life of the Debt being renewed, refunded or
extended; and
(vii) Debt payable solely in, or mandatorily convertible into,
Capital Stock (other than Redeemable Stock) of the Company;
(viii) all Exchange Notes issued pursuant to the terms of the
Registration Rights Agreement for the Notes;
(ix) Debt (in addition to Debt permitted under clauses (i)
through (viii) above) in an aggregate principal amount outstanding at
any time not to exceed $50.0 million.
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Company or any of its Restricted Subsidiaries (i) is responsible for
the managerial control of such joint venture and (ii) owns at least 40%
of the outstanding Capital Stock of such joint venture; PROVIDED that
such joint venture, together with all other Permitted Joint Ventures
described in this clause (b), does not cover or service more than 10%
of the POPs (computed by including only a percentage of the total POPs
equal to the Company's percentage ownership in that joint venture)
covered by the Company at the date of determination (as determined in
good faith by the board of directors).
"Permitted Liens" means (i) Liens securing Debt or other
monetary obligations under a Credit Facility to the extent the
principal amount of such obligations is permitted by the terms of this
Indenture to be incurred; (ii) Liens in favor of the Company or a
Wholly Owned Restricted Subsidiary; (iii) Liens on property of a Person
existing at the time such Person is merged with or into or consolidated
with the Company or any Subsidiary of the Company; 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; (iv) Liens on
property existing at the time of acquisition thereof by the Company or
any Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition; (v) Liens to
secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred
in the ordinary course of business; (vi) Liens to secure Indebtedness
(including Capital Lease Obligations) permitted by clause (iii) of the
definition of "Permitted Debt"; (vii) Liens on the date 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 generally accepted account principles shall
have been made therefor; (ix) Liens (including zoning restrictions,
servitudes, easements and rights-of-way) incurred in the ordinary
course of business of the Company or any Subsidiary of the Company that
(a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially
detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Subsidiary;
(x) Liens of a lessor under a lease (other than a capitalized lease);
(xi) Liens not otherwise permitted by the foregoing clauses (i) through
(vii) securing Debt in an aggregate amount not to exceed 5% of the
Company's consolidated tangible assets; and (xii) Liens to secure Debt
incurred to refinance, in whole or in part, Debt secured by any Lien
referred to in the foregoing clauses (i), (iii), (iv), (v) or this
clause (xii) so long as such Lien does not extend to any other property
(other than improvements and accessions to the original property) and
the principal amount of Debt so secured is not increased except as
otherwise permitted by this Indenture.
"Permitted Transaction" means (1) any written agreements
existing on the Closing Date and described in or incorporated by
reference into the Memorandum and (ii) any transaction or transactions
with any vendor or vendors (other than Motorola, Inc.) of
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property or materials used in the telecommunications business
(including related activities and services) of the Company or any
Restricted Subsidiary, PROVIDED (x)such transactions are in the
ordinary course of business and (y) such vendor does not beneficially
own more than 10% of the voting power of the Voting Stock of the
Company, (iii) any amendment, modification or other change to the
purchase agreement between the Company and Motorola, Inc., dated as of
January 29, 1999 and as amended on September 9, 1999, or any other
similar agreement with Motorola, Inc. that has been approved by a
majority of the Disinterested Directors of the Company, (iv)
agreements and transactions contemplated by the joint venture agreement
entered into by and among the Company and Nextel Communications, Inc.
and their respective Subsidiaries as of January 29, 1999, as amended,
(v) any License Exchange and (vi) any issuance of equity by the Company
(other than Redeemable Stock).
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency
or political subdivision thereof.
"POP" means the population equivalents as estimated by the
Company by extrapolation from the 1990 or 2000 U.S. Census and other
publicly available information.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.08
in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Preferred Capital Stock" as applied to the Capital Stock of
any Person, means Capital Stock of such Person of any class or classes
(however designated) that ranks prior, as to the payment of dividends
or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of any other class of such Person.
"Preferred Stock" means the Company's Series B Redeemable
Preferred Stock.
"Private Placement Legend" means the legend initially set
forth on the Securities in the form set forth in Section 2.05.
"Purchase Amount" has the meaning specified in the definition
of Offer to Purchase.
"Purchase Date" has the meaning specified in the definition of
Offer to Purchase.
"Purchase Price" has the meaning specified in the definition
of Offer to Purchase.
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"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Record Expiration Date" has the meaning specified in Section
1.04.
"Redeemable Stock" of any Person means any Capital Stock of
such Person that by its terms or otherwise is (1) required to be
redeemed prior to the Stated Maturity of the Securities, (ii)
redeemable at the option of the holder thereof at any time prior to the
Stated Maturity of the Securities or (iii) convertible into or
exchangeable for Capital Stock referred to in clause (i) or (ii) above
or Debt having a scheduled maturity prior to the Stated Maturity of the
Securities; PROVIDED that any Capital Stock that would not constitute
Redeemable Stock but for provisions thereof giving holders thereof the
right to require such Person to repurchase or redeem such Capital Stock
upon the occurrence of a "change of control" occurring prior to the
Stated Maturity of the Securities shall not constitute Redeemable Stock
if the "change of control" provisions applicable to such Capital Stock
are no more favorable to the holders of such Capital Stock than the
provisions contained in Section 10.13 and such Capital Stock
specifically provides that such Person will not repurchase or redeem
any such stock, pursuant to such provision prior to the Company's
repurchase of such Securities as are required to be repurchased
pursuant to Section 10.13.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to
this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement dated the Closing Date, between the Company and the Initial
Purchasers.
"Registration Statement" means the Registration Statement as
defined and described in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the March 1 or September 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment
Date.
"Regulation S" means Regulation S under the Securities Act.
"Required Consent" means, except as otherwise expressly
provided in this Indenture with respect to matters requiring the
consent of each holder of Securities affected thereby, the consent of
holders of not less than a majority in aggregate principal amount at
Stated Maturity of the Securities.
"Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the
Trustee (or any successor group of the Trustee) with direct
responsibility for the administration of this Indenture and also means,
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with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Payments" has the meaning specified in Section
10.09.
"Restricted Subsidiary" means any Subsidiary of the Company,
whether existing on the Closing Date or created subsequent thereto,
designated from time to time by the Board of Directors as (or
otherwise deemed to be) a "Restricted Subsidiary" in accordance with
Section 10.10.
"Rule 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services or, if Standard
& Poor's Ratings Services shall cease rating debt securities having a
maturity at original issuance of at least one year and such ratings
business shall have been transferred to a successor Person, such
successor Person; PROVIDED, HOWEVER, that if Standard & Poor's Ratings
Services ceases rating debt securities having a maturity at original
issuance of at least one year and its ratings business with respect
thereto shall not have been transferred to any successor Person, then
"S&P" shall mean any other nationally recognized rating agency (other
than Moody's) that rates debt securities having a maturity at original
issuance of at least one year and that shall have been designated by
the Company by a written notice given to the Trustee.
"Securities" means securities designated in the first
paragraph of the RECITALS OF THE COMPANY that are authenticated and
delivered under this Indenture. For all purposes of this Indenture, the
term "Securities" shall include the Securities issued on the Closing
Date, any Exchange Securities to be issued and exchanged for any
Securities pursuant to the Registration Rights Agreement and any other
Securities issued after the Closing Date under this Indenture. For
purposes of this Indenture all Securities shall vote together as one
series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.05.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.09.
"Specialized Mobile Radio" or "SMR" means a mobile radio
communications system that is operated as described in the Memorandum.
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"Stated Maturity" when used with respect to any Debt security
or any installment of interest thereon, means the date specified in
such Debt Security as the fixed date on which the principal of such
Debt Security or such installment of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than
50% of the outstanding Voting Stock of which is owned, directly or
indirectly, by such Person or by one or more other Subsidiaries of such
Person or by such Person and one or more Subsidiaries thereof or (ii)
any other Person (other than a corporation) in which such Person, or
one or more other Subsidiaries of such Person or such Person and one or
more other Subsidiaries thereof, directly or indirectly, has at least a
majority ownership and power to direct the policies, management and
affairs thereof.
"Total Common Equity" of any Person means, as of any day of
determination (and as modified for purposes of the definition of
"Change of Control"), the product of (i) the aggregate number of
outstanding primary shares of Common Stock of such Person on such day
(which shall not include any options or warrants on, or securities
convertible or exchangeable into, shares of Common Stock of such
Person) and (ii) the average Closing Price of such Common Stock over
the 20 consecutive Trading Days immediately preceding such day. If no
such Closing Price exists with respect to shares of any such class, the
value of such shares for purposes of clause (ii) of the preceding
sentence shall be determined by the Board of Directors in good faith
and evidenced by a Board Resolution.
"Total Invested Capital" means at any time of determination,
the sum of, without duplication, (i) the total amount of equity
contributed to the Company as of January 29, 1999 (being $183.2
million), PLUS (ii) the aggregate net cash proceeds received by the
Company from capital contributions or the issuance or sale of Capital
Stock (other than Redeemable Stock but including Capital Stock issued
upon the conversion of convertible Debt or from the exercise of
options, warrants or rights to purchase Capital Stock (other than
Redeemable Stock)), including cash payments under the Committed Capital
Contribution, subsequent to January 29, 1999, other than to a
Restricted Subsidiary, PLUS (iii) the aggregate net cash proceeds
received by the Company or any Restricted Subsidiary from the sale,
disposition or repayment of any Investment made after January 29, 1999
and constituting a Restricted Payment in an amount equal to the lesser
of (a) the return of capital with respect to such Investment and (b)
the initial amount of such Investment, in either case, less the cost of
the disposition of such Investment, PLUS (iv) an amount equal to the
Consolidated net Investment (as of the date of determination) the
Company and/or any of the Restricted Subsidiaries has made in any
Subsidiary that has been designated as an Unrestricted Subsidiary after
January 29, 1999 upon its redesignation as a Restricted Subsidiary in
accordance with Section 10.10, PLUS (v) Consolidated Debt MINUS (vi)
the aggregate amount of all Restricted Payments declared or made on or
after January 29, 1999.
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"Trading Day" with respect to a securities exchange or
automated quotation system means a day on which such exchange or system
is open for a full day of trading.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture,
and thereafter "Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed;
PROVIDED, HOWEVER, that in the event the Trust Indenture Act of 1939
is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so
amended.
"U.S. Global Securities" has the meaning provided in Section
2.01.
"U.S. Government Obligation" has the meaning specified in
Section 12.04.
"U.S. Physical Securities" has the meaning provided in Section
2.01.
"Unrestricted Subsidiary" means any Subsidiary that is not a
Restricted Subsidiary and includes any Restricted Subsidiary that
becomes an Unrestricted Subsidiary in accordance with Section 10.10.
"Vendor Financing Debt" means any Debt owed to (i) a vendor or
supplier of any property or materials used by the Company or its
Restricted Subsidiaries in their telecommunications business, (ii) any
Affiliate of such a vendor or supplier, (iii) any assignee of such a
vendor, supplier or Affiliate of such a vendor or supplier, or (iv) a
bank or other financial institution that has financed or refinanced the
purchase of such property or materials from such a vendor, supplier,
Affiliate of such a vendor or supplier or assignee of such a vendor or
supplier; PROVIDED that the aggregate amount of such Debt does not
exceed the sum of (w) the purchase price of such property or materials
(including transportation, installation, warranty and testing charges,
as well as applicable taxes paid, in respect of such property or
materials), (x) the cost of design, development, site acquisition and
construction, (y) any interest or other financing costs accruing or
otherwise payable in respect of the foregoing, and (z) the cost of any
services provided by such vendor, supplier or Affiliate of such vendor
or supplier.
"Vice President", when used with respect to the Company or
the Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice
president".
"Voting Stock" of any Person means Capital Stock of such
Person which ordinarily has voting power for the election of directors
(or persons performing similar functions) of such Person, whether at
all times or only so long as no senior class of securities has such
voting power by reason of any contingency.
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"Wholly Owned Restricted Subsidiary" of the Company means a
Restricted Subsidiary all of the outstanding Capital Stock of which
(other than directors' qualifying shares) shall at the time be owned by
the Company or by one or more Wholly Owned Restricted Subsidiaries or
by the Company and one or more Wholly Owned Restricted Subsidiaries.
Section 1.02. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture (except, for
any actions in connection with the original issuance of Securities
hereunder), the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act. Each such
certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirement set forth in this
Indenture.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(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 each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his certificate or
opinion is
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based are erroneous. Any such certificate or opinion of counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of,
or representations by, an officer or officers of the Company stating that
the information with respect to such factual matters is in the possession of
the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect
to such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Section 1.04. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall also
constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to give
or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Securities, PROVIDED that the Company may not set a
record date for,
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and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to
in the next paragraph. If any record date is set pursuant to this paragraph,
the Holders of Outstanding Securities on such record date, and no other
Holders, shall be entitled to take the relevant action, whether or not such
Holders remain Holders after such record date; PROVIDED that no such action
shall be effective hereunder unless taken on or prior to the applicable
Record Expiration Date by Holders of the requisite principal amount of
Outstanding Securities on such record date; and PROVIDED, FURTHER, that for
the purpose of determining whether Holders of the requisite principal amount
of such Securities have taken such action, no Security shall be deemed to
have been Outstanding on such record date unless it is also Outstanding on
the date such action is to become effective. Nothing in this paragraph shall
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any
Person be canceled and of no effect), nor shall anything in this paragraph be
construed to render ineffective any action taken by Holders of the requisite
principal amount of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the
Company at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Record Expiration Date to be
given to the Trustee in writing and to each Holder of Securities in the
manner set forth in Section 1.06.
The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.02, (iii) any request to institute
proceedings referred to in Section 5.07(2), (iv) any direction referred to in
Section 5.12 or (v) the Required Consent. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities on such record date,
and no other Holders, shall be entitled to join in such notice, declaration,
request or direction, whether or not such Holders remain Holders after such
record date; PROVIDED that no such action shall be effective hereunder unless
taken on or prior to the applicable Record Expiration Date by Holders of the
requisite principal amount of Outstanding Securities on such record date; and
PROVIDED, FURTHER, that for the purpose of determining whether Holders of the
requisite principal amount of such Securities have taken such action, no
Security shall be deemed to have been Outstanding on such record date unless
it is also Outstanding on the date such action is to become effective.
Nothing in this paragraph shall be construed to prevent the Trustee from
setting a new record date for any action (whereupon the record date
previously set shall automatically and without any action by any Person be
canceled and of no effect), nor shall anything in this paragraph be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the matter(s) to
be submitted for potential action by Holders and the applicable Record
Expiration Date to be given to the Company in writing and to each Holder of
Securities in the manner set forth in Section 1.06.
With respect to any record date set pursuant to this
Section, the party hereto that sets such record date may designate any day as
the "Record Expiration Date" and from time to time may change the Record
Expiration Date to any earlier or later day, PROVIDED that no such
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<PAGE>
change shall be effective unless notice of the proposed new Record Expiration
Date is given to the other party hereto in writing, and to each Holder of
Securities in the manner set forth in Section 1.06, on or before the
existing Record Expiration Date. If a Record Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Record Expiration Date
with respect thereto, subject to its right to change the Record Expiration
Date as provided in this paragraph. Notwithstanding the foregoing, no Record
Expiration Date shall be later than the 180th day after the applicable record
date.
Without limiting the foregoing, a Holder entitled hereunder
to take any action hereunder with regard to any particular Security may do so
with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such principal amount.
Section 1.05. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing and mailed, first-class postage prepaid, to or with
the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
Section 1.06. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
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In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 1.07. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be part
of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 1.08. 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.
Section 1.09. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.10. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 1.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders of Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 1.12. GOVERNING LAW.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
Section 1.13. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity of any Security shall not be a Business Day,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made on such date, but may be made on the next succeeding Business Day with
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the same force and effect (including with respect to the accrual of interest) as
if made on the Interest Payment Date, Redemption Date or Purchase Date, or at
the Stated Maturity.
Section 1.14. NO RECOURSE AGAINST OTHERS.
No recourse for the payment of the principal of, premium, if
any, or interest on any of the Securities, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company contained in this Indenture, or in any of
the Securities, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator or against any past, present or
future partner, shareholder, other equity holder, officer, director, employee or
controlling person, as such, of the Company or of any successor Person, either
directly or through the Company or any successor Person, whether by virtue of
any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Securities.
ARTICLE 2.
Security Forms
Section 2.01. FORMS GENERALLY.
The Securities and the Trustee's certificates of
authentication shall be in substantially the forms set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
or as may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution thereof.
Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Securities in
registered form, substantially in the form set forth in Section 2.02 (the "U.S.
Global Securities"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee as custodian for the Depository or its nominee, as
hereinafter provided.
Securities offered and sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of one or more
permanent Global Securities in registered form substantially in the form set
forth in Section 2.02 (the "Offshore Global Securities") deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the Offshore Global Securities may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary, as hereinafter provided.
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The Offshore Physical Securities and U.S. Physical Securities
are sometimes collectively herein referred to as the "Physical Securities."
The U.S. Global Securities and the Offshore Global Securities are sometimes
collectively herein referred to as the "Global Securities."
Securities offered and sold in reliance on Regulation D under
the Securities Act shall be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in Section
2.02 (the "U.S. Physical Securities"). Securities issued pursuant to Section
3.07 in exchange for interests in the Global Securities shall be in the form
of permanent certificated Securities in registered form substantially in the
form set forth in Section 2.02 (the "Offshore Physical Securities").
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section 2.02. FORM OF FACE OF SECURITY.
Nextel Partners, Inc.
11% Senior Notes due 2010
No.___________ $_____________
CUSIP NO._____________
CINS NO._____________
Nextel Partners, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_________, or registered assigns, the principal amount of _________ Dollars
on March 15, 2010 and to pay cash interest thereon from September 15, 2000 or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually in arrears on March 15 and September 15 in
each year, commencing September 15, 2000 at the rate of 11% per annum, until
the principal hereof is paid or duly provided for, PROVIDED that any
principal and premium, and any such installment of interest, which is overdue
shall bear interest at the rate of 11% per annum (to the extent that the
payment of such interest shall be legally enforceable), from the dates such
amounts are due until they are paid or duly provided for, and such interest
shall be payable on demand. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the March 1 or September 1
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in
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whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Securities not less than 10 days prior to such Special Record Date,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
In accordance with the terms of the Registration Rights
Agreement (i) if the Company fails to file an Exchange Offer Registration
Statement with the Commission on or prior to July 10, 2000, (ii) if the Exchange
Offer Registration Statement is not declared effective by the Commission on or
prior to September 10, 2000, (iii) if the Exchange Offer is not consummated on
or before the 30th business day after the Exchange Offer Registration Statement
is declared effective, (iv) if obligated to file the Shelf Registration
Statement and the Company fails to file the Shelf Registration Statement with
the Commission on or prior to the 60th day after such filing obligation arises,
(v) if obligated to file a Shelf Registration Statement and the Shelf
Registration Statement is not declared effective on or prior to the 90th day
after the obligation to file a Shelf Registration Statement arises, or (vi) if
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, is declared effective but thereafter ceases to be effective
or useable in connection with resales of the Transfer Restricted Securities, for
such time of non-effectiveness or non-usability (each, a "Registration
Default"), the Company agrees to pay to each Holder of Transfer Restricted
Securities affected thereby liquidated damages ("Liquidated Damages") in an
amount equal to $0.05 per week per $ 1,000 in principal amount of Transfer
Restricted Securities held by such Holder for each week or portion thereof that
the Registration Default continues for the first 90 day period immediately
following the occurrence of such Registration Default. The amount of the
Liquidated Damages shall increase by an additional $0.05 per week per $ 1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90 day period until all Registration Defaults have been cured, up to
a maximum amount of Liquidated Damages of $0.50 per week per $ 1,000 in
principal amount of Transfer Restricted Securities. The Company shall not be
required to pay Liquidated Damages for more than one Registration Default at any
given time. Following the cure of all Registration Defaults, the accrual of
Liquidated Damages will cease.
