<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 1, 2000
<TABLE>
<S> <C>
METRICOM, INC. METRICOM FINANCE, INC.
(Exact name of registrant as specified (Exact name of registrant as specified
in its charter) in its charter)
DELAWARE DELAWARE
(State or other jurisdiction (State of or other jurisdiction
of incorporation) of incorporation)
77-0294597 77-0529272
(IRS Employer Identification No.) (IRS Employer Identification No.)
0-19903 333-91359-01
(Commission File Number) (Commission File Number)
</TABLE>
980 UNIVERSITY AVENUE,
LOS GATOS, CALIFORNIA 95030-2375
(Address of principal executive offices and zip code)
Registrants' telephone number, including area code: (408) 399-8200
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C>
1.1 Form of Underwriting Agreement and related
Terms Agreement
4.1 Form of Supplemental Indenture for Senior Notes
</TABLE>
2.
<PAGE> 3
SIGNATURES OF METRICOM, INC.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 7, 2000 METRICOM, INC.
By: /s/ James E. Wall
-------------------------------
James E. Wall
Chief Financial Officer
SIGNATURES OF METRICOM FINANCE, INC.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 7, 2000 METRICOM, INC.
By: /s/ James E. Wall
-------------------------------
James E. Wall
Chief Financial Officer
3.
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
1.1 Form of Underwriting Agreement and related Terms Agreement
4.1 Form of Supplemental Indenture for Senior Notes
</TABLE>
<PAGE> 1
EXHIBIT 1.1
METRICOM, INC.
METRICOM FINANCE, INC.
UNDERWRITING AGREEMENT
February 1, 2000
TO: LEHMAN BROTHERS INC.
SALOMON SMITH BARNEY INC.
CHASE SECURITIES INC.
HAMBRECHT & QUIST LLC
J.P. MORGAN SECURITIES INC.
MERRILL, LYNCH, PIERCE, FENNER & SMITH INCORPORATED
As Representatives of the Several Underwriters
C/O LEHMAN BROTHERS INC.
3 World Financial Center
New York, New York 10285
Dear Sirs:
Metricom, Inc., a Delaware corporation (the "Company"), and
Metricom Finance, Inc., a Delaware corporation ("Finance Sub" and, together with
the Company, the "Issuers"), propose to issue and sell from time to time, either
together or separately, certain of their (i) senior debt securities (the "Senior
Notes"), (ii) subordinated debt securities (the "Subordinated Notes," and
together with the Senior Notes, the "Debt Securities"), (iii) shares of the
Company's common stock, par value $.001 per share (the "Common Stock"), and/or
(iv) warrants to purchase shares of Common Stock (the "Warrants") in one or more
offerings on terms determined at the time of sale and set forth in a term
agreement in the form of Exhibit A hereto (the "Terms Agreement"). The Debt
Securities may be convertible into shares of Common Stock as set forth in the
applicable Terms Agreement relating thereto.
The Senior Notes are to be issued under a Senior Indenture,
dated as of December 29, 1999, to be supplemented by one or more supplemental
indentures dated subsequent to the date hereof, and may be amended and further
supplemented (the "Senior Supplemental Indenture" and, together with the Senior
Indenture, the "Senior Indenture"), between the Issuers and Bank One Trust
Company, N.A., as trustee (the "Senior Trustee"). The Subordinated Notes are to
be issued under a Subordinated Indenture dated as of December 29, 1999, to be
supplemented by one or more supplemental indentures dated subsequent to the date
hereof, and may be amended or further supplemented (the "Supplemental
Subordinated Indenture" and, together with the Subordinated Indenture, the
"Subordinated Indenture"), between the Issuers and Bank One Trust Company, N.A.,
as trustee (the "Subordinated Trustee," and together with the Senior Trustee,
the "Trustees"). The Senior Indenture and the Subordinated Indenture are
collectively referred to herein as the "Indentures." The Senior Notes and the
Subordinated Notes may have varying designations, maturities, rates and times of
payment of interest, if any, selling prices, redemption terms, if any, exchange
terms, if any, conversion terms (in the case of Subordinated Notes) and other
<PAGE> 2
specific terms as set forth in the applicable Terms Agreement relating thereto.
The Senior Notes and the Subordinated Notes may be issued alone or together with
Warrants as units with such terms as set forth in the applicable Terms Agreement
relating thereto.
The Warrants are to be issued under a Warrant Agreement, to be
dated subsequent to the date hereof (the "Warrant Agreement"), between the
Company and the warrant agent named therein (the "Warrant Agent"). The Warrants
may be issued with respect to varying numbers of shares of Common Stock and with
varying exercise prices, antidilution provisions and other specific terms as set
forth in the applicable Terms Agreement relating thereto. Warrants may be issued
alone or together with the Debt Securities as units with such terms as set forth
in the applicable Terms Agreement relating thereto.
The Debt Securities, Warrants and Common Stock, to be issued and
sold as specified in the applicable Terms Agreement, shall collectively be
referred to herein as the "Offered Securities." As used herein, unless the
context otherwise requires, the term "Underwriters" shall mean the firm or firms
specified as Underwriter or Underwriters in the applicable Terms Agreement
relating to the Offered Securities and the term "you" shall mean the Underwriter
or Underwriters, if no underwriting syndicate is purchasing the Offered
Securities, or the representative or representatives of the Underwriters, if an
underwriting syndicate is purchasing the Offered Securities, as specified in the
applicable Terms Agreement.
Whenever the Issuers or the Company, as applicable, determine to
make an offering of Offered Securities, the Issuers or the Company, as
applicable, will enter into a Terms Agreement providing for the sale of the
applicable Offered Securities to, and the purchase and offering thereof by, the
Underwriters. The Terms Agreement relating to the Offered Securities shall
specify the type of Offered Securities to be issued, the names of the
Underwriters participating in such offering (subject to substitution as provided
in Section 8 hereof), the principal amount or number of Offered Securities that
each such Underwriter severally agrees to purchase, the price at which the
Offered Securities are to be purchased by the Underwriters from the Issuers or
the Company, as applicable, the public offering price, the time and place of
delivery and payment and other specific terms. In addition, each Terms Agreement
shall specify whether the Issuers or the Company, as applicable, have agreed to
grant to the Underwriters an option to purchase additional Offered Securities to
cover over-allotments, if any, and the amount of Offered Securities subject to
such option (the "Option Securities"). As used herein, the term "Offered
Securities" shall include the Option Securities, if any. The Terms Agreement may
take the form of an exchange of any standard form of written telecommunication
between you and the Issuers or the Company, as applicable. Each offering of
Offered Securities will be governed by this Agreement, as supplemented by the
applicable Terms Agreement, and this Agreement and such Terms Agreement shall
inure to the benefit of and be binding upon the Issuers or the Company, as
applicable, and each Underwriter participating in the offering of such Offered
Securities, except as set forth in Section 12 hereof.
The Issuers have prepared and filed with the Securities and
Exchange Commission (the "Commission") registration statements on Form S-3 (File
Nos. 333-91359
2
<PAGE> 3
and 333-95669), each including a prospectus, collectively relating to the
Offered Securities and the offering thereof from time to time in accordance with
Rule 415 under the Securities Act of 1933, as amended (the "Securities Act").
Such registration statements have been declared effective by the Commission. As
provided in Section 4(a), a final prospectus supplement for each applicable
prospectus reflecting the terms of the Offered Securities covered thereby, the
terms of the offering thereof and the other matters set forth therein will be
prepared and filed pursuant to Rule 424 under the Securities Act. Each final
prospectus supplement or prospectus supplements, in the form first filed after
the date of the applicable Terms Agreement pursuant to Rule 424, is herein
referred to as a "Prospectus Supplement." Such registration statements, as
amended at the date of the applicable Terms Agreement, including the exhibits
thereto and the documents incorporated by reference therein, are herein called
the "Registration Statements," each being called a "Registration Statement,"
which also means such registration statements as amended at the Effective Time
(as defined below). The prospectuses included in and relating to all offerings
of securities under the Registration Statements, as supplemented by any
Prospectus Supplement, are herein called the "Prospectuses", except that, if
such prospectuses are amended or supplemented on or prior to the date on which
any Prospectus Supplement is first filed pursuant to Rule 424, the term
"Prospectus" shall refer to the prospectus as so amended or supplemented and as
supplemented by any Prospectus Supplement, in either case including any
documents filed by the Issuers with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that are incorporated by
reference therein. As used herein, "Effective Time" means the date and the time
as of which the Registration Statements, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus Supplement"
means each prospectus supplement included in such registration statement, or
amendments thereof, after the Registration Statement became effective under the
Securities Act but containing a "Subject to Completion" legend comparable to
that contained in paragraph 10 of Item 501 under Regulation S-K of the Rules and
Regulations.
1. Representations, Warranties and Agreements of the
Issuers. The Issuers represent, warrant and agree that:
(a) The Issuers meet the requirements for use of Form
S-3 under the Securities Act and the rules and regulations of
the Commission thereunder (the "Rules and Regulations"). The
Registration Statement (File No. 333-91359) was declared
effective by the Commission on December 30, 1999 and the
Registration Statement (File No. 333-95669) was declared
effective on February 1, 2000.
(b) Each Registration Statement and any amendments
thereto conformed when it became effective, and each
Prospectus Supplement and any further amendments or
supplements to the Registration Statements or any Prospectus
Supplement will when they were or are filed with the
Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and
Regulations and did not, as of the applicable effective date
(as to the Registration Statement and any amendment thereto)
and as of the applicable filing date (as to each Prospectus
Supplement and any
3
<PAGE> 4
supplement thereto) contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the
case of any Prospectus Supplement, in light of the
circumstances under which they were made) not misleading;
provided, however, that no representation or warranty is made
as to information contained in or omitted from a Registration
Statement or any Prospectus Supplement in reliance upon and in
conformity with written information furnished to the Issuers
through any Underwriter specifically for inclusion therein.
(c) Each Registration Statement and any amendment
thereto conformed, and each Prospectus Supplement and any
further amendments or supplements to the Registration
Statements or any Prospectus Supplement will, when they were
or are filed with the Commission, as the case may be, conform
in all respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "TIA") and the rules and regulations
thereunder. At each Delivery Date, the applicable Indenture,
if any, will comply in all material respects with the
requirements of the TIA and the rules and regulations
thereunder.
(d) The documents incorporated by reference or deemed to
be incorporated in any Prospectus or Prospectus Supplement
pursuant to Item 12 of Registration Statements on Form S-3
under the Securities Act, at the time they were filed with the
Commission, complied or will comply in all material respects
with the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder (the "Exchange Act
Regulations") and, when read together and with the other
information in the Prospectus, as of the Effective Date of the
Registration Statement and any amendment thereto, did not and
will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(e) The Issuers have been duly incorporated and are
validly existing as corporations in good standing under the
laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as
foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of
their respective businesses requires such qualification,
except where the failure to be so qualified would not have a
material adverse effect on the business, financial condition
or results of operations of the Issuers, and have all power
and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are
engaged; and none of the subsidiaries of the Company is a
"significant subsidiary," as such term is defined in Rule 405
of the Rules and Regulations.
(f) At each Delivery Date (as defined in Section 3), the
Issuers or the Company, as applicable, will have an authorized
capitalization as set forth in,
4
<PAGE> 5
or included in, the applicable Prospectus Supplement, and all
of the issued shares of capital stock of the Issuers or the
Company, as applicable, have been duly and validly authorized
and issued, are fully paid and non-assessable and conform in
all material respects to the description thereof contained in
the Registration Statement and Prospectus; and all of the
issued shares of capital stock of each subsidiary of the
Issuers or the Company, as applicable, have been duly and
validly authorized and issued and are fully paid and
non-assessable and are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities
or claims.
(g) If the Offered Securities include Common Stock, such
shares of Common Stock to be issued and sold by the Issuers or
the Company, as applicable, to the Underwriters have been duly
and validly authorized and, when issued and delivered against
payment therefor as provided herein and in the applicable
Terms Agreement, will be duly and validly issued, fully paid
and non-assessable and the terms of such Common Stock conform
in all material respects to the description thereof contained
in each Prospectus Supplement or contained in or incorporated
by reference in the Prospectus.
(h) This Agreement has been duly authorized, executed
and delivered by the Issuers or the Company, as applicable,
and upon execution and delivery of each Terms Agreement by the
Issuers or the Company, as applicable, such Terms Agreement
shall have been duly authorized, executed and delivered by the
Issuers or the Company, as applicable.
(i) The execution, delivery and performance of this
Agreement and each Terms Agreement by the Issuers or the
Company, as applicable, and the consummation of the
transactions contemplated hereby and thereby will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Issuers or the Company, as applicable,
or any of its subsidiaries is a party or by which the Issuers
or the Company, as applicable, or any of their subsidiaries is
bound or to which any of the property or assets of the Issuers
or the Company, as applicable, or any of their subsidiaries is
subject, except where such a breach, violation or default
would not have a material adverse effect on the business,
financial condition or results of operations of the Issuers,
nor will such actions result in any violation of the
provisions of the charter or by-laws of the Issuers or the
Company, as applicable, or any of their subsidiaries, nor will
such actions result in a violation of any statute or any
order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Issuers or Company, as
applicable, or any of their subsidiaries or any of their
properties or assets, except where such a violation would not
have a material adverse effect on the business, financial
condition or results of operations of the Issuers; and except
for the registration of the Offered Securities under the
Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state
5
<PAGE> 6
or foreign securities laws in connection with the purchase and
distribution of the Offered Securities by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance
of this Agreement or the applicable Terms Agreement by the
Issuers or the Company, as applicable, and the consummation of
the transactions contemplated hereby and thereby.
(j) There are no contracts, agreements or understandings
between the Issuers or the Company, as applicable, and any
person granting such person the right (other than rights which
have been waived or satisfied) to require the Issuers or the
Company, as applicable, to file a registration statement under
the Securities Act with respect to any securities of the
Issuers or the Company, as applicable owned or to be owned by
such person or to require the Issuers or the Company, as
applicable, to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Issuers or the Company, as applicable,
under the Securities Act.
(k) Except as described in each Prospectus Supplement,
the Issuers or the Company, as applicable, have not and will
not have as of any Delivery Date sold or issued any shares of
Common Stock or Debt Securities during the six-month period
preceding the date of such Prospectus Supplement, including
any sales pursuant to Rule 144A under, or Regulations D or S
of, the Securities Act, other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other
employee compensation plans or pursuant to outstanding
options, rights or warrants.
(l) None of the Issuers or the Company, as applicable,
or any of their subsidiaries has sustained, since the date of
the latest financial statements included or incorporated by
reference in each Prospectus or subsequent Prospectus
Supplement, any material loss or interference with its
business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise
than as set forth or contemplated in each Prospectus
Supplement; and, since such date, there has not been any
change in the capital stock or long-term debt of the Issuers
or the Company, as applicable, or any of their subsidiaries or
any material adverse change, or any development involving a
prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders'
equity or results of operations of the Issuers or the Company,
as applicable, and their subsidiaries, otherwise than as set
forth or contemplated in the Prospectus or each Prospectus
Supplement.
(m) The historical and pro forma financial statements
(including the related notes and supporting schedules) filed
as part of the Registration Statement or included in, or
incorporated by reference in, each Prospectus or
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<PAGE> 7
subsequent Prospectus Supplement present fairly the financial
condition and results of operations of the entities purported
to be shown thereby, at the dates and for the periods
indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved. The pro forma financial
statements have been prepared on a basis consistent with such
historical statements of the Issuers or the Company, as
applicable, except for the pro forma adjustments specified
therein, and give effect to assumptions made on a reasonable
basis and in good faith and present fairly the historical and
proposed transactions contemplated by each Prospectus
Supplement, each applicable Terms Agreement and this
Agreement. The other financial and statistical information and
data included in each Prospectus or subsequent Prospectus
Supplement, historical and pro forma, have been derived from
the financial records of the Issuers or the Company (or its
predecessors), as applicable, and, in all material respects,
have been prepared on a basis consistent with such books and
records of the Issuers or the Company, as applicable, (or its
predecessor).
(n) Arthur Andersen LLP, who have certified certain
financial statements of the Company, whose report is
incorporated by reference in the Registration Statement and
who have delivered the initial letter referred to in Section
6(f) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(o) The Issuers or the Company, as applicable, and each
of their subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to
all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects except such as do
not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made
of such property by the Issuers or the Company, as applicable,
and their subsidiaries; and all real property and buildings
held under lease by the Issuers or the Company, as applicable,
and their subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are
not material and do not interfere with the use made and
proposed to be made of such property and buildings by the
Issuers or the Company, as applicable, and their subsidiaries.
(p) The Issuers or the Company, as applicable and each
of their subsidiaries carry, or are covered by, insurance in
such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their
respective properties and, to the best knowledge of the
Issuers or the Company, as applicable, as is customary for
companies engaged in similar businesses in similar industries.
(q) The Issuers or the Company, as applicable, and each
of their subsidiaries own or possess adequate rights to use
all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations,
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<PAGE> 8
service mark registrations, copyrights and licenses necessary
for the conduct of their respective businesses and have no
reason to believe that the conduct of their respective
businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of
others.
(r) There are no legal or governmental proceedings
pending to which the Issuers or the Company, as applicable, or
any of their subsidiaries is a party or of which any property
or assets of the Issuers or the Company, as applicable, or any
of their subsidiaries is the subject which, if determined
adversely to the Issuers or the Company, as applicable, or any
of their subsidiaries, might have a material adverse effect on
the consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company,
and its subsidiaries; and to the best of the Company's
knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(s) There are no contracts or other documents which are
required by the Rules and Regulations to be described in each
Prospectus Supplement or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and
Regulations which have not been described in such Prospectus
Supplement or filed as exhibits to the Registration Statement.
(t) No relationship, direct or indirect, exists between
or among the Issuers or the Company. as applicable, on the one
hand, and the directors, officers, stockholders, customers or
suppliers of the Issuers or the Company. as applicable, on the
other hand, which is required by the Rules and Regulations to
be described in each Prospectus Supplement which is not so
described.
(u) No labor disturbance by the employees of the Issuers
or the Company, as applicable, exists or, to the knowledge of
the Issuers or the Company, as applicable, is imminent which
would reasonably be expected to have a material adverse effect
on the consolidated financial position, stockholders' equity,
results of operations, business or prospects of the Company
and its subsidiaries.
(v) The Issuers or the Company, as applicable, have
filed all federal, state and local income and franchise tax
returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Issuers or the Company, as
applicable, or any of their subsidiaries which has had (nor do
the Issuers or the Company, as applicable, have any knowledge
of any tax deficiency which, if determined adversely to the
Issuers or the Company, as applicable, or any of their
subsidiaries, would reasonably be expected to have a material
adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries.
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<PAGE> 9
(w) Since the date as of which information is given in
each Prospectus Supplement through the date hereof, and except
as may otherwise be disclosed in each Prospectus Supplement,
the Issuers or the Company, as applicable, have not (i) issued
or granted any securities other than options or rights granted
in the ordinary course of business under any existing option
plans or stock purchase plans or stock issued upon the
exercise or conversion of outstanding options, rights or
warrants, (ii) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations which were
incurred in the ordinary course of business, (iii) entered
into any transaction not in the ordinary course of business or
(iv) declared or paid any dividend on its capital stock, other
than dividends paid on the Company's Series A1 and A2
Preferred Stock.
(x) The Issuers or the Company, as applicable, (i) make
and keep accurate books and records and (ii) maintain internal
accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization
and (D) the reported accountability for its assets is compared
with existing assets at reasonable intervals.
(y) None of the Issuers or the Company, as applicable,
(i) is in violation of its charter or by-laws, (ii) is in
default, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which it is
a party or by which it is bound or to which any of its
properties or assets is subject, except where such a default
would not have a material adverse effect on the business,
financial condition or results of operations of the Issuers,
or (iii) is in violation of any law, ordinance, governmental
rule, regulation or court decree to which it or its property
or assets may be subject or has failed to obtain any material
license, permit, certificate, franchise or other governmental
authorization or permit necessary to the ownership of its
property or to the conduct of its business, except where such
a violation would not have a material adverse effect on the
business, financial condition or results of operations of the
Issuers.