All accrued Liquidated Damages shall be paid by the Company to
Holders entitled thereto by wire transfer to the accounts specified by them or
by mailing checks to their registered address if no such accounts have been
specified.
The Holder of this Security is entitled to the benefits of
such Registration Rights Agreement.
Payment of the principal of (and premium, if any) and any
interest on this Security will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; PROVIDED,
HOWEVER, that at the option of the Company payment of interest may be made by
check
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mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
Nextel Partners, Inc. promises to pay to ____________, or
registered assigns, the principal amount at maturity of Two Hundred Million
Dollars on March 15, 2010. Reference is hereby made to the further provisions
of this Security set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 2000.
Record Dates: March 1 and September 1.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
NEXTEL PARTNERS, INC.
By:_________________________________
Title:
Section 2.03. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of Securities
of the Company designated as its Senior Notes due 2010 (herein called the
"Securities"), limited in aggregate principal amount at Stated Maturity to
$200,000,000, issued and to be issued under an Indenture, dated as of March 10,
2000 (herein called the "Indenture", which term shall have the meaning assigned
to it in such instrument), between the Company and The Bank of New York, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.
The Securities may be redeemed at any time on or after March
15, 2005, at the Company's option, in whole or in part, upon not less than 30
nor more than 60 days' prior written notice mailed by first class mail to each
Holder's last address as it appears in the Security Register, at the Redemption
Prices (expressed as a percentage of the principal amount at maturity thereof)
set forth below, plus an amount in cash equal to all accrued and unpaid interest
and Liquidated Damages, if any, to the Redemption Date, if redeemed during the
twelve-month period beginning March 15 of each of the years set forth below.
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<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2005........................... 105.5000%
2006........................... 103.6667%
2007........................... 101.8333%
2008 and thereafter............ 100.0000%
</TABLE>
In addition, in the event of one or more sales by the
Company on or prior to March 15, 2003 of at least $75.0 million of its
Capital Stock (other than Redeemable Stock), the Company may redeem up to 35%
of the aggregate principal amount of the Notes originally issued with the
proceeds of such sale at a Redemption Price equal to 111% of such principal
amount on the Redemption Date, plus accrued and unpaid interest and
Liquidated Damages, if any thereon, to the Redemption Date; provided that at
least 65% of the aggregate principal amount of the Notes originally issued
remain outstanding immediately after the occurrence of any such redemption
(excluding Notes held by the Company and its Restricted Subsidiaries); and
provided, further, that such redemption occurs within 60 days after
consummation of any such sale.
The Securities do not have the benefit of any sinking fund
obligations.
In the event of redemption, or purchase pursuant to an Offer
to Purchase, of this Security in part only, a new Security or Securities for the
unredeemed or unpurchased portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
The Indenture contains provisions for defeasance at any time
of the entire indebtedness of this Security or certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance
with certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, there
may be declared due and payable the Default Amount of the Securities, in the
manner and with the effect provided in the Indenture. The Default Amount in
respect of this Security as of any particular date shall equal 100% of the
principal amount payable in respect of this Security at the Stated Maturity
hereof. Upon payment of (i) the Default Amount so declared due and payable and
any overdue installment of interest in respect of this Security, (ii) any
overdue principal or premium payable on redemption or repurchase of this
Security and (iii) as provided on the face hereof, any interest on any overdue
Default Amount, principal, premium or interest in respect of this Security (to
the extent that the payment of such interest shall be legally enforceable), all
of the Company's obligations in respect of the payment of the principal of and
any premium and interest on this Security shall terminate.
The Indenture provides that, subject to certain conditions, if
a Change of Control occurs, the Company shall be required to make an Offer to
Purchase for all of the Securities.
Unless the context otherwise requires, references herein to
the principal amount of any Security mean, as of any day, (i) with respect to
any portion thereof required hereunder to be redeemed or repurchased on any
redemption or repurchase date on or prior to such day, the amount due and
payable in respect of such portion upon such redemption or repurchase date
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(excluding premium and interest), (ii) with respect to any portion thereof not
required to be so redeemed or repurchased, but which has been declared due and
payable prior to the Stated Maturity thereof as provided in the Indenture, the
Default Amount in respect of such portion as of such day and (iii) with respect
to any portion thereof not required so to be redeemed or repurchased and not so
declared due and payable, such portion of the principal amount of such Security
payable at Stated Maturity thereof.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee after having received
the Required Consent (defined as follows). The Indenture also contains
provisions permitting those Persons giving the Required Consent, on behalf of
the Holders of all the Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As used herein, "Required Consent" means, except as otherwise
expressly provided in the Indenture with respect to matters requiring the
consent of each holder of Securities affected thereby, the consent of holders of
not less than a majority in aggregate principal amount at Stated Maturity of the
Securities.
As provided in and subject to the provisions of the
Indenture, the Holder of this Security shall not have the right to institute
any proceeding with respect to the Indenture or for the appointment of a
receiver or trustee or for any other remedy thereunder, unless such Holder
shall have previously given the Trustee written notice of a continuing Event
of Default with respect to the Securities, the Holders of not less than a
majority in principal amount at Stated Maturity of the Securities at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee indemnity satisfactory to the Trustee and the Trustee shall not have
received from the Holders of a majority in principal amount at Stated
Maturity of Securities at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, within
60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to certain suits described in the Indenture,
including any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein (or, in the case
of redemption, on or after the Redemption Date or, in the case of any
purchase of this Security required to be made pursuant to an Offer to
Purchase, on or after the Purchase Date.)
No reference herein to the Indenture and no provision of
this Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed.
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As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable
in the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in the Borough of Manhattan,
The City of New York, duty endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized
in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, the Securities are exchangeable for a like aggregate principal amount
of Securities of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Interest on this Security shall be computed on the basis of a
360-day year of twelve 30-day months.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
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[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto
INSERT TAXPAYER IDENTIFICATION NO.
________________________________________________________________________________
Please print or typewrite name and address including zip code of assignee
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ________________________ attorney to transfer said Security on the
books of the Company with full power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL SECURITIES OTHER THAN EXCHANGE SECURITIES
AND UNLEGENDED OFFSHORE PHYSICAL AND GLOBAL SECURITIES]
In connection with any transfer of this Security occurring prior to the date
which is the earlier of (i) the date the Shelf Registration Statement with
respect to resales of the Securities is declared effective or (ii) the end of
the period referred to in Rule 144(k) under the Securities Act, the undersigned
confirms that without utilizing any general solicitation or general advertising
that:
[Check One]
[](a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
[](b) this Security is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee shall not be obligated to
register this Security in the name of any Person other than the Holder hereof
unless and until the conditions to any such transfer of registration set forth
herein and in Section 3.07 of the Indenture shall have been satisfied.
Date:____________________ _________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
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TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Date:____________________ _________________________________
NOTICE: To be executed by an executive
officer.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its
entirety by the Company pursuant to Section 10.13 or 10.21 of the Indenture,
check the appropriate box:
/ / 10.13 / / 10.21
If you want to elect to have only a part of the principal
amount at Stated Maturity of this Security purchased by the Company pursuant
to Section 10.13 or 10.21 of the Indenture, state the portion of such amount:
$____________________
Dated: Your Signature:__________________________________
(Sign exactly as name appears
on the other side of this Security)
Signature Guarantee:___________________________________
(Signature must be guaranteed by a financial institution that is a member of
the Securities Transfer Agent Medallion Program ("STAMP"), the Stock Exchange
Medallion Program ("SEMP"), the New York Stock Exchange, Inc. Medallion
Signature Program ("MSP") or such other signature guarantee program as may be
determined by the Security Registrar in addition to, or in substitution for,
STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of
1934, as amended.)
Section 2.04. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
Dated:
This is one of the Securities referred to in the
within-mentioned Indenture.
The Bank of New York,
as Trustee
By__________________________
Authorized Signatory
Section 2.05. RESTRICTIVE LEGENDS.
Unless and until a Security is exchanged for an Exchange
Security or sold in connection with an effective Shelf Registration Statement
pursuant to the Registration Rights Agreement, (i) each U.S. Global Security
and each U.S. Physical Security shall bear the legend set forth below on the
reverse thereof and (ii) each Offshore Physical Security and each Offshore
Global Security shall bear the legend set forth below on the reverse thereof,
until at least the 41st
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day after the Closing Date and receipt by the Company and the Trustee of a
certificate substantially in the form of EXHIBIT A hereto:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF
OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT, IF IT PURCHASED THIS NOTE DIRECTLY FROM AN
INITIAL PURCHASER IN AN EXEMPT RESALE, IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR
904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)
(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN
BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT AT MATURITY OF NOTES
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
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Each Global Security, whether or not an Exchange Security,
shall also bear the following legend on the reverse thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY), ANY TRANSFER. PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 3.07 OF THE INDENTURE.
ARTICLE 3.
The Securities
Section 3.01. TITLE AND TERMS.
The aggregate principal amount at Stated Maturity of Securities
which may be authenticated and delivered under this Indenture is limited to
$200,000,000 of which $200,000,000 will be issued on the date hereof, except
for Securities authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities pursuant to Section 3.04,
3.05, 3.08, 9.06 or 11.08 or in connection with an Offer to Purchase
pursuant to Section 10.13.
The Securities shall be known and designated as the "Senior
Notes due 2010" of the Company. Their Stated Maturity shall be March 15, 2010
and they shall bear cash interest at the rate of 11% per annum, from
September 15, 2000 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
semi-annually on March 15 and September 15, commencing September 15, 2000
until the principal thereof is paid or made available for payment.
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company in the
Borough of Manhattan, The City of New
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York maintained for such purpose and at any other office or agency maintained
by the Company for such purpose; PROVIDED, HOWEVER, that at the option of the
Company, payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register.
The Company may be required to make an Offer to Purchase the
Securities as provided in Section 10.13.
The Securities shall be redeemable as provided in Article 2 and
Article 11.
The Securities shall be subject to Defeasance and/or Covenant
Defeasance as provided in Article 12.
Section 3.02. DENOMINATIONS.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 principal amount and any
integral multiple thereof.
Section 3.03. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its President or one of its Vice Presidents. The
signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities; and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
Section 3.04. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are
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printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of
such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to
Section 10.02, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Securities the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations and of a like
tenor. Until so exchanged the temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities.
Section 3.05. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and
in any other office or agency designated pursuant to Section 10.02 being
herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated. pursuant to Section 10.02 for
such purpose, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Securities of any authorized denominations and of a like aggregate
principal amount and tenor. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Security Registrar in the
Security Register. Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee and any agent of the Company shall
treat the person in whose name the Security is registered as the owner
thereof for all purposes whether or not the Security shall be overdue, and
neither the Company, the Trustee, nor any such agent shall be affected by
notice to the contrary. Furthermore, any Holder of a Global Security shall,
by acceptance of such Global Security, agree that transfers of beneficial
interests in such Global Security may be effected only through a book entry
system maintained by the Holder of such Global Security (or its agent) and
that ownership of a beneficial interest in the Security shall be required to
be reflected in a book entry.
At the option of the Holder, Securities may be exchanged for
other Securities (including an exchange of securities for Exchange
Securities) of any authorized denominations and of a like aggregate principal
amount and tenor, upon surrender of the Securities to be
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exchanged at such office or agency PROVIDED, that no exchange of Securities for
Exchange Securities shall occur until a Registration Statement shall have been
declared effective by the Commission and that Securities that are exchanged for
Exchange Securities pursuant to such Registration Statement shall be canceled by
the Trustee. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.04, 9.06 or 11.08 or in accordance with any
Offer to Purchase pursuant to Section 10.13, and in any such case not involving
any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 11.04 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
Section 3.06. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) The Global Security initially shall (i) be registered in
the name of the Depository for such Global Security or the nominee of such
Depository; (ii) be delivered to the Trustee as custodian for such Depository;
and (iii) bear legends as set forth in Section 2.05.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Security and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization
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furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depository,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depository and the provisions of Section 3.07. In addition, U.S.
Physical Securities and Offshore Physical Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in the U.S. Global
Securities or Offshore Global Securities, respectively, if (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for the U.S. Global Securities or Offshore Global Securities, as the case may
be, and a successor depository is not appointed by the Company within 90 days of
such notice, (ii) an Event of Default has occurred and is continuing and the
Security Registrar has received a request therefor from the Depository or (iii)
in accordance with the rules and procedures of the Depository and the provisions
of Section 3.07.
(c) In connection with any transfer of a portion of the
beneficial interests in the Global Security to beneficial owners pursuant to
paragraph (b) of this Section, the Security Registrar shall reflect on the
Security Register the date and a decrease in the principal amount of the Global
Security in an amount equal to the principal amount of the beneficial interest
in the Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
(d) In connection with the transfer of an entire U.S. Global
Security or Offshore Global Security to beneficial owners pursuant to paragraph
(b) of this Section, such U.S. Global Security or Offshore Global Security shall
be deemed to be surrendered to the Trustee for cancellation, and the Company
shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in such U.S. Global Security or Offshore Global Security, as the case
may be, an equal aggregate principal amount of U.S. Physical Securities or
Offshore Physical Securities of authorized denominations.
(e) Any Physical Security delivered in exchange for an
interest in the Global Security pursuant to paragraph (b), (c) or (d) of this
Section shall, except as otherwise provided by paragraph (d) of Section 3.07
bear the legend regarding transfer restrictions applicable to the Physical
Securities set forth in Section 2.05.
(f) The registered holder of a Global Security may grant
proxies and otherwise authorize any person, including Agent Members and
persons that may hold interests through Agent Members, to take any action
which a Holder is entitled to take under this Indenture or the Securities.
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Section 3.07. SPECIAL TRANSFER PROVISIONS.
Unless and until a Security is exchanged for an Exchange
Security or sold in connection with an effective Shelf Registration Statement
pursuant to the Registration Rights Agreement, the following provisions shall
apply:
(a) TRANSFERS TO QIBS. The following provisions shall apply
with respect to the registration of any proposed transfer of a Physical Security
or an interest in the Global Security prior to the removal of the Private
Placement Legend to a QIB (excluding Non-U.S. Persons):
(i) If the Security to be transferred consists of (x) (A)
U.S. Physical Securities or (B) an interest in an Offshore Global
Security prior to the removal of the Private Placement Legend, the
Security Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided
for on the form of security stating, or has otherwise advised the
Company and the Security Registrar in writing, that the sale has been
made in compliance with the provisions of Rule 144A, to a transferee
who has signed the certification provided for on the form of Security
stating, or has otherwise advised the Company and the Security
Registrar in writing, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A or (y) an interest in a U.S. Global Security, the
transfer of such interest may be effected only through the book entry
system maintained by the Depository.
(ii) If the proposed transferee is an Agent Member, and the
Security to be transferred consists of U.S. Physical Securities, upon
receipt by the Security Registrar of the documents referred to in
clause (i) and instructions given in accordance with the Depository's
and the Security Registrar's procedures, the Security Registrar shall
reflect in the Security Register the date and an increase in the
principal amount at maturity of the U.S. Global Security in an amount
equal to the principal amount at maturity of the U.S. Physical
Securities to be transferred, and the Trustee shall cancel the U.S.
Physical Securities so transferred.
(b) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS.
The following provisions shall apply with respect to the registration of any
proposed transfer of a Security to any Institutional Accredited Investor which
is not a QIB (excluding Non-U.S. Persons):
(i) The Security Registrar shall register the transfer of
any Security, whether or not such Security bears the Private Placement
Legend, if (x) the requested transfer is after the time period referred
to in Rule 144(k) under the Securities Act as in effect with respect to
such transfer or (y) the proposed transferee has delivered to the
Security
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Registrar (A) a certificate substantially in the form of EXHIBIT B
hereto and (B) if the aggregate principal amount of the Notes being
transferred is less than $250,000 at the time of such transfer, an
Opinion of Counsel acceptable to the Company that such transfer is in
compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Security Registrar of (x) the documents, if any, required by the
preceding paragraph (i), and (y) instructions given in accordance with
the Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and a
decrease in the principal amount of the U.S. Global Security in an
amount equal to the principal amount of the beneficial interest in the
U.S. Global Security to be transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more U.S.
Physical Securities of like tenor and amount.
(c) TRANSFERS OF INTERESTS IN THE OFFSHORE GLOBAL SECURITIES
OR OFFSHORE PHYSICAL SECURITIES. The following provisions shall apply with
respect to any transfer of interests in the Offshore Global Securities or
Offshore Physical Securities:
(i) prior to removal of the Private Placement Legend from an
Offshore Global Security or Offshore Physical Security pursuant to
Section 2.05, the Security Registrar shall refuse to register such
transfer unless such transfer complies with Section 3.07(a) or Section
3.07(d), as the case may be; and
(ii) after such removal, the Security Registrar shall
register the transfer of any such Security without requiring any
additional certification.
(d) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following
provisions shall apply with respect to any transfer of a Security to a Non-U.S.
Person:
(i) The Security Registrar shall register any proposed
transfer to any Non-U.S. Person if the Security to be transferred is a
U.S. Physical Security or an interest in a U.S. Global Security only
upon receipt of a certificate substantially in the form of EXHIBIT C
hereto from the proposed transferor.
(ii) (A) If the proposed Transferor is an Agent Member
holding a beneficial interest in a U.S. Global Security, upon receipt
by the Security Registrar of (x) the documents required by paragraph
(i) and (y) instructions in accordance with the Depositary's and the
Security Registrar's procedures, the Security Registrar shall reflect
on its books and records the date and a decrease in the principal
amount of such U.S. Global Security in an amount equal to the principal
amount of the beneficial interest in the U.S. Global Security to be
transferred, and (B) if the proposed transferee is an Agent Member,
upon receipt by the Security Registrar of instructions given in
accordance with the Depositary's and the Security Registrar's
procedures, the Security Registrar shall reflect on its books and
records the date and an increase in the principal amount of the
Offshore Global Security in an amount equal to the principal amount
of the U.S. Physical
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Securities or the U.S. Global Security, as the case may be, to be
transferred, and the Trustee shall cancel the Physical Security, if
any, so transferred or decrease the amount of the U.S. Global
Security.
(e) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the Security
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of securities bearing the
Private Placement Legend, the Security Registrar shall deliver only Securities
that bear the Private Placement Legend unless either (i) the circumstances
contemplated by Section 2.05 exist or (ii) there is delivered to the Trustee an
Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.
(f) GENERAL. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture. The Security Registrar shall not register a transfer
of any Security unless such transfer complies with the restrictions on transfer
of such Security set forth in the Private Placement Legend and in this
Indenture. In connection with any transfer of Securities, each Holder agrees by
its acceptance of the Securities to furnish the Trustee or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; PROVIDED that the Trustee shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Trustee shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.06 or this Section
3.07. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Trustee.
Section 3.08. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and Bearing a number
not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.09. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security 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 or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment.
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The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given to each Holder in the manner
specified in Section 1.06, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2):
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 3.10. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered as the
owner of such Security for the purpose of receiving payment of principal of
(and premium, if any) and (subject to Section 3.09) interest on such Security
and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
Section 3.11. CANCELLATION.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any Offer to
Purchase pursuant to Section 10.13 shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled
by it. The Company may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture.
All canceled Securities held by the Trustee shall be disposed of as directed
by a Company Order; PROVIDED, HOWEVER, that the Trustee shall not be required
to destroy canceled Securities.
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Section 3.12. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of
a 360-day year of twelve 30-day months.
Section 3.13 CUSIP, CINS AND ISIN NUMBERS.
The Company in issuing the Securities may use "CUSIP,"
"CINS" and "ISIN" numbers (if then generally in use), and, if so, the Trustee
shall use the "CUSIP," "CINS" and "ISIN" numbers in notices of redemption or
repurchase as a convenience to Holders; PROVIDED that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption or
repurchase and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption or repurchase shall
not be affected by any defect in or omission of such numbers.
ARTICLE 4.
Satisfaction and Discharge
Section 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 3.08 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 10.03) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of
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redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of ( i ), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of
such deposit (in the case of Securities which have become due
and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article 4, the obligations of the Company to the Trustee under Section
6.07, the obligations of the Trustee to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 4.02 and the last paragraph of Section 10.03 shall survive.
Section 4.02. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section
10.03, all money deposited with the Trustee pursuant to Section 4.01 shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for whose payment such money has been deposited
with the Trustee.
ARTICLE 5.
Remedies
Section 5.01. EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) failure to pay principal of (or premium, if any, on) any
Security at its Maturity; or
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(2) failure to pay any interest upon any Security when due,
continued for 30 days; or
(3) default, on the applicable Purchase Date, in the
purchase of Securities required to be purchased by the Company pursuant
to an Offer to Purchase as to which an Offer has been mailed to Holders
or failure to make an Offer to Purchase as required hereunder; or
(4) default in the performance or breach, of Section 8.01;
or
(5) default in the performance, or breach, of any covenant
or warranty of the Company in this Indenture (other than a covenant or
warranty a default whose performance or whose breach is elsewhere in
this Section specifically dealt with) or in the Securities, and
continuance of such default or breach for a period of 60 days after
there has been given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate principal
amount at Stated Maturity of the outstanding Securities a written
notice specifying such default or breach and requiring it to be
remedied and stating that Such notice is a "Notice of Default"
hereunder; or
(6) a default or defaults under any bond(s), debenture(s),
note(s) or other evidence(s) of Debt for money borrowed by the Company
or any Restricted Subsidiary (or under any mortgage(s), indenture(s) or
instrument(s) under which there may be issued or by which there may be
secured or evidenced any Debt for money borrowed by the Company or any
Restricted Subsidiary) having, individually or in the aggregate, a
principal or similar amount outstanding of at least $25,000,000,
whether such Debt now exists or shall hereafter be created, which
default or defaults shall constitute a failure to pay any portion of
the principal or similar amount of such Debt when due and payable after
the expiration of any applicable grace period with respect thereto or
shall have resulted in such Debt becoming or being declared due and
payable; or
(7) a final judgment or final judgments for the payment of
money are entered against the Company or any Restricted Subsidiary in
an aggregate amount in excess of $25,000,000 by a court or courts of
competent jurisdiction, which judgments remain undischarged or unbonded
for a period (during which execution shall not be effectively stayed)
of 60 days after the right to appeal all such judgments has expired; or
(8) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or any
Restricted Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Restricted Subsidiary a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Restricted
Subsidiary under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Restricted Subsidiary or
of any substantial part of the property of the Company or any
Restricted Subsidiary, or ordering the winding up or
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liquidation of the affairs of the Company or any Restricted Subsidiary,
and the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 60
consecutive days; or
(9) the commencement by the Company or any Restricted
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by the Company or any Restricted
Subsidiary to the entry of a decree or order for relief in respect of
the Company or any Restricted Subsidiary in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against the Company
or any Restricted Subsidiary, or the filing by the Company or any
Restricted Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by the Company or any Restricted Subsidiary to the filing
of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or
similar official of the Company or any Restricted Subsidiary or of any
substantial part of the property of the Company or any Restricted
Subsidiary, or the making by the Company or any Restricted Subsidiary
of an assignment for the benefit of creditors, or the admission by the
Company or any Restricted Subsidiary in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company or any Restricted Subsidiary in furtherance of
any such action.
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default
specified in Section 5.01(8) or (9)) occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in aggregate principal
amount at Stated Maturity of the Outstanding Securities may declare the Default
Amount of all the Securities to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such Default Amount and any accrued interest shall become
immediately due and payable. If an Event of Default specified in Section 5.01(8)
or (9) occurs, the Default Amount of and any accrued interest on the Securities
then Outstanding shall IPSO FACTO become immediately due and payable without any
declaration or other Act on the part of the Trustee or any Holder.
The Default Amount in respect of any particular Security as of
any particular date shall equal 100% of the principal amount payable in respect
of the Security at the Stated Maturity thereof.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount at Stated Maturity of the Outstanding Securities,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities (without
duplication of any amount thereof paid or deposited pursuant
to Clause (B) or (C) below),
(B) the principal of (and premium, if any, on) any
Securities which have become due otherwise than by such
declaration of acceleration (including any Securities required
to have been purchased on the Purchase Date pursuant to an
Offer to Purchase made by the Company) and, to the extent that
payment of such interest is lawful, interest thereon at the
rate provided by the Securities (without duplication of any
amount thereof paid or deposited pursuant to Clause (A) above
or Clause (C) below),
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate provided by
the Securities (without duplication of any amount thereof paid
or deposited pursuant to Clause (A) or (B) above), and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Unless the context otherwise requires, references in this
Indenture to the principal amount of any Security mean, as of any day, (i) with
respect to any portion thereof required thereunder to be redeemed or repurchased
on any redemption or repurchase date on or prior to such day, the amount due and
payable in respect of such portion upon such redemption or repurchase date
(excluding premium and interest), (ii) with respect to any portion thereof not
required to be so redeemed or repurchased, but which has been declared due and
payable prior to the Stated Maturity thereof, the Default Amount in respect of
such portion as of such day and (iii) with respect to any portion thereof not
required so to be redeemed or repurchased and not so declared due and payable,
such portion of the principal amount of such Security payable at Stated Maturity
thereof
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
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(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof or, with
respect to any Security required to have been purchased pursuant to an
Offer to Purchase made by the Company, at the Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate provided by the Securities, and, in addition thereto, 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.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.04. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due 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 6.07.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding;
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.
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Section 5.05. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 5.06. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.07; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal (and premium, if any) and interest, respectively.
Section 5.07. LIMITATION ON SUITS.
No Holder of any Security shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to a
Responsible Officer of the Trustee of a continuing Event of Default;
(2) the Holders of a majority in aggregate principal amount at
Stated Maturity of the Outstanding Securities shall have made written
request to a Responsible Officer of the Trustee to institute
proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount at Stated Maturity of the Outstanding
Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
Section 5.08. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 3.09) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date or in the case of an Offer to Purchase made by the Company and
required to be accepted as to such Security, on the Purchase Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 5.09. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 5.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 3.08, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and
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remedy given by this Article or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
Section 5.12. CONTROL BY HOLDERS.
By giving the Required Consent, those Persons giving the
Required Consent shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, PROVIDED that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 5.13. WAIVER OF PAST DEFAULTS.
By giving the Required Consent, those Persons giving the
Required Consent may, on behalf of the Holders of all the Securities, waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of (or premium, if any)
or interest on any Security (including any Security which is required
to have been purchased pursuant to an Offer to Purchase which has been
made by the Company), or
(2) in respect of a covenant or provision hereof which
under Article 9 cannot be modified or amended without the consent of
the Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
Section 5.14. 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, suffered or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of such suit,
and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; PROVIDED, that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit
instituted by the Company.
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Section 5.15. WAVIER OF STAY OF EXTENSION 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 usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 6.
The Trustee
Section 6.01. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or, risk its
own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it. Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.
Section 6.02. NOTICE OF DEFAULTS.
The Trustee shall give the Holders notice of any Default
hereunder as and to the extent provided by the Trust Indenture Act; PROVIDED,
HOWEVER, that in the case of any Default of the character specified in
Section 5.01(5), no such notice to Holders shall be given until at least 30
days after a Responsible Officer has actual knowledge of the occurrence
thereof.
Section 6.03. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.01:
(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
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(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution Of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, Suffering or omitting ally action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) 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 pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled (subject to
reasonable confidentiality arrangements as may be proposed by the
Company) to examine the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture;
(i) the Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee
has actual knowledge thereof or unless written notice of any event
which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture;
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(j) the rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its
right to be indemnified are extended to, and shall be enforceable
by, the Trustee in each of its capacities hereunder, and to each
agent, Custodian and other Person employed to act hereunder; and
(k) tile Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Indenture, which Officers' Certificate may be signed
by any person authorized to sign an Officers' Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded.
Section 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
Section 6.05. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other a gent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 6.08 and 6.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
Section 6.06. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Company.
Section 6.07. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel),
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except any such expense, disbursement or advance as may be attributable
to its negligence or bad faith; and
(3) to indemnify the Trustee and any predecessor Trustee for,
and to hold it harmless against, any and all loss, damage, claim,
liability or expense incurred without negligence or bad faith on its
part, including taxes (other than taxes based upon measured by or
determined by the revenue or income of the Trustee), arising out of or
in connection with the acceptance or administration of this trust
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing to it pursuant
to this Section 6.07, except with respect to funds held in trust for the
benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.01(8) or Section
5.01(9), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive any termination of
this Indenture.
Section 6.08. CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided
by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
Section 6.09. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000 and its
Corporate Trust Office in the Borough of Manhattan, The City of New York. If
such Person publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for
the purposes of this Section and to the extent permitted by the Trust
Indenture Act, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
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Section 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee in accordance with the applicable requirements of Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount at Stated Maturity of the
Outstanding Securities, delivered to the Trustee and to the Company. If an
instrument of acceptance by a successor Trustee in accordance with the
applicable requirements of Section 6.11 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of removal, the
Trustee may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
(d) If at any time:
(2) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(3) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(4) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee.
(a) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount at Stated
Maturity of the Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the
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applicable requirements of Section 6.11, become the Successor Trustee and
supersede the Successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and
accepted appointment in accordance with the applicable requirements of
Section 6.11, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any Court of competent jurisdiction for the appointment of a
Successor Trustee.
(b) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to
all Holders in the manner provided in Section 1.06. Each notice shall include
the name of the successor Trustee and the address of its Corporate Trust
Office.
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but,
on request of the Company or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such Successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
Section 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
Section 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust
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Indenture Act regarding the collection of claims against the Company (or any
such other obligor).
Section 6.14. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents which
shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon original issue and upon exchange, registration of
transfer or partial redemption or partial purchase or pursuant to Section
3.08, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall
be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia, authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to all
or substantially all the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the
Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment in the manner provided in Section 1.06,
to all Holders as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if
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originally named as an Authenticating Agent. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternative certificate of authentication
in the following form:
This is one of the Securities described in the within-mentioned
Indenture.
Dated:
The Bank of New York,
as Trustee
By
--------------------------------,
As Authenticating Agent
By
--------------------------------,
Authority Signatory
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ARTICLE 7.
Holders' Lists and Reports by Trustee and Company
Section 7.01. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each March 1
and September 1, commencing September 15, 2000 a list, in such form as
the Trustee may reasonably require, of the names and addresses of the
Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
EXCLUDING from any such list names and addresses received by the Trustee in
its capacity as Security Registrar.
Section 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities,
and the corresponding rights and duties of the Trustee, shall be as provided
by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held accountable by
reason of any disclosure of information as to the names and addresses of
Holders made pursuant to the Trust Indenture Act.
Section 7.03. REPORTS BY TRUSTEE.
(a) Within 60 days after March 1 of each year commencing
March 1, 2001, the Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant
to the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be tiled by the Trustee with each stock exchange
upon which the Securities are listed,
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with the Commission and with the Company. The Company will promptly notify
the Trustee when the Securities are listed on any stock exchange.
Section 7.04. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so required to be filed
with the Commission. The Trustee's receipt of such reports, information and
documents shall not constitute constructive notice of any information
contained therein or determinable from information contained therein.
ARTICLE 8.
Consolidation, Merger, Conveyance, Transfer or Lease
Section 8.01. COMPANY MAY CONSOLIDATE, ETC. ONLY ON CERTAIN TERMS.
The Company (x) shall not, in any transaction or series of
related transactions, merge or consolidate with or into, or sell, assign,
convey, transfer or otherwise dispose of its properties and assets
substantially as an entirety to, any Person, and (y) shall not permit any of
its Restricted Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer or other disposition
of the properties and assets of the Company and its Restricted Subsidiaries,
taken as a whole, substantially as an entirety to any Person, unless, in each
case (x) or (y), at the time and after giving effect thereto
(i) either: (A) if the transaction or series of transactions
is a consolidation of the Company with or a merger of the Company with
or into any other Person, the Company shall be the surviving Person of
such merger or consolidation, or (B) the Person formed by any
consolidation with or merger with or into the Company, or to which the
properties and assets of the Company or the Company and its Restricted
Subsidiaries, taken as a whole, as the case may be, substantially as an
entirety are sold, assigned, conveyed or otherwise transferred (any
such surviving Person or transferee Person referred to in this clause
(B) being the "Surviving Entity"), shall be a corporation, partnership,
limited liability company or trust organized and existing under the
laws of the United States of America, any state thereof or the District
of Columbia and shall expressly assume by a supplemental indenture
executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under the Securities and
this Indenture and, in each case, this Indenture, as so supplemented,
shall remain in full force and effect, and
(ii) immediately before and immediately after giving effect to
such transaction or series of transactions on a PRO FORMA basis
(including any Debt Incurred or anticipated
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to be Incurred in connection with or in respect of such transaction or
series of transactions), no Default or Event of Default shall have
Occurred and be continuing, and
(iii) the Company or the Surviving Entity will, at the time of
such transaction and after giving PRO FORMA effect thereto as if such
transaction had occurred at the beginning of the applicable period, (A)
have Consolidated Net Worth immediately after the transaction equal to
or greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) be permitted to Incur at least $1.00
of additional Debt pursuant to clause (a) of Section 10.08;
PROVIDED, HOWEVER , that the foregoing requirements shall not apply to any
transaction or series of transactions involving the sale, assignment,
conveyance, transfer or other disposition of the properties and assets by any
Restricted Subsidiary to any other Restricted Subsidiary, or the merger or
consolidation of any Restricted Subsidiary with or into any other Restricted
Subsidiary. The Company shall not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.
In connection with any consolidation, merger, sale, assignment,
conveyance, transfer or other disposition contemplated by the foregoing
provisions, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate stating that such consolidation, merger, sale,
assignment, conveyance, transfer, or other disposition and the Supplemental
indenture in respect thereof (required under clause (i)(B) of the preceding
paragraph) comply with the requirements of this Indenture and an Opinion of
Counsel that the conditions of this Article 8 have been complied with. Each
such Officers' Certificate shall set forth the manner of determination of the
Company's compliance in accordance with clause (iii) of the preceding
paragraph.
For all purposes of this Indenture and the Securities
(including the provisions described in the two immediately preceding,
paragraphs and Section 10.08 and Section 10.10), Subsidiaries of any
Surviving Entity will, upon such transaction or series of transactions,
become Restricted Subsidiaries or Unrestricted Subsidiaries as provided
pursuant to Section 10.10 and all Debt of the Surviving Entity and its
Subsidiaries that was not Debt of the Company and its Subsidiaries
immediately prior to such transaction or series of transactions shall be
deemed to have been Incurred upon such transaction or series of transactions.
Section 8.02. SUCCESSOR SUBSTITUTED.
Upon any transaction or series of transactions that are of the
type described in clause (x) or (y) of, and are effected in accordance with,
Section 8.01, the Surviving Entity shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such Surviving Entity had been named as the
Company herein, and thereafter the predecessor Person shall be relieved of
all obligations and covenants under this Indenture and the Securities.
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ARTICLE 9.
Supplemental Indentures
Section 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to comply with any requirements of the Commission in order
to effect and maintain the qualification of this Indenture under the
Trust Indenture Act; or
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or
(5) to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, PROVIDED such action pursuant to
this Clause (5) shall not adversely affect the interests of the Holders
in any material respect (as determined in good faith by the Board of
Directors).
Section 9.02. SUPPLEMENTAL INDENTURE WITH CONSENT OF HOLDERS.
After receipt of the Required Consent, given by Act of those
Persons giving the Required Consent delivered to the Company and the Trustee,
the Company, when authorized by a Board Resolution, and the Trustee may enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
thereon, or reduce the Default Amount that would be due and payable on
acceleration of the Maturity thereof pursuant to Section 5.02, or
change the place of payment where, or the coin or currency in which,
any Security or any premium or interest thereon is payable, or impair
the right to institute suit for the
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enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date or, in
the case of any Security required to be purchased pursuant to an Offer
to Purchase, on or after the applicable Purchase Date), or
(2) reduce the percentage in principal amount at Stated
Maturity of the Outstanding Securities, the consent of whose Holders
is required for any such Supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13
or Section 10.18, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(4) following the mailing of an Offer with respect to an
Offer to Purchase pursuant to Section 10.13, modify the provisions of
this Indenture with respect to such Offer to Purchase in a manner
adverse to Such Holder.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
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Section 9.06. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities so modified as to conform, in the opinion
of the Trustee and the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
ARTICLE 10.
Covenants
Section 10.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms
of the Securities and this Indenture.
Section 10.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of
the Trustee, and the Company hereby appoints the Trustee as its agent to
receive all such presentations, surrenders, notices and demands. In the event
any such notice or demands are so made or served on the Trustee, the Trustee
will promptly forward copies thereof to the Company.
The Company may also from time to time designate one or more
other offices or agencies (in or outside the Borough of Manhattan, The City
of New York) where the Securities 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 in the
Borough of Manhattan, The City of New York, for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
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Section 10.03. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying
Agent, it will, on or before each due date of the principal of (and premium,
if any) or interest on any of the Securities, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents,
it will, prior to each due date of the principal of (and premium, if any) or
interest on any Securities, deposit with a Paying Agent a sum sufficient to
pay the principal (and premium, if any) or interest so becoming due, such sum
to be held as provided by the Trust Indenture Act, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such
Paying Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will: (i) comply with the provisions of the
Trust Indenture Act applicable to it as Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities) in the making of any payment in respect of the Securities, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums were held
by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the principal of
(and premium, if any) or interest on any Security and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only
to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease.
Section 10.04. EXISTENCE.
Subject to Article 8, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and material franchises; PROVIDED,
HOWEVER, that the Company shall not be required to preserve any
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such right or franchise if the Board of Directors in good faith shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 10.05. MAINTENANCE OF PROPERTIES.
The Company will cause all material properties used or
useful in the conduct of its business or the business of any Restricted
Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; PROVIDED, HOWEVER, that nothing in
this Section shall prevent the Company from discontinuing the operation or
maintenance of any of such material properties if such discontinuance is, as
determined by the Board of Directors in good faith, desirable in the conduct
of its business or the business of any Restricted Subsidiary and not
disadvantageous in any material respect to the Holders.
Section 10.06. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or
any of its Restricted Subsidiaries or upon the income, profits or property of
the Company or any of its Restricted Subsidiaries, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Company or any of its Restricted Subsidiaries;
PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings.
Section 10.07. MAINTENANCE OF INSURANCE.
The Company shall, and shall cause its Restricted
Subsidiaries to, keep at all times all of their properties which are of an
insurable nature insured against loss or damage with insurers believed by the
Company to be responsible to the extent that property of similar character is
usually so insured by corporations similarly situated and owning like
properties in accordance with good business practice.
Section 10.08. LIMITATION ON CONSOLIDATED DEBT.
The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur any Debt (including Acquired Debt), other than Permitted
Debt, unless immediately after giving effect to the Incurrence of such Debt
and the receipt and application of the net proceeds therefrom (including,
without limitation, the application or use of the net proceeds therefrom to
repay Debt or make any Restricted Payment) (a) the Consolidated Debt to
Annualized Operating Cash Flow Ratio would be less than 7.0 to 1.0, or (b) in
the case of any incurrence of Debt prior
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to January 1, 2005 only, Consolidated Debt would be equal to or less than 80%
of Total Invested Capital.