(z) None of the Issuers or the Company, as applicable,
nor to the best knowledge of the Issuers or the Company, as
applicable, any of their subsidiaries, nor any director,
officer, agent, employee or other person associated with or
acting on behalf of the Issuers or the Company, as applicable,
has used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to
political activity, made any direct or indirect unlawful
payment to any foreign or domestic government official or
employee from corporate funds; violated or is in
9
<PAGE> 10
violation of any provision of the Foreign Corrupt Practices
Act of 1977, or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(aa) None of the Issuers or the Company, as applicable,
nor any of their subsidiaries, or will be after the offering
and use of proceeds therefrom, an "investment company" within
the meaning of such term under the Investment Company Act of
1940 and the rules and regulations of the Commission
thereunder.
(bb) If the Offered Securities include Debt Securities,
such Debt Securities shall, on the date of the Terms Agreement
relating to such Offered Securities, be duly authorized for
issuance and sale pursuant to this Agreement and, when such
Debt Securities are duly executed, authenticated and delivered
pursuant to the provisions of this Agreement and the
applicable Indenture against payment of the consideration
therefor in accordance with this Agreement and the applicable
Terms Agreement, such Debt Securities will be valid and
legally binding obligations of the Issuers or the Company, as
applicable, enforceable in accordance with their terms, except
as enforceability thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement
of creditors' rights or by general equity principles and will
be entitled to the benefits of the applicable Indenture; and
the Indentures conform in all material respects to all
statements relating thereto contained in each Prospectus
Supplement; and, if the Offered Securities include
Subordinated Notes that are convertible into shares of Common
Stock ("Convertible Debt Securities"), then such Debt
Securities shall be convertible into shares of Common Stock in
accordance with their terms and the terms of a Convertible
Debt Securities Prospectus Supplement (a "Convertible
Prospectus Supplement").
(cc) If the Offered Securities include Debt Securities,
the applicable Indenture and any supplement thereto has been
duly authorized by the Issuers or the Company, as applicable,
and, when duly executed and delivered by the Issuers or the
Company, as applicable, and the Trustee, will constitute a
valid and binding obligation of the Issuers or the Company, as
applicable, enforceable against the Issuers or the Company, as
applicable, in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement
of creditors' rights or by general equity principles; and the
summary descriptions of the applicable Indenture set forth in
each Prospectus Supplement relating to such Debt Securities
conforms in all material respects to the provisions contained
in the applicable Indenture.
(dd) If the Offered Securities include Warrants, the
applicable Warrant Agreement and any supplement thereto has
been duly authorized by the Company and, when duly executed
and delivered by the Company and the Warrant Agent, will
constitute a valid and binding obligation of the Company
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enforceable against the Company in accordance with its terms,
except as enforceability thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement
of creditors' rights or by general equity principles; and the
summary descriptions of the applicable Warrant Agreement set
forth in each Prospectus Supplement relating to such Warrants
conforms in all material respects to the provisions contained
in the applicable Warrant Agreement.
(ee) Except for such matters as would not have a
material adverse effect on the Company: (i) no written notice,
request for information, order, complaint or penalty has been
received by the Company relating to any Environmental Law, and
there are no judicial, administrative or other actions, suits
or proceedings pending, nor to the knowledge of the Company,
threatened against the Company which allege a violation of any
Environmental Law; (ii) (a) the company and each of its
subsidiaries have all environmental permits necessary for
their operations to comply with all applicable Environmental
Laws in all material respects and are in substantial
compliance with the terms of such permits and (b) there are no
legal proceedings pending, nor to the knowledge of the
Company, threatened to revoke such environmental permits; and
(iii) there has been no written environmental audit conducted
within the past five years by the Company or any of its
subsidiaries of any property currently owned or leased by the
Company or any of its subsidiaries.
"ENVIRONMENTAL LAW" means any material federal, state or
local (including common law), statute, code, ordinance, rule
or regulation, relating to the environment, natural resources,
or the effect of the environment on public or employee health
and safety and includes, but is not limited to, the
Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801
et seq., the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. Section 6901 et seq., the Clean Water Act, 33 U.S.C.
Section 1251 et seq., the Clean Air Act, 33 U.S.C. Section
2601 et seq., the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. Section 136 et seq., the Oil
Pollution Act of 1990, 33 U.S.C.Section 2701 et seq., as such
laws have been amended or supplemented on or prior to the
effective date of the Registration Statement, and the
regulations promulgated pursuant thereto on or prior to the
Registration Statement, and all analogous state or local
statutes.
2. Purchase of the Offered Securities by the Underwriters. The
several commitments of the Underwriters to purchase Offered Securities pursuant
to any Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties herein contained and shall be subject to the
terms and conditions set forth herein.
In addition, on the basis of the representations and warranties
herein and subject to the terms and contained herein set forth, the Issuers or
the Company, as applicable
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may grant, if so provided in the Terms Agreement applicable to any Offered
Securities, an option to the Underwriters named in such Terms Agreement,
severally and not jointly, to purchase up to the amount of Option Securities set
forth therein at the same price per security as is applicable to the Offered
Securities. Such option, if granted, may be exercised in whole or in part from
time to time for the purpose of covering over-allotments as provided in Section
4 hereof. Option Securities shall be purchased severally for the account of the
Underwriters in proportion to the number of shares of Offered Securities set
opposite the name of such Underwriters in the Terms Agreement applicable to the
Offered Securities. The respective purchase obligations of each Underwriter with
respect to any Option Securities that are Common Stock shall be adjusted by the
Underwriters so that no Underwriter shall be obligated to purchase such Common
Stock other than in 100 share amounts.
Neither the Issuers nor the Company, as applicable, shall be
obligated to deliver any of the Offered Securities to be delivered on any
Delivery Date (as hereinafter defined), as the case may be, except upon payment
for all the Offered Securities to be purchased on such Delivery Date as provided
herein.
3. Delivery of and Payment for the Securities. (a) Delivery of
and payment for the Offered Securities shall be made at the office of Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153, at 10:00 A.M.,
New York City time, on the third full business day (unless postponed in
accordance with the provisions of this Agreement) following the date of the
Terms Agreement or at such other date or place as shall be agreed upon by you
and the Issuers or the Company, as applicable, in the applicable Terms
Agreement. This date and time are sometimes referred to as the "First Delivery
Date." On the Delivery Date, the Issuers or the Company, as applicable, shall
deliver or cause to be delivered certificates representing the Offered
Securities to the Underwriters for the account of each Underwriter named in the
Terms Agreement applicable to the Offered Securities against payment to or upon
the order of the Issuers or the Company, as applicable, of the purchase price by
wire transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to the applicable Terms
Agreement is a further condition of the obligation of each Underwriter
thereunder. Upon delivery, the Offered Securities shall be registered in such
names and in such denominations as the Underwriters shall request in writing not
less than two full business days prior to the First Delivery Date.
(b) Any option granted in Section 2 will expire 30 days after the
date of the applicable Terms Agreement and may be exercised in whole or in part
from time to time by written notice being given to the Issuers, or the Company,
as applicable, by the Underwriters. Such notice shall set forth the aggregate
number of Option Securities as to which the option is being exercised, the names
in which the Option Securities are to be registered, the denominations in which
the Option Securities are to be issued and the date and time, as determined by
the Underwriters, when the Option Securities are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been exercised nor later than the fifth business day after the date
on which the option shall have been exercised. The date and time the Option
Securities are delivered are sometimes referred to as a "Second
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<PAGE> 13
Delivery Date" and the First Delivery Date and any Second Delivery Date are
sometimes each referred to as a "Delivery Date."
(c) If applicable, delivery of and payment for the Option Securities
shall be made at the place specified in the first sentence of Section 3(a) (or
at such other place as shall be determined by agreement between the Underwriters
and the Issuers or the Company, as applicable) at 10:00 A.M., New York City
time, on such Second Delivery Date. On such Second Delivery Date, the Issuers or
the Company, as applicable, shall deliver or cause to be delivered the
certificates representing the Option Securities to the Underwriters for the
account of each Underwriter against payment to or upon the order of the Issuers
or the Company, as applicable, of the purchase price by wire transfer in
immediately available funds. Time shall be of the essence, and delivery at the
time and place specified pursuant to the applicable Terms Agreement shall be a
further condition of the obligation of each Underwriter thereunder. Upon
delivery, the Option Securities shall be registered in such names and in such
denominations as the Underwriters shall request in the aforesaid written notice.
4. Further Agreements of the Issuers. The Issuers or the Company,
as applicable, agree:
(a) To prepare a Prospectus Supplement in a form approved by
the Underwriters and, not later than the Commission's close of
business on the second business day following the execution and
delivery of each Terms Agreement or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Securities Act,
to file a Prospectus Supplement pursuant to Rule 424(b) under the
Securities Act; to make no further amendment to the Registration
Statement (including any post-effective amendment) or any amendment
or supplement to the Prospectus except as permitted herein and by
the applicable Terms Agreement; to advise the Underwriters ,
promptly after receiving notice thereof, of the time when any
supplement to each Prospectus Supplement has been filed and to
furnish such Underwriters with copies thereof; to advise such
Underwriters, promptly after receiving notice thereof, of the
issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus
Supplement or any Prospectus Supplement, of the suspension of the
qualification of the Offered Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or any
Prospectus Supplement or for additional information; and, in the
event of the issuance of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus Supplement or
any Prospectus Supplement or suspending any such qualification, to
use promptly its best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Underwriters and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally
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<PAGE> 14
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request:
(i) conformed copies of the Registration Statement as originally
filed with the Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement and the computation of
per share earnings) and (ii) each Preliminary Prospectus Supplement,
each Prospectus Supplement and any supplemented Prospectus
Supplement and, if the delivery of a Prospectus Supplement is
required at any time after the Effective Time in connection with the
offering or sale of the Offered Securities or any other securities
relating thereto and if at such time any events shall have occurred
as a result of which any Prospectus Supplement as then supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, when such Prospectus Supplement is delivered, not misleading,
or, if for any other reason it shall be necessary to supplement any
Prospectus Supplement in order to comply with the Securities Act, to
notify the Underwriters and, upon their request, to prepare and
furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Underwriters may from time to time
reasonably request of a supplemented Prospectus Supplement which
will correct such statement or omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or any supplement to each Prospectus
Supplement that may, in the reasonable judgment of the Issuers or
the Company, as applicable, or the Underwriters, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to each Prospectus Supplement
or any Prospectus Supplement pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Underwriters and
counsel for the Underwriters and obtain the consent of the
Underwriters to the filing;
(f) As soon as practicable (it being understood that the
Issuers or the Company, as applicable, shall have until at least 410
or, if the fourth quarter following the fiscal quarter that includes
the applicable effective date is the last fiscal quarter of the
fiscal year, 455 days after the end of the current fiscal quarter),
to make generally available to the Company's security holders, as
applicable, and to deliver to the Underwriters, an earnings
statement of the Issuers or the Company, as applicable, and their
subsidiaries (which need not be audited) complying with Section
11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Issuers or the Company, as
applicable, Rule 158);
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<PAGE> 15
(g) For a period of five years following the Effective Date,
to furnish to the Underwriters copies of all materials furnished by
the Issuers or the Company, as applicable, to its securityholders
and all public reports and all reports and financial statements
furnished by the Company to the Nasdaq Stock Market or the principal
national securities exchange upon which the Common Stock may be
listed pursuant to requirements of or agreements with Nasdaq or such
exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Underwriters may reasonably request to qualify the Offered
Securities for offering and sale under the securities laws of such
jurisdictions as the Underwriters may request and to comply with
such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Offered Securities; provided that
in connection therewith the Issuers or the Company, as applicable,
shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period specified in the applicable Terms Agreement
under the caption "Lock-up Provisions," commencing on the date of
such Terms Agreement, not to, directly or indirectly, (1) offer for
sale, sell, contract to sell, pledge, hedge or otherwise dispose,
directly or indirectly, of any shares of Common Stock, Debt
Securities or securities convertible into or exchangeable for Common
Stock (other than the Offered Securities and shares issued pursuant
to employee benefit plans, qualified stock option plans or other
employee, director or consultant compensation plans existing on the
date hereof or pursuant to currently outstanding options, warrants
or rights), or sell or grant options, rights or warrants with
respect to any shares of Common Stock, Debt Securities or securities
convertible into or exchangeable for Common Stock (other than the
grant of options or rights pursuant to option plans or stock
purchase plans existing on the date hereof), or (2) enter into any
swap or other derivatives transaction that transfers to another, in
whole or in part, any of the economic benefits or risks of ownership
of such shares of Common Stock or Debt Securities, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock, Debt Securities or other securities, in
cash or otherwise, or (3) publicly disclose an intention to make any
such offer, sale, pledge, hedge, swap or other transaction, in each
case without the prior written consent of the Underwriters named in
the applicable Terms Agreement; and to cause each officer and
director of the Issuers or the Company, as applicable, to furnish to
the Underwriters, prior to the First Delivery Date, a letter or
letters, in form and substance satisfactory to counsel for the
Underwriters, pursuant to which each such person shall agree not to,
directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device which
is designed to, or could be expected to, result in the disposition
by any person at any time in the future of) any shares of Common
Stock (including, without
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<PAGE> 16
limitation, shares of Common Stock that may be deemed to be
beneficially owned by such party in accordance with the Rules and
Regulations and shares of Common Stock that may be issued upon
exercise of any option or warrant) or securities convertible into or
exchangeable for Common Stock (other than any shares of Common Stock
contemplated by a Terms Agreement) owned by such party on the date
the letter is completed and the date of the applicable Terms
Agreement, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of
the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or other
securities, in cash or otherwise, in each case for a period
specified in the applicable Terms Agreement, commencing on the date
of such Terms Agreement, without the prior written consent of the
Underwriters named in the applicable Terms Agreement;
(j) If and to the extent specified in the applicable Terms
Agreement, to apply for the inclusion of the Offered Securities in
the National Market System of the Nasdaq Stock Market and to use its
best efforts to complete that listing, subject only to official
notice of issuance and evidence of satisfactory distribution, prior
to the First Delivery Date;
(k) To take such steps as shall be necessary to ensure that
none of the Issuers or the Company, as applicable, or any of their
subsidiaries shall become an "investment company" within the meaning
of such term under the Investment Company Act of 1940 and the rules
and regulations of the Commission thereunder.
5. Expenses. The Issuers or the Company, as applicable, agree to
pay all expenses incident to the performance of its obligations under this
Agreement and any applicable Terms Agreement, including (a) the costs incident
to the authorization, issuance, sale and delivery of the Offered Securities and
any taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus Supplement, each Prospectus Supplement and any supplement
to any Prospectus Supplement, all as provided in this Agreement; (d) the costs
of producing and distributing this Agreement and any other related documents in
connection with the offering, purchase, sale and delivery of the stock; (e) any
applicable listing or other fees; (f) the fees and expenses of qualifying the
Offered Securities under the securities laws of the several jurisdictions as
provided in Section 4 (h) and of preparing, printing and distributing a Blue Sky
Memorandum (including related reasonable fees and expenses of counsel to the
Underwriters); (g) one-half of the air transportation expenses related to the
roadshow, with the Company and the Underwriters otherwise responsible for any
other costs or expenses associated with the roadshow; and (h) all other costs
and expenses incident to the performance of the obligations of the Issuers or
the Company, as applicable, under this Agreement; provided that, except as
provided in this Section 5 and in Section 10 the
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<PAGE> 17
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Offered Securities which
they may sell and the expenses of advertising any offering of the Offered
Securities made by the Underwriters.
6. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on the applicable Delivery Date, of the representations and warranties of
the Issuers or the Company, as applicable, contained herein, to the performance
by the Issuers or the Company, as applicable, of their obligations hereunder,
and to each of the following additional terms and conditions:
(a) The Prospectus Supplement shall have been timely filed
with the Commission in accordance with Section 4(a); no stop order
suspending the effectiveness of the Registration Statement or any
part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission;
and any request of the Commission for inclusion of additional
information in the Registration Statement or any Prospectus
Supplement or otherwise shall have been complied with.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to such Delivery Date that the Registration
Statement or any Prospectus Supplement or any amendment or
supplement thereto contains an untrue statement of a fact which
shall not have been corrected on or prior to such Delivery Date in
an amendment or supplement thereto, and which, in the reasonable
opinion of Weil, Gotshal & Manges LLP, counsel for the Underwriters,
is material or omits to state a fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
applicable Terms Agreement, the Offered Securities, the Registration
Statement and each Prospectus Supplement, and all other legal
matters relating to this Agreement and the applicable Terms
Agreement and the transactions contemplated hereby and thereby shall
be reasonably satisfactory in all material respects to counsel for
the Underwriters, and the Issuers or the Company, as applicable,
shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such
matters.
(d) Cooley Godward LLP shall have furnished to the
Underwriters their written opinion, as counsel to the Issuers or the
Company, as applicable, addressed to the Underwriters and dated such
Delivery Date, in form and substance reasonably satisfactory to the
Underwriters, to the effect that:
(i) The Issuers or the Company, as applicable, and each
of their subsidiaries have been duly incorporated and are
validly existing as corporations in good standing under the
laws of their respective
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jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or lease
of property or the conduct of their respective businesses
requires such qualification and have all power and authority
necessary to own or hold their respective properties and
conduct the businesses in which they are engaged;
(ii) The Issuers or the Company, as applicable, have an
authorized capitalization as set forth in the Prospectus and
Prospectus Supplement, and all of the issued shares of capital
stock of the Issuers or the Company, as applicable, (including
the Offered Securities being delivered on such Delivery Date)
have been duly and validly authorized and issued, are fully
paid and non-assessable and conform to the description thereof
contained in the Prospectus and Prospectus Supplement; and all
of the issued shares of capital stock of each subsidiary of
the Issuers or the Company, as applicable, have been duly and
validly authorized and issued and are fully paid,
non-assessable and are owned directly or indirectly by the
Issuers or the Company, as applicable, free and clear of all
liens, encumbrances, equities or claims;
(iii) There are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any of the Offered Securities pursuant
to the Issuers' or the Company's, as applicable, charter or
by-laws or any agreement or other instrument known to such
counsel;
(iv) To the best of such counsel's knowledge, there are
no legal or governmental proceedings pending to which the
Issuers or the Company, as applicable, or any of their
subsidiaries is a party or of which any property or assets of
the Issuers or the Company, as applicable, or any of its
subsidiaries is the subject which, if determined adversely to
the Issuers or the Company, as applicable, or any of its
subsidiaries, might have a material adverse effect on the
consolidated financial position, stockholders' equity, results
of operations, business or prospects of the Company and its
subsidiaries; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(v) The Registration Statement was declared effective
under the Securities Act as of the date and time specified in
such opinion, each Prospectus Supplement was filed with the
Commission pursuant to the subparagraph of Rule 424(b) of the
Rules and Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued
and, to the knowledge of such counsel, no
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<PAGE> 19
proceeding for that purpose is pending or threatened by the
Commission;
(vi) The Registration Statement and each Prospectus
Supplement and any further amendments or supplements thereto
made by the Issuers or the Company, as applicable, prior to
such Delivery Date (other than the financial statements and
related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Rules and
Regulations;
(vii) To the best of such counsel's knowledge, there are
no contracts or other documents which are required to be
described in any Prospectus Supplement or filed as exhibits to
the Registration Statement by the Securities Act or by the
Rules and Regulations which have not been described or filed
as exhibits to the Registration Statement;
(viii) This Agreement and the applicable Terms Agreement
have been duly authorized, executed and delivered by the
Issuers or the Company, as applicable;
(ix) The issue and sale of the Offered Securities being
delivered on such Delivery Date by the Issuers or the Company,
as applicable, and the compliance by the Issuers or the
Company, as applicable, with all of the provisions of this
Agreement and the consummation of the transactions
contemplated hereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Issuers or the Company, as
applicable, or any of their subsidiaries is a party or by
which the Issuers or the Company, as applicable, or any of
their subsidiaries is bound or to which any of the property or
assets of the Issuers or the Company, as applicable, or any of
their subsidiaries is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of
the Issuers or the Company, as applicable, or any of their
subsidiaries or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Issuers or the Company, as
applicable, or any of its subsidiaries or any of their
properties or assets; and, except for the registration of the
Offered Securities under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state or
foreign securities laws in connection with the purchase and
distribution of the Offered Securities by the Underwriters, no
consent, approval, authorization or order of, or filing or
registration with, any such court
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<PAGE> 20
or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Issuers or
the Company, as applicable, and the consummation of the
transactions contemplated hereby;
(x) To the best of such counsel's knowledge, there are
no contracts, agreements or understandings between the Issuers
or the Company, as applicable, and any person granting such
person the right (other than rights which have been waived or
satisfied) to require the Issuers or the Company, as
applicable, to file a registration statement under the
Securities Act with respect to any securities of the Issuers
or the Company, as applicable, owned or to be owned by such
person or to require the Issuer or the Company, as applicable,
to include such securities in the securities registered
pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement
filed by the Issuer or the Company, applicable, under the
Securities Act;
(xi) If the Offered Securities include Debt Securities,
the applicable Indenture and any supplement thereto has been
duly and validly authorized, executed and delivered by the
Issuers or the Company, as applicable, and constitutes the
valid and binding agreement of the Issuers or the Company, as
applicable, enforceable in accordance with its terms, except
as enforcement thereof may be limited by bankruptcy,
insolvency or other laws relating to or affecting enforcement
of creditors' rights or by general equity principles;
(xii) If the Offered Securities include Debt Securities,
such Debt Securities are in the form contemplated by the
applicable Indenture, and have been duly and validly
authorized by all necessary corporate action and, when
executed and authenticated as specified in the applicable
Indenture and delivered against payment pursuant to this
Agreement, as supplemented by the applicable Terms Agreement,
will be valid and binding obligations of the Issuers or the
Company, as applicable, enforceable in accordance with their
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws relating to or affecting
enforcement of creditors' rights or by general equity
principles, and except further as enforcement thereof may be
limited by requirements that a claim (or a foreign currency
judgment in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law, and will be entitled to
the benefits of the applicable Indenture;
(xiii) The Offered Securities and, if applicable, the
Indenture and the Common Stock, conform in all material
respects to the
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<PAGE> 21
descriptions thereof in the Prospectus and the applicable
Prospectus Supplement;
(xiv) If the Offered Securities include Debt Securities,
the applicable Indenture is qualified under the 1939 Act; and
(xv) If the Offered Securities include Convertible Debt
Securities or Convertible Preferred Stock, the shares of
Common Stock issuable upon conversion of such Convertible Debt
Securities have been duly authorized and reserved for issuance
upon such conversion by all necessary corporate action and
such shares, when issued upon such conversion will be duly and
validly issued and will be fully paid and non-assessable, and
the issuance of such shares upon such conversion will not be
subject to preemptive rights.