Section 10.09. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, directly or indirectly:
(i) declare or pay any dividend on, or make any
distribution to the holders of, any shares of its Capital
Stock (other than dividends or distributions payable solely in
its Capital Stock (other than Redeemable Stock) or in options,
warrants or other rights to purchase any such Capital Stock
(other than Redeemable Stock));
(ii) purchase, redeem or otherwise acquire or retire
for value, or permit any Restricted Subsidiary to, directly or
indirectly, purchase, redeem or otherwise acquire or retire
for value (other than value consisting solely of Capital Stock
of the Company that is not Redeemable Stock or options,
warrants or other rights to acquire such Capital Stock that is
not Redeemable Stock), any Capital Stock of the Company
(including options, warrants or other rights to acquire such
Capital Stock);
(iii) redeem, repurchase, defease or otherwise
acquire or retire for value, or permit any Restricted
Subsidiary to, directly or indirectly, redeem, repurchase,
defease or otherwise acquire or retire for value (other than
value consisting solely of Capital Stock of the Company that
is not Redeemable Stock or options, warrants or other rights
to acquire such Capital Stock that is not Redeemable Stock),
prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Debt that is subordinate
(whether pursuant to its terms or by operation of law) in
right of payment to the Securities; or
(iv) make, or permit any Restricted Subsidiary,
directly or indirectly, to make, any Investment (other than
any Permitted Investment) in any Person (other than in a
Restricted Subsidiary or a Person that becomes a Restricted
Subsidiary as a result of such Investment);
(each of the foregoing actions set forth in clauses (i) through (iv), other
than any such action that is a Permitted Investment or a Permitted
Distribution, being referred to as a "Restricted Payment") unless, at the
time of such Restricted Payment, and after giving effect thereto:
(a) no Default or Event of Default shall have
occurred and be continuing;
(b) 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
applicable period, have been permitted to Incur at least $1.00
of additional Debt pursuant to clause (a) of Section 10.08;
and
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(c) after giving effect to such Restricted Payment on
a PRO FORMA basis, the aggregate amount of all Restricted
Payments made on or after the date hereof shall not exceed:
(1) the amount of (x) the Operating Cash
Flow of the Company after December 31, 2002 through
the end of the latest full fiscal quarter for which
consolidated financial statements of the Company are
available preceding the date of such Restricted
Payment (treated as a single accounting period) less
(y) 150% of the cumulative Consolidated Interest
Expense of the Company after December 31, 2002
through the end of the latest full fiscal quarter for
which consolidated financial statements are available
preceding the date of such Restricted Payment
(treated as a single accounting period), plus
(2) the aggregate net proceeds (other than
proceeds from a Committed Capital Contribution),
including the fair market value of property other
than cash (as determined, (A) in the case of any
property other than cash with a value less than $25.0
million, by the Board of Directors, whose good faith
determination shall be conclusive and as evidenced by
a Board Resolution, or (B) in the case of any
property other than cash with a value equal to or
greater than $25.0 million, by an accounting,
appraisal or investment banking firm of national
standing and evidenced by a written opinion of such
firm), received by the Company from the issuance and
sale (other than to a Restricted Subsidiary) on or
after February 24, 2000 of shares of its Capital
Stock (other than Redeemable Stock), or any options,
warrants or other rights to purchase such Capital
Stock (other than Redeemable Stock), other than
shares of Capital Stock or options, warrants or other
rights to purchase Capital Stock (or shares issuable
upon exercise thereof), the proceeds of the issuance
of which is used to make a Directed Investment
(unless such designation has been revoked by the
Board of Directors and the Company is able to make
such Investment pursuant to this Section 10.09 (other
than as a Directed Investment)), plus
(3) the aggregate net proceeds, including
the fair market value of property other than cash (as
determined, (A) in the case of any property other
than cash with a value less than $25.0 million, by
the Board of Directors, whose good faith
determination shall be conclusive and as evidenced by
a Board Resolution, or (B) in the case of any
property other than cash with a value equal to or
greater than $25.0 million, by an accounting,
appraisal or investment banking firm of national
standing and evidenced by a written opinion of such
firm), received by the Company from the issuance or
sale (other than to a Restricted Subsidiary) after
February 24, 2000 of any Capital Stock of the Company
(other than Redeemable Stock), or any options,
warrants or other rights to purchase
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such Capital Stock (other than Redeemable Stock),
upon the conversion of, or exchange for, Debt of the
Company or a Restricted Subsidiary.
The foregoing limitations in this Section 10.09 do not
limit or restrict the making of any Permitted Distribution, Permitted
Investment or Directed Investment, and neither a Permitted Distribution nor a
Permitted Investment shall be counted as a Restricted Payment for purposes of
clause (c) above. In addition, the foregoing limitations do not prevent the
Company from (I) paying a dividend on Capital Stock of the Company within 60
days after the declaration thereof if, on the date when the dividend was
declared, the Company could have paid such dividend in accordance with the
provisions of this Indenture, (II) repurchasing Capital Stock of the Company
(including options, warrants or other rights to acquire such Capital Stock)
from former employees or Directors of the Company or any Subsidiary thereof
for consideration not to exceed (A) in the case of all such employees or
directors (other than Itemized Executives), $500,000 in the aggregate in any
fiscal year, with amounts not used in any given fiscal year being carried
over into subsequent fiscal years, and (B) in the case of any Itemized
Executive, $2.0 million per Itemized Executive (plus the amount of any
proceeds of any key man life insurance received by the Company in respect of
such Itemized Executive) in any fiscal year, with the aggregate amount of
such repurchases under this clause (II)(B) not to exceed $5.0 million in any
fiscal year; PROVIDED that the aggregate amount of all such repurchases made
pursuant to this clause (II) does not exceed $17.0 million in the aggregate
(not including the amount of any proceeds of key man life insurance received
by the Company in respect to any Itemized Executive), (III) the repurchase,
redemption or other acquisition for value of Capital Stock of the Company to
the extent necessary to prevent the loss or secure the renewal or
reinstatement of any license or franchise held by the Company or any of its
Subsidiaries from any governmental agency, (IV) making a loan in the
aggregate principal amount of approximately $2.2 million to certain
officer(s) of the Company as described in the Memorandum (with Restricted
Payments pursuant to this clause not being counted as Restricted Payments for
purposes of clause (c) above), (V) the redemption, repurchase, defeasance or
other acquisition or retirement for value of Indebtedness that is
subordinated in right of payment to the Securities, including premium, if
any, and accrued and unpaid interest, with the proceeds of, or in exchange
for, (a) the proceeds of a capital contribution or a substantially concurrent
offering of, shares of Capital Stock (other than Redeemable Stock) of the
Company (or options, warrants or other rights to acquire such Capital Stock)
the proceeds of which are not designated as a Directed Investment, or (b)
Debt that is at least as subordinated in right of payment to the Securities,
including premium, if any, and accrued and unpaid interest, as the Debt being
purchased, (with Restricted Payments pursuant to this clause not being
counted as Restricted Payments for purposes of clause (c) above), (VI) the
repurchase, redemption or other acquisition of Capital Stock of the Company
(or options, warrants or other rights to acquire such Capital Stock) in
exchange for, or out of the proceeds of a capital contribution or a
substantially concurrent offering of, shares of Common Stock (other than
Redeemable Stock) of the Company (or options, warrants or other rights to
acquire such Capital Stock) the proceeds of which are not designated as a
Directed Investment or (VII) other Restricted Payments not to exceed $5.0
million in the aggregate at any time outstanding (with Restricted Payments
pursuant to this clause not being counted as Restricted Payments for purposes
of clause (c) above).
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Notwithstanding the foregoing, no Investment in a Person that
immediately thereafter would be a Restricted Subsidiary will be a Restricted
Payment. In addition, if any Person in which an Investment is made, which
Investment constitutes a Restricted Payment when made, thereafter becomes a
Restricted Subsidiary, all such Investments previously made in such Person shall
no longer be counted as Restricted Payments for purposes of calculating the
aggregate amount of Restricted Payments pursuant to clause (c) of the third
preceding paragraph or the aggregate amount of Investments pursuant to clause
(V)(a) of the immediately preceding paragraph, in each case to the extent such
Investments would otherwise be so counted.
For purposes of clause (c)(3) above, the net proceeds received
by the Company from the issuance or sale of its Capital Stock either upon the
conversion of, or exchange for, Debt of the Company or any Restricted Subsidiary
shall be deemed to be an amount equal to (a) the sum of (i) the principal amount
or accreted value (whichever is less) of such Debt on the date of such
conversion or exchange and (ii) the additional cash consideration, if any,
received by the Company upon such conversion or exchange, less any payment on
account of fractional shares, MINUS (b) all expenses incurred in connection with
such issuance or sale. In addition, for purposes of clause (c)(3) above, the net
proceeds received by the Company from the issuance or sale of its Capital Stock
upon the exercise of any options or warrants of the Company or any Restricted
Subsidiary shall be deemed to be an amount equal to (a) the additional cash
consideration, if any, received by the Company upon such exercise, MINUS (b) all
expenses incurred in connection with such issuance or sale.
For purposes of this Section 10.09, if a particular Restricted
Payment involves a non-cash payment, including a distribution of assets, then
such Restricted Payment shall be deemed to be an amount equal to the cash
portion of such Restricted Payment, if any, plus an amount equal to the fair
market value of the non-cash portion of such Restricted Payment, as determined
by the Board of Directors (whose good faith determination shall be conclusive
and evidenced by a Board Resolution).
The amount of any Investment outstanding at any time shall be
deemed to be equal to the amount of such Investment on the date made, less the
return of capital, repayment of loans and return on capital (including interest
and dividends), in each case, received in cash, up to the amount of such
Investment on the date made.
Section 10.10. RESTRICTED SUBSIDIARIES.
Subject to compliance with Section 10.09, the Board of
Directors may designate any Restricted Subsidiary as an Unrestricted Subsidiary.
The designation by the Board of Directors of a Restricted
Subsidiary as an Unrestricted Subsidiary shall, for all purposes of Section
10.09 (including clause (b) thereof), be deemed to be a Restricted Payment of an
amount equal to the fair market value of the Company's ownership interest in
such Subsidiary (including, without duplication, such indirect ownership
interest in all Subsidiaries of such Subsidiary), as determined by the Board of
Directors in good faith and evidenced by a Board Resolution.
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Notwithstanding the foregoing provisions of this Section
10.10, the Board of Directors may not designate a Subsidiary of the Company
to be an Unrestricted Subsidiary if, after such designation, (a) the Company
or any of its other Restricted Subsidiaries (i) provides credit support for,
or a Guarantee of, any Debt of such Subsidiary (including any undertaking,
agreement or instrument evidencing such Debt) or (ii) is directly or
indirectly liable for any Debt of such Subsidiary, (b) a default with respect
to any Debt of such Subsidiary (including any right which the holders thereof
may have to take enforcement action against such Subsidiary) would permit
(upon notice, lapse of time or both) any holder of any other Debt of the
Company or any Restricted Subsidiary to declare a default on such other Debt
or cause the payment thereof to be accelerated or payable prior to its final
scheduled maturity or (c) such Subsidiary owns any Capital Stock of, or owns
or holds any Lien on any property of, any Restricted Subsidiary which is not
a Subsidiary of the Subsidiary to be so designated.
The Board of Directors, from time to time, may designate any
Person that is about to become a Subsidiary of the Company as an Unrestricted
Subsidiary, and may designate any newly-created Subsidiary of the Company as an
Unrestricted Subsidiary, if at the time such Subsidiary is created it contains
no assets (other than such DE MINIMIS amount of assets then required by law for
the formation of corporations) and no Debt. Subsidiaries of the Company that are
not designated by the Board of Directors as Restricted or Unrestricted
Subsidiaries shall be deemed to be Restricted Subsidiaries. Notwithstanding any
provisions of this Section 10.10, all Subsidiaries of an Unrestricted Subsidiary
shall be Unrestricted Subsidiaries.
Section 10.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) or series of related transactions with any Affiliate of the Company on
terms that are less favorable to the Company or such Restricted Subsidiary, as
the case may be, than those which might be obtained at the time of such
transaction from a Person that is not such an Affiliate; PROVIDED, HOWEVER, that
this Section 10.11 shall not limit, or be applicable to, (i) any transaction
between Unrestricted Subsidiaries not involving the Company or any Restricted
Subsidiary, (ii) any transaction between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries or (iii) any Permitted
Transactions. In addition, any transaction or series of related transactions,
other than Permitted Transactions, between the Company or any Restricted
Subsidiary and any Affiliate of the Company (other than a Restricted Subsidiary)
involving an aggregate consideration of $5 million or more must be approved in
good faith by a majority of the Company's Disinterested Directors (of which
there must be at least one) and evidenced by a Board Resolution, or if there is
no Disinterested Director at such time or such transaction involves aggregate
consideration of $25.0 million or more, by an opinion as to fairness ("Fairness
Opinion") to the Company or such Subsidiary from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing. For purposes of this Section 10.11, any transaction or series of
related transactions between the Company or any Restricted Subsidiary and an
Affiliate of the Company that is approved by a majority of the Disinterested
Directors (of which there must be at least one to utilize this method of
approval) and evidenced by a Board Resolution or for which a Fairness Opinion
has been
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issued shall be deemed to be on terms as favorable as those that might be
obtained at the time of such transaction (or series of transactions) from a
Person that is not such an Affiliate and thus shall be permitted under this
Section 10.11.
Section 10.12. LIENS.
The Company shall not and shall not permit any of its
Restricted Subsidiaries to create, incur, assume or otherwise cause or suffer to
exist or become effective any Lien of any kind (other than Permitted Liens) upon
any of their property or assets, now owned or hereafter acquired, unless all
payments due under this Indenture and the Securities are secured on an equal and
ratable basis with the obligations so secured until such time as such
obligations are no longer secured by a Lien.
Section 10.13. CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, the Company shall
be required to make an Offer to Purchase all or any part of Outstanding
Securities at a cash purchase price equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
to the Purchase Date. The Offer to Purchase must be made within 30 days
following a Change of Control, must remain open for at least 30 and not more
than 180 days and must comply with the requirements of Rule 14e-1 under the
Exchange Act and any other applicable securities laws and regulations.
Section 10.14. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Restricted 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 Restricted Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any indebtedness owed to the Company or any
of its Restricted Subsidiaries, (ii) make loans or advances to the Company or
any of its Restricted Subsidiaries or (iii) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries. However, the
foregoing restrictions will not apply to encumbrances or restrictions existing
under or by reason of (a) existing Debt as in effect on the date hereof, (b) any
Credit Facility as in effect as of the date hereof (or in the case of the New
Credit Facility, as initially executed by the parties thereto), and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole, with
respect to such dividend and other payment restrictions than those contained in
such Credit Facility as in effect on the date hereof (as conclusively determined
in good faith by the Board of Directors and set forth in a Board Resolution),
(c) this Indenture and the Securities, (d) applicable law, (e) any instrument
governing Debt (and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings are no
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more restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in such Debt as in effect on the
date of its incurrence by the Company or any Restricted Subsidiary (as
conclusively determined in good faith by an executive officer of the
Company)) or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except
to the extent such Debt 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, provided that, in the
case of Debt, such Debt was permitted by the terms of this Indenture to be
incurred, (f) customary nonassignment provisions in leases entered into in
the ordinary course of business, (g) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so acquired, (h) any
agreement for the sale or other disposition of a Restricted Subsidiary that
restricts distributions by that Subsidiary pending its sale or other
disposition, (i) Liens securing Debt otherwise permitted to be incurred
pursuant to the provisions of the covenant described above under Section
10.12 that limit the right of the Company or any of its Restricted
Subsidiaries to dispose of the assets subject to such Lien, (j) provisions
with respect to the disposition or distribution of assets or property in
joint venture agreements and other similar agreements entered into in the
ordinary course of business and (k) restrictions on cash or other deposits or
net worth imposed by customers under contracts entered into in the ordinary
course of business.
Section 10.15. ACTIVITIES OF THE COMPANY AND RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than the telecommunications business
and related activities and services, including such businesses, activities and
services as the Company and the Restricted Subsidiaries are engaged in on the
Closing Date.
Section 10.16. PROVISION OF FINANCIAL INFORMATION.
Whether or not the Company is subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, the Company shall
file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to such Section 13(a) or 15(d) or any successor provision thereto if
the Company were subject thereto, such documents to be filed with the Commission
on or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required to file them. The Company shall also in any
event (a) within 15 days of each Required Filing Date (i) transmit by mail to
all Holders, as their names and addresses appear in the Security Register,
without cost to such Holders, and (ii) file with the Trustee copies of the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13(a) or
15(d) of the Exchange Act or any successor provisions thereto if the Company
were subject thereto and (b) if filing such documents by the Company with the
Commission is not permitted under the Exchange Act, promptly upon written
request supply copies of such documents to any prospective Holder. The
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Trustee's receipt of such reports, information and documents shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein.
In addition, for so long as any Securities remain outstanding,
the Company shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A under the Securities Act.
Section 10.17. STATEMENT BY OFFICERS AS TO DEFAULT: COMPLIANCE CERTIFICATES.
(a) The Company shall deliver to the Trustee, within 120
days after the end of each fiscal year of the Company ending after the date
hereof an Officers' Certificate, stating whether or not to the best knowledge of
the signers thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder), and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
(b) The Company shall deliver to a Responsible Officer of
the Trustee, as soon as possible and in any event within 10 days after the
Company becomes aware of the occurrence of a Default or an Event of Default, an
Officers' Certificate setting forth the details of such Default or Event of
Default, and the action which the Company proposes to take with respect thereto.
Section 10.18. WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Section 8.01, provided pursuant to
Section 9.01(2) and set forth in Sections 10.04 to 10.16, inclusive, if before
the time for such compliance the Holders of at least a majority in principal
amount at Stated Maturity of the Outstanding Securities shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect; PROVIDED, HOWEVER, with respect to an Offer to
Purchase as to which an Offer has been mailed, no such waiver may be made or
shall be effective against any Holder tendering Securities pursuant to such
Offer, and the Company may not omit to comply with the terms of such Offer as to
such Holder.
Section 10.19. LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN
WHOLLY OWNED SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Restricted
Subsidiary of the Company to, transfer, convey, sell or otherwise dispose
("Transfer") of any Capital Stock in any Wholly Owned Restricted Subsidiary of
the Company to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company) unless (a) such Transfer is of all the Capital Stock
in such Wholly Owned Restricted Subsidiary and (b) the cash Net Proceeds from
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such Transfer are applied in accordance with the covenant described below
under Section 10.21 and (ii) will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Capital Stock (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company. The foregoing restrictions shall not apply to (i)
the creation of Permitted Joint Ventures; (ii) any Transfer required by
applicable law or regulation, (iii) the issuance of Redeemable Stock that is
otherwise permitted to be issued pursuant to the terms of this Indenture, and
(iv) Transfers in which the Company or a Restricted Subsidiary acquired at
the same time not less than its proportionate share in such issuance of
Capital Stock.
Section 10.20. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Restricted Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder of any Securities
for or as an inducement to any consent, waiver or amendment of any of the
terms or provisions of this Indenture or the Securities unless such
consideration is offered to be paid or is paid to all Holders of the
Securities that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
Section 10.21. ASSET SALES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company
(or the Restricted Subsidiary, as the case may be) receives consideration at
the time of such Asset Sale at least equal to the fair market value (which
shall be conclusively evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets or
Capital Stock issued or sold or otherwise disposed of and (ii) at least 80%
of the consideration therefor received by the Company or such Subsidiary is
in the form of cash; provided that the amount of (x) any liabilities (as
shown on the Company's or such Restricted Subsidiary's most recent balance
sheet), of the Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes
or any guarantee thereof) that are assumed by the transferee of any such
assets and (y) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are
contemporaneously (subject to ordinary settlement periods) converted by the
Company or such Subsidiary into cash (to the extent of the cash received),
shall be deemed to be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company may apply such Net Proceeds, at its option, (a) to
repay Debt under a Credit Facility or any Vendor Financing Debt or (b) to
make a capital expenditure in the same or similar line of business as the
Company is engaged in on the date hereof or in a business reasonably related
thereto, or (c) to acquire (i) Capital Stock of an entity that is or becomes
a Restricted Subsidiary or (ii) other long-term assets that are used or
useful in the same or similar line of business as the Company or such
Restricted Subsidiaries were engaged in on the date hereof or in businesses
reasonably related thereto. Pending the final application of any such Net
Proceeds, the Company
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may temporarily reduce revolving credit borrowings or otherwise invest such
Net Proceeds in any manner that is not prohibited by this Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company will be required to make an offer (an "Asset Sale Offer") to all
Holders of Notes and all holders of other Debt that is pari passu with the
Notes containing provisions similar to those set forth in this Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets
to purchase the maximum principal amount at maturity of Notes and such other
pari passu Debt that may be purchased out of the Excess Proceeds. The offer
price for such Asset Sale Offer shall be an amount in cash equal to 100% of
the principal amount thereof plus accrued and unpaid interest thereon, if
any, to the date of purchase, in accordance with the procedures set forth in
this Indenture and the instrument or instruments governing such other pari
passu Debt, respectively. To the extent that any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes tendered into such Asset Sale Offer surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis. Upon completion of such
offer to purchase, the amount of Excess Proceeds shall be reset at zero.
ARTICLE 11.
Redemption of Securities
Section 11.01. RIGHT OF REDEMPTION.
The Securities may be redeemed at any time on or after March
15, 2005, at the Company's option, in whole or in part, upon not less than 30
or more than 60 days' prior written notice mailed by first class mail to each
Holder's last address as it appears in the Security Register, at the
Redemption Prices (expressed as a percentage of the principal amount at
maturity thereof) set forth below, plus an amount in cash equal to all
accrued and unpaid interest and Liquidated Damages, if any, to the Redemption
Date, if redeemed during the twelve-month period beginning March 15 of each
of the years set forth below.
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2005 ....................................... 105.5000%
2006 ....................................... 103.6667%
2007 ....................................... 101.8333%
2008 and thereafter ........................ 100.0000%
</TABLE>
In addition, in the event of one or more sales by the Company
on or prior to March 15, 2003 of at least $75.0 million of its Capital Stock
(other than Redeemable Stock), the Company may redeem up to 35% of the
aggregate principal amount of the Notes originally issued with the proceeds
of such sale at a Redemption Price equal to 111% of such principal amount on
the Redemption Date, plus Liquidated Damages, if any thereon, to the
Redemption Date; PROVIDED that at least 65% of the aggregate principal amount
of the Notes originally issued
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remain outstanding immediately after the occurrence of any such redemption
(excluding Notes held by the Company and its Restricted Subsidiaries); and
PROVIDED, FURTHER, that such redemption occurs within 60 days after
consummation of any such sale.
Section 11.02. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company, as
permitted by this Indenture and the provisions of the Securities, shall be
made in accordance with such provisions and this Article.
Section 11.03. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant
to Section 11.01 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company pursuant to Section 11.01, the
Company shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities to be redeemed.
Section 11.04. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
In the case of any partial redemption, selection of the
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Securities are listed or, if the Securities are not listed on a national
securities exchange, on a PRO RATA basis, by lot or by such other method as
the Trustee shall deem to be fair and appropriate; PROVIDED that no Security
of $1,000 in principal amount or less shall be redeemed in part.
The Trustee shall promptly notify the Company and each
Security Registrar in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture and of the Securities,
unless the context otherwise requires, all provisions relating to the
redemption of Securities shall relate, in the case of any Securities redeemed
or to be redeemed only in part, to the portion of the principal amount of
such Securities which has been or is to be redeemed.
Section 11.05. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 45 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state (including CUSIP, CINS
and ISIN numbers, if any):
(1) the Redemption Date,
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(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed, including
CUSIP, CINS and ISIN numbers,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that cash
interest thereon will cease to accrue on and after said Redemption Date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) if the redemption is being made pursuant to the provisions
of the Securities set forth in the third paragraph of Section 2.03, a brief
description of the nature and amount of Capital Stock sold by the Company,
the aggregate purchase price thereof and the net cash proceeds therefrom
available for such redemption, the date or dates on which such sale was
completed and the percentage of the aggregate principal amount of Outstanding
Securities being redeemed.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and shall
be irrevocable.
Section 11.06. DEPOSIT OF REDEMPTION PRICE.
On or before 10:00 a.m. New York time on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) any applicable accrued interest on, all the Securities which
are to be redeemed on that date.
Section 11.07. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and any applicable accrued interest) such Securities shall not bear interest.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price,
together with any applicable accrued and unpaid interest to the Redemption
Date; PROVIDED, HOWEVER, that installments of interest whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.09.
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If any Security called for redemption in accordance with the
election of the Company made pursuant to Section 11.01 shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate
provided by the Security.
Section 11.08. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 10.02 (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination
as requested by such Holder, in aggregate principal amount at Stated Maturity
equal to and in exchange for the unredeemed portion of the principal amount
at Stated Maturity of the Security so surrendered.
ARTICLE 12.
Defeasance and Covenant Defeasance
Section 12.01. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may elect, at its option at any time, to have
Section 12.02 or Section 12.03 applied to the Outstanding Securities (as a
whole and not in part) upon compliance with the conditions set forth below in
this Article. Any such election shall be evidenced by a Board Resolution.
Section 12.02. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option to have this Section
applied to the Outstanding Securities (as a whole and not in part), the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date
the conditions set forth in Section 12.04 are satisfied (hereinafter called
"Defeasance"), and thereafter such Securities shall not be subject to
redemption pursuant thereto. For this purpose, such Defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such
Securities are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), subject to the
following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Securities to receive, solely
from the trust fund described in Section 12.04 and as more fully set forth in
such Section, payments in respect of the principal of and any premium and
interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 3.04, 3.05, 3.08,
10.02 and 10.03, (3) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (4) this Article. Subject to compliance with this
Article, the Company may
90
<PAGE>
exercise its option to have this Section applied to the Outstanding
Securities (as a whole and not in part) notwithstanding the prior exercise
of its option to have Section 12.03 applied to such Securities.
Section 12.03. COVENANT DEFEASANCE.
Upon the Company's exercise of its option to have this Section
applied to the Outstanding Securities (as a whole and not in part), (1) the
Company shall be released from its obligations under Section 8.01 (iii),
Sections 10.05 through 10.16, inclusive, and 10.19 through 10.21,
inclusive and any covenant provided pursuant to Section 9.01(2) and (2) the
occurrence of any event specified in Section 5.01(4) (with respect to Section
8.01(iii)), Section 5.01(5) (with respect to any of Sections 10.05 through
10.16, inclusive and 10.19 through 10.21, inclusive, and any such
covenants provided pursuant to Section 9.01(2)), Section 5.01(6) or Section
5.01(7) shall be deemed not to be or result in an Event of Default, in each
case with respect to such Securities as provided in this Section on and after
the date the conditions set forth in Section 12.04 are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance
means that, with respect to such Securities, the Company may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so
specified in the case of Sections 5.01(4) and 5.01(5)), whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein
or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
Section 12.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
Section 12.02 or Section 12.03 to the Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 6.09 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefits of the Holders
of such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or any such other qualifying trustee) to pay
and discharge, the principal of and any installment of interest on such
Securities on the respective Stated Maturities thereof, in accordance
with the terms of this Indenture and such Securities. As used herein,
"U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of
which the full faith and credit of the United States of America is
pledged or (ii) an obligation of a Person
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<PAGE>
controlled or supervised by and acting as an agency or instrumentality
of the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States
of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depository
receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government
Obligation which is specified in Clause (x) above and held by such bank
for the account of the holder of such depository receipt, or with
respect to any specific payment of principal of or interest on any U.S.
Government Obligation which is so specified and held, PROVIDED that
(except as required by law) such custodian is not authorized to make
any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of principal or
interest evidenced by such depository receipt.
(2) In the event of an election to have Section 12.02 apply to
the Outstanding Securities, the Company shall have delivered to the
Trustee an Opinion of Counsel stating that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Closing Date there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the
effect that, and based thereon such opinion shall confirm that, the
Holders of such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner
and at the same times as would be the case if such deposit, Defeasance
and discharge were not to occur.
(3) In the event of an election to have Section 12.03 apply to
the Outstanding Securities, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such
Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit and Covenant Defeasance were not
to occur.
(4) No Default with respect to the Outstanding Securities
shall have occurred and be continuing at the time of such deposit or,
with regard to any such event specified in Sections 5.01(8) and (9), at
any time on or prior to the 90th day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied
until after such 90th day).
(5) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the
meaning of such Act).
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(6) Such Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(7) Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act unless such
trust shall be registered under such Act or exempt from registration
thereunder.
(8) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
Section 12.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section
10.03, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee (solely for
purposes of this Section and Section 12.06, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section
12.04 in respect of the Outstanding Securities shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any such
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities, of all sums due and
to become due thereon in respect of principal and any premium and interest,
but money so held in trust need not be segregated from other funds except to
the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 12.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 12.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would
then be required to be deposited to effect the Defeasance or Covenant
Defeasance, as the case may be, with respect to the Outstanding Securities.
Section 12.06. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article with respect to any Securities by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
obligations under this Indenture and such Securities from which the Company
has been
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<PAGE>
discharged or released pursuant to Section 12.02 or 12.03 shall be revived
and reinstated as though no deposit had occurred pursuant to this Article
with respect to such Securities, until such time as the Trustee or Paying
Agent is permitted to apply all money held in trust pursuant to Section 12.05
with respect to such Securities in accordance with this Article; PROVIDED,
HOWEVER, that if the Company makes any payment of principal of or any premium
or interest on any such Security following such reinstatement of its
obligations, the Company shall be subrogated to the rights (if any) of the
Holders of such Securities to receive such payment from the money so held in
trust.
---------------------------
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
94
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, all as of the day and year first above written.
NEXTEL PARTNERS, INC.
By: /s/ John D. Thompson
-------------------------------------
Title: Vice President
----------------------------------
THE BANK OF NEW YORK, Trustee
By: /s/
-------------------------------------
Title:
----------------------------------
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
NEXTEL PARTNERS, INC.
By:
-------------------------------------
Title:
----------------------------------
THE BANK OF NEW YORK, Trustee
By: /s/ Michele L. Russo
-------------------------------------
Title: Assistant Treasurer
----------------------------------
<PAGE>
EXHIBIT A
Form of Certificate to Be
Delivered in Connection with
Transfers Pursuant to Regulation S
----------------------------------
______________,______
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
Nextel Partners, Inc.
4500 Carillon Point
Kirkland, Washington 98033
Re: Nextel Partners, Inc. (the "Company")
11% Senior Notes Due 2010 (the "Notes")
---------------------------------------
Dear Sirs:
This letter relates to U.S. $_______________ principal amount
of Notes represented by a Note (the "Legended Note" which bears a legend
outlining restrictions upon transfer of such Legended Note. Pursuant to Section
2.05 of the Indenture dated as of March 10, 2000 (the "Indenture") relating to
the Notes, we hereby certify that we are (or we will hold such securities on
behalf of) a person outside the United States to whom the Notes could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are hereby requested
to exchange the legended certificate for an unlegended certificate representing
an identical principal amount of Notes, all in the manner provided for in the
Indenture.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:_____________________________________
Authorized Signature
A-1
<PAGE>
EXHIBIT B
Form of Certificate to Be Delivered
in Connection with Transfers to
Non-QIB Institutional Accredited Investors
------------------------------------------
______________,______
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
Nextel Partners, Inc.
4500 Carillon Point
Kirkland, Washington 98033
Re: Nextel Partners, Inc. (the "Company")
11% Senior Notes due 2010 (the "Notes")
---------------------------------------
Dear Sirs:
In connection with our proposed purchase of U.S. $_______
aggregate principal amount at stated maturity of the Notes, we confirm that:
1. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture dated
as of March 10, 2000 (the "Indenture"), relating to the Notes, and we agree to
be bound by, and not to resell, pledge or otherwise transfer the Notes except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have
not been registered under the Securities Act, and that the Notes may not be
offered or sold except as permitted in the following sentence. We agree, on
our own behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should offer or sell any Notes, we will do so
only (A) to the Company or any subsidiary thereof, (B) in accordance with
Rule 144A under the Securities Act to a "qualified institutional buyer" (as
defined therein), (C) to an institutional "accredited investor" (as defined
below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter, (D) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act, (E) pursuant to
an effective registration statement under the Securities Act, or (F) outside
the United States in accordance with Rule 904 of Regulation S under the
Securities Act, and we further agree to provide to any person purchasing any
of the Notes from us a notice advising such purchaser that resales of the
Notes are restricted as stated herein.
A-2
<PAGE>
3. We understand that, on any proposed resale of any Notes, we
will be required to furnish to you and the Company Such certifications, legal
opinions and other information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:
----------------------------------
Authorized Signature
-----------------------
A-3
<PAGE>
EXHIBIT C
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
______________,______
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
Nextel Partners, Inc.
4500 Carillon Point
Kirkland, Washington 98033
Re: Nextel Partners, Inc. (the "Company")
11% Senior Notes due 2010 (the "Notes")
---------------------------------------
Dear Sirs:
In connection with our proposed sale of U.S. $__________
aggregate principal amount at maturity of the Notes, we confirm that such sale
has been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933 and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the
United States in contravention of the requirements of Rule 903(b) or Rule 904(b)
of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
A-4
<PAGE>
Very truly yours,
[Name of Transferor]
By:_____________________________________
Authorized Signature
A-5
<PAGE>
EXECUTION COPY
================================================================================
NEXTEL PARTNERS, INC.
$200,000,000
11% Senior Notes due 2010
Purchase Agreement
February 28, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
================================================================================
<PAGE>
$200,000,000
11% SENIOR NOTES DUE 2010
OF NEXTEL PARTNERS, INC.
PURCHASE AGREEMENT
February 28, 2000
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Nextel Partners, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to Donaldson, Lufkin & Jenrette Securities
Corporation, (the "INITIAL PURCHASER") an aggregate of $200,000,000 in principal
amount of its 11% Senior Notes due 2010 (the "SERIES A NOTES"), subject to the
terms and conditions set forth herein. The Series A Notes are to be issued
pursuant to the provisions of an indenture (the "INDENTURE"), to be dated as of
the Closing Date (as defined below), among the Company and The Bank of New York,
as trustee (the "TRUSTEE"). The Series A Notes and the Series B Notes (as
defined below) issuable in exchange therefor are collectively referred to
herein as the "NOTES." Capitalized terms used but not defined herein shall have
the meanings given to such terms in the Indenture.
The Company intends to use the gross proceeds from the sale to
the Initial Purchaser of the Series A Notes for general corporate purposes,
including to fund the Network Build-out (as defined in the Offering Memorandum),
operating losses and working capital through 2003.
1. OFFERING MEMORANDUM. The Series A Notes will be offered and
sold to the Initial Purchaser pursuant to one or more exemptions from the
registration requirements under the Securities Act of 1933, as amended (the
"ACT"). The Company has prepared a final offering memorandum, dated February 28,
2000 (the "OFFERING MEMORANDUM"), relating to the Series A Notes.
Upon original issuance thereof, and until such time as the
same is no longer required pursuant to the Indenture, the Series A Notes (and
all securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
<PAGE>
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS
NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF
SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES"
HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF
THE FOREGOING."
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2. AGREEMENTS TO SELL AND PURCHASE.
On the basis of the representations, warranties and covenants
contained in this Agreement, and subject to the terms and conditions contained
herein, the Company agrees to issue and sell to the Initial Purchaser, and the
Initial Purchaser agrees to purchase from the Company, an aggregate principal
amount of $200,000,000 of Series A Notes at a purchase price equal to 97.5% of
the principal amount thereof (the "PURCHASE PRICE").
3. TERMS OF OFFERING.
The Initial Purchaser has advised the Company that the Initial
Purchaser will make offers (the "EXEMPT RESALES") of the Series A Notes
purchased hereunder on the terms set forth in the Offering Memorandum, as
amended or supplemented, solely to persons whom the Initial Purchaser reasonably
believes to be "qualified institutional buyers" as defined in Rule 144A under
the Act ("QIBS") (such persons specified in this clause being referred to herein
as the "ELIGIBLE PURCHASERS"). The Initial Purchaser will offer the Series A
Notes to Eligible Purchasers initially at a price equal to 100.0% of the
principal amount thereof. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A
Notes will have the registration rights set forth in the registration rights
agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date,
in substantially the form of Exhibit A hereto, for so long as such Series A
Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company will agree to file with the Securities and Exchange Commission (the
"COMMISSION") under the circumstances set forth therein, (i) a registration
statement under the Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating
to the Company's 11% Series B Senior Notes due 2010 (the "SERIES B NOTES"), to
be offered in exchange for the Series A Notes (such offer to exchange being
referred to as the "EXCHANGE OFFER") and (ii) a shelf registration statement
pursuant to Rule 415 under the Act (the "SHELF REGISTRATION STATEMENT" and,
together with the Exchange Offer Registration Statement, the "REGISTRATION
STATEMENTS") relating to the resale by certain holders of the Series A Notes and
to use its best efforts to cause such Registration Statements to be declared and
remain effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes and the Registration Rights Agreement are hereinafter sometimes
referred to collectively as the "OPERATIVE DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price
for, the Series A Notes shall be made at the offices of Latham & Watkins, 885
Third Avenue, Suite 1000, New York, New York, 10022, or such other location
as may be mutually acceptable. Such delivery and payment shall be made at
9:00 a.m. New York City time, on or before March 10, 2000 or at such other
time on the same date or such other date as shall be agreed upon by the
Initial
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Purchaser and the Company in writing. The time and date of such delivery and the
payment for the Series A Notes are herein called the "CLOSING DATE."
(b) One or more of the Series A Notes in definitive
global form, registered in the name of Cede & Co., as nominee of the
Depository Trust Company ("DTC"), having an aggregate principal amount
corresponding to the aggregate principal amount of the Series A Notes
(collectively, the "GLOBAL NOTE"), shall be delivered by the Company to the
Initial Purchaser (or as the Initial Purchaser directs) in each case with any
transfer taxes thereon duly paid by the Company against payment by the
Initial Purchaser of the Purchase Price thereof by wire transfer in
immediately available funds to the order of the Company. The Global Note
shall be made available to the Initial Purchaser for inspection not later
than 9:30 a.m., Now York City time, on the business day immediately preceding
the Closing Date.
5. AGREEMENTS OF THE COMPANY.
The Company hereby agrees with the Initial Purchaser as
follows:
(a) To advise the Initial Purchaser promptly and,
if requested by the Initial Purchaser, confirm such advice in writing, (i) of
the issuance by any state securities commission of any stop order suspending
the qualification or exemption from qualification of any Series A Notes for
offering or sale in any jurisdiction designated by the Initial Purchaser
pursuant to Section 5(e) hereof, or the initiation of any proceeding by any
state securities commission or any other federal or state regulatory
authority for such purpose and (ii) of the happening of any event during the
period referred to in Section 5(c) below that makes any statement of a
material fact made in the Offering Memorandum untrue or that requires any
additions to or changes in the Offering Memorandum in order to make the
statements therein not misleading. The Company shall use all commercially
reasonable efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Series A Notes under any
state securities or Blue Sky laws and, if at any time any state securities
commission or other federal or state regulatory authority shall issue an
order suspending the qualification or exemption of any Series A Notes under
any state securities or Blue Sky laws, the Company shall use all commercially
reasonable efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish the Initial Purchaser and those
persons identified by the Initial Purchaser to the Company as many copies of
the Offering Memorandum, and any amendments or supplements thereto, as the
Initial Purchaser may reasonably request for the time period specified in
Section 5(c). Subject to the Initial Purchaser's compliance with its
representations and warranties and agreements set forth in Section 7 hereof,
the Company consents to the use of the Offering Memorandum, and any
amendments and supplements thereto required pursuant hereto, by the Initial
Purchaser in connection with Exempt Resales.
(c) During such period as in the opinion of counsel
for the Initial Purchaser an Offering Memorandum is required by law to be
delivered in connection with Exempt Resales by the Initial Purchaser, (i) not
to make any amendment or supplement to the
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Offering Memorandum of which the initial Purchaser shall not previously have
been advised or to which the Initial Purchaser shall reasonably object after
being so advised and (ii) to prepare promptly upon the Initial Purchaser's
reasonable request, any amendment or supplement to the Offering Memorandum
which may be necessary or advisable in connection with such Exempt Resales.