In rendering such opinion, such counsel may state that their opinion
is limited to matters governed by the Federal laws of the United
States of America and the General Corporation Law of the State of
Delaware. Such counsel shall also have furnished to the Underwriters
a written statement, addressed to the Underwriters and dated such
Delivery Date, in form and substance satisfactory to the
Underwriters, to the effect that (x) such counsel has acted as
counsel to the Issuers or the Company, as applicable, in connection
with previous financing transactions and has acted as counsel to the
Company in connection with the preparation of the Registration
Statement, and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead them to believe that the
Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, or that any Prospectus Supplement
contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing opinion and
statement may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or any Prospectus Supplement except for the
statements made in each Prospectus Supplement under the identified
in Section 8(d)(viii) and (ix).
(e) The Underwriters shall have received from Weil Gotshal &
Manges LLP, counsel for the Underwriters, such opinion or opinions,
dated such Delivery Date, with respect to the issuance and sale of
the Offered Securities, the Registration Statement, each Prospectus
Supplement and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
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(f) At the time of execution of this Agreement, the
Underwriters shall have received from Arthur Andersen LLP a letter,
in form and substance satisfactory to the Underwriters, addressed to
the Underwriters and dated the date hereof (i) confirming that they
are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the
date hereof (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in each Prospectus Supplement, as of
a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered
public offerings.
(g) With respect to the letter of Arthur Andersen LLP referred
to in the preceding paragraph and delivered to the Underwriters
concurrently with the execution of this Agreement (the "initial
letter"), the Issuers or the Company, as applicable, shall have
furnished to the Underwriters a letter (the "bring-down letter") of
such accountants, addressed to the Underwriters and dated such
Delivery Date (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in
compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of
the Commission, (ii) stating, as of the date of the bring-down
letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified
financial information is given in each Prospectus Supplement, as of
a date not more than five days prior to the date of the bring-down
letter), the conclusions and findings of such firm with respect to
the financial information and other matters covered by the initial
letter and (iii) confirming in all material respects the conclusions
and findings set forth in the initial letter.
(h) The Issuers or the Company, as applicable, shall have
furnished to the Underwriters a certificate, dated such Delivery
Date, of its Chairman of the Board, its President or a Vice
President and its chief financial officer stating that:
(i) The representations, warranties and agreements
of the Company in Section 1 are true and correct as of
such Delivery Date; the Issuers or the Company, as
applicable, have complied in all material respects with
all their agreements contained herein; and the
conditions set forth in Subsections (a) and (i) of this
Section 7 have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and each Prospectus Supplement and, in their
opinion (A) as of the Effective Date, the Registration
Statement and, as of the Delivery Date, the Prospectus
Supplement did not include any untrue
22
<PAGE> 23
statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary
to make the statements therein not misleading, and (B)
since the Effective Date, no event has occurred which
should have been set forth in a supplement or amendment
to the Registration Statement or any Prospectus
Supplement.
(i) (i) None of the Issuers or the Company, as
applicable, or any of their subsidiaries shall have sustained
since the date of the latest financial statements included or
incorporated by reference in each Prospectus Supplement any
loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance,
or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated
in each Prospectus Supplement or (ii) since such date there
shall not have been any change in the capital stock or
long-term debt of the Issuers or the Issuers or the Company,
as applicable, or any of their subsidiaries or any change, or
any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Issuers
or the Company, as applicable, and their subsidiaries,
otherwise than as set forth or contemplated in each Prospectus
Supplement, the effect of which, in any such case described in
clause (i) or (ii), is, in the reasonable judgment of the
Underwriters, so material and adverse as to make it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Offered Securities being
delivered on such Delivery Date on the terms and in the manner
contemplated in any Prospectus Supplement.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following:
(i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the
over-the-counter market, or trading in any securities of the
Issuers or the Company, as applicable, on any exchange or in
the over-the-counter market, shall have been suspended or
minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or
by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United
States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United
States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic,
political or financial conditions (or the effect of
international conditions on the financial markets in the
United States shall be such) as to make it, in the judgment of
the Underwriters impracticable or inadvisable to proceed with
the public offering or delivery of the Offered Securities
being delivered on such Delivery Date on the terms and in the
manner contemplated in any Prospectus Supplement.
23
<PAGE> 24
(k) The Nasdaq Stock Market or such other exchange as
may be specified in the applicable Terms Agreement shall have
approved the Offered Securities for inclusion in the National
Market System, subject only to official notice of issuance and
evidence of satisfactory distribution.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
7. Indemnification and Contribution.
(a) The Issuers or the Company, as applicable, shall
indemnify and hold harmless each Underwriter, its officers and
employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Offered Securities), to
which that Underwriter, officer, employee or controlling
person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact
contained in the Prospectus, any Preliminary Prospectus
Supplement, the Registration Statement or any Prospectus
Supplement or in any amendment or supplement thereto (ii) the
omission or alleged omission to state in the Prospectus, any
Preliminary Prospectus Supplement, the Registration Statement
or any Prospectus Supplement, or in any amendment or
supplement thereto, or in any Blue Sky Application any
material fact required to be stated therein or necessary to
make the statements therein not misleading or (iii) any act or
failure to act or any alleged act or failure to act by any
Underwriter in connection with, or relating in any manner to,
the Offered Securities or the offering contemplated hereby,
and which is included as part of or referred to in any loss,
claim, damage, liability or action arising out of or based
upon matters covered by clause (i) or (ii) above (provided
that neither the Issuers nor the Company, as applicable, shall
be liable under this clause (iii) to the extent that it is
determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or
action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct), and shall
reimburse each Underwriter and each such officer, employee or
controlling person promptly upon demand for any legal or other
expenses reasonably incurred by that Underwriter, officer,
employee or controlling person in connection with
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that (A) neither the Issuers
nor the Company, as applicable, shall be liable in any such
case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or
alleged omission made in
24
<PAGE> 25
the Prospectus, any Preliminary Prospectus Supplement, the
Registration Statement or any Prospectus Supplement, or in any
such amendment or supplement, in reliance upon and in
conformity with written information concerning such
Underwriter furnished to the Issuers or the Company, as
applicable, through the Underwriters by or on behalf of any
Underwriter specifically for inclusion therein which
information will consist solely of the information specified
in the Terms Agreement or in writing between the Issuers or
the Company, as applicable, and the Underwriters, and (B) the
indemnification provided for in this Section 7(a) with respect
to any preliminary prospectus (or the Prospectus) shall not
inure to the benefit of any Underwriter from whom the person
asserting any such loss, claim, damage, liability or action
purchased the Offered Securities which are the subject thereof
(or to the benefit of any person controlling such Underwriter)
if at or prior to the written confirmation of the sale of such
Offered Securities a copy of the Prospectus (or the Prospectus
as amended or supplemented) was not sent or delivered to such
person and the untrue statement or omission of a material fact
contained in such preliminary prospectus (or the Prospectus)
was corrected in the Prospectus (or the Prospectus as amended
or supplemented) and delivery of such Prospectus (or
Prospectus as amended or supplemented) would have eliminated
any such loss, claim, damage, liability or action unless the
failure is the result of non-compliance by the Issuers or the
Company, as applicable, with Section 4(c) hereof. The
foregoing indemnity agreement is in addition to any liability
which the Issuers or the Company, as applicable, may otherwise
have to any Underwriter or to any officer, employee or
controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Issuers or the Company, as
applicable, their respective officers and employees, each of
their respective directors and each person, if any, who
controls the Issuers or Company, as applicable, within the
meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in
respect thereof, to which the Issuers or the Company, as
applicable, or any such director, officer or controlling
person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact
contained (A) in the Prospectus, any Preliminary Prospectus
Supplement, the Registration Statement or any Prospectus
Supplement or in any amendment or supplement thereto, or (B)
in any Blue Sky Application or (ii) the omission or alleged
omission to state in the Prospectus, any Preliminary
Prospectus Supplement, the Registration Statement or any
Prospectus Supplement, or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact
required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance
upon and in conformity with written information concerning
such Underwriter furnished to the Issuers or the Company, as
applicable,
25
<PAGE> 26
through the Underwriters by or on behalf of that Underwriter
specifically for inclusion therein, and shall reimburse the
Issuers or the Company, as applicable, and any such director,
officer or controlling person for any legal or other expenses
reasonably incurred by the Issuers or the Company, as
applicable, or any such director, officer or controlling
person promptly upon demand in connection with investigating
or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the
Issuers or the Company, as applicable, or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under
this Section 7 of notice of any claim or the commencement of
any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of
the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have
under this Section 7 except to the extent it has been
materially prejudiced by such failure and, provided further,
that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any
such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein
and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to
the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 7 for any
legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however,
that the Underwriters shall have the right to employ counsel
to represent jointly the Underwriters and their respective
officers, employees and controlling persons who may be subject
to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the
Issuers or the Company, as applicable, under this Section 7
if, in the reasonable judgment of the Underwriters, it is
advisable for the Underwriters and those officers, employees
and controlling persons to be jointly represented by separate
counsel, and in that event the fees and expenses of such
separate counsel shall be paid by the Issuers or the Company,
as applicable. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from
26
<PAGE> 27
all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such
action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section
7 shall for any reason be unavailable to or insufficient to
hold harmless an indemnified party under Section 7(a) or 7(b)
in respect of any loss, claim, damage or liability, or any
action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage
or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative
benefits received by the Issuers or the Company, as
applicable, on the one hand and the Underwriters on the other
from the offering of the Offered Securities or (ii) if the
allocation provided by clause (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
(i) above but also the relative fault of the Issuers or the
Company, as applicable, on the one hand and the Underwriters
on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action
in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Issuers
or the Company, as applicable, on the one hand and the
Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net
proceeds from the offering of the Offered Securities purchased
under this Agreement (before deducting expenses but after
deducting amounts with respect to any reserves for the payment
of interest in connection with Debt Securities) received by
the Issuers or the Company, as applicable, on the one hand,
and the total underwriting discounts and commissions received
by the Underwriters with respect to the Offered Securities
purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Offered
Securities under this Agreement, in each case as set forth in
the table on the cover page of each Prospectus Supplement. The
relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates
to information supplied by the Issuers or the Company, as
applicable, or the Underwriters, the intent of the parties and
their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Issuers or Company, as applicable, agree that it would not
be just and equitable if contributions pursuant to this
Section were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose)
or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of
the loss, claim,
27
<PAGE> 28
damage or liability, or action in respect thereof, referred to
above in this Section shall be deemed to include, for purposes
of this Section 7(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Offered Securities underwritten by it and distributed to the
public was offered to the public exceeds the amount of any
damages which such Underwriter has otherwise paid or become
liable to pay by reason of any 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 Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
as provided in this Section 7(d) are several in proportion to
their respective underwriting obligations and not joint.
8. Defaulting Underwriters.
If, on the applicable Delivery Date, any Underwriter defaults
in the performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters participating in an offering of Offered Securities
shall be obligated to purchase the Offered Securities which the defaulting
Underwriter agreed but failed to purchase on such Delivery Date in the
respective proportions which the number of the Offered Securities set opposite
the name of each remaining non-defaulting Underwriter named in the applicable
Terms Agreement bears to the total number of the Offered Securities set opposite
the names of all the remaining non-defaulting Underwriters named in the
applicable Terms Agreement; provided, however, that the remaining non-defaulting
Underwriters shall not be obligated to purchase any of the Offered Securities on
such Delivery Date if the total number of the Offered Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of the Offered Securities to be purchased
on such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of the Offered Securities
which it agreed to purchase on such Delivery Date pursuant to the terms of
Section 3. If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Underwriters who
so agree, shall have the right, but shall not be obligated, to purchase, in such
proportion as may be agreed upon among them, all the Offered Securities to be
purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Underwriters do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase, and of the
Issuers and the Company, as applicable, to sell, the Option Securities) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Issuers or the Company, as applicable, except that the Issuer or the Company, as
applicable, will continue to be liable for the payment of expenses to the extent
set forth in Sections 5 and 10.
28
<PAGE> 29
Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have to the Issuers or the Company, as applicable, for
damages caused by its default. If other underwriters are obligated or agree to
purchase the Offered Securities of a defaulting or withdrawing Underwriter,
either the Underwriters or the Issuers or the Company, as applicable, may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, any Prospectus
Supplement or in any other document or arrangement.
9. Termination. The obligations of the Underwriters
hereunder may be terminated by the Underwriters by notice given to and received
by the Issuers or the Company, as applicable, prior to delivery of and payment
for the Offered Securities if, prior to that time, any of the events described
in Sections 6(i) or 6(j), shall have occurred or if the Underwriters shall
decline to purchase the Offered Securities for any reason permitted under this
Agreement.
10. Reimbursement of Underwriters' Expenses. If (a) the
Issuers or the Company, as applicable, shall fail to tender the Offered
Securities for delivery to the Underwriters by reason of any failure, refusal or
inability on the part of the Issuers or the Company, as applicable, to perform
any agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Issuers or the Company, as applicable, will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Offered Securities, and upon demand
the Issuers or the Company, as applicable, shall pay the full amount thereof to
the Representative(s). If this Agreement is terminated pursuant to Section 9 by
reason of the default of one or more Underwriters, neither the Issuer nor the
Company, as applicable, shall be obligated to reimburse any defaulting
Underwriter on account of those expenses.
11. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent
by mail, telex or facsimile transmission to such persons as
are indicated in any Terms Agreement;
(b) if to the Issuer or the Company shall be delivered
or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration
Statement, Attention: Chief Financial Officer (Fax: (408)
399-8274), with a copy to Kenneth L. Guernsey, Cooley Godward
LLP, One Maritime Plaza, 20th Floor, San Francisco, California
94111 (Fax: (415) 951-3699;
provided, however, that any notice to an Underwriter pursuant to Section 7(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Underwriters, which address will be supplied to any
29
<PAGE> 30
other party hereto by the Underwriters upon request. Any such statements,
requests, notices or agreements shall take effect at the time of receipt
thereof. The Issuers or the Company, as applicable, shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on by the
Underwriters.
12. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters, the Issuers
or the Company, as applicable, and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (A) the representations, warranties, indemnities and
agreements of the Issuers or the Company, as applicable, contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 7(b) of this Agreement shall be deemed to be for the benefit of the
respective directors of the Issuers, respective officers of the Issuers who have
signed the Registration Statement and any person controlling the Issuers or the
Company, as applicable, within the meaning of Section 13 of the Securities Act.
Nothing in this Agreement is intended or shall be construed to give any person,
other than the persons referred to in this Section 12, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.
13. Survival. The respective indemnities, representations,
warranties and agreements of the Issuers or the Company, as applicable, and the
Underwriters contained in this Agreement and each Terms Agreement or made by or
on behalf on them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Offered Securities and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
14. Definition of "Business Day" and "Subsidiary". For
purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
16. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
30
<PAGE> 31
Very truly yours,
METRICOM, INC.
By
------------------------------------------
Name:
Title:
METRICOM FINANCE, INC.
By
------------------------------------------
Name:
Title:
Accepted:
For itself and as Representative of the
several Underwriters named above
By LEHMAN BROTHERS INC.
By
--------------------------------------
Perry Hoffmeister
Managing Director
31
<PAGE> 32
Exhibit A
[UNDERWRITERS]
[Title of Securities]
TERMS AGREEMENT
Dated: , 200_
TO: METRICOM, INC.
METRICOM FINANCE, INC.
RE: UNDERWRITING AGREEMENT DATED ________, 2000.
DEAR SIRS:
WE (THE "REPRESENTATIVE[S]") UNDERSTAND THAT METRICOM, INC., A DELAWARE
CORPORATION (THE "COMPANY") AND/OR METRICOM FINANCE, INC. ("FINANCE SUB" AND,
TOGETHER WITH THE COMPANY, THE "ISSUERS"), PROPOSE TO ISSUE AND SELL [[$
AGGREGATE PRINCIPAL AMOUNT] OF THEIR [SENIOR DEBT SECURITIES] [AND]
[SUBORDINATED [CONVERTIBLE DEBT SECURITIES] (THE "DEBT SECURITIES")] [AND]
[_________ SHARES OF THE COMPANY'S COMMON STOCK, PAR VALUE $.001 PER SHARE (THE
"COMMON STOCK")]. THIS AGREEMENT IS THE TERMS AGREEMENT REFERRED TO IN THE
UNDERWRITING AGREEMENT DATED _______________, 200_ (THE "UNDERWRITING
AGREEMENT"). SUBJECT TO THE TERMS AND CONDITIONS SET FORTH HEREIN OR
INCORPORATED BY REFERENCE HEREIN, THE UNDERWRITERS NAMED BELOW (THE
"UNDERWRITERS") OFFER TO PURCHASE, SEVERALLY AND NOT JOINTLY, THE RESPECTIVE
[AMOUNTS OF [DEBT SECURITIES] [AND] [COMMON STOCK]] SET FORTH BELOW.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF
UNDERWRITER DEBT SECURITIES COMMON STOCK
------------------- -------------------
<S> <C> <C>
TOTAL $_________ $_________
</TABLE>
DEBT SECURITIES
TITLE OF DEBT SECURITIES: PRINCIPAL AMOUNT TO BE ISSUED: $
SENIOR OR SUBORDINATED:
CURRENCY:
CURRENT RATINGS:
<PAGE> 33
INTEREST RATE OR FORMULA: %
INTEREST PAYMENT DATES:
DATE OF MATURITY:
REDEMPTION PROVISIONS:
SINKING FUND REQUIREMENTS:
INITIAL PUBLIC OFFERING PRICE: % OF THE PRINCIPAL AMOUNT, PLUS ACCRUED
INTEREST, IF ANY, [OR AMORTIZED ORIGINAL ISSUE DISCOUNT, IF ANY,] FROM , 200_.
PURCHASE PRICE: % OF THE PRINCIPAL AMOUNT, PLUS ACCRUED INTEREST, IF
ANY, [OR AMORTIZED ORIGINAL ISSUE DISCOUNT, IF ANY,] FROM , 200_ (PAYABLE IN
NEXT DAY FUNDS).
LISTING REQUIREMENT: [NONE] [NASDAQ]
CONVERTIBLE:
CONVERSION PROVISIONS:
DELIVERY DATE AND LOCATION:
ADDITIONAL REPRESENTATIONS, IF ANY:
REDEMPTION PROVISIONS:
LOCK-UP PROVISIONS:
SINKING FUND REQUIREMENTS:
NUMBER OF OPTION SECURITIES, IF ANY:
OTHER TERMS AND CONDITIONS:
COMMON STOCK
TITLE OF COMMON STOCK:
NUMBER OF SHARES TO BE ISSUED:
CURRENCY:
32
<PAGE> 34
ANNUAL CASH DIVIDEND RATE: %
PAYABLE:
LIQUIDATION PREFERENCE PER SHARE:
INITIAL PUBLIC OFFERING PRICE: %, PLUS ACCRUED INTEREST OR AMORTIZED
ORIGINAL ISSUE DISCOUNT, IF ANY, FROM ____________, 200_
PURCHASE PRICE: % PLUS ACCRUED INTEREST OR AMORTIZED ORIGINAL ISSUE
DISCOUNT, IF ANY, FROM _____________, 200_ (PAYABLE IN NEXT DAY FUNDS).
LISTING REQUIREMENT: [NONE] [NASDAQ]
CONVERTIBLE:
INITIAL CONVERSION PRICE: $_____ PER SHARE OF [COMMON STOCK].
OTHER CONVERSION PROVISIONS:
DELIVERY DATE AND LOCATION:
ADDITIONAL REPRESENTATIONS, IF ANY:
REDEMPTION PROVISIONS:
LOCK-UP PROVISIONS:
SINKING FUND REQUIREMENTS:
NUMBER OF OPTION SECURITIES, IF ANY:
OTHER TERMS AND CONDITIONS:
2
<PAGE> 1
EXHIBIT 4.1
- --------------------------------------------------------------------------------
METRICOM, INC.
METRICOM FINANCE, INC.
ISSUERS
METRICOM, INC.
GUARANTOR
FIRST SUPPLEMENTAL INDENTURE
RELATING TO
13% NOTES DUE 2010
DATED AS OF FEBRUARY 7, 2000
BANK ONE TRUST COMPANY, N.A.
TRUSTEE
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
PAGE
<S> <C>
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE ......................................... 2
Section 1.01. Relation to Indenture .................................................. 2
Section 1.02. Definitions ............................................................ 2
Section 1.03. Other Definitions ...................................................... 20
ARTICLE 2 THE SERIES OF NOTES ................................................................ 21
Section 2.01. Title of the Securities ................................................ 21
Section 2.02. Limitation on Aggregate Principal Amount and Additional Notes .......... 21
Section 2.03. Interest and Interest Rate; Maturity Date of Notes ..................... 21
Section 2.04. Form ................................................................... 22
Section 2.05. Other Debt Securities .................................................. 23
Section 2.06. Warrants ............................................................... 23
ARTICLE 3 REDEMPTION AND PREPAYMENT .......................................................... 24
Section 3.01. Optional Redemption .................................................... 24
Section 3.02. Repurchase at the Option of Holders .................................... 25
ARTICLE 4 COVENANTS .......................................................................... 27
Section 4.01. Reports ................................................................ 27
Section 4.02. Release of Obligations Following Holding Company Reorganization ........ 28
Section 4.03. Limitation on Restricted Payments ...................................... 28
Section 4.04. Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock 31
Section 4.05. Limitation on Liens .................................................... 31
Section 4.06. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries ................................................ 32
Section 4.07. Limitation on Sale of Assets ........................................... 33
Section 4.08. Limitation on Transactions with Affiliates ............................. 34
Section 4.09. Limitation on Sale and Leaseback Transactions .......................... 36
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 4.10. Limitation on Issuance of Guarantees of Indebtedness by Restricted
Subsidiaries ....................................................... 36
Section 4.11. Limitation on Business Activities .................................. 37
Section 4.12. Limitation on Issuance and Sale of Equity Interests of Restricted
Subsidiaries ....................................................... 37
Section 4.13. Designation of Restricted and Unrestricted Subsidiaries ............ 38
Section 4.14. Change of Control .................................................. 39
ARTICLE 5 SUCCESSORS ..................................................................... 40
Section 5.01. Merger, Consolidation, or Sale of Assets ........................... 40
Section 5.02. Successor Corporation Substituted .................................. 41
Section 5.03. Additional Amounts ................................................. 41
ARTICLE 6 DEFAULTS AND REMEDIES .......................................................... 43
Section 6.01. Events of Default .................................................. 43
Section 6.02. Acceleration ....................................................... 45
ARTICLE 7 INTEREST RESERVE ............................................................... 46
Section 7.01. Interest Reserve; Security ......................................... 46
Section 7.02. Recording and Opinions ............................................. 47
Section 7.03. Release of the Pledged Securities .................................. 48
Section 7.04. Certificates of the Issuers ........................................ 49
Section 7.05. Certificates of the Trustee ........................................ 49
Section 7.06. Authorization of Actions to Be Taken by the Trustee Under the Pledge
Agreement .......................................................... 49
Section 7.07. Trustee's Duties ................................................... 50
Section 7.08. Authorization of Receipt of Funds by the Trustee Under the Pledge
Agreement .......................................................... 50
Section 7.09. Termination of Security Interest ................................... 51
Section 7.10. Cooperation of Trustee ............................................. 51
Section 7.11. Collateral Agent ................................................... 51
ARTICLE 8 NOTE GUARANTEES ................................................................ 52
Section 8.01. Subsidiary Guarantees .............................................. 52
Section 8.02. Additional Guarantees .............................................. 54
Section 8.03. Limitation on Guarantor Liability .................................. 54
Section 8.04. Legal Defeasance or Covenant Defeasance ............................ 54
</TABLE>
ii
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<TABLE>
<S> <C>
Section 8.05. Merger and Consolidation of Guarantors 56
Section 8.06. Release .............................. 56
ARTICLE 9 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
ARTICLE 10 MISCELLANEOUS ................................... 57
Section 10.01.Ratification of Indenture ............ 57
Section 10.02.Governing Law ........................ 57
Section 10.03.Counterpart Originals ................ 57
</TABLE>
iii
<PAGE> 5
CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT
<TABLE>
<CAPTION>
SECTION INDENTURE
- ------- ---------
<S> <C>
310 (a)(1).................................................................7.10
(a)(2) ....................................................................7.10
(a)(3).....................................................................N.A.
(a)(4).....................................................................N.A.
(a)(5).....................................................................7.10
(i)(b).....................................................................7.10
(ii)(c)....................................................................N.A.
311(a).....................................................................7.11
(b)........................................................................7.11
(iii)(c)...................................................................N.A.
312 (a)....................................................................2.06
(b)........................................................................10.03
(iv)(c)....................................................................10.03
313(a).....................................................................7.06
(b)(2).....................................................................7.07
(v)(c).....................................................................7.06;
10.02
(vi)(d)....................................................................7.06
314(a).....................................................................4.03;
4.04(a);
10.02
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C>
(c)(1).....................................................................10.04
(c)(2).....................................................................10.04
(c)(3).....................................................................N.A.
(vii)(e)...................................................................10.05
(f)NA315 (a)...............................................................7.01
(b)........................................................................7.05,
10.02
(A)(c).....................................................................7.01
(d)........................................................................7.01
(e)........................................................................6.11
316 (a)(last sentence).....................................................2.10
(a)(1)(A)..................................................................6.05
(a)(1)(B)..................................................................6.04
(a)(2).....................................................................N.A.
(b)........................................................................6.07
(B)(c).....................................................................2.12
317 (a)(1).................................................................6.08
(a)(2).....................................................................6.09
(b)........................................................................2.05
318 (a)....................................................................10.01
(b)........................................................................N.A.
(c)........................................................................10.01
</TABLE>
N.A. means not applicable.
*This cross-reference Table is not part of the Indenture.
v
<PAGE> 7
FIRST SUPPLEMENTAL INDENTURE, dated as of February 7, 2000 (this
"First Supplemental Indenture"), to that certain Senior Indenture dated as of
December 29, 1999 (the "Indenture"), between Metricom, Inc., a Delaware
corporation (the "Company"), Metricom Finance, Inc., a Delaware corporation
("Finance Sub," and together with the Company, the "Issuers" and each an
"Issuer") and Bank One Trust Company, N.A., a national banking association, as
trustee (the "Trustee").
The Issuers and the Trustee have heretofore executed the
Indenture, which has been filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, as Exhibit 4.4 to the Company's
Registration Statement on Form S-3 (Registration No. 333-91359), providing for
the issuance from time to time of unsecured and unsubordinated debt securities
of the Issuers.
The Company, Bank One Trust Company, N.A., as the initial
warrant agent (the "Initial Warrant Agent"), and EquiServe LP, as warrant agent
(the "Warrant Agent") have heretofore executed that certain Warrant Agreement
dated as of February 7, 2000 (the "Warrant Agreement"), providing for the
issuance from time to time of warrants (the "Warrants") to acquire an aggregate
of 1,425,000 shares of the Company's Common Stock (as defined herein) and for
the issuance of such shares of the Company's Common Stock underlying such
Warrants.
The Issuers and the Trustee are hereby supplementing the
Indenture pursuant to the provisions of Section 9.01 of the Indenture to
establish the form and terms of the debt securities issued pursuant to this
First Supplemental Indenture.
The Board of Directors of each Issuer has duly adopted
resolutions authorizing such Issuer to execute and deliver this First
Supplemental Indenture providing for the issuance and sale of the Notes and the
Warrant Agreement providing for the concurrent issuance of the Warrants.
All the conditions and requirements necessary to make this First
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
The Issuers and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the holders of the Notes
(the "Holders"), as follows:
<PAGE> 8
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. RELATION TO INDENTURE. This First Supplemental
Indenture constitutes an integral part of the Indenture. To the extent there are
inconsistent provisions between this First Supplemental Indenture and the
Indenture, the provisions of this First Supplemental Indenture shall govern.
SECTION 1.02. DEFINITIONS. For all purposes of this First
Supplemental Indenture, except as otherwise expressly provided for or unless the
context otherwise requires:
(a) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Indenture; and
(b) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of
this First Supplemental Indenture.
(c) The following terms have the indicated meaning for purposes
of this First Supplemental Indenture:
"Acquired Debt" means, with respect to any specified Person, (1)
Indebtedness of any other Person existing at the time the other Person is merged
with or into or became a Restricted Subsidiary of the specified Person,
including, without limitation, Indebtedness Incurred in connection with, or in
contemplation of, the other Person merging with or into or becoming a Restricted
Subsidiary of the specified Person, and (2) Indebtedness secured by a Lien
encumbering any asset acquired by the specified Person.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control" and
correlative meanings, the terms "controlling," "controlled by" and "under common
control with," as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Annualized Consolidated Cash Flow" means, with respect to any
Person, that Person's Consolidated Cash Flow for the Reference Period multiplied
by two.
"Asset Acquisition" means (1) an Investment by an Issuer or any
Restricted Subsidiary of an Issuer in any other Person pursuant to which that
Person becomes a Restricted Subsidiary of the Issuers or merges into or
consolidates with an Issuer or any of the Issuers' Restricted Subsidiaries,
provided that that Person's primary business is a Communications and Data Access
Business, or (2) an acquisition by an
2
<PAGE> 9
Issuer or any Restricted Subsidiary of an Issuer of the property and assets of
any Person other than an Issuer or any of their Restricted Subsidiaries that
constitute all or substantially all of the assets of that Person or a division
or line of business of that Person, provided that the property and assets
acquired are assets used in a Communications and Data Access Business.
"Asset Disposition" means the sale or other disposition by an
Issuer or any Restricted Subsidiary of an Issuer, other than to an Issuer or any
of their Restricted Subsidiaries, of (1) all or a significant amount of the
Capital Stock of any Restricted Subsidiary of an Issuer, or (2) all or
substantially all of the assets that constitute a division or line of business
of an Issuer or a division or line of business of any Restricted Subsidiary of
an Issuer.
"Asset Sale" means (1) the sale, lease, conveyance or other
disposition of any assets or properties, including, without limitation, by way
of a consolidation, merger or sale and leaseback, other than in the ordinary
course of business; provided, however, that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Issuers and the
assets of their Restricted Subsidiaries taken as a whole shall be governed by
Section 4.14 and Section 5.01 and not by the provisions of Section 4.07, and (2)
the issue or sale by the Issuers or any of their Restricted Subsidiaries of
Equity Interests of any Restricted Subsidiary of an Issuer, in the case of
either clause (1) or (2), whether in a single transaction or a series of related
transactions (a) that have a fair market value in excess of $2.0 million or (b)
for Net Proceeds in excess of $2.0 million.
Notwithstanding the foregoing, none of the following shall be
deemed to be an Asset Sale: (I) a transfer of assets by an Issuer to a
Restricted Subsidiary of an Issuer or by such a Restricted Subsidiary to an
Issuer or to another Restricted Subsidiary of an Issuer; (II) an issuance or
sale of Equity Interests by a Restricted Subsidiary of an Issuer to an Issuer or
to another Restricted Subsidiary of an Issuer; (III) a Permitted Investment or a
Restricted Payment that is permitted by Section 4.03; (IV) issuances of Equity
Interests, other than in respect of Disqualified Stock, of a Restricted
Subsidiary pursuant to an employee stock option plan providing for customary and
reasonable stock-based compensation; (V) a transfer constituting the granting of
a Permitted Lien; and (VI) sales or other dispositions of property or equipment
determined by the management of that Issuer in good faith to be worn out,
obsolete or damaged.
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the present value, discounted
at the rate of interest implicit in the transaction, determined in accordance
with GAAP, of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such Sale and Leaseback Transaction,
including any period for which the lease has been extended or may, at the option
of the lessor, be extended.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
3
<PAGE> 10
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the obligation to pay rent or other payment
amount in respect of a lease that would at such time be required to be
classified and accounted for as a capital lease on a balance sheet prepared in
accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, however designated,
whether voting or non-voting, in equity of such Person, whether now outstanding
or issued after the date hereof, including, without limitation, all Common Stock
and Preferred Stock.
"Cash Equivalents" means (1) United States dollars; (2)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than one year from the date of acquisition; (3) certificates of deposit
and eurodollar time deposits with maturities of not more than one year from the
date of acquisition, bankers' acceptances with maturities of not more than one
year from the date of acquisition and overnight bank deposits, in each case with
any domestic commercial bank having capital and surplus in excess of $500
million and a Thompson Bank Watch Rating of "B" or better; (4) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (2) and (3) above entered into with any financial
institution meeting the qualifications specified in clause (3) above; (5)
commercial paper rated at least P-1 by Moody's Investors Service, Inc. or at
least A-1 by Standard & Poor's with maturities of not more than one year from
the date of acquisition; or (6) money market or mutual funds at least 95% of the
assets of which are invested in investments of the types specified in clauses
(1) through (5) above.
"Change of Control" means such time as (1) a "person" or
"group," within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act,
other than a Permitted Holder, becomes the ultimate "beneficial owner," as
defined in Rule 13d-3 under the Exchange Act, of more than 50% of the total
voting power of the then outstanding Voting Stock of either Issuer on a fully
diluted basis; (2) individuals who at the beginning of any period of two
consecutive calendar years constituted the Board of Directors of either Issuer,
together with any directors who are members of such Board of Directors on the
date hereof and any new directors whose election by the Board of Directors or
whose nomination for election by the stockholders of such Issuer was approved by
a vote of at least two-thirds of the members of the Board of Directors then
still in office who either were members of the Board of Directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
members of such Board of Directors then in office; (3) the sale, lease,
transfer, conveyance or other disposition, other than by way of merger or
consolidation, in one or a series of related transactions, of all or
substantially all of the assets of the Issuers and their Subsidiaries taken as a
whole to any such "person" or "group," other than to a Permitted Holder or a
Restricted Subsidiary of an Issuer; (4) the merger or consolidation of an Issuer
with or into another corporation or the merger of another corporation with or
into an Issuer with the effect that immediately after such transaction any such
"person" or "group" of persons or entities, other than a Permitted
4
<PAGE> 11
Holder, shall have become the ultimate beneficial owner of securities of the
surviving corporation of such merger or consolidation representing more than 50%
of the total voting power of the then outstanding Voting Stock of the surviving
corporation; or (5) the approval by the holders of the Capital Stock of an
Issuer of a plan relating to the liquidation or dissolution of such Issuer.
In no event shall the consummation of a Holding Company
Reorganization constitute a Change of Control and, prior to a Holding Company
Reorganization, this definition shall not apply to Finance Sub.
"Common Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, however designated,
whether voting or non-voting, of that Person's equity, other than Preferred
Stock of that Person, whether now outstanding or issued after the date the Notes
are issued, including without limitation, all series and classes of that equity.
"Communications and Data Access Business" means a business
primarily involved in the ownership, design, development, construction,
acquisition, installation, integration, management and/or provision of
telecommunications equipment, inventory, systems, content and/or services,
including, without limitation, mobile or landline Internet, mobile telephone,
PCS, microwave or paging or data transmission, or businesses reasonably related
thereto as determined in good faith by the Board of Directors of each Issuer.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of that Person for that period plus: (1)
an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale, to the extent such losses were deducted in
computing such Consolidated Net Income, plus (2) provision for taxes based on
income or profits of that Person and its Restricted Subsidiaries for that
period, to the extent that the provision for taxes was deducted in computing
Consolidated Net Income, plus (3) the Consolidated Interest Expense of that
Person and its Restricted Subsidiaries for that Period, to the extent such
interest expense was deducted in computing Consolidated Net Income, plus (4)
depreciation and amortization, including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period, of that Person and its Restricted Subsidiaries for that
period to the extent that such depreciation and amortization were deducted in
computing such Consolidated Net Income, plus (5) all other non-cash items
reducing Consolidated Net Income, other than items that will require cash
payments and for which an accrual or reserve is, or is required by GAAP to be,
made, minus (6) non-cash items increasing Consolidated Net Income for that
period, other than items that were accrued in the ordinary course of business,
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the foregoing, the provision for taxes on the
income or profits of, and the depreciation and amortization and other non-cash
charges of, any Restricted Subsidiary of an Issuer shall be added to
Consolidated Net Income to compute
5
<PAGE> 12
the Consolidated Cash Flow only to the extent, and in same proportion, that the
Net Income of such Restricted Subsidiary was included in calculating the
Consolidated Net Income of that Issuer.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the sum, without duplication, of (1) the Consolidated Interest
Expense of that Person and its Restricted Subsidiaries for that period, plus (2)
any interest expense on Indebtedness of another Person that is Guaranteed by
that Person or one of its Restricted Subsidiaries or secured by a Lien on assets
of such Person or one of its Restricted Subsidiaries, whether or not such
Guarantee or Lien is called upon, plus (3) the product of (a) all dividend
payments, whether or not in cash, on any series of Preferred Stock of such
Person or any of its Restricted Subsidiaries, other than dividend payments on
Equity Interests payable solely in Equity Interests of an Issuer, other than
Disqualified Stock, times (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then effective combined federal, state and
local statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any
Person, that Person's consolidated interest expense, whether paid or accrued and
whether or not capitalized, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges Incurred in respect of letter of credit or
bankers' acceptance financing, and net payments, if any, pursuant to Hedging
Obligations, to the extent that any such expense was deducted in computing the
Consolidated Net Income of that Person.