(d) If, during the period referred to in Section 5(c)
above, any event shall occur or condition shall exist as a result of which,
in the opinion of counsel to the Initial Purchaser, it becomes necessary to
amend or supplement the Offering Memorandum in order to make the statements
therein, in the light of the circumstances when such Offering Memorandum is
delivered to an Eligible Purchaser, not misleading, or if, in the opinion of
counsel to the Initial Purchaser, it is necessary to amend or supplement the
Offering Memorandum to comply with any applicable law, forthwith to prepare
an appropriate amendment or supplement to such Offering Memorandum so that
the statements therein, as so amended or supplemented, will not, in the light
of the circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with applicable law, and to furnish to the
Initial Purchaser and such other persons as the Initial Purchaser may
designate such number of copies thereof as the Initial Purchaser may
reasonably request.
(e) Prior to the sale of all Series A Notes pursuant to
Exempt Resales as contemplated hereby, to cooperate with the Initial
Purchaser and counsel to the Initial Purchaser in connection with the
registration or qualification of the Series A Notes for offer and sale to the
Initial Purchaser and pursuant to Exempt Resales under the securities or Blue
Sky laws of such jurisdictions as the Initial Purchaser may request and to
continue such registration or qualification in effect so long as required for
Exempt Resales and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; PROVIDED, HOWEVER, that the Company shall not be required in
connection therewith to qualify as a foreign corporation in any jurisdiction
in which it is not now so qualified or to take any action that would subject
it to general consent to service of process or taxation other than as to
matters and transactions relating to the Offering Memorandum or Exempt
Resales, in any jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to furnish as
soon as practicable after the end of each fiscal year to the record holders
of the Notes a financial report of the Company and its subsidiaries on a
consolidated basis (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a consolidated
balance sheet, a consolidated statement of operations, a consolidated
statement of cash flows and a consolidated statement of shareholders' equity
as of the end of and for such fiscal year, together with comparable
information as of the end of and for the preceding year, certified by the
Company's independent public accountants and (ii) to furnish as soon as
practicable after the end of each quarterly period (except for the last
quarterly period of each fiscal year) to such holders, a consolidated
balance sheet, a consolidated statement of operations and a consolidated
statement of cash flows (and similar financial reports of all unconsolidated
subsidiaries, if any) as of the end of and for such period, and for the
period from the beginning of such year to the close of
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<PAGE>
such quarterly period, together with comparable information for the
corresponding periods of the preceding year.
(g) So long as the Notes are outstanding, to furnish to the
Initial Purchaser as soon as available copies of all reports or other
communications furnished by the Company to its security holders or furnished
to or filed with the Commission or any national securities exchange on which
any class of securities of the Company is listed and such other publicly
available information concerning the Company and/or its subsidiaries as the
Initial Purchaser may reasonably request (without documents incorporated
therein by reference or exhibits thereto, unless requested in writing).
(h) So long as any of the Series A Notes remain outstanding
and during any period in which the Company is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"),
to make available to any holder of Series A Notes in connection with any sale
thereof and any prospective purchaser of such Series A Notes from such
holder, the information ("RULE 144A INFORMATION") required by Rule 144A(d)(4)
under the Act.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to
be paid all expenses incident to the performance of the obligations of the
Company under this Agreement, including: (i) the fees, disbursements and
expenses of counsel to the Company and accountants of the Company in
connection with the sale and delivery of the Series A Notes to the Initial
Purchaser and pursuant to Exempt Resales, and all other fees and expenses in
connection with the preparation, printing, filing and distribution of the
Offering Memorandum and all amendments and supplements to any of the
foregoing (including financial statements), including the mailing and
delivering of copies thereof to the Initial Purchaser and persons designated
by the Initial Purchaser in the quantities specified herein, (ii) all costs
and expenses related to the transfer and delivery of the Series A Notes to
the Initial Purchaser and pursuant to Exempt Resales, including any transfer
or other taxes payable thereon, (iii) all costs of printing or producing this
Agreement, the other Operative Documents and any other agreements or documents
in connection with the offering, purchase, sale or delivery of the Series A
Notes, (iv) all expenses in connection with the registration or qualification
of the Series A Notes for offer and sale under the securities or Blue Sky
laws of the several states and all costs of printing or producing any
preliminary and supplemental Blue Sky memoranda in connection therewith
(including the filing fees and fees and disbursements of counsel for the
Initial Purchaser in connection with such registration or qualification and
memoranda relating thereto), (v) the cost of printing certificates
representing the Series A Notes, (vi) all expenses and listing fees in
connection with the application for quotation of the Series A Notes in the
National Association of Securities Dealers, Inc. ("NASD") Automated Quotation
System - PORTAL ("PORTAL"), (vii) the fees and expenses of the Trustee and
the Trustee's counsel in connection with the Indenture and the Notes, (viii)
the costs and charges of any transfer agent, registrar and/or depository
(including DTC), (ix) any fees charged by rating agencies for the rating of
the Notes, (x) all costs and expenses of the Exchange Offer and any
Registration Statement, as set forth in the Registration Rights Agreement,
and (xi) and all other costs and expenses incident to the performance of the
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<PAGE>
obligations of the Company hereunder for which provision is not otherwise
made in this Section, but excluding fees and expenses of counsel to the
Initial Purchaser (other than fees and expenses set forth in clause (iv)
above).
(j) To use all commercially reasonable efforts to effect
the inclusion of the Series A Notes in PORTAL and to maintain the listing of
the Series A Notes on PORTAL for so long as the Series A Notes are
outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer
of the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Notes by DTC for "book-entry" transfer.
(l) During the period beginning on the date hereof and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise transfer or dispose of any debt securities of the Company
or any warrants, rights or options to purchase or otherwise acquire debt
securities of the Company substantially similar to the Notes (other than (i)
the Notes and (ii) commercial paper issued in the ordinary course of
business), without the prior written consent of the Initial Purchaser.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Series A Notes to the Initial
Purchaser or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Series A Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes.
(o) To cause the Exchange Offer to be made in the
appropriate form to permit Series B Notes registered pursuant to the Act to
be offered in exchange for the Series A Notes and to comply with all
applicable federal and state securities laws in connection with the Exchange
Offer.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use all commercially reasonable efforts to do and
perform all things required or necessary to be done and performed under this
Agreement by it prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Series A Notes.
6. REPRESENTATIONS. WARRANTIES AND AGREEMENTS OF THE COMPANY.
As of the date hereof, the Company represents and warrants to, and
agrees with, the Initial Purchaser that:
(a) The Offering Memorandum does not, and any supplement or
amendment to it will not, contain any untrue statement of a material fact or
omit to state any
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<PAGE>
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph (a) shall not apply to statements in or omissions
from the Offering Memorandum (or any supplement or amendment thereto) based
upon information relating to the Initial Purchaser furnished to the Company
in writing by the Initial Purchaser expressly for use therein. No stop order
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or any order asserting that any of the transactions contemplated by
this Agreement are subject to the registration requirements of the Act, has
been issued.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Offering Memorandum
and to own, lease and operate its properties, and each is duly qualified and
is in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure to
be so qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company and
its subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
(c) All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid,
non-assessable and, except for rights set forth in the Shareholders'
Agreement and the Restated Certificate of Incorporation, are not subject to
any preemptive or similar rights.
(d) The entities listed on Schedule A hereto are the only
subsidiaries, direct or indirect, of the Company. All of the outstanding
shares of capital stock of each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and non-assessable, and are
owned by the Company, directly or indirectly through one or more
subsidiaries, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature (each, a "LIEN"), except for
Liens (i) securing indebtedness under the Credit Facility and (ii) created by
the Shareholders' Agreement and the Restated Certificate of Incorporation.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The Indenture has been duly authorized by the Company
and, on the Closing Date, will have been validly executed and delivered by
the Company. When the Indenture has been duly executed and delivered by the
Company, the Indenture will be a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Indenture will conform in all material respects to the requirements of the
Trust
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Indenture Act of 1939, as amended (the "TIA" or "TRUST INDENTURE ACT"), and
the rules and regulations of the Commission applicable to an indenture which
is qualified thereunder.
(g) The Series A Notes have been duly authorized and, on
the Closing Date, will have been validly executed and delivered by the
Company. When the Series A Notes have been issued, executed and authenticated
in accordance with the provisions of the Indenture and delivered to and paid
for by the Initial Purchaser in accordance with the terms of this Agreement,
the Series A Notes will be entitled to the benefits of the Indenture and will
be valid and binding obligations of the Company, enforceable in accordance
with their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (ii) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability. On the
Closing Date, the Series A Notes will conform as to legal matters to the
description thereof contained in the Offering Memorandum.
(h) On the Closing Date, the Series B Notes will have been
duly authorized by the Company. When the Series B Notes are issued, executed
and authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Series B Notes will be entitled to the benefits of the
Indenture and will be the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
(i) The Registration Rights Agreement has been duly
authorized by the Company and, on the Closing Date, will have been duly
executed and delivered by the Company. When the Registration Rights Agreement
has been duly executed and delivered, the Registration Rights Agreement will
be a valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Registration Rights Agreement will
conform as to legal matters to the description thereof in the Offering
Memorandum.
(j) Neither the Company nor any of its subsidiaries is in
violation of its respective charter or by-laws or in default in the
performance of any obligation, agreement, covenant or condition contained in
any indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken as a
whole, to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries or their respective property is bound.
(k) Except as disclosed in the Offering Memorandum, the
execution, delivery and performance of this Agreement and the other Operative
Documents by the Company, compliance by the Company with all provisions
hereof and thereof and the
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consummation of the transactions contemplated hereby and thereby will not (i)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except such as
may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of its
subsidiaries or any indenture, loan agreement, mortgage, lease or other
agreement or instrument that is material to the Company and its subsidiaries,
taken as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound, (iii) violate or conflict with any applicable law or any
rule, regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company, any of its subsidiaries
or their respective property, (iv) result in the imposition or creation of
(or the obligation to create or impose) a Lien under, any agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or their respective property is
bound, or (v) result in the termination, suspension or revocation of any
Authorization (as defined below) of the Company or any of its subsidiaries or
result in any other impairment of the rights of the holder of any such
Authorization.
(l) Except as disclosed in the Offering Memorandum, there
are no legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is or could be a party or to which any of
their respective property is or could be subject, which would, if adversely
determined, result, singly or in the aggregate, in a Material Adverse Effect.
(m) Neither the Company nor any of its subsidiaries has
violated any foreign, federal, state or local law or regulation relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), any provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any provisions of the Foreign Corrupt
Practices Act or the rules and regulations promulgated thereunder, except for
such violations which, singly or in the aggregate, would not have a Material
Adverse Effect.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any Authorization, any related constraints on operating
activities and any potential liabilities to third parties) which would,
singly or in the aggregate, have a Material Adverse Effect.
(o) Except as disclosed in the Offering Memorandum, each
of the Company and its subsidiaries has such permits, licenses, consents,
exemptions, franchises, authorizations and other approvals (each, an
"AUTHORIZATION") of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory organizations and
all courts and other tribunals, including without limitation, under any
applicable Environmental Laws, as are necessary to own, lease, license and
operate its respective properties and to conduct its business, except where
the failure to have any such Authorization or to make any such filing
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or notice would not, singly or in the aggregate, have a Material Adverse
Effect. Each such Authorization is valid and in full force and effect and
each of the Company and its subsidiaries is in compliance with all the terms
and conditions thereof and with the rules and regulations of the authorities
and governing bodies having jurisdiction with respect thereto; and no event
has occurred (including, without limitation, the receipt of any notice from
any authority or governing body) which allows or, after notice or lapse of
time or both, would allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or both, would
result in any other impairment of the rights of the holder of any such
Authorization; and such Authorizations contain no restrictions that are
burdensome to the Company or any of its subsidiaries; except where such
failure to be valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction would
not, singly or in the aggregate, have a Material Adverse Effect.
(p) The PRO FORMA balance sheets included in the Offering
Memorandum have been prepared in accordance with generally accepted
accounting principles in the United States and give effect to assumptions
used in the preparation thereof on a reasonable basis and in good faith and
present fairly, in all material respects, the proposed transactions
contemplated by the Offering Memorandum. The other PRO FORMA financial and
statistical information and data included in the Offering Memorandum are, in
all material respects, accurately presented and prepared on a basis
consistent with the PRO FORMA balance sheet.
(q) The Company is not and, after giving effect to the
offering and sale of the Series A Notes and the application of the net
proceeds thereof as described in the Offering Memorandum, will not be, an
"investment company," as such term is defined in the Investment Company Act
of 1940, as amended.
(r) Other than the Amended and Restated Shareholders'
Agreement (as defined in the Offering Memorandum), the Restated Certificate
of Incorporation and the Registration Rights Agreement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the Act with respect to any securities of the Company or to
require the Company to include such securities with the Notes registered
pursuant to any Registration Statement.
(s) Neither the Company nor any of its subsidiaries nor
any agent thereof acting on the behalf of them has taken, and none of them
will take, any action that might cause this Agreement or the issuance or sale
of the Series A Notes to violate Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System.
(t) No "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Act (i) has imposed (or has informed the Company that it is considering
imposing) any condition (financial or otherwise) on the Company's retaining
any rating assigned to the Company, any securities of the Company or (ii) has
indicated to the Company that it is considering (a) the downgrading,
suspension, or
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withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change
in the outlook for any rating of the Company, or any securities of the
Company.
(u) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement), (i) there has not occurred any material adverse
change or any development involving a prospective material adverse change in
the condition, financial or otherwise, or the earnings, business, management
or operations of the Company and its subsidiaries, taken as a whole, (ii)
there has not been any material adverse change or any development involving a
prospective material adverse change in the capital stock or in the long-term
debt of the Company or any of its subsidiaries and (iii) neither the Company
nor any of its subsidiaries has incurred any material liability or
obligation, direct or contingent.
(v) The Offering Memorandum, as of its date, contains all
the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Act.
(w) When the Series A Notes are issued and delivered
pursuant to this Agreement, the Series A Notes will not be of the same class
(within the meaning of Rule 144A under the Act) as any security of the
Company that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted in a United States automated
inter-dealer quotation system.
(x) No form of general solicitation or general
advertising (as defined in Regulation D under the Act) was used by the
Company or any of its respective representatives (other than the Initial
Purchaser, as to whom the Company makes no representation) in connection with
the offer and sale of the Series A Notes contemplated hereby, including, but
not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio,
or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the
Series A Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(y) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under the TIA.
(z) No registration under the Act of the Series A Notes
is required for the sale of the Series A Notes to the Initial Purchaser as
contemplated hereby or for the Exempt Resales assuming the accuracy of the
Initial Purchaser's representations and warranties and agreements set forth
in Section 7 hereof.
(aa) Each certificate signed by any officer of the
Company and delivered to the Initial Purchaser or counsel for the Initial
Purchaser shall be deemed to be a representation and warranty by the Company
to the Initial Purchaser as to the matters covered thereby.
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The Company acknowledges that the Initial Purchaser and, for
purposes of the opinions to be delivered to the Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial Purchaser
will rely upon the accuracy and truth of the foregoing representations and
hereby consents to such reliance.
7. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES.
The Initial Purchaser represents and warrants to, and agrees with, the
Company:
(a) Such Initial Purchaser is a QIB with such knowledge
and experience in financial and business matters as is necessary in order to
evaluate the merits and risks of an investment in the Series A Notes.
(b) Such Initial Purchaser (A) is not acquiring the
Series A Notes with a view to any distribution thereof or with any present
intention of offering or selling any of the Series A Notes in a transaction
that would violate the Act or the securities laws of any state of the United
States or any other applicable jurisdiction and (B) will be reoffering and
reselling the Series A Notes only to QIBs in reliance on the exemption from
the registration requirements of the Act provided by Rule 144A.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Series A Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection
with Exempt Resales, such Initial Purchaser will solicit offers to buy the
Series A Notes only from, and will offer to sell the Series A Notes only to,
Eligible Purchasers. Each Initial Purchaser further agrees that it will offer
to sell the Series A Notes only to, and will solicit offers to buy the Series
A Notes only from Eligible Purchasers that such Initial Purchaser reasonably
believes are QIBs, that agree that (x) the Series A Notes purchased by them
may be resold, pledged or otherwise transferred within the time period
referred to under Rule 144(k) (taking into account the provisions of Rule
144(d) under the Act, if applicable) under the Act, as in effect on the date
of the transfer of such Series A Notes, only (I) to the Company or any of its
subsidiaries, (II) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (III) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements
of Rule 904 of the Act, (IV) in a transaction meeting the requirements of
Rule 144 under the Act, (V) to an Accredited Institution that, prior to such
transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer of
such Series A Note (the form of which may be obtained from the Trustee) and,
if such transfer is in respect of an aggregate principal amount of Series A
Notes less than $250,000, an opinion of
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counsel acceptable to the Company that such transfer is in compliance with
the Act, (VI) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable to
the Company) or (VII) pursuant to an effective registration statement and, in
each case, in accordance with the applicable securities laws of any state of
the United States or any other applicable jurisdiction and (y) they will
deliver to each person to whom such Series A Notes or an interest therein is
transferred a notice substantially to the effect of the foregoing.
Such Initial Purchaser acknowledges that the Company and, for purposes
of the opinions to be delivered to such Initial Purchaser pursuant to Section 9
hereof, counsel to the Company and counsel to the Initial Purchaser will rely
upon the accuracy and truth of the foregoing representations and such Initial
Purchaser hereby consents to such reliance.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchaser, its directors, its officers and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation,
any legal or other expenses incurred in connection with investigating or
defending any matter, including any action, that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Offering Memorandum (or any amendment or supplement thereto) or any Rule 144A
Information provided by the Company to any holder or prospective purchaser of
Series A Notes pursuant to Section 5(h) or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission based
upon information relating to the Initial Purchaser furnished in writing to
the Company by such Initial Purchaser.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, and its directors and officers and each person, if any,
who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Company, to the same extent as the foregoing indemnity
from the Company to the Initial Purchaser but only with reference to
information relating to the Initial Purchaser furnished in writing to the
Company by the Initial Purchaser expressly for use in the Offering Memorandum.
(c) In case any action shall be commenced involving any
person in respect of which indemnity may be sought pursuant to Section 8(a)
or 8(b) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly
notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party shall assume the
defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as incurred (except that in the case of any action
in respect of which indemnity may be sought pursuant to both
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Sections 8(a) and 8(b), the Initial Purchaser shall not be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
the Initial Purchaser). Any indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case
of the parties indemnified pursuant to Section 8(a), and by the Company, in the
case of parties indemnified pursuant to Section 8(b). The indemnifying party
shall indemnify and hold harmless the indemnified party from and against any and
all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more than twenty
business days after the indemnifying party shall have received a request from
the indemnified party for reimbursement for the fees and expenses of counsel (in
any case where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party shall
have failed to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, on the one hand, and the Initial Purchaser on the other hand from the
offering of the Series A Notes or (ii) if the allocation
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<PAGE>
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company, on the
one hand, and the Initial Purchaser, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand
and the Initial Purchaser, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Series A Notes
(after underwriting discounts and commissions, but before deducting expenses)
received by the Company, and the total discounts and commissions received by the
Initial Purchaser bear to the total price to investors of the Series A Notes, in
each case as set forth in the table on the cover page of the Offering
Memorandum. The relative fault of the Company, on the one hand, and the Initial
Purchaser, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, on the one hand, or the Initial Purchaser, on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, the Initial
Purchaser shall not be required to contribute any amount in excess of the amount
by which the total discounts and commissions received by such Initial Purchaser
exceeds the amount of any damages which such Initial Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS.
The obligations of the Initial Purchaser to purchase the Series A
Notes under this Agreement are subject to the satisfaction of each of the
following conditions:
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(a) All the representations and warranties of the Company
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of nor shall any notice
have been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended review) for
a possible change that does not indicate the direction of the possible change
in, any rating of the Company or any securities of the Company (including,
without limitation, the placing of any of the foregoing ratings on credit
watch with negative or developing implications or under review with an
uncertain direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Act, (ii) there shall not have occurred any change, nor shall any notice
have been given of any potential or intended change, in the outlook for any
rating of the Company or any securities of the Company by any such rating
organization and (iii) no such rating organization shall have given notice
that it has assigned (or is considering assigning) a lower rating to the
Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any change or any
development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, (ii) there shall not have been any
change or any development involving a prospective change in the capital stock or
in the long-term debt of the Company or any of its subsidiaries and (iii)
neither the Company nor any of its subsidiaries shall have incurred any
liability or obligation, direct or contingent, the effect of which, in any such
case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Series A Notes on the terms and in the manner contemplated in the Offering
Memorandum.