"Consolidated Leverage Ratio" means, on any date of
determination, the ratio of: (1) the aggregate amount of the Indebtedness of the
Issuers and their Restricted Subsidiaries on a consolidated basis as of the end
of the most recent fiscal quarter for which financial statements for the Issuers
have become publicly available prior to that date, to (2) the aggregate amount
of Annualized Consolidated Cash Flow.
In making the foregoing calculation, (a) Indebtedness shall be
calculated after giving pro forma effect to: (I) any Indebtedness, including, if
applicable, the Notes, Incurred subsequent to the end of the Reference Period
and on or prior to the date of determination, in each case as if such
Indebtedness had been Incurred and the proceeds had been applied on the last day
of that Reference Period for purposes of clause (1) above, and on the first day
of the Reference Period for purposes of clause (2) above, and (II) any
Indebtedness that was outstanding during or after the Reference Period but that
is not outstanding or is to be repaid on the date of determination, in each case
as if such Indebtedness was repaid on the last day of such Reference Period for
purposes of clause (1) above, and on the first day of the Reference Period for
purposes of clause (2) above; (b) pro forma effect shall be given to Asset
Dispositions and Asset Acquisitions, including giving pro forma effect to the
application of proceeds of any Asset Disposition,
6
<PAGE> 13
that occurred during or after the Reference Period and on or prior to the
determination date as if they had occurred and such proceeds had been applied on
the first day of the Reference Period; and (c) pro forma effect shall be given
to asset dispositions and asset acquisitions, including giving pro forma effect
to the application of proceeds of any asset disposition, that have been made by
any Person that has become a Restricted Subsidiary or has been merged with or
into an Issuer or any Restricted Subsidiary during or after the Reference Period
and on or prior to the determination date and that would have constituted Asset
Dispositions or Asset Acquisitions had such transactions occurred when that
Person was a Restricted Subsidiary as if those asset dispositions or asset
acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the
first day of the Reference Period.
"Consolidated Net Income" means, with respect to any Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries, for such period, on a consolidated basis determined in accordance
with GAAP; provided, however, that (1) the Net Income, but not loss, of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary; (2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval, that
has not been obtained, or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, except in the case of any restriction or encumbrance permitted
under clause (a) of Section 4.06; (3) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded for purposes of computing the amount of Restricted
Payments that the Issuers or their Restricted Subsidiaries may make; and (4) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person, the
consolidated stockholders' or partners' equity of that Person reflected on the
most recent financial statements of that Person, determined in accordance with
GAAP, less any amounts attributable to redeemable Capital Stock of that Person
otherwise included in the consolidated stockholders' or partners' equity of that
Person.
"Credit Facilities" means one or more debt facilities or
commercial paper facilities with banks or other lenders providing for revolving
credit loans, letters of credit, term loans, equipment financing or receivables
financing, including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables, in each case, as amended, restated, modified, renewed, refunded,
replaced, supplemented, extended or refinanced in whole or in part from time to
time, and whether involving the same or different agents, banks or lenders.
7
<PAGE> 14
"Default" means any event that is, or after notice or passage of
time or both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms
or by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder of that security, or upon the happening
of any event (other than an optional call for redemption by the issuer of that
Capital Stock), matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder of that
security, in whole or in part, on or prior to the date on which the notes
mature, except to the extent that the Capital Stock is solely redeemable with,
or solely exchangeable for, any Capital Stock of that Person that is not
Disqualified Stock; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions of that Capital Stock giving
holders of that Capital Stock a right to require that Person to repurchase or
redeem that Capital Stock upon the occurrence of an "asset sale" or a "change of
control" occurring prior to the final maturity date of the applicable notes
shall not constitute Disqualified Stock if the "asset sale" or "change of
control" provisions applicable to that Capital Stock are no more favorable to
the holders of that Capital Stock than the provisions contained in Section 4.07
and Section 4.14 and the Capital Stock specifically provides that the Person
will not repurchase or redeem any such Capital Stock pursuant to those "asset
sales" or "change of control" provisions prior to the repurchase of any Notes
that are required to be repurchased pursuant to Section 4.07 and Section 4.14
and at all times subject to Section 4.03; provided, further, that if an Issuer
issues any Capital Stock pursuant to any plan for the benefit of its employees
or of employees of its Restricted Subsidiaries, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by such Issuer in order to satisfy applicable statutory or
regulatory obligations. Notwithstanding anything herein to the contrary, neither
the Series A1 Preferred Stock nor Series A2 Preferred Stock shall constitute
Disqualified Stock for any purpose of the Indenture or this First Supplemental
Indenture.
"Equity Interests" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock, but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock.
"ERISA" means the Employee Retirement Income Security Act of
1974 and regulations promulgated thereunder.
"Escrow Agent" means Bank One Trust Company, N.A., as escrow
agent under the Pledge Agreement.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"FCC" means the Federal Communications Commission and any
successor governmental entity thereto.
8
<PAGE> 15
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, the statements and
pronouncements of the Financial Accounting Standards Board and such other
statements by such other entities as have been approved by a significant segment
of the accounting profession, which are applicable at the date of any
determination made under the Indenture or this First Supplemental Indenture.
"Hedging Obligations" means, with respect to any Person, the net
payment obligations of that Person under (1) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and (2) other
agreements or arrangements in the ordinary course of business designed to
protect that Person against fluctuations in commodity prices, interest rates or
currency exchange rates, in any case, not entered into for speculative purposes.
"Holding Company Reorganization" means a transaction or a series
of transactions resulting in the assets and operations of the Company being held
and operated by Finance Sub or its Restricted Subsidiaries; provided, however,
that a transaction or a series of transactions shall qualify as a "Holding
Company Reorganization" only if it does not result in adverse tax consequences
to the Holders or material adverse tax consequence to the Issuers, as determined
in good faith by each Issuer's Board of Directors by a resolution set forth in
an officers' certificate delivered to the Trustee, which resolution shall be
based on an opinion of independent tax counsel of national standing that there
will be no adverse tax consequences to the Holders or material adverse
consequences to the Issuers. A Holding Company Reorganization may be effected,
without limitation, through: (1) a transaction or series of transactions in
which the Company contributes all or substantially of its assets and liabilities
to Finance Sub which may at any time and from time to time transfer these assets
to its Restricted Subsidiaries, but retains its obligations under the notes, or
(2) a transaction in which (A) a wholly owned subsidiary of Finance Sub formed
solely for the purpose of effecting the Holding Company Reorganization merges
with and into the Company, with the Company being the surviving entity and in
which Finance Sub becomes the sole holder of all of the issued and outstanding
Capital Stock of the surviving entity and all of the holders of the Capital
Stock of the Company become the holders of all of the issued and outstanding
shares of the Capital Stock of Finance Sub; or (B) the Company merges into a
newly-formed limited liability company the sole member of which is Finance Sub
as a result of which Finance Sub becomes the sole owner of the limited liability
company successor of the Company, and all of the holders of the Capital Stock of
the Company, become the holders of all of the issued and outstanding shares of
the Capital Stock of Finance Sub.
Following the completion of a Holding Company Reorganization,
the term "Issuers" will refer only to the holding company resulting from the
consummation of the Holding Company Reorganization.
"Incur" means create, incur, issue, assume, guarantee or
otherwise become liable, directly or indirectly, contingently or otherwise, for
any Indebtedness. The term
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"Incurrence" when used as a noun shall have a correlative meaning. The accretion
of principal of a non-interest bearing or other discount security shall not be
deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person, any
indebtedness of that Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit, or reimbursement agreements in respect of letters of credit, or
banker's acceptances or representing Capital Lease Obligations, the balance
deferred and unpaid of the purchase price of any property or representing any
Hedging Obligations, except any such balance that constitutes an accrued expense
or trade payable, or all Disqualified Stock valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, if and to the extent any of the foregoing indebtedness, other than
letters of credit and Hedging Obligations, would appear as a liability upon a
balance sheet of such Person prepared in accordance with GAAP, as well as all
Indebtedness or other liabilities of others secured by a Lien on any asset of
that Person, whether or not such Indebtedness is assumed by that Person, and, to
the extent not otherwise included, the guarantee by such Person of any
Indebtedness or other liabilities of others, whether or not contingent, and
whether or not such guarantee appears on the balance sheet of that Person. The
amount of any Indebtedness outstanding as of any date shall be: (1) the accreted
value thereof, in the case of any Indebtedness that does not require current
payments of interest, (2) the principal amount of Indebtedness, together with
any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness, and (3) the face amount of any bankers acceptances, letters
of credit or similar instruments (but in the case of a letter of credit only to
the extent not secured by cash collateral for such obligation) and the maximum
amount of any guarantee provided in respect of other liabilities by such Person;
provided, however, that in each case, with respect to any Indebtedness of any
Person secured by a Lien on any asset of such Person and non-recourse to such
Person other than to the extent of the asset subject to such Lien, the amount of
such Indebtedness shall be the lesser of (A) the principal amount thereof and
(B) the fair market value of the asset subject to such Lien; provided that such
non-recourse Indebtedness does not have final stated maturity (and is not
otherwise required to be repaid, redeemed or repurchased) prior to the final
stated maturity of the notes and such non-recourse Indebtedness is Subordinated
Debt.
"Investment" means, with respect to any Person, all investments
by that Person in other Persons, including Affiliates, in the form of direct or
indirect loans, guarantees of Indebtedness or other obligations, advances of
assets or capital contributions, excluding commission, travel and entertainment,
moving, and similar advances to officers and employees made in the ordinary
course of business, purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Issue Date" means the date that any Notes are issued under this
First Supplemental Indenture.
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<PAGE> 17
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in any asset and any filing of or agreement to give any
financing statement under the Uniform Commercial Code or equivalent statutes of
any jurisdiction.
"Market Capitalization" of any Person means, as of any day of
determination, the average Closing Price of that Person's common stock over the
20 consecutive trading days immediately preceding that day. "Closing Price" on
any trading day with respect to the per share price of any shares of common
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 the shares of common stock are not listed or admitted to trading on that
exchange, on the principal national securities exchange on which the shares are
listed or admitted to trading or, if not listed or admitted to trading on any
national securities exchange, on the National Association of Securities Dealers
Automated Quotations National Market System or, if the shares are not listed or
admitted to trading on any national securities exchange or quoted on such
automated quotation system but the issuer if a Foreign Issuer, as defined in
Rule 3b-4(b) under the Exchange Act, and the principal securities exchange on
which the 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 that
principal exchange, or, if the shares are not listed or admitted to trading on
any national securities exchange or quoted on that automated quotation system
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 marked
as furnished by any New York Stock Exchange member firm that is selected from
time to time by the Issuers for that purpose and is reasonably acceptable to the
Trustee.
"MCI WorldCom Reseller Agreement" means that certain Ricochet2
Reseller Agreement, dated as of June 20, 1999, between Metricom, Inc and MCI
Worldcom, Inc., as amended through the date the notes are issued.
"Net Income" means, with respect to any Person, the net income
or loss of that Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (1) any
gain, but not loss, together with any related provision for taxes on such gain,
but not loss, realized in connection with (a) any Asset Disposition, including,
without limitation, dispositions pursuant to Sale and Leaseback Transactions, or
(b) the disposition of any securities by that Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of that Person or any of
its Restricted Subsidiaries, and (2) any extraordinary gain, but not loss,
together with any related provision for taxes on such extraordinary gain, but
not loss.
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"Net Proceeds" means the aggregate cash proceeds or Cash
Equivalents received by the Issuers or any of their 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 all costs relating to such Asset Sale, including, without
limitation, legal, accounting, investment banking and brokers fees, and sales
and underwriting commissions, taxes paid or payable as a result of the Asset
Sale, after taking into account any available tax credits or deductions and any
tax sharing arrangements, and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness: (1) as to which neither
an Issuer nor any of their Restricted Subsidiaries: (a) provides credit support
of any kind, including any undertaking, agreement or instrument that would
constitute Indebtedness; (b) is directly or indirectly liable, as a guarantor or
otherwise; or (c) constitutes the lender; (2) no default with respect to which,
including any rights that the holders of that Indebtedness may have to take
enforcement action against an Unrestricted Subsidiary, would permit upon notice,
lapse of time or both any holder of any other of Indebtedness of the Issuers,
other than the Notes, or of the Indebtedness of any Restricted Subsidiary of the
Issuers to declare a default on that other Indebtedness or cause the payment of
that other Indebtedness to be accelerated or payable prior to its Stated
Maturity; and (3) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Issuers or any of
their Restricted Subsidiaries.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Debt" means each and all of the following: (1)
Indebtedness under one or more Credit Facilities and related guarantees under
the Credit Facilities in any aggregate principal amount not to exceed $275.0
million at any time outstanding (exclusive of any amount incurred under any such
Credit Facilities pursuant to Section 4.04, including this definition of
Permitted Debt), less any permanent reductions as a result of the application of
proceeds from an Asset Sale to permanently reduce Indebtedness represented by
the Credit Facilities as provided under Section 4.07; (2) Indebtedness
outstanding on the date hereof; (3) Indebtedness represented by the notes;
provided that any additional notes issued after the initial issuance of the
notes represent Indebtedness that, but for this clause (3), could otherwise have
been incurred under Section 4.04; provided, further, that if any additional
Notes are to be issued prior to February 15, 2002, we shall deposit in the
Pledge Account funds sufficient to pay, or to permit the purchase of additional
Pledged Securities sufficient to pay, when due, all cash interest payments
accruing on the additional Notes on or prior to February 15, 2002; (4) Permitted
Refinancing Indebtedness, which will not include the refinancing, renewal,
replacement, defeasance or refunding of Indebtedness under clauses (1), (5) or
(11) of this definition; (5) Indebtedness: (a) in respect of performance, surety
or appeal bonds or letters of credit, in each case provided in the ordinary
course of business; (b) in respect of Hedging Obligations; provided that such
agreements do not increase the Indebtedness of
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<PAGE> 19
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 incurred in connection with the disposition of any business, assets
or Restricted Subsidiary; (6) intercompany Indebtedness between or among an
Issuer and any of the Issuers' Restricted Subsidiaries; provided, however, that
(a) if the Company is the obligor on the Indebtedness, that Indebtedness is
expressly subordinated to the prior payment in full in cash of all obligations
with respect to the Notes, the Indenture and the Supplemental Indenture, and (b)
if an Issuer's Restricted Subsidiary is the obligor on the Indebtedness, that
Indebtedness is expressly subordinated to the prior payment in full in cash of
all obligations with respect to any guarantee of the Notes, Indenture and
Supplemental Indenture issued under Section 4.10 covenant, and (c) (I) any
subsequent event or issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than an Issuer or a Restricted
Subsidiary of an Issuer and (II) any sale or other transfer of any of that
Indebtedness to a Person other than an Issuer or one of the Issuers' Restricted
Subsidiaries shall be deemed, in each case, to constitute an Incurrence of that
Indebtedness by such Issuer or Restricted Subsidiary, as the case may be, that
was not permitted by this clause (6); (7) Indebtedness due and owing to
governmental entities in connection with telecommunications license, permit or
similar fees or Indebtedness incurred to finance the payment of deposits with
and license, permit or similar fees to the FCC and other governmental
authorities, including, without limitation, international telecommunications
agencies and governmental authorities; (8) Indebtedness the proceeds of which
are, or the credit support provided by that Indebtedness is, used to finance the
development, construction, expansion, operation or acquisition of assets used or
to be used in, or at least a majority of the Voting Stock of, a Communications
and Data Access Business (including, in the case of the acquisition of at least
a majority of the Voting Stock of a Communications and Data Access Business,
Acquired Debt not to exceed, individually or in the aggregate, $200.0 million
principal amount; provided, however, that such Acquired Debt was not incurred in
connection with or in contemplation of such acquisition); (9) the guarantee by
an Issuer or any Restricted Subsidiary of an Issuer of Indebtedness of an Issuer
or a Restricted Subsidiary of an Issuer that was permitted to be incurred by
Section 4.04 hereof; (10) Indebtedness under this clause (10) the aggregate
principal amount or accreted amount of which, taken together with the aggregate
principal amount or accreted amount of all other Indebtedness issued under this
clause (10), does not exceed 2.0 times the aggregate net proceeds received by us
after the date hereof from the issuance and sale (other than to one or more of
an Issuers' Subsidiaries) of Equity Interests (other than in respect of
Disqualified Stock), other than (A) proceeds to the extent relied upon to permit
the making of one or more Restricted Payments in compliance with Section 4.03,
and (B) proceeds to the extent relied upon by the Issuers to permit the making
of one or more Permitted Investments pursuant to clause (8) of the definition of
Permitted Investments; and (11) Indebtedness not otherwise permitted hereunder
in an aggregate principal amount or accreted amount which, when aggregated with
the principal amount or accreted amount
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of all other Indebtedness then outstanding and incurred pursuant to this clause
(11), does not exceed $50.0 million at any one time outstanding.
For purposes of the foregoing clause (10), the amount of net
proceeds the Issuers receive from the issuance and sale of Equity Interests, if
other than cash, will be determined by each Issuer's Board of Directors in good
faith, whose resolution will be delivered to the Trustee, and the Board of
Director's determination shall be based upon the opinion or appraisal issued by
an investment banking firm, appraisal firm or accounting firm, in each case of
national standing, if the fair market value of such Equity Interests exceeds
$15.0 million.
"Permitted Holder" means either MCI Worldcom or Vulcan Ventures,
or any majority owned Affiliate thereof.
"Permitted Investment" means (1) any Investment in an Issuer or
in any Restricted Subsidiary of an Issuer by an Issuer or any of their
Restricted Subsidiaries; (2) any Investment in Cash Equivalents; (3) any
Investment by an Issuer or any Restricted Subsidiary of an Issuer in a Person
engaged in a Communications and Data Access Business, if as a result of that
Investment (a) that Person becomes a Restricted Subsidiary of an Issuer or (b)
that Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, an Issuer or
Restricted Subsidiary of an Issuer; (4) any Restricted Investment made as a
result of the receipt of non-cash consideration from an Asset Sale that was made
pursuant to and in compliance with the provisions described under Section 4.07;
(5) any acquisition of assets solely in exchange for the issuance of Equity
Interests of an Issuer, other than Disqualified Stock; (6) other Investments by
an Issuer or any Restricted Subsidiary of an Issuer in any Person having an
aggregate fair market value, measured as of the date made and without giving
effect to subsequent changes in value, when taken together with all other
Investments made pursuant to this clause (6) that are at the time outstanding,
not to exceed $50.0 million; (7) Investments arising in connection with Hedging
Obligations; (8) any Investment in a Person engaged or proposed to be engaged in
a Communications and Data Access Business made in exchange for, or out of the
proceeds of, an offering for cash of shares of the Capital Stock of an Issuer,
other than Disqualified Stock, excluding any proceeds from an offering of shares
of the Capital Stock of such Issuer that are relied upon by the Issuers to Incur
any Indebtedness pursuant to clause (10) of the definition of the term Permitted
Debt; (9) payroll, travel and similar advances to cover matters that are
expected at the time of such advance ultimately to be treated as expenses in
accordance with GAAP; and (10) investments in negotiable instruments held for
collection, lease, utility and workers' compensation, performance and other
similar pledges or deposits, and other pledges or deposits permitted under
Section 4.05.
"Permitted Liens" means (1) Liens on the assets of an Issuer or
of any Restricted Subsidiary of an Issuer to secure Indebtedness, other than
Subordinated Debt, permitted by the Indenture and this First Supplemental
Indenture to be Incurred; (2) Liens on property of a Person existing at the time
such Person is merged into or consolidated with an Issuer or any Restricted
Subsidiary of an Issuer; provided, however, that such
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<PAGE> 21
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 such Issuer or Restricted Subsidiary; (3) Liens
on property existing at the time of acquisition of that property by an Issuer or
any Restricted Subsidiary of an Issuer; provided, however, 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 such Issuer or Restricted Subsidiary; (4) Liens existing on
the date hereof; (5) Liens in favor of an Issuer or any Restricted Subsidiary of
an Issuer; (6) Liens incurred in the ordinary course of the business of the
Issuers or of any of their Restricted Subsidiaries with respect to obligations
that do not exceed, in the aggregate at any one time outstanding, more than 5%
of the total consolidated assets of the Issuers and their Restricted
Subsidiaries, determined in accordance with GAAP and based on the most recent
publicly available consolidated balance sheet, and 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 ordinary course of business by the Issuers or
their Restricted Subsidiaries; (7) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds, deposits to secure the
performance of bids, trade contracts, government contracts, leases or licenses
or other obligations of a like nature Incurred in the ordinary course of
business, including, without limitation, landlord Liens on leased properties;
(8) 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 prosecutes, provided that any
reserve or other appropriate provision as shall be required to conform with GAAP
shall have been made for that reserve or provision; (9) carriers',
warehousemen's, mechanics', landlords' materialmen's, repairmen's or other like
Liens arising in the ordinary course of business in respect of obligations not
overdue for a period in excess of 60 days or which are being contested in good
faith by appropriate proceedings promptly instituted and diligently prosecuted;
provided, however, that any reserve or other appropriate provision as shall be
required to conform with GAAP shall have been made for that reserve or
provision; (10) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects incurred, or leases or subleases
granted to third parties, in the ordinary course of business, which do not in
any case materially detract from the value of the property subject to the Lien
or do not interfere with or adversely affect in any material respect the
ordinary conduct of the business of the Issuers and their Restricted
Subsidiaries taken as a whole; (11) Liens in favor of customs and revenue
authorities to secure payment of customs duties in connection with the
importation of goods in the ordinary course of business and other similar Liens
arising in the ordinary course of business; (12) leases or subleases granted to
third Persons not interfering with the ordinary course of business of the
Issuers and their Restricted Subsidiaries; (13) Liens, other than any Lien
imposed by ERISA or any rule or regulation promulgated under ERISA, incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance, and other types of social security; (14)
deposits made in the ordinary course of business to secure liability to
insurance carriers;
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(15) any attachment or judgment Lien in respect of a judgment not constituting
an Event of Default under clause (8) of Section 6.01; (16) any interest or title
of a lessor or sublessor under any operating lease, conditional sale, title
retention, consignment or similar arrangements entered into in the ordinary
course of business; (17) Liens under licensing agreements for use of
intellectual property entered into in the ordinary course of business; (18)
Liens under the Pledge Agreement; (19) bankers' liens in respect of deposit
accounts; (20) Liens imposed by law incurred by the Issuers or their Restricted
Subsidiaries in the ordinary course of business; and (21) Liens to secure
Attributable Debt in connection with Sale and Leaseback Transactions.
"Permitted Refinancing Indebtedness" means any Indebtedness of
an Issuer or any Restricted Subsidiary of an Issuer issued in exchange for, or
the net proceeds of which are or are to be used to extend, refinance, renew,
replace, defease or refund other Indebtedness of an Issuer or any Restricted
Subsidiary of an Issuer, other than intercompany Indebtedness; provided,
however, that: (1) the principal amount, or accreted value, if applicable, of
such Permitted Refinancing Indebtedness does not exceed the principal amount of,
or accreted value, if applicable, plus accrued and unpaid interest on, any
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded,
plus the amount of customary or prescribed premiums and reasonable expenses
incurred in connection with that extension, refinancing, renewal, replacement,
defeasance or refunding; (2) the Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the notes, such
Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (4) the Indebtedness is Incurred by an
Issuer if such Issuer is the obligor on the Indebtedness or by an Issuer or a
Restricted Subsidiary of an Issuer if a Restricted Subsidiary of an Issuer is
the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
of that government or agency.
"Pledge Account" means that certain segregated account provided
for under the Pledge Agreement.
"Pledge Agreement" means that certain Pledge Agreement entered
into by the Issuers and the Trustee concurrently with this First Supplemental
Indenture and providing for an amount of cash or U.S. Government Securities
sufficient to pay the first
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four scheduled interest payments on the Notes to be deposited with and held by
the Escrow Agent for such purpose.
"Pledged Securities" means the cash and U.S. Government
Securities deposited in the Pledge Account, together with any interest or other
distributions received on that cash or those securities.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents, however designated,
whether voting or non-voting, of that Person's equity that have a preference as
to the payment of dividends or as to payments upon a liquidation of that Person,
whether now outstanding or issued after the date hereof, including without
limitation, all series and classes of such equity.
"Qualified Equity Offering" means an underwritten primary public
offering for cash of the Capital Stock of an Issuer, other than Disqualified
Stock, pursuant to an effective registration statement under the Securities Act
in which such Issuer receives gross proceeds of at least $50.0 million.
"Reference Period" means the latest two fiscal quarters for
which financial statements are publicly available.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Payment" means any payment or action to: (1) declare
or pay any dividend or make any other payment or distribution on account of
Equity Interests of an Issuer or any Restricted Subsidiary of an Issuer,
including, without limitation, any payment in connection with any merger or
consolidation involving an Issuer, or to the direct or indirect holders of
Equity Interests of an Issuer or any Restricted Subsidiary of an Issuer in their
capacity as such, other than dividends or distributions payable in Equity
Interests, except Disqualified Stock, of an Issuer or Restricted Subsidiary of
an Issuer; (2) purchase, redeem or otherwise acquire or retire for value,
including without limitation, in connection with any merger or consolidation
involving an Issue, any Equity Interests of an Issuer or of a direct or indirect
parent or other Affiliate of an Issuer, other than in exchange for Equity
Interests, except Disqualified Stock, of an Issuer or any Restricted Subsidiary
of an Issuer; (3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except a payment of interest or principal at Stated
Maturity; or (4) make any Restricted Investment.
"Restricted Subsidiary" means any of Subsidiary other than an
Unrestricted Subsidiary.
"Sale and Leaseback Transaction" of any Person means an
arrangement with any lender or investor or to which such lender or investor is a
party providing for the leasing by such Person of any property or asset of such
Person which has been or is being
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sold or transferred by such Person more than 365 days after the acquisition
thereof or the completion of construction or commencement of operation thereof
to such lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or asset.
The stated maturity of such arrangement is the date of the last payment of rent
or any other amount due under such arrangement prior to the first date on which
such arrangement may be terminated by the lessee without payment of a penalty.
"Securities Act" means the Securities Act of 1933, as amended.
"Notes" shall have the meaning set forth in Section 2.01 hereof.
"Separability Legend" has the meaning specified in Section
2.06(f).
"Separation Date" means the earliest to occur of (i) August 15,
2000, (ii) the occurrence of an Event of Default, (iii) the occurrence of an
Exercise Event, as defined in the Warrant Agreement, and (iv) such other date as
Lehman Brothers Inc. shall determine in its sole discretion.
"Series A1 Preferred Stock" means the Series A1 Preferred Stock
of the Company.
"Series A2 Preferred Stock" means the Series A2 Preferred Stock
of the Company.
"Significant Subsidiary" means any Restricted Subsidiary that
meets any of the following conditions: (1) the Issuers' and their Restricted
Subsidiaries' investments in and advances to such Restricted Subsidiary exceed
10% of the total assets of the Issuers and their Restricted Subsidiaries
consolidated as of the end of the most recently completed fiscal year (or, for a
proposed business combination to be accounted for as a pooling of interests,
when the number of common shares exchanged or to be exchanged by an Issuer
exceeds 10% of its total common shares outstanding at the date the combination
is initiated); (2) the Issuers' and their Restricted Subsidiaries' proportionate
share of the total assets (after intercompany eliminations) of such Restricted
Subsidiary exceeds 10% of the total assets of the Issuers and their Restricted
Subsidiaries consolidated as of the end of the most recently completed fiscal
year; or (3) the Issuers and their Restricted Subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of such Restricted
Subsidiary exceeds 10% of such income of the Issuers and their Restricted
Subsidiaries consolidated for the most recently completed fiscal year, in each
case as computed in accordance with Rule 1-02(w) of Regulation S-X under the
Securities Act.
"Stated Maturity" means (1) with respect to any debt security,
the date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (2) with
respect to any scheduled installment
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<PAGE> 25
of principal of or interest on any debt security, the date specified in such
debt security as the fixed date on which such installment is due and payable.
"Subordinated Debt" means any of Indebtedness subordinated in
right of payment to the Notes.
"Subsidiary" means, with respect to any Person, (1) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled, without regard to the
occurrence of any contingency, to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
that Person and (2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or an entity described in clause (1) and
related to such Person or (b) the only general partners of which are such Person
or of one or more entities described in clause (1) and related to such Person or
(c) any combination entities described in clauses (1) and (2).
"Unrestricted Subsidiary" means any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
resolution of the Board of Directors, but only to the extent that such
Subsidiary: (1) has no Indebtedness other than Non-Recourse Debt; and (2) is a
Person with respect to which neither the Issuers nor any of their Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests, or (b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results.
"U.S. Government Securities" means securities that are direct
obligations of, or obligations guaranteed by, the United States of America for
the payment of which its full faith and credit is pledged.
"Voting Stock" of any Person as of any date means the Capital
Stock of that Person that is at the time entitled to vote in the election of
directors or similar individuals of that Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (1) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years, calculated to the nearest one-twelfth, that will elapse between
such date and the making of such payment, by (2) the then outstanding principal
amount of such Indebtedness.
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SECTION 1.03. OTHER DEFINITIONS.
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
"Additional Amounts" Section 5.03
"Additional Notes" Section 2.02
"Affiliate Transaction" Section 4.11
"Asset Sale Offer" Section 4.10
"Change of Control Offer" Section 4.14
"Change of Control Payment" Section 4.14
"Change of Control Payment Date" Section 4.14
"Company" Preamble
"Event of Default" Section 6.01
"Finance Sub" Preamble
"First Supplemental Indenture" Preamble
"Holders" Preamble
"Indenture" Preamble
"Initial Warrant Agent" Preamble
"Interest Payment Date" Section 2.03
"Issuers" ("Issuer") Preamble
"Notes" Section 2.01
"Offer Amount" Section 3.02
"Offer Period" Section 3.02
"Payment Default" Section 6.01
</TABLE>
21
<PAGE> 27
<TABLE>
<S> <C>
"Purchase Date" Section 3.02
"Regular Record Date" Section 2.03
"Repurchase Offer" Section 3.02
"Separability Legend" Section 2.06
"Trustee" Preamble
"Warrants" Preamble
"Warrant Agent" Preamble
"Warrant Agreement" Preamble
</TABLE>
ARTICLE 2
THE SERIES OF NOTES
SECTION 2.01. TITLE OF THE SECURITIES. The series of Notes
issued in accordance with the terms and conditions of this First Supplemental
Indenture shall be designated the "13% Senior Notes due 2010" (together with any
Additional Notes issued in accordance with Section 2.02 hereof, the "Notes").
SECTION 2.02. LIMITATION ON AGGREGATE PRINCIPAL AMOUNT AND
ADDITIONAL NOTES. The Notes are initially limited to an aggregate principal
amount of $300,000,000 million, all of which will be issued on the date hereof,
and an additional amount of Notes that, together with all other Notes issued
under this Indenture (the "Additional Notes") is no more than $600 million in
aggregate principal amount or principal amount at maturity, that may be issued
from time to time after the date hereof, subject to compliance with Section 4.04
hereof.
Nothing contained in this Section 2.02 or elsewhere in this
First Supplemental Indenture, or in the Notes, is intended to or shall limit
execution by the Issuers or authentication or delivery by the Trustee of Notes
under the circumstances contemplated in the Indenture or this First Supplemental
Indenture.
The Issuers may, pursuant to the provisions of the Indenture,
and without the consent of Holders of the Notes, create and issue further Notes
ranking equally and ratably with the Notes initially issued hereunder in all
respects (or in all respects other than the payment of interest accruing prior
to the Issue Date of such additional Notes or except for the first payment of
interest following the Issue Date of such additional Notes) and so that such
additional Notes shall be consolidated with and form a single series with the
previously issued Notes and shall have the same terms as to status, redemption
or
21
<PAGE> 28
otherwise as the Notes. Any Additional Notes shall be issued in accordance with
Section 2.01 of the Indenture.
SECTION 2.03. INTEREST AND INTEREST RATE; MATURITY DATE OF
NOTES. The Notes shall bear interest at a rate of 13%, from their original Issue
Date or from the immediately preceding Interest Payment Date to which interest
has been paid on such Notes or duly provided for, payable semi-annually in
arrears on February 15 and August 15 of each year, commencing August 15, 2000
with respect to the Notes issued on the date hereof (each an "Interest Payment
Date"), to the Persons in whose name the Notes are registered in the security
register at the close of business on the February 1 or August 1 (whether or not
a Business Day), as the case may be, next preceding such Interest Payment Date
(each, a "Regular Record Date"). Interest shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
The Issuers shall pay principal, premium, if any, and interest,
to the extent required, on the Notes by wire transfer of immediately available
funds to the registered Holder of the Global Note represent such Notes at the
corporate trust operations office of the Trustee; provided, however, that with
respect to Notes issued in certificated form, the Issuers may pay interest at
their option by check mailed to the address of the Person entitled to payment as
it appears in the Security Register or by wire transfer of immediately available
funds in accordance with instructions provided by the registered Holders of such
certificated Notes.
The Stated Maturity of the Notes shall be February 15, 2010.
If any Interest Payment Date or the Stated Maturity falls on a
day that is not a Business Day, the required payment shall be made on the next
Business Day as if it were made on the date such payment was due and no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date or the Stated Maturity, as the case may be.
SECTION 2.04. FORM. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this First Supplemental
Indenture and the Issuers, the Guarantor and the Trustee, by their execution and
delivery of this First Supplemental Indenture, expressly agree to such terms and
provisions and to be bound thereby. To the extent any provision of any Note
conflicts with the express provisions of the Indenture or this First
Supplemental Indenture, the provisions of the Indenture or this First
Supplemental Indenture shall govern and be controlling, subject to the
resolution of inconsistent provisions in accordance with Section 2.01 hereof.
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<PAGE> 29
Notes issued in global form shall be substantially in the form
of Exhibit A hereto (including the Global Note Legend thereon and the "Schedule
of Exchanges of Interests in the Global Note" attached thereto). Notes issued in
certificated form shall be substantially in the form of Exhibit A attached
hereto (but without the Global Note Legend thereon and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.07 of the Indenture.
SECTION 2.05. OTHER DEBT SECURITIES. The Notes and any debt
securities subsequently issued under the Indenture but not under this First
Supplemental Indenture, shall be treated as distinct classes of debt securities
for all purposes under the Indenture, including waivers, amendments, redemptions
and offers to purchase.
SECTION 2.06. ASSOCIATED WARRANTS OFFERING. The Notes issued on
the date hereof are being issued together with Warrants.
(a) LEGENDS. In addition to other legends provided for in the
Indenture, the following legends shall appear on the face of all Global Notes
and Notes issued in certificated form under this First Supplemental Indenture
and relating to the Notes originally issued on the date hereof:
(i) SEPARABILITY LEGEND. Until the Separation Date, each Global
Note and Notes issued in certificated form under this First Supplemental
Indenture shall bear a legend in substantially the following form (the
"Separability Legend"):
"UNTIL THE SEPARATION DATE (AS DEFINED), THIS NOTE HAS BEEN
ISSUED WITH, AND MUST BE TRANSFERRED WITH, THE ASSOCIATED
WARRANTS TO PURCHASE COMMON STOCK OF THE COMPANY. EACH $1,000
PRINCIPAL AMOUNT OF NOTES IS ASSOCIATED WITH A WARRANT TO
PURCHASE 4.75 SHARES OF COMMON STOCK, SUBJECT TO ADJUSTMENT
UNDER CERTAIN CIRCUMSTANCES. A COPY OF THE WARRANT AGREEMENT
PURSUANT TO WHICH THE WARRANTS HAVE BEEN ISSUED IS AVAILABLE
FROM THE COMPANY UPON REQUEST."
(ii) ORIGINAL ISSUE DISCOUNT LEGEND. Each Global Note and Notes
issued in certificated form under this First Supplemental Indenture shall bear a
legend in substantially the following form:
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<PAGE> 30
"FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE
DISCOUNT. FOR PURPOSES OF SECTION 1273 OF THE CODE, THE ISSUE
PRICE IS $787.94 AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS
$212.06, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT OF THIS
SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE, THE YIELD TO
MATURITY COMPOUNDED SEMIANNUALLY IS 17.57%."
(b) SEPARATION OF NOTES AND WARRANTS.
(i) Prior to the Separation Date, no Notes may be sold, assigned
or otherwise transferred to any Person unless, simultaneously with such
transfer, the Trustee receives confirmation from the Warrant Agent for the
Warrants that the Holder of the Notes has requested a transfer of the related
Warrants to the same transferee.
(ii) On or after the Separation Date, the Holder of a Note
containing a Separability Legend may surrender such Note accompanied by a
written application to the Trustee, duly executed by the Holder, for a new Note
or Notes not containing a Separability Legend. Whether or not the Holder obtains
a new Note, from and after the Separation Date, the Separability Legend shall
have no further force and effect.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. OPTIONAL REDEMPTION. Commencing February 15, 2005,
the Issuers may redeem the Notes, at their option, in whole or in part, at any
time or from time to time, upon not less than 30 nor more than 60 days' prior
notice mailed by first class mail to each registered Holder's address as it
appears in the applicable note register, at the following redemption prices
expressed in percentages of principal amount, plus accrued and unpaid interest
to the redemption date, if redeemed during the 12-month period commencing on
February 15 of the years set forth below:
REDEMPTION
<TABLE>
<CAPTION>
YEAR PRICE
- ---- --------
<S> <C>
2005..................................... 108.000%
2006..................................... 106.000%
2007..................................... 104.000%
</TABLE>
24
<PAGE> 31
<TABLE>
<S> <C>
2008..................................... 102.000%
2009 and thereafter...................... 100.000%
</TABLE>
SECTION 3.02. REPURCHASE AT THE OPTION OF HOLDERS. In the event
that, pursuant to Section 4.07 hereof, the Issuers shall be required to commence
an offer to all Holders to purchase Notes (a "Repurchase Offer"), and they shall
follow the procedures specified below.
The Repurchase Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Issuers shall purchase at the purchase price (as
determined in accordance with Section 4.07 hereof, the principal amount of Notes
required to be purchased pursuant to Section 4.07 hereof, in the aggregate (the
"Offer Amount") or, if less than the Offer Amount has been tendered, all Notes
tendered in response to such Repurchase Offer. Payment for any Notes so
purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to such Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Issuers shall
send, by first class mail, a notice to the Trustee and each of the Holders, with
a copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to such Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of such Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this
Section 3.02 and Section 4.07 hereof, and the length of time the Repurchase
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Issuers default in making such payment, any
Note accepted for payment pursuant to the Repurchase Offer shall cease to accrue
interest after the Purchase Date;
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<PAGE> 32
(e) that Holders electing to have a Note purchased pursuant to
any Repurchase Offer may elect to have Notes purchased in integral multiples of
$1,000 only;
(f) that Holders electing to have a Note purchased pursuant to
any Repurchase Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Issuers, a Depositary, if
appointed by the Issuers, or a Paying Agent at the address specified in the
notice before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Issuers, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Notes purchased; and
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Notes shall be selected for purchase
pursuant to the terms of this Section 3.02, and that Holders whose Notes were
purchased only in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Issuers shall, to the extent
lawful, accept for payment, pursuant to the terms of this Section 3.02, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Issuers in accordance
with the terms of this Section 3.02. The Issuers, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
Business days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Issuers for purchase, and the Issuers shall promptly issue a new
Note, and the Trustee, upon written request from the Issuers shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Issuers to the Holder thereof. The
Issuers shall publicly announce through PR Newswire, Dow Businesswire or any
comparable wire service that distributes releases to the broad financial and
investor media, the results of the Repurchase Offer on the Purchase Date.