(d) You shall have received on the Closing Date a
certificate dated the Closing Date, signed by the President and the Chief
Financial Officer of the Company, confirming the matters set forth in Sections
9(a), 9(b) and 9(c) and stating that the Company has complied with all the
agreements and satisfied all of the conditions herein contained and required to
be complied with or satisfied on or prior to the Closing Date.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchaser), dated the Closing
Date, of Friedman Kaplan & Seiler, special counsel for the Company to the effect
that:
(i) each of the Company and its subsidiaries has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of its jurisdiction of
incorporation and has the corporate power
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<PAGE>
and authority to carry on its business as described in the
Offering Memorandum and to own, lease and operate its
properties;
(ii) each of the Company and its subsidiaries (as
set forth on Schedule A hereto) is duly qualified and is in
good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified
would not have a Material Adverse Effect;
(iii) all the outstanding shares of capital stock of
the Company as set forth in the Offering Memorandum have been
duly authorized and validly issued and are fully paid,
non-assessable and, to our knowledge, not subject to any
preemptive or similar rights except as provided in the
Restated Certificate of Incorporation or the Amended and
Restated Shareholders' Agreement;
(iv) all of the outstanding shares of capital stock
of each of the Company's subsidiaries have been duly
authorized and validly issued and are fully paid and
non-assessable, and, to the best of such counsel's knowledge,
are owned by the Company, free and clear of any Lien other
than pursuant to (A) the Credit Facility, (B) the Restated
Certificate of Incorporation or (C) the Amended and Restated
Shareholders' Agreement;
(v) the Series A Notes have been duly authorized
and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by
the Initial Purchaser in accordance with the terms of this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the Company,
enforceable in accordance with their terms except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(vi) the Indenture has been duly authorized,
executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms except as (x) the
enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles
of general applicability;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
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(viii) The Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and is
a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights
generally, (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of
general applicability and (z) indemnity provisions may be
unenforceable as against public policy;
(ix) the Series B Senior Notes have been duly
authorized;
(x) the statements under the captions "Business,"
"Description of Notes" (to the extent that they constitute a
summary of the terms of the Notes) and "Related-Party
Transactions" (to the extent that they constitute a summary of
the documents referred to therein and subject to the
qualification that reference is made to the Agreements and the
Restated Certificate of Incorporation referred to therein for
a full description of the matters contained therein) in the
Offering Memorandum, in each case accurately summarizes the
legal matters purported to be summarized therein;
(xi) Except for the post-closing authorizations and
approvals referred to in the Offering Memorandum, the
execution, delivery and performance of this Agreement and the
other Operative Documents by the Company, the compliance by
the Company with all provisions hereof and thereof and the
consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any
court or governmental body or agency (except such as may be
required under the securities or Blue Sky laws of the various
states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or
by-laws of the Company or any of its subsidiaries or, to the
knowledge of counsel, any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the
Company and its subsidiaries, taken as a whole, to which the
Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or their respective
property is bound, (iii) violate or conflict with any
applicable law or any rule or regulation, or, to the knowledge
of counsel, any judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the
Company, any of its subsidiaries or their respective property,
(iv) to the knowledge of counsel, result in the imposition or
creation of (or the obligation to create or impose) a Lien
under, any agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any
of its subsidiaries or their respective property is bound, or
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<PAGE>
(v) to the knowledge of counsel, result in the termination,
suspension or revocation of any Authorization (as defined
above) of the Company or any of its subsidiaries or result in
any other impairment of the rights of the holder of any such
Authorization except as enforcement of rights to indemnity or
contribution may be limited by Federal or state securities
laws or principles of public policy;
(xii) the Company is not and, after giving effect to
the offering and sale of the Series A Notes and the
application of the net proceeds thereof as described in the
Offering Memorandum, will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as
amended;
(xiii) the Indenture complies as to form in all
material respects with the requirements of the TIA, and the
rules and regulations of the Commission applicable to an
indenture which is qualified thereunder. It is not necessary
in connection with the offer, sale and delivery of the Series
A Notes to the Initial Purchaser in the manner contemplated by
this Agreement or in connection with the Exempt Resales to
qualify the Indenture under the TIA;
(xiv) no registration under the Act of the Series A
Notes is required for the sale of the Series A Notes to the
Initial Purchaser as contemplated by this Agreement or for the
Exempt Resales assuming that (i) the Initial Purchaser is a
QIB, (ii) the accuracy of, and compliance with, the Initial
Purchaser's representations and agreements contained in
Section 7 of this Agreement, (iii) the accuracy of the
representations of the Company set forth in Sections 6(v), (w)
and (x) of this Agreement; and
(xv) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to
which the Company or any of its subsidiaries is or could be a
party or to which any of their respective property is or could
be subject, which might result, singly or in the aggregate, in
a Material Adverse Effect.
Nothing has come to the attention of such counsel that has led them
to believe that, as of the date of the Offering Memorandum or as of the
Closing Date, the Offering Memorandum, as amended or supplemented, if
applicable (except for the financial data included therein (including the
supporting notes), as to which such counsel does not express any belief)
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
The statement of Friedman Kaplan & Seiler, in the penultimate
paragraph of this section 9(e) shall be rendered to you at the request of the
Company and shall so state therein. In
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providing such statement with respect to the matters covered by the penultimate
paragraph of this Section 9(e), Friedman Kaplan & Seiler, may state that their
statement is based upon their participation in the preparation of the Offering
Memorandum and any amendments or supplements thereto and review and discussion
of the contents thereof, but is without independent check or verification except
as specified.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchaser), dated the Closing
Date, of Willkie Farr & Gallagher, special FCC counsel for the Company, to the
effect that:
(i) The execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement and any other agreement executed in connection with
the transactions contemplated thereby do not violate (i) the
Federal Communications Act of 1934, as amended (the
"Communications Act"), (ii) any rules or regulations of the
Federal Communications Commission ("FCC") applicable to the
Company, or (iii) to the best of such counsel's knowledge, any
decree from any court or tribunal, and (B) no authorization of
or filing with the FCC is necessary for the execution and
delivery of or the performance by the Company of its
obligations under this Agreement or any other agreement
executed in connection with the transactions contemplated
thereby in accordance with the terms thereof, except such as
have been obtained;
(ii) The Company and its subsidiaries have all
certificates, orders, permits, licenses, authorizations,
consents and approvals of and from, and have made all reports,
filings and registrations with, and paid all fees required by,
the FCC necessary to own, lease, license and use its
properties and assets and to conduct its business in the
manner described in the Offering Memorandum, except where such
failure would not materially affect their business operations
as a whole; and (B) to the best of such counsel's knowledge,
the Company and each subsidiary have not received any notice
of proceedings relating to the violation, revocation or
modification of any such certificates, orders, permits,
licenses, authorizations, consents or approvals, or the
qualifications or rejection of any such filing or
registration, the effect of which, singly or in the aggregate,
would have a Material Adverse Effect on the business or
operations of the Company and its subsidiaries, taken as a
whole;
(iii) To the best of such counsel's knowledge, each
of the Company and any of its subsidiaries is not in violation
of, or in default under, the Communications Act or the
telecommunications rules or regulations of the FCC, the effect
of which, singly or in the aggregate, would have a Material
Adverse Effect on the Company and it subsidiaries, taken as a
whole;
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(iv) To the best of such counsel's knowledge (A) no
adverse judgment, decree or order of the FCC has been issued
against the Company or any of its subsidiaries and (B) no
litigation, proceeding inquiry or investigation has been
commenced or threatened against the Company or any of its
subsidiaries before or by the FCC which, if decided adversely
to its interest, would have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole; and
(v) The statements set forth in the Offering
Memorandum under captions "Risk Factors--Risk Factors
Relating To Our Industry--Regulatory authorities exercise
considerable power over our operations, which could be
exercised against our interests and impose additional
unanticipated costs" and "Regulation", insofar as they purport
to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair;
Nothing has come to the attention of such
counsel that has led them to believe that, as of the date of
the Offering Memorandum or as of the Closing Date, the
Offering Memorandum, as amended or supplemented, if applicable
(except for the financial statements and other financial data
included therein (including the supporting notes), as to which
such counsel does not express any belief) contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
The statement of Willkie Farr & Gallagher in the penultimate paragraph
of this Section 9(f) shall be rendered to you at the request of the Company and
shall so state therein. In providing such statement with respect to the matters
covered by the penultimate paragraph of this Section 9(f), Willkie Farr &
Gallagher may state that their statement is based upon their participation in
the preparation of the Offering Memorandum and any amendments or supplements
thereto and review and discussion of the contents thereof, but is without
independent check or verification except as specified.
(g) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchaser), dated the Closing
Date, of Donald Manning, Esq., general counsel of the Company, to the effect
that:
(i) each of the Company and its subsidiaries has such
Authorizations of, and has made all filings with and notices
to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other
tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license
and operate its respective properties and to conduct its
business, except where the failure to have any such
Authorization or to make any such
22
<PAGE>
filing or notice would not reasonably be expected to, singly
or in the aggregate, have a Material Adverse Effect and except
for such matters as are disclosed in the Offering Memorandum.
Each such Authorization is valid and in full force and effect
and each of the Company and its subsidiaries is in compliance
with all the terms and conditions thereof and with the rules
and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and to the best of such
counsel's knowledge, no event has occurred (including the
receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such
Authorization or results or, after notice or lapse of time or
both, would result in any other impairment of the rights of
the holder of any such Authorization; except where such
failure to be valid and in full force and effect or to be in
compliance or the occurrence of any such event would not
reasonably be expected to, singly or in the aggregate, have a
Material Adverse Effect and except for such matters as are
disclosed in the Offering Memorandum;
(ii) neither the Company nor any of its subsidiaries
is in violation of its respective charter or by-laws and, to
the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its subsidiaries is in default
in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is
material to the Company and its subsidiaries, taken as a
whole, to which the Company or any or its subsidiaries is a
party or by which the Company or any of its subsidiaries or
their respective property is bound; and
(iii) to the best of such counsel's knowledge after
due inquiry other than the Amended and Restated Shareholders'
Agreement and the Resated Certificate of Incorporation, there
are no contracts, agreements or understandings between the
Company and any person granting such person the right to
require the Company to file a registration statement under the
Act with respect to any securities of the Company or to
require the Company to include such securities with the Notes
registered pursuant to any Registration Statement.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Initial Purchaser), dated the Closing
Date, of Davis Wright Tremaine LLP, special tax counsel to the Company, to the
effect that:
(i) such counsel is of the opinion ascribed to it in
the Offering Memorandum under the caption "Material U.S. Tax
Consequences to Non-U.S. Holders."
23
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(i) The Initial Purchaser shall have received on the Closing
Date an opinion, dated the Closing Date, of Latham & Watkins, counsel for the
Initial Purchaser, in form and substance reasonably satisfactory to the Initial
Purchaser.
(j) The Initial Purchaser shall have received, at the Closing
Date, a letter dated the Closing Date, as the case may be in form and substance
satisfactory to the Initial Purchaser from Arthur Andersen LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchaser
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(k) The Series A Notes shall have been approved by the NASD
for trading and duly listed in PORTAL.
(1) The Initial Purchaser shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company and the Trustee.
(m) The Company shall have executed the Registration Rights
Agreement and the Initial Purchaser shall have received an original copy
thereof, duly executed by the Company.
(n) The Company shall not have failed at or prior to the
Closing Date to perform or comply with any of the agreements herein contained
and required to be performed or complied with by the Company, as the case may
be, at or prior to the Closing Date.
(o) The Company shall have obtained the consent of its lenders
under the Credit Facility to the transactions contemplated by this Agreement,
including the issuance of the Notes and the payment of interest thereon.
(p) The Company shall have obtained the consent from the
trustee under the indenture governing the 14% Senior Discount Notes due 2009
waiving certain notice requirements in connection with the Company exercising
its right to purchase a portion of the 14% Senior Discount Notes with the
proceeds of an offering of equity securities of the Company.
(q) As of the Closing Date, the Notes shall not have received
a rating any lower than the rating received with respect to the 14% Senior
Discount Notes.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION.
This Agreement shall become effective upon the execution and delivery
of this Agreement by the parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchaser by written notice to the Company if any of the
following has occurred: (i) any outbreak or escalation of hostilities or other
national or international calamity or crisis or
24
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change in economic conditions or in the financial markets of the United
States or elsewhere that, in the Initial Purchaser's judgment, is material
and adverse and, in the Initial Purchaser's judgment, makes it impracticable
to market the Series A Notes on the terms and in the manner contemplated in
the Offering Memorandum, (ii) the suspension or material limitation of
trading in securities or other instruments on the New York Stock Exchange,
the American Stock Exchange, the Chicago Board of Options Exchange, the
Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq
National Market or limitation on prices for securities or other instruments
on any such exchange or the Nasdaq National Market, (iii) the suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in the Initial Purchaser's
reasonable judgment materially and adversely affects, or will materially and
adversely affect, the business, prospects, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in
your opinion has a material adverse effect on the financial markets in the
United States.
11. INITIAL PURCHASER'S INFORMATION.
The Company and the Initial Purchaser severally acknowledge and
agree for all purposes under this Agreement that the statements with respect
to the offering of the Notes set forth in the last paragraph of the outside
front cover page; the stabilization language in the first paragraph of page
(ii); and the first sentence of the third paragraph, the fourth sentence of
the fourth paragraph and the sixth paragraph under the caption "Plan of
Distribution" in such Offering Memorandum constitute the only information
furnished to the Company in writing by the Initial Purchaser expressly for
use in the Offering Memorandum.
12. MISCELLANEOUS.
Notices given pursuant to any provision of this Agreement shall be
addressed as follows: (i) if to the Company, to 4500 Carillon Point,
Kirkland, Washington 98033, Attention: Donald Manning, Esq. and (ii) if to
the Initial Purchaser, Donaldson, Lufkin & Jenrette Securities Corporation,
277 Park Avenue, New York, New York 10172, Attention: Syndicate Department,
or in any case to such other address as the person to be notified may have
requested in writing.
The respective indemnities, contribution agreements,
representations, warranties and other statements of the Company and the
Initial Purchaser set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of
and payment for the Series A Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the Initial
Purchaser, the officers or directors of the Initial Purchaser, any person
controlling the Initial Purchaser, the Company, the officers or directors of
the Company, or any person controlling the Company, (ii) acceptance of the
Series A Notes and payment for them hereunder and (iii) termination of this
Agreement.
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(a) If for any reason the Series A Notes are not delivered
by or on behalf of the Company as provided herein (other than as a result of
any termination of this Agreement pursuant to Section 10 or the failure to
satisfy the condition to closing set forth in Section 9(o) above), the
Company agrees to reimburse the Initial Purchaser for all out-of-pocket
expenses (including the fees and disbursements of counsel) incurred by them.
Notwithstanding any termination of this Agreement, the Company shall be
liable for all expenses which it has agreed to pay pursuant to Section 5(i)
hereof. The Company also agrees to reimburse the Initial Purchaser and their
officers, directors and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act for any and all fees and expenses (including without limitation
the fees and expenses of counsel) incurred by them in connection with
enforcing their rights under this Agreement (including without limitation its
rights under Section 8). The Initial Purchaser agrees to reimburse the
Company, and its directors and officers and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act) the Company for any and all fees and expenses (including without
limitation the fees and expenses of counsel) incurred by them in connection
with enforcing their rights under this Agreement (including without
limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Initial
Purchaser, the Initial Purchaser's directors and officers, any controlling
persons referred to herein, the directors of the Company and their respective
successors and assigns, all as and to the extent provided in this Agreement,
and no other person shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Series A Notes from the Initial Purchaser merely
because of such purchase.
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SCHEDULE A
SUBSIDIARIES
Nextel Partners Operating Corp., Inc., a DE corp.
Nextel Partners of Upstate New York, Inc., a DE corp.
Nextel WIP Lease Corp. a DE corp.
Nextel WIP License Corp., a DE corp.
NPCR, Inc., a DE corp.
NPFC, Inc., a NV corp.
Nextel Partners Equipment Corp., a NV corp.
<PAGE>
EXHIBIT A
FORM OF REGISTRATION RIGHTS AGREEMENT
i
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THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the
agreement among the Company and the Initial Purchaser.
Very truly yours,
NEXTEL PARTNERS, INC.
By: /s/ Donald J. Manning
-----------------------------
Name: Donald J. Manning
Title: Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Edward Yorke
----------------------------
Name: Edward Yorke
Title: MD
<PAGE>
AMENDMENT NO. 1 TO CREDIT AGREEMENT AND
PARENT GUARANTY AND PLEDGE AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT AND PARENT GUARANTY AND PLEDGE
AGREEMENT (this "AMENDMENT NO. 1"), dated as of March 10, 2000, among NEXTEL
PARTNERS, INC., a Delaware corporation (the "PARENT"), NEXTEL PARTNERS OPERATING
CORP., a Delaware corporation (the "BORROWER"), each of the entities identified
as Consenting Obligors on the signature pages hereto (collectively, the
"CONSENTING OBLIGORS"), the various financial institutions from time to time
parties to the Credit Agreement (as defined below) as lenders (collectively, the
"LENDERS"), DLJ CAPITAL FUNDING, INC., as syndication agent (the "SYNDICATION
AGENT") for the Lenders, THE BANK OF NEW YORK, as documentation agent (the
"DOCUMENTATION AGENT") for the Lenders, BANK OF MONTREAL, as administrative
agent (the "ADMINISTRATIVE AGENT") for the Lenders, and Donaldson, Lufkin &
Jenrette Securities Corporation, as lead arranger (the "LEAD ARRANGER") and sole
book running manager (the "SOLE BOOK RUNNING MANAGER") for the Lenders (the
Syndication Agent and the Administrative Agent are collectively referred to
herein as the "AGENTS" and each as an "AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Syndication Agent, the
Documentation Agent and the Administrative Agent are parties to an Amended and
Restated Credit Agreement, dated as of September 9, 1999 (as in effect from time
to time, the "CREDIT AGREEMENT");
WHEREAS, the Parent and the Administrative Agent are parties to the
Parent Guaranty and Pledge Agreement, dated as of January 29, 1999 (as in effect
from time to time, the "PARENT GUARANTY AND PLEDGE AGREEMENT");
WHEREAS, the Parent has issued shares of Class A common stock of the
Parent to the public pursuant to an initial, primary offering registered under
the Securities Act of 1933, as amended (the "INITIAL PUBLIC OFFERING");
WHEREAS, in connection with the Initial Public Offering, the Parent
proposes to issue not more than $200,000,000 of its 11% senior unsecured
notes due 2010 (together with any other notes having substantially
identical terms issued in exchange therefor, the "NEW SENIOR NOTES", with the
issuance thereof being herein referred to as the "NEW SENIOR NOTES ISSUANCE");
WHEREAS, the Parent further contemplates the issuance of not more than
$200,000,000 of its additional senior unsecured notes (together with any other
notes having substantially identical terms issued in exchange therefor, the
"ADDITIONAL SENIOR NOTES", with the issuance thereof being herein referred to as
the "ADDITIONAL SENIOR NOTES ISSUANCE"), upon terms and
<PAGE>
conditions (including as to pricing, maturity and covenants) substantially
similar to those applicable to the New Senior Notes;
WHEREAS, in connection with the New Senior Notes Issuance and any
Additional Senior Notes Issuance, each of the Parent and the Borrower has
requested the Lenders to amend certain terms and provisions of the Credit
Agreement and the Parent Guaranty and Pledge Agreement as set forth herein;
WHEREAS, all Loans and Obligations (such capitalized terms, and other
terms used herein, to have the meanings provided in PART I) shall continue to be
and shall be fully guaranteed by the Parent Guaranty and Pledge Agreement and
the Subsidiary Guaranty and fully secured by, among other things, the Parent
Guaranty and Pledge Agreement, the Borrower Security and Pledge Agreement and
the Subsidiary Security and Pledge Agreement; and
WHEREAS, each of Parent and the Borrower desires, and each of the
Lenders are willing, upon the terms and conditions hereinafter set forth, to
amend the Credit Agreement and the Parent Guaranty and Pledge Agreement as set
forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. CERTAIN DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment No. 1, including its
preamble and recitals, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"ADDITIONAL SENIOR NOTES" is defined in the FIFTH RECITAL.