The Issuers shall comply with the requirements of Rule 14e-1
under the Exchange Act, and any other securities laws and regulations thereunder
to the extent that such laws or regulations are applicable in connection with
the repurchase of the Notes pursuant to the Repurchase Offer. To the extent that
the provisions of Rule 14e-1 under the Exchange Act or any securities laws or
regulations conflict with the provisions of this Section 3.02 or with Section
4.07 hereof, the Issuers will comply with the applicable
26
<PAGE> 33
securities laws and regulations and will not be deemed to have breached its
obligations under those sections of this First Supplemental Indenture.
SECTION 3.03. Any redemption pursuant to Section 3.01 or 3.02
hereof shall also be made in accordance with the provisions of Section 3.01
through 3.06 of the Indenture, subject to the provisions of Section 2.01. Notes
called for redemption become due and payable on the date fixed for redemption.
Interest will cease to accrue on the Notes or portions thereof being redeemed on
and after the redemption date, unless the Issuers default in the payment of the
redemption or repurchase price.
ARTICLE 4
COVENANTS
SECTION 4.01. REPORTS. (a) The Issuers shall file on a timely
basis with the SEC, to the extent such filings are accepted by the SEC and
whether or not the Issuers have a class of securities registered under the
Exchange Act, the annual reports, quarterly reports, current reports and other
documents that the Issuers would be required to file if they were subject to
Section 13 or 15(d) of the Exchange Act, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" that describes
the financial condition and results of operations of the Issuers and their
consolidated Subsidiaries, as well as disclosure showing in reasonable detail,
either on the face of the financial statements or in the footnotes to those
statements, the financial condition and results of operations of the Issuers and
their Restricted Subsidiaries separate from the financial information and
results of operations of their Unrestricted Subsidiaries and, with respect to
the annual information only, a report on those financial statements by the
Issuers' certified independent accountants. The Issuers shall also (1) file with
the Trustee, and provide to each Holder, without cost to that Holder, copies of
all of the above reports and documents within 15 days after the date on which
the Issuers file such reports and documents with the SEC or the date on which
the Issuers would be required to file such reports and documents if they were so
required, and (2) if filing such reports and documents with the SEC is not
accepted by the SEC or is prohibited under the Exchange Act, to supply at the
Issuers' cost copies of such reports and documents to any prospective Holder
promptly upon request. Notwithstanding the foregoing, prior to a Holding Company
Reorganization Metricom Finance will not have any of the foregoing obligations
unless and to the extent otherwise required by law.
(b) The Issuers shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Issuers are taking or propose to
take with respect thereto.
SECTION 4.02. RELEASE OF OBLIGATIONS FOLLOWING HOLDING COMPANY
REORGANIZATION. Upon consummation of the Holding Company Reorganization, the
obligation of (a) Finance Sub with respect to the Notes shall automatically be
extinguished and only the Company shall continue as the sole obligor on the
Notes, if the
27
<PAGE> 34
Holding Company Reorganization is one in which the assets and operations of the
Company are transferred to Finance Sub or any of its Restricted Subsidiaries, as
contemplated by clause (1) of the definition of Holding Company Reorganization,
or (b) the Company with respect to the Notes shall automatically be extinguished
and only Finance Sub shall continue as the sole obligor on the Notes, if the
Holding Company Reorganization is one in which the assets and operations of the
Company remain with the Company or its successor corporation or organization, as
contemplated by clause (2) of the definition of Holding Company Reorganization;
provided, however, that upon consummation of the Holding Company Reorganization,
the Company's guarantee of Finance Sub's obligations with respect to the Notes
shall automatically, and without further notice to or action by the Holders, be
extinguished and shall cease to be of any further force or effect. In that
event, the Trustee shall, at the request of either obligor, enter into a
Supplemental Indenture to evidence the release of the Company or Finance Sub, as
the case may be, from its obligations on the notes, and the release of the
Company from its guarantee of Finance Sub's obligations with respect to the
Notes.
SECTION 4.03. LIMITATION ON RESTRICTED PAYMENTS. The Issuers
shall not make, and shall not permit any Restricted Subsidiary to make, directly
or indirectly a Restricted Payment, unless, at the time of and after giving
effect to that Restricted Payment: (1) no Default or Event of Default will have
occurred and be continuing or would occur as a consequence of the Restricted
Payment; (2) the Issuers would, at the time of the Restricted Payment and after
giving pro forma effect to the Restricted Payment as if it had been made at the
beginning of the applicable Reference Period, have been permitted to incur at
least $1.00 of additional Indebtedness under the Consolidated Leverage Ratio
test set forth in the first paragraph of Section 4.04 hereof; and (3) the
Restricted Payment, together with the aggregate amount of all other Restricted
Payments made by the Issuers or any of their Restricted Subsidiaries after the
date hereof are issued, excluding Restricted Payments permitted by clauses (ii),
(iii), (iv) or (v) of the immediately following paragraph below, is less than
the sum of: (a) the amount by which Consolidated Cash Flow exceeds 1.5 times
Consolidated Fixed Charges for the period from the first day of the calendar
quarter in which the Notes are issued through the end of the last completed
fiscal quarter for which consolidated financial statements for the Issuers are
publicly available; plus (b) 100% of the aggregate net cash proceeds received by
the Issuers from the issue or sale since the date hereof of (I) Equity
Interests, other than Disqualified Stock, of the Issuers, except to the extent
any such net cash proceeds are relied upon to incur Indebtedness pursuant to
clause (10) of the definition of the term Permitted Debt or used to make
Permitted Investments pursuant to clause (8) of the definition of the term
Permitted Investment, and (II) Disqualified Stock or convertible debt securities
of the Issuers to the extent converted into Equity Interests, other than
Disqualified Stock, and in any case other than Equity Interests, Disqualified
Stock or convertible debt securities sold to a Restricted Subsidiary; plus (c)
to the extent not already included in Consolidated Cash Flow for the Issuers for
the relevant period, without duplication, if any Restricted Investment that was
made by the Issuers or any of their Restricted Subsidiaries after the date
hereof is sold for cash or otherwise liquidated or repaid for cash, the lesser
of: (I) the cash return of capital with respect to the Restricted
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<PAGE> 35
Investment, less the cost of disposition, if any; and (II) the initial amount of
the Restricted Investment; plus (d) to the extent not already included in
Consolidated Cash Flow for the Issuers the relevant period, without duplication,
an amount equal to the net reduction in Restricted Investments made by the
Issuers or any of their Restricted Subsidiaries from the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary not to exceed the lesser of:
(I) the amount of the Restricted Investment, valued in each case as provided
under Section 4.13 hereof, previously made by the Issuers or any of their
Restricted Subsidiaries in that Unrestricted Subsidiary, which amount was
included in the calculation of the amount of Restricted Payments associated with
that Restricted Investment, and (II) the fair market value of the Investment by
the Issuers or their Restricted Subsidiaries in the Unrestricted Subsidiary at
the time of the redesignation.
The foregoing provision will not be violated by reason of: (i)
the payment of any dividend with respect to any Equity Interests of the Issuers
or their Restricted Subsidiaries within 60 days after the date of its
declaration if the payment would comply with the foregoing paragraph at the date
of its declaration; (ii) the payment of dividends with respect to the Series A1
Preferred Stock and Series A2 Preferred Stock through November 15, 2002 in
accordance with the terms of those securities as of the date hereof; (iii) the
redemption, repurchase, defeasance or other acquisition or retirement for value
of Equity Interests of the Issuers or any Indebtedness that is subordinated to
the Notes, in each case in exchange for, or out of the net cash proceeds of the
substantially concurrent sale, other than to a Restricted Subsidiary of an
Issuer of, Equity Interests of an Issuer, other than Disqualified Stock;
provided, however, that the amount of any net cash proceeds that are utilized
for any such redemption, repurchase, retirement, defeasance or other acquisition
will be excluded from clause (b) of the preceding paragraph; (iv) the
defeasance, redemption, repurchase or other acquisition or retirement of
Indebtedness which is subordinated to the Notes with the net cash proceeds from
an incurrence of Permitted Refinancing Indebtedness; (v) the payment of any
dividend or distribution by any Restricted Subsidiary of an Issuer, including
Finance Sub, to the holders of such Restricted Subsidiary's Common Stock so long
as that dividend or distribution is paid to all holders of the Common Stock of
that Restricted Subsidiary pro rata in accordance with their interests; (vi)
payments or distributions to dissenting stockholders pursuant to applicable law,
pursuant to or in connection with a consolidation, merger or transfer of assets
that complies with the provisions of Section 5.01 of the Indenture and Section
5.01 of this First Supplemental Indenture; (vii) cash payments in lieu of the
issuance of fractional shares in connection with the exercise of any warrants,
options or other securities convertible into or exchangeable for Common Stock of
an Issuer or of a Restricted Subsidiary of an Issuer; (viii) the purchase,
redemption, acquisition, cancellation or other retirement for value of shares of
Capital Stock of an Issuer or any Restricted Subsidiary of an Issuer to the
extent required by FCC rules, other comparable foreign telecommunications
authorities or any other governmental agencies in order to prevent the loss or
secure the renewal or reinstatement of any license or franchise held by the
Issuers or any Restricted Subsidiary; (ix) the purchase by the Issuers or a
Restricted Subsidiary of Equity Interests, other than with respect to
Disqualified Stock, in a
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<PAGE> 36
Restricted Subsidiary from employees, officers or directors of that Restricted
Subsidiary in connection with the termination of their employment with such
Restricted Subsidiary; provided that the Equity Interests so repurchased are not
Capital Stock of, or Equity Interests to acquire Capital Stock of, a class that
is listed on a national securities exchange or admitted for trading in the
National Market of the Nasdaq Stock Market; provided further that the amount of
all Restricted Payments made pursuant to this clause (ix) do not exceed $2.5
million in any calendar year or $10.0 million in the aggregate; (x) other
Restricted Payments in an aggregate amount not to exceed $5.0 million; and (xi)
the repurchase of Subordinated Debt at a purchase price not greater than 101% of
the principal or accreted amount thereof, plus accrued and unpaid interest, if
any, pursuant to a mandatory offer to repurchase made after a Change of Control;
provided, however, that the Issuers shall have first made any Change of Control
Offer and repurchased all tendered notes pursuant to Section 4.14 hereof;
provided, further, that except for clauses (i), (v), (vii) and (viii), no
Default or Event of Default shall have occurred and be continuing or occur as a
consequence of the Restricted Payment.
The amount of all Restricted Payments, other than cash, will be
the fair market value on the date the Restricted Payment is made of the assets
or securities proposed to be transferred or issued by the Issuers or any
Restricted Subsidiary pursuant to the Restricted Payment. The fair market value
of any non-cash Restricted Payment will be determined by each Issuer's Board of
Directors in good faith, whose resolution will be delivered to the Trustee, and
its determination will be based upon an opinion or appraisal issued by an
investment banking firm, appraisal firm or accounting firm, in each case of
national standing, if the fair market value exceeds $15.0 million. Not later
than the date of making any Restricted Payment, the Issuers will deliver to the
Trustee an Officers' Certificate stating that the Restricted Payment is
permitted and setting forth the basis hereof, unless all payments due under the
Indenture or this First Supplemental Indenture with respect to the Notes, and
the applicable Notes, are secured on an equal and ratable basis with (or if the
obligations being secured rank junior in right of payment to the Notes, on a
senior basis to) the obligations so secured until such time as such obligations
are no longer secured by a Lien, provided, however, in no event will the Issuers
or their Restricted Subsidiaries be permitted at any time to have Liens securing
more than $700 million principal amount of Indebtedness.
SECTION 4.04. LIMITATION ON INCURRENCE OF INDEBTEDNESS AND
ISSUANCE OF PREFERRED STOCK. The Issuers shall not, and shall not permit any of
their Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness
(including Acquired Debt) and the Issuers will not issue any Disqualified Stock
and will not permit any of their Restricted Subsidiaries to issue any shares of
Preferred Stock; provided, however, that the Issuers may Incur Indebtedness
(including Acquired Debt) or issue shares of Disqualified Stock and any of their
Restricted Subsidiaries may Incur Indebtedness if the incurrence results in a
Consolidated Leverage Ratio that is no greater than 7.0 to 1.0 if the
Indebtedness is Incurred or the Disqualified Stock is issued prior to February
1, 2005, or 6.0 to 1.0 thereafter. Notwithstanding the foregoing, as long as no
Default or Event of Default shall have occurred and be continuing, the Issuers
and, except
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as specified in the definition of Permitted Debt, any of their Restricted
Subsidiaries may Incur Permitted Debt.
Notwithstanding any other provision of this Section 4.04,
including the definition of Permitted Debt, the Issuers and their Restricted
Subsidiaries may Incur the U.S. dollar equivalent of any Indebtedness in a
foreign currency and the maximum amount of Indebtedness that the Issuers or a
Restricted Subsidiary may incur pursuant to this covenant will not be deemed to
be exceeded with respect to any outstanding Indebtedness due solely to the
result of subsequent fluctuations in the exchange rates of currencies.
For purposes of determining compliance with this Section 4.04,
in the event that an item of proposed Indebtedness meets the criteria of more
than one of the categories of Permitted Debt described in clauses (1) through
(11) of the definition of Permitted Debt or would be entitled to be Incurred
pursuant to the first paragraph of this Section 4.04, at the date of Incurrence,
the Issuers, in their sole discretion, shall classify and from time thereafter
may reclassify, in whole or in part, that item of Indebtedness in any manner
that complies with this Section 4.04. Accrual of interest, accretion of accreted
value and the payment of interest in the form of additional Indebtedness shall
not be deemed an Incurrence of Indebtedness for purposes of this Section 4.04.
In addition, for purposes of determining any particular amount
of Indebtedness under this Section 4.04, neither (A) Guarantees, Liens or
obligations with respect to letters of credit supporting Indebtedness otherwise
included in the determination of such particular amount, or (B) any Liens
granted pursuant to the equal and ratable provisions referred to in Section 4.05
hereof, will be included.
SECTION 4.05. LIMITATION ON LIENS. The Issuers shall not, and
shall not permit any of their Restricted Subsidiaries to, create, incur, assume
or otherwise cause or suffer to exist or become effective any Lien of any kind
securing Indebtedness, Attributable Debt or trade payables, other than Permitted
Liens, upon any of the Issuers' or their Restricted Subsidiaries' property or
assets, now owned or acquired after the date hereof, unless all payments due
under the Indenture or this First Supplemental Indenture with respect to the
Notes, and the applicable Notes, are secured on an equal and ratable basis with
(or if the obligations being secured rank junior in right of payment to the
Notes, on a senior basis to) the obligations so secured until such time as such
obligations are no longer secured by a Lien; provided, however, in no event will
the Issuers or their Restricted Subsidiaries be permitted at any time to have
Liens securing more than $700 million principal amount of Indebtedness.
SECTION 4.06. LIMITATION ON DIVIDEND AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES. For so long as any of the Notes
are outstanding, the Issuers shall not, and shall not permit any of their
Restricted Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to: (1) pay dividends or make any other
distributions to the Issuers or any of their Restricted
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Subsidiaries on any Capital Stock or with respect to any other interest or
participation in, or measured by, profits; (2) pay any Indebtedness owed to the
Issuers or any of their Restricted Subsidiaries; (3) make loans or advances to
the Issuers or any Restricted Subsidiary; or (4) transfer any property or assets
of a Restricted Subsidiary to the Issuers or any Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (a) contained in the terms of any Indebtedness or any agreement
pursuant to which such Indebtedness was issued if the encumbrance or restriction
applies only in the event of a payment default or default with respect to a
financial covenant contained in that Indebtedness or agreement and such
encumbrance or restriction is not materially more disadvantageous to the Holders
than is customary in comparable financings, as determined by each Board of
Directors of the Issuers, in good faith, and such Boards of Directors determine
in good faith that any such encumbrance or restriction is not reasonably likely
to materially affect the Issuers' ability to make principal or interest payments
on the Notes; (b) existing under or by reason of applicable law; (c) existing
with respect to any Person, or the property or assets of that Person, acquired
by the Issuers or any Restricted Subsidiary existing at the time of the
acquisition and not incurred in contemplation of the acquisition, which
encumbrances or restrictions are not applicable to any Person or the property or
assets of any Person other than the acquired Person or the property or assets of
the Person so acquired, provided that, in the case of encumbrances and
restrictions with respect to Acquired Indebtedness, that Indebtedness was
permitted to be incurred under the Indenture and this First Supplemental
Indenture; (d) in the case of clause (4) (and, in case of subparagraph (II)
below to the extent relating to the sale of all of an Issuer's Capital Stock in,
or all or substantially all the assets of, a Restricted Subsidiary, clause (1))
of the first paragraph of this Section 4.06, (I) that restrict in a customary
manner the subletting, assignment or transfer of any property or asset that is,
or is subject to, a lease, purchase mortgage obligation, license, conveyance or
similar agreement or instrument; (II) existing by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any of the
property or assets of the Issuers of any Restricted Subsidiary not otherwise
prohibited by the Indenture or this First Supplemental Indenture, or (III)
arising or agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract from
the value of the property or assets of the Issuers or of any Restricted
Subsidiary in any manner material to the Issuers or any Restricted Subsidiary;
(e) existing under purchase money obligations that impose restrictions of the
nature described in clause (4) above on the property so acquired; (f) existing
under Permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing the Permitted Refinancing Indebtedness are
no more restrictive than those contained in the agreements governing the
Indebtedness being refinanced; or (g) provisions in joint venture and other
similar agreements entered into in the ordinary course of business that prohibit
actions of the type described in clauses (1), (3) or (4) above unless the joint
venture or similar entity satisfies net worth or other operating or financial
performance standards customary in these types of agreements, as determined by
each Board of Directors of the Issuers in good faith.
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Nothing contained in this Section 4.06 will prevent the Issuers
or any Restricted Subsidiary from: (A) creating, incurring, assuming or
suffering to exist any Liens otherwise permitted by Section 4.05; or (B)
restricting the sale or other disposition of property or assets of the Issuers
or any of their Restricted Subsidiaries that secure Indebtedness of the Issuers
or any of their Restricted Subsidiaries.
SECTION 4.07. LIMITATION ON SALE OF ASSETS. The Issuers shall
not, and shall not permit any of their Restricted Subsidiaries to, consummate an
Asset Sale, unless (1) the Issuers or such Restricted Subsidiary receive
consideration at the time of the Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of,
as determined in good faith by the Board of Directors of each Issuer, whose
determination will be conclusive, and in each case where the fair market value
is greater than $10.0 million, evidenced by a Board Resolution and set forth in
an Officers' Certificate delivered to the Trustee; and (2) at least 75% of the
consideration received by the Issuers or such Restricted Subsidiary for the
Asset Sale consists of cash or Cash Equivalents; provided, however, that the
amount of:
(a) any liabilities of (I) the Issuers, as shown on the most recent
balance sheet, other than contingent liabilities and liabilities that are
by their terms subordinated to the Notes or (II) any Restricted
Subsidiaries, as shown on the most recent consolidated balance sheet,
other than contingent liabilities or liabilities that are by their terms
subordinated to any guarantees of the Notes, in each case that are
assumed by the transferee in the Asset Sale pursuant to a customary
novation agreement that releases the Issuers or such Restricted
Subsidiary, as applicable, from further liability, and
(b) any securities, notes or other obligations received by the Issuers
or such Restricted Subsidiary from the transferee in the Asset Sale that
are converted into cash or Cash Equivalents within 30 days, to the extent
of the cash or Cash Equivalents received in that conversion,
shall be treated as cash for purposes of this clause (2).