"ADDITIONAL SENIOR NOTES ISSUANCE" is defined in the FIFTH RECITAL.
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"AGENT" and "AGENTS" are defined in the PREAMBLE.
"AMENDMENT NO. 1" is defined in the PREAMBLE.
"AMENDMENT NO. 1 EFFECTIVE DATE" is defined in SUBPART 5.1.
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"BORROWER" is defined in the PREAMBLE.
"CONSENTING OBLIGORS" means each of the entities identified as such on
the signature pages hereof.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"INITIAL PUBLIC OFFERING" is defined in the THIRD RECITAL.
"LEAD ARRANGER" is defined in the PREAMBLE.
"LENDERS" is defined in the PREAMBLE.
"NEW SENIOR NOTES" is defined in the FOURTH RECITAL.
"NEW SENIOR NOTES ISSUANCE" is defined in the FOURTH RECITAL.
"PARENT" is defined in the PREAMBLE.
"PARENT GUARANTY AND PLEDGE AGREEMENT" is defined in the SECOND
RECITAL.
"SOLE BOOK RUNNING MANAGER" is defined in the PREAMBLE.
"SYNDICATION AGENT" is defined in the PREAMBLE.
SUBPART 1.2. OTHER DEFINITIONS. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment No. 1, including its
preamble and recitals, have the meanings ascribed thereto in the Credit
Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and
each other similar reference and each reference to "this Agreement" and each
other similar reference contained in the Credit Agreement, the Parent Guaranty
and Pledge Agreement or any other Loan Document, as the case may be, shall from
and after the Amendment No. 1 Effective Date refer to the Credit Agreement or
the Parent Guaranty and Pledge Agreement, as the case may be, as amended hereby.
PART II
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Credit Agreement is hereby amended in accordance with this
PART II. Except to the extent amended by this Amendment No. 1, the Credit
Agreement is and shall continue to be in full force and effect and is hereby
ratified and confirmed in all respects.
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<PAGE>
SUBPART 2.1. AMENDMENTS TO ARTICLE I. Article I of the Credit Agreement is
amended as set forth in this SUBPART 2.1.
(a) The following new definitions are added to Section 1.1 of the
Credit Agreement in their appropriate alphabetical order:
"ADDITIONAL SENIOR NOTES" means up to $200,000,000 in
aggregate principal amount of 11% senior unsecured notes of
the Parent, issued pursuant to the Additional Senior Notes
Indenture, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with
SECTION 7.2.10, together with any other notes having
substantially identical terms issued in exchange therefor.
"ADDITIONAL SENIOR NOTES INDENTURE" means the
Indenture entered into by and between the Parent and The Bank
of New York, as trustee thereunder, as the same may be
amended, supplemented, amended and restated or otherwise
modified from time to time in accordance with SECTION 7.2.10.
"ADDITIONAL SENIOR NOTES ISSUANCE" means the issuance
of the Additional Senior Notes pursuant to the Additional
Senior Notes Indenture and in accordance with the terms and
conditions contained in clause (a)(ii) of Section 5.9 of the
Parent Guaranty and Pledge Agreement, as amended by
Amendment No. 1.
"AMENDMENT NO. 1" means Amendment No. 1 to Credit
Agreement and Parent Guaranty and Pledge Agreement, dated as
of March 10, 2000, among the Parent, the Borrower, the
Consenting Obligors, the Lenders, the Syndication Agent, the
Documentation Agent and the Administrative Agent.
"AMENDMENT NO. 1 EFFECTIVE DATE" shall have the
meaning set forth in Subpart 5.1 of Amendment No. 1.
"NEW SENIOR NOTES" means the $200,000,000 in
aggregate principal amount of senior unsecured notes due 2010
of the Parent, issued pursuant to the New Senior Notes
Indenture, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with
SECTION 7.2.10, together with any other notes having
substantially identical terms issued in exchange therefor.
"NEW SENIOR NOTES INDENTURE" means the Indenture
entered into by and between the Parent and The Bank of New
York, as trustee thereunder, as in effect on the date hereof
and as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time in accordance
with SECTION 7.2.10.
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<PAGE>
"NEW SENIOR NOTES ISSUANCE" means the issuance of the
New Senior Notes pursuant to the New Senior Notes Indenture
on the Amendment No. 1 Effective Date.
"PUBLIC OFFERING" means for any Person, any sale of
the Capital Stock of such Person to the public pursuant to any
primary offering registered under the Securities Act of 1933,
as amended.
(b) The definition of "Net Debt Proceeds" contained in Section
1.1 of the Credit Agreement is amended to replace the parenthetical
text contained in the second and third lines thereof with the following
parenthetical text:
"(other than Debt incurred as part of the Transaction
or the Option Capitalization Transaction, other Debt
permitted by SECTION 7.2.2, and any proceeds of the
New Senior Notes Issuance or the Additional Senior
Notes Issuance contributed by the Parent to the
Borrower),".
(c) The definition of "Senior Debt" contained in Section 1.1
of the Credit Agreement is amended to insert the words ", the New
Senior Notes or the Additional Senior Notes" immediately following the
words "Senior Notes" contained in the second line thereof.
(d) The definition of "Senior Notes Documents" contained in
Section 1.1 of the Credit Agreement is deleted.
(e) The definition of "Transaction Documents" contained in
Section 1.1 of the Credit Agreement is amended to insert the words ",
the New Senior Notes Issuance, the Additional Senior Notes Issuance"
immediately following the words "the Senior Discount Note Issuance"
contained in the seventh line thereof.
SUBPART 2.2. AMENDMENTS TO ARTICLE VII. Article VII of the Credit
Agreement is amended as set forth in this SUBPART 2.2.
(a) Section 7.2.6 of the Credit Agreement is amended as
follows:
(i) The words ", any New Senior Notes and any
Additional Senior Notes" are inserted immediately following
the words "Senior Notes" contained in the fourth and
seventeenth lines of the first paragraph thereof.
(ii) The words "the New Senior Notes and the
Additional Senior Notes" are inserted immediately following
the words "Senior Notes" contained in clause (a)(ii) thereof.
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<PAGE>
(b) Section 7.2.10 of the Credit Agreement is amended to
insert the words (i) ", any New Senior Notes or any Additional Senior
Notes" immediately following the words "any Senior Discount Notes"
contained in the fifth line thereof and (ii) ", the New Senior Notes
Issuance or the Additional Senior Notes Issuance" immediately following
the words "the Senior Discount Note Issuance" contained in the sixth
line thereof.
PART III
AMENDMENT TO PARENT GUARANTY
AND PLEDGE AGREEMENT, CONSENT
Effective on (and subject to the occurrence of) the Amendment No. 1
Effective Date, the Parent Guaranty and Pledge Agreement is hereby amended in
accordance with this PART III. Except to the extent amended by this Amendment
No. 1, the Parent Guaranty and Pledge Agreement is and shall continue to be in
full force and effect and is hereby ratified and confirmed in all respects.
SUBPART 3.1. AMENDMENT TO ARTICLE V. Section 5.9 of the Parent Guaranty
and Pledge Agreement is amended to replace existing clause (a) thereof with a
new clause (a) to read in its entirety as follows:
"(a) Indebtedness in respect of (i) the Senior Notes and the
New Senior Notes and (ii) the Additional Senior Notes; PROVIDED, THAT,
(A) the aggregate outstanding principal amount of
Indebtedness evidenced by the Additional Senior Notes shall
not exceed $200,000,000 at any time outstanding and the
Additional Senior Notes Issuance shall have occurred not later
than the one-year anniversary of the Amendment No. 1 Effective
Date;
(B) the Agents shall have received (with copies for
each Lender that shall have expressly requested copies
thereof) a fully-executed copy of the Additional Senior Notes
Indenture, and all certificates, opinions and other documents
delivered thereunder, pursuant to which the Additional Senior
Notes shall have been issued upon terms and conditions
(including as to pricing, maturity and covenants)
substantially similar to those contained in the New Senior
Notes Indenture and in form and substance satisfactory to the
Agents;
(C) no Default shall have occurred and be continuing
on the date of the Additional Senior Notes Issuance, nor would
a Default result from the Additional Senior Notes Issuance;
(D) after giving effect to the Additional Senior
Notes Issuance, the Parent and its Subsidiaries shall be in
PRO FORMA compliance with the covenants set forth
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<PAGE>
in Section 7.2.4 of the Credit Agreement for the most recent
full Fiscal Quarter immediately preceding the date of the
Additional Senior Notes Issuance for which relevant financial
information has been delivered pursuant to clause (a) or (b)
of Section 7.1.1 of the Credit Agreement;
(E) all Net Debt Proceeds received by the Parent from
the Additional Senior Notes Issuance shall be applied by the
Parent to finance Capital Expenditures associated with the
Network Build-out and ongoing working capital and general
corporate needs of the Borrower and its Subsidiaries or to
redeem, repurchase or exchange all or part of the Senior
Discount Notes; and
(F) an Authorized Officer of the Parent shall have
delivered a certificate to the Agents in form and substance
satisfactory to the Agents (including calculation of
compliance with the covenants set forth in Section 7.2.4 of
the Credit Agreement) certifying as to the accuracy of CLAUSES
(A) through (E) above; and"
By their signatures below, each of the Lenders consents, subject to the
terms and conditions set forth in this Amendment No. 1, the Credit Agreement and
the Parent Guaranty and Pledge Agreement (each as modified by this Amendment No.
1), to the New Senior Notes Issuance and Additional Senior Notes Issuance and
the incurrence of the Indebtedness in respect of the New Senior Notes and the
Additional Senior Notes; PROVIDED, HOWEVER, that all of the Net Debt Proceeds
received by the Parent from the New Senior Notes Issuance and the Additional
Senior Notes Issuance shall be applied by the Parent to finance Capital
Expenditures associated with the Network Build-out and the ongoing working
capital and general corporate needs of the Borrower and its Subsidiaries or, in
the case of the Additional Senior Notes Issuance only, to redeem, repurchase or
exchange all or part of the Senior Discount Notes.
PART IV
AFFIRMATION AND CONSENT
SUBPART 4.1. ACKNOWLEDGMENT AND REAFFIRMATION. Each of the Parent and
the Consenting Obligors hereby acknowledges the amendments to the Credit
Agreement and the Parent Guaranty and Pledge Agreement pursuant to the terms and
provisions set forth in this Amendment No. 1. Each of the Parent and the
Consenting Obligors hereby reaffirms, as of the Amendment No. 1 Effective Date,
(i) the covenants and agreements contained in each Loan Document to which it is
a party, including, in each case, as such covenants and agreements may be
modified by this Amendment No. 1 and the transactions contemplated hereby, and
(ii) its guarantee of payment of, and grant of security interest to secure, all
Obligations under the Credit Agreement, the Notes and each other Loan Document
pursuant to the Security Documents to which the Parent or such Consenting
Obligor is a party.
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<PAGE>
SUBPART 4.2. REPRESENTATIONS AND WARRANTIES, ETC. Each of the Parent
and the Consenting Obligors hereby certifies that, as of the date hereof (both
before and after giving effect to the occurrence of the Amendment No. 1
Effective Date), the representations and warranties made by it contained in the
Loan Documents to which it is a party are true and correct in all material
respects with the same effect as if made on the date hereof (unless stated to
relate solely to an earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier
date).
SUBPART 4.3. LOAN DOCUMENTS. Each of the Parent and the Consenting
Obligors further confirms that each Loan Document to which it is a party is and
shall continue to be in full force and effect and the same is hereby ratified
and confirmed in all respects, except that upon the occurrence of the Amendment
No. 1 Effective Date, all references in such Loan Documents to the "Credit
Agreement", "Parent Guaranty and Pledge Agreement", "Loan Documents",
"thereunder", "thereof", or words of similar import shall mean the Credit
Agreement, the Parent Guaranty and Pledge Agreement and the Loan Documents, as
the case may be, in each case after giving effect to the amendments and other
modifications provided for in this Amendment No. 1.
SUBPART 4.4. COURSE OF DEALING, ETC. Each of the Parent and the
Consenting Obligors hereby acknowledges and agrees that the acceptance by the
Agents and each Lender of this document shall not be construed in any manner to
establish any course of dealing on the Agent's or Lender's part, including the
providing of any notice or the requesting of any acknowledgment not otherwise
expressly provided for in any Loan Document with respect to any future
amendment, waiver, supplement or other modification to any Loan Document or any
arrangement contemplated by any Loan Document.
PART V
CONDITIONS TO EFFECTIVENESS
SUBPART 5.1. EFFECTIVE DATE. This Amendment No. 1 shall be and become
effective upon the prior or concurrent satisfaction of each of the conditions
precedent set forth in this SUBPART 5.1 (the "AMENDMENT NO. 1 EFFECTIVE DATE").
SUBPART 5.1.1. EXECUTION OF COUNTERPARTS. The Agents shall have
received counterparts of this Amendment No. 1 duly executed by the Parent, the
Borrower, the Consenting Obligors and the Required Lenders (or evidence thereof
satisfactory to the Agents). The delivery of an executed counterpart hereof by
the Borrower shall constitute a representation and warranty by the Borrower
that, on the Amendment No. 1 Effective Date, after giving effect to this
Amendment No. 1, all statements set forth in Article VI of the Credit Agreement,
as amended by this Amendment No. 1, are true and correct as of such date (unless
stated to relate solely to an earlier date, in which case such representation
and warranty were true and correct in all material respects as of such earlier
date).
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SUBPART 5.1.2. RESOLUTIONS, ETC. The Agents shall have received from
the Parent, the Borrower and each Consenting Obligor, as applicable, (i) a copy
of a good standing certificate, dated a date reasonably close to the Amendment
No. 1 Effective Date, for each such Person and (ii) a certificate, dated the
Amendment No. 1 Effective Date and with counterparts for each Lender, duly
executed and delivered by such Person's Secretary or Assistant Secretary as to
(a) resolutions of each such Person's board of directors then
in full force and effect authorizing, to the extent relevant, all
aspects of the New Senior Notes Issuance and the Additional Senior
Notes Issuance applicable to such Person, and the execution, delivery
and performance of Amendment No. 1 and each other Loan Document to be
executed by such Person and the transactions contemplated hereby and
thereby;
(b) the incumbency and signatures of those of its officers or
managing members authorized to act with respect to Amendment No. 1 and
each other Loan Document to be executed by such Person; and
(c) the full force and validity of each Organic Document of
such Person and copies thereof,
upon which certificates each Agent and each Lender may conclusively rely until
it shall have received a further certificate of the Secretary, Assistant
Secretary or other duly authorized representative of any such Person canceling
or amending the prior certificate of such Person.
SUBPART 5.1.3. NEW SENIOR NOTES INDENTURE. The Agents shall have
received (with copies for each Lender that shall have expressly requested copies
thereof) a fully-executed copy of the New Senior Notes Indenture and all
certificates, opinions and other documents delivered thereunder, certified to be
true and complete copies thereof by an Authorized Officer of the Parent.
SUBPART 5.1.4. IPO PROCEEDS. The Agents shall have received evidence
satisfactory to each of them that the Parent received funded proceeds from the
Initial Public Offering of not less than $450,000,000.
SUBPART 5.1.5 OPINION OF COUNSEL. The Agents shall have received an
opinion, dated the Amendment No. 1 Effective Date and addressed to the Agents
and all Lenders from Friedman Kaplan & Seiler LLP, New York counsel to the
Parent, the Borrower and each of the Consenting Obligors, satisfactory in form
and substance to the Syndication Agent and its counsel. Such legal opinion shall
cover such matters incident to the transactions contemplated by Amendment No. 1
as the Syndication Agent may reasonably require.
SUBPART 5.1.6. PAYMENT OF FEES AND EXPENSES. The Administrative
Agent shall have received, for the account of each Lender which shall have
delivered to the Agents a duly executed counterpart of this Amendment No. 1
by March 7, 2000, an amendment fee in the amount of .10% of such Lender's
Loans and Commitments. In addition, the Borrower hereby
-9-
<PAGE>
agrees to pay and reimburse the Syndication Agent for all its reasonable fees
and expenses incurred in connection with the negotiation, preparation, execution
and delivery of this Amendment No. 1 and related documents, including all
reasonable fees and disbursements of counsel to the Syndication Agent.
SUBPART 5.1.7. SATISFACTORY LEGAL FORM. The Syndication Agent and its
counsel shall have received all information, and such counterpart originals or
such certified or other copies of such materials, as the Syndication Agent or
its counsel may reasonably request, and all legal matters incident to the
effectiveness of this Amendment No. 1 shall be satisfactory to the Syndication
Agent and its counsel. All documents executed or submitted pursuant hereto or
in connection herewith shall be reasonably satisfactory in form and substance to
the Syndication Agent and its counsel.
SUBPART 5.2. LIMITATION. Except as expressly provided hereby, all of
the representations, warranties, terms, covenants and conditions of the Credit
Agreement, the Parent Guaranty and Pledge Agreement and each other Loan Document
shall remain unamended and unwaived and shall continue to be, and shall remain,
in full force and effect in accordance with their respective terms. The
amendments, modifications and consents set forth herein shall be limited
precisely as provided for herein, and shall not be deemed to be a waiver of,
amendment of, consent to or modification of any other term or provision of the
Credit Agreement or the Parent Guaranty and Pledge Agreement or of any term or
provision of any other Loan Document or other instrument referred to therein or
herein, or of any transaction or further or future action on the part of the
Parent, the Borrower or any other Person which would require the consent of the
Agents or any of the Lenders under the Credit Agreement, the Parent Guaranty and
Pledge Agreement or any such other Loan Document or instrument.
PART VI
MISCELLANEOUS
SUBPART 6.1. CROSS-REFERENCES. References in this Amendment No. 1 to
any Part or Subpart are, unless otherwise specified, to such Part or Subpart
of this Amendment No. 1. References in this Amendment No. 1 to any Article or
Section are, unless otherwise specified, to such Article or Section of the
Credit Agreement or the Parent Guaranty and Pledge Agreement, as the case may
be.
SUBPART 6.2. LOAN DOCUMENT. This Amendment No. 1 is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated therein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement, as amended hereby, including
Article X of the Credit Agreement.
-10-
<PAGE>
SUBPART 6.3. COUNTERPARTS, ETC. This Amendment No. 1 may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
Agreement.
SUBPART 6.4. GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SUBPART 6.5. SUCCESSORS AND ASSIGNS. This Amendment No. 1 shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SUBPART 6.6. PAYMENT OF FEES AND EXPENSES. The Borrower agrees to pay
and reimburse the Agents for all its reasonable expenses incurred in connection
with the negotiation, preparation, execution and delivery of this Amendment No.
1 and related documents, including all reasonable fees and disbursements of
counsel to the Agents.
[INTENTIONALLY LEFT BLANK - - SIGNATURE PAGES FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be executed by their respective officers hereunto duly authorized as of the
day and year first above written.
PARENT: NEXTEL PARTNERS, INC.,
a Delaware corporation
By: /s/ Donald J. Manning
---------------------------
Name: Donald J. Manning
Title: Vice President
BORROWER: NEXTEL PARTNERS OPERATING CORP.,
a Delaware corporation
By: /s/ Donald J. Manning
---------------------------
Name: Donald J. Manning
Title: Vice President
CONSENTING OBLIGORS: NPCR, INC.,
a Delaware corporation
By: /s/ Donald J. Manning
---------------------------
Name: Donald J. Manning
Title: Vice President
NEXTEL PARTNERS OF UPSTATE
NEW YORK, INC.,
a Delaware corporation
By: /s/ Donald J. Manning
---------------------------
Name: Donald J. Manning
Title: Vice President
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