The Issuers shall, or shall cause the relevant Restricted
Subsidiary to, within 360 days after the date of receipt of the Net Proceeds
from an Asset Sale, at the option of the Issuers either apply these Net Proceeds
(a) to permanently repay, and reduce the amount permitted to be borrowed under,
any of the Issuers' Indebtedness secured by a Lien or any Indebtedness of one or
more of the Issuers' Restricted Subsidiaries, or (b) acquire a controlling
interest in, or all or substantially all the assets of, another Communications
and Data Access Business, make a capital expenditure in assets used or to be
used in a Communications and Data Access Business or acquire other long-term
assets that are used or are to be used in a Communications and Data Access
Business.
Pending the final application of any Net Proceeds from an Asset
Sale, the Issuers may temporarily reduce Indebtedness under any revolving Credit
Facility or otherwise invest those Net Proceeds in any manner that is not
prohibited by the Indenture
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or this First Supplemental Indenture. Any Net Proceeds from Asset Sales that are
not applied or invested as provided above will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Issuers shall make an offer to all Holders and holders of any other
Indebtedness that ranks equally in right of payment with the Notes and that
requires the Issuers to make such an offer (an "Asset Sale Offer") to purchase
the maximum principal amount or principal amount at maturity, as applicable, of
Notes and other Indebtedness that ranks equally in right of payment with the
Notes that may be purchased out of the Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount of the Notes, plus
accrued and unpaid interest, if any, to the purchase date.
If the aggregate amount of Notes and other Indebtedness ranking
equally with the Notes tendered in an Asset Sale Offer exceeds the amount of
Excess Proceeds, the Holders validly accepting the Asset Sale Offer will be
entitled to receive their pro rata portion of the Excess Proceeds (calculated
for each Holder based on the ratio of the principal amount of the Notes tendered
by such Holder to the total principal amount of Notes, or principal amount at
maturity of all other Indebtedness tendered in respect of such Asset Sale
Offer). Following the completion of an Asset Sale Offer, the amount of Excess
Proceeds remaining, if any, will be deemed to be zero. To the extent that the
aggregate amount of Notes and other Indebtedness tendered in response to an
Asset Sale Offer is less than the Excess Proceeds, the Issuers may use any
remaining Excess Proceeds for any purpose not prohibited by the Indenture and
this First Supplemental Indenture.
SECTION 4.08. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
make any payment to, or sell, lease, transfer or otherwise dispose of any
properties or assets to, or purchase any property or assets from, or enter into
or make or amend any transaction, contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate of the Issuers
or any of their Restricted Subsidiaries (each of the foregoing, an "Affiliate
Transaction"), unless
(1) the Affiliate Transaction is on terms that are no less favorable
to the Issuers or such Restricted Subsidiary than terms that would have
been obtained in a comparable transaction by the Issuers or such
Restricted Subsidiary with an unrelated Person and
(2) the Issuers deliver to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0 million, a resolution
of the Board of Directors of each Issuer set forth in an Officers'
Certificate certifying that the Affiliate Transaction complies with
clause (1) above and that the Affiliate Transaction has been approved by
a majority of the disinterested members of each Board of Directors and
(b) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$15.0 million, an opinion or appraisal as to the fairness to the Issuers
or such Restricted Subsidiary of the Affiliate Transaction from a
financial
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point of view, issued by an investment banking firm, appraisal firm or
accounting firm, in each case of national standing.
The foregoing limitation does not limit, and will not apply to:
(I) any employment agreement entered into by the Issuers or any of
their Restricted Subsidiaries in the ordinary course of business;
(II) transactions between or among the Issuers and/or their Restricted
Subsidiaries;
(III) Restricted Payments that are permitted by Section 4.03;
(IV) fees and compensation paid to members of the Boards of Directors
of the Issuers and their Restricted Subsidiaries in their capacity as
such, to the extent such fees and compensation are reasonable and
customary;
(V) reasonable advances to employees for moving, entertainment and
travel expenses, and similar expenditures in the ordinary course of
business;
(VI) fees and compensation paid to, and indemnity provided on behalf
of, officers, directors or employees of the Issuers or any of their
Restricted Subsidiaries, as determined by the Board of Directors of each
Issuer or of any such Restricted Subsidiary, to the extent those fees and
compensation are reasonable and customary;
(VII) the MCI WorldCom Reseller Agreement as in effect on the date
hereof;
(VIII) any agreement similar to the MCI WorldCom Reseller Agreement
entered into with any Affiliate of the Issuers or of their Restricted
Subsidiaries on terms not more favorable to such party than the terms of
the MCI WorldCom Reseller Agreement, as in effect immediately before the
effective time of any such similar agreement;
(IX) compliance by the Company with its obligations under the
outstanding Series A1 Preferred Stock and Series A2 Preferred Stock, as
the same exist on the date hereof;
(X) the consummation of the Holding Company Reorganization;
(XI) any sale or other issuance of Equity Interests, other than in
respect of Disqualified Stock; or
(XII) commercial, technical and similar agreements or transactions
related to the provision of services by the Issuers or their Restricted
Subsidiaries or related to the acquisition of goods and services by the
Issuers or their Restricted Subsidiaries, in any case entered into in the
ordinary course of business; provided, however, that the terms of such
agreements or transactions are no less favorable to the Issuers than
terms that
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would have been obtained in a comparable transaction by the Issuers or
their Restricted Subsidiaries with an unrelated Person.
SECTION 4.09. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The
Issuers shall not, and shall not permit any of their Restricted Subsidiaries to,
enter into any Sale and Leaseback Transaction; provided, however, that the
Issuers and their Restricted Subsidiaries may enter into a Sale and Leaseback
Transaction if (1) the Issuers or such Restricted Subsidiary could have Incurred
Indebtedness in an amount equal to the Attributable Debt relating to the Sale
and Leaseback Transaction pursuant to Section 4.04 hereof; (2) the gross cash
proceeds of the Sale and Leaseback Transaction are at least equal to the fair
market value, as determined in good faith by the Board of Directors of each
Issuer and set forth in an Officers' Certificate delivered to the Trustee, of
the property that is the subject of the Sale and Leaseback Transaction; and (3)
the transfer of assets in the Sale and Leaseback Transaction is permitted by,
and the Issuers apply the proceeds of the transaction in compliance with,
Section 4.07.
SECTION 4.10. LIMITATION ON ISSUANCE OF GUARANTEES OF
INDEBTEDNESS BY RESTRICTED SUBSIDIARIES. The Issuers shall not permit any
Restricted Subsidiary, directly or indirectly, to guarantee, assume or in any
other manner become liable with respect to any of Indebtedness of the Issuers
that ranks equally in right of payment with, or junior in right of payment to
the Notes unless:
(1) that Restricted Subsidiary simultaneously executes and delivers a
Supplemental Indenture to the Indenture providing for a guarantee of the
Notes on terms substantially similar to the guarantee of such
Indebtedness, along with a notation relating to such guarantee in
substantially the form of Exhibit E hereto, except that if such
Indebtedness is by its express terms subordinated in right of payment to
the Notes, any such assumption, guarantee or other liability of such
Restricted Subsidiary with respect to such Indebtedness will be
subordinated in right of payment to such Restricted Subsidiary's
assumption, guarantee of other liability with respect to the Notes
substantially to the same extent as such Indebtedness is subordinated to
the Notes, and
(2) that Restricted Subsidiary waives, and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the
Issuers or any of their Restricted Subsidiaries as a result of any
payment by such Restricted Subsidiary under its guarantee.
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Notwithstanding the foregoing, any guarantee by a Restricted
Subsidiary may provide by its terms that it will be automatically and
unconditionally released and discharged upon (a) any sale, exchange or transfer,
to any Person not an Affiliate of the Issuers, of all of the Capital Stock of
the Issuers and their Restricted Subsidiaries in, or all or substantially all of
the assets of, such Restricted Subsidiary, which sale, exchange or transfer is
not prohibited by the Indenture or this First Supplemental Indenture; provided,
however, that the Person to which that Capital Stock is sold does not, directly
or indirectly, guarantee, assume or in any other manner become liable with
respect to any Indebtedness of the Issuers as a result of or in connection with
the sale, exchange or transfer, or (b) the release or discharge of the
Indebtedness which resulted in the creation of that guarantee, except a
discharge or release by or as a result of payment under such guarantee.
SECTION 4.11. LIMITATION ON BUSINESS ACTIVITIES. The Issuers
shall not, and shall not permit any of their Restricted Subsidiaries to,
directly or indirectly, engage in any line of business other than a
Communications and Data Access Business, except to such extent as would not be
material to the Issuers and their Restricted Subsidiaries taken as a whole.
SECTION 4.12. LIMITATION ON ISSUANCE AND SALE OF EQUITY INTERESTS
OF RESTRICTED SUBSIDIARIES. Other than in connection with the Holding Company
Reorganization, the Issuers shall not sell, transfer, convey or otherwise
dispose of and shall not permit any Restricted Subsidiary, directly or
indirectly, to issue, sell, transfer, convey or otherwise dispose of any Equity
Interests of such Restricted Subsidiary or any other Restricted Subsidiary to
any Person, except:
(1) to the Issuers or any of their Restricted Subsidiaries;
(2) issuances of director's qualifying shares or sales to foreign
nationals of shares of Capital Stock of non-U.S. Restricted Subsidiaries
to the extent required by law; and
(3) issuances and sales of Equity Interests in respect of Common Stock
of Restricted Subsidiaries effected in compliance with Section 4.07
hereof or in a transaction excluded from the definition of the term
"Asset Sale"; provided, however, that, if, after giving effect to such
issuance or sale, that Restricted Subsidiary would cease to be a
Subsidiary of the Issuers, then the Issuers shall not effect, or permit
their Restricted Subsidiary, to effect such issuance or sale unless any
remaining Investment in such Person would have been permitted to be made
(and shall be treated as a Restricted Investment) under Section 4.03
hereof, with the value of such remaining Investment to be determined in
the manner prescribed by the last sentence of the first paragraph of
Section 4.13 hereof.
SECTION 4.13. DESIGNATION OF RESTRICTED AND UNRESTRICTED
SUBSIDIARIES. For so long as no Default or Event of Default has occurred and is
continuing, the Board of Directors of the Company prior to a Holding Company
Reorganization and the Board of Directors of Finance Sub, after a Holding
Company
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Reorganization will be permitted to designate any Restricted
Subsidiary to be an Unrestricted Subsidiary; provided, however, that the Issuers
could incur, immediately after that designation, $1.00 of Indebtedness under the
Consolidated Leverage Ratio test set forth in the first paragraph of Section
4.04 hereof as though such designation had occurred at the beginning of the
Reference Period. In the event that the Issuers designate a Restricted
Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the
Issuers and their Restricted Subsidiaries, except to the extent repaid in cash,
in the Restricted Subsidiary so designated will be deemed to be an Investment at
the time of the designation and will reduce the amount available for Restricted
Payments under the first paragraph of Section 4.03 hereof or otherwise available
as a Permitted Investment, as applicable. All of these outstanding Investments
will be valued at an amount equal to the greater of:
(1) the fair market value of those Investments at the time of the
designation; and
(2) the original fair market value of those Investments at the time
they were made.
The Issuers shall only be permitted to designate a Restricted
Subsidiary as an Unrestricted Subsidiary if the Restricted Payment or an
equivalent Permitted Investment would be permitted at that time and if the
Restricted Subsidiary otherwise would meet the definition of an Unrestricted
Subsidiary.
Any designation by the Board of Directors of the Company, prior
to a Holding Company Reorganization, and the Board of Directors of Finance Sub,
after a Holding Company Reorganization, of a Restricted Subsidiary as an
Unrestricted Subsidiary will be required to be evidenced by the filing with the
Trustee of a certified copy of the Board Resolution giving effect to the
designation and an Officers' Certificate certifying that the designation
complied with the foregoing conditions. If, at any time, any Unrestricted
Subsidiary would fail to meet the definition of an Unrestricted Subsidiary, it
will thereafter cease to be an Unrestricted Subsidiary for purposes of the
Indenture and this First Supplemental Indenture and any Indebtedness of that
Subsidiary will be deemed to be incurred by a Restricted Subsidiary as of that
date and, if the Indebtedness is not permitted to be Incurred as of that date
under Section 4.04 hereof, the Issuers will be in default of such Section 4.04.
The Board of Directors of the Company, prior to a Holding Company
Reorganization, and the Board of Directors of Finance Sub, after a Holding
Company Reorganization, will be permitted to at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
the designation will be deemed to be an Incurrence of Indebtedness by a
Restricted Subsidiary of any outstanding Indebtedness of the Unrestricted
Subsidiary and the designation will only be permitted if (a) the Indebtedness is
permitted under the first paragraph of Section 4.04 hereof, and (b) no Default
or Event of Default would be in existence immediately following such
designation.
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SECTION 4.14. CHANGE OF CONTROL. Upon the occurrence of a Change
of Control, each Holder will have the right to require the Issuers to repurchase
all or any part of such Holder's Notes pursuant to the Change of Control Offer
described below at a purchase price in cash (the "Change of Control Payment")
equal to 101% of the principal amount of such Notes, plus accrued and unpaid
interest to the Change of Control Payment Date.
Within 10 days following any Change of Control, the Issuers shall
mail a notice to the Trustee and each Holder describing the transaction or
transactions that constitute the Change of Control and offering to repurchase
the Notes (the "Change of Control Offer") on the date specified in the notice,
which will not be earlier than 30 days or later than 60 days from the date the
notice is mailed (the "Change of Control Payment Date").
On the Change of Control Payment Date, the Issuers shall, to the
extent lawful: (a) accept for payment Notes or portions thereof properly
tendered and not withdrawn pursuant to the Change of Control Offer; (b) deposit
with the Paying Agent an amount equal to the Change of Control Payment for all
Notes or portions thereof so accepted; and (c) deliver, or cause to be
delivered, to the Trustee, all Notes or portions thereof so accepted together
with an Officers' Certificate specifying the Notes or portions thereof that
accepted for payment.
The Paying Agent promptly shall mail the Change of Control
Payment due to the Holders accepted for purchase. The Trustee shall promptly
authenticate and mail or cause to be transferred by book entry to the Holders a
new Note equal in principal amount of any unpurchased portion of the Notes
surrendered. In any event, each Note that is purchased and each new Note that
issued will be in a principal amount of $1,000 or integral multiples thereof.
The Issuers shall announce publicly the results of the Change of Control Offer
on or as soon as practicable after the Change of Control Payment Date.
The Change of Control provisions described in this Section 4.14
will be applicable whether or not any other provisions of the Indenture and this
First Supplemental Indenture are applicable. Except as described in this Section
4.14, the Indenture and First Supplemental Indenture do not contain provisions
that permit the Holders to require the Issuers to repurchase or redeem the Notes
in the event of a takeover, recapitalization or similar transaction.
The Issuers shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in the Indenture and this Supplemental Indenture
applicable to a Change of Control Offer made by the Issuers and purchases all
Notes validly tendered and not withdrawn under that Change of Control Offer.
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The Issuers shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations to the extent those laws and
regulations are applicable in the event that a Change of Control occurs and the
Issuers are required to offer to repurchase the Notes under this Section 4.14.
In the event of a conflict between complying with applicable laws and the
provisions of the Indenture and this First Supplemental Indenture, the Issuers
shall comply with applicable laws and shall not be deemed to have committed a
Default or Event of Default as a result of so complying.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS. The
Issuers shall not, directly or indirectly, consolidate or merge with or into,
whether or not an Issuer is the surviving corporation, or sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
Issuers' properties or assets in one or more related transactions, to another
Person unless
(1) an Issuer is the surviving corporation or the Person formed by or
surviving the consolidation or merger, if other than an Issuer, or to
which the sale, assignment, transfer, conveyance or other disposition is
made is organized under the laws of the United States or any state of the
United States or the District of Columbia, the British Virgin Islands,
Cayman Islands, The Netherlands, Ireland, Jersey or Luxembourg;
(2) the Person formed by or surviving the consolidation or merger, if
other than an Issuer, or the Person to which the sale, assignment,
transfer, conveyance or other disposition is made assumes all of the
Issuers' obligations under the Notes and the Indenture and this First
Supplemental Indenture pursuant to a Supplemental Indenture in a form
reasonably satisfactory to the Trustee;
(3) immediately before and after the transaction no Default or Event
of Default will have occurred;
(4) in the event that the continuing Person is incorporated in a
jurisdiction other than under the laws of the United States or any state
of the United States or the District of Columbia: (a) the Issuers deliver
to the Trustee an opinion of counsel stating that the obligations of the
continuing person under the Indenture and this First Supplemental
Indenture are enforceable under the laws of the new jurisdiction of its
incorporation to the same extent as the Issuers' obligations under the
Indenture and this First Supplemental Indenture immediately prior to the
transaction; (b) the continuing Person agrees in writing to submit to
jurisdiction and appoints an agent for the service of process, each under
terms substantially similar to the terms contained in the Indenture and
this First Supplemental Indenture with respect to the Issuers; (c) the
continuing Person agrees in writing to pay Additional Amounts with
respect to any withholding tax imposed by the country of the continuing
Person's organization or any political subdivision thereof, and such
Additional Amounts will relate to any
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withholding tax whatsoever regardless of any change of law, subject to
exceptions set forth below under Section 5.03 hereof; and (d) the Board
of Directors of the Company, prior to a Holding Company Reorganization,
or Finance Sub, after a Holding Company Reorganization, determines in
good faith that the transaction is not reasonably likely to have a
material adverse effect on the Holders and a Board Resolution to that
effect is delivered to the Trustee; and
(5) except in the case of the Holding Company Reorganization, an
Issuer or the Person formed by or surviving the consolidation or merger,
if other than an Issuer, or to which the Issuers sell, assign, transfer,
convey or otherwise dispose of all or substantially all their properties
or assets, will, immediately after the transaction after giving pro forma
effect to the transaction and any related financing transactions as if
the same had occurred at the beginning of the applicable Reference
Period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Leverage Ratio test set forth in the first
paragraph of Section 4.04 hereof.
In addition, the Issuers shall not, directly or indirectly, lease
all or substantially all of their properties or assets, in one or more related
transactions, to any other Person.
Notwithstanding the foregoing provisions, nothing in this Section
5.01 shall prohibit the Issuers from completing the Holding Company
Reorganization, provided that the completion of that transaction is solely for
the purpose of effecting the Holding Company Reorganization and not for the
purpose of circumventing any other provision of the Indenture or this First
Supplemental Indenture.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any
consolidation or merger, or any sale, assignment, transfer, conveyance or other
disposition of all or substantially all of the Issuers' assets in accordance
with the foregoing provisions in which an Issuer is not the continuing obligor
under the Notes and the Indenture and First Supplemental Indenture, the
surviving entity will succeed to, and be substituted for, and may exercise every
right and power of, the Issuers under the Notes, Indenture and the First
Supplemental Indenture with the same effect as if that successor had been named
as an Issuer in the Notes, Indenture and First Supplemental Indenture. When a
successor assumes all the obligations of its predecessor under the Notes,
Indenture and First Supplemental Indenture, the predecessor will be released
from those obligations.
SECTION 5.03. ADDITIONAL AMOUNTS. The Issuers shall pay to each
Holder such additional amounts ("Additional Amounts") as may be necessary in
order that every net payment of the principal of and interest on such Holder's
Notes, after deduction or withholding for or on account of any present or future
tax, assessment or governmental charge imposed upon or as a result of such
payment by the country in which the continuing Person is organized or any
political subdivision or taxing authority in that political subdivision or
taxing authority, will not be less than the amount provided
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for in such Notes, then due and payable before any such tax, assessment or other
governmental charge; provided, however, that the foregoing obligation to pay
Additional Amounts shall not apply to:
(a) any tax, assessment or other governmental charge which would not have
been so imposed but for:
(i) the existence of any present or former connection between such
Holder (or between a fiduciary, settler, beneficiary, member,
partner or shareholder of, or possessor of a power over, such
Holder, if such Holder is an estate, trust, partnership or
corporation) and the country in which the Issuers are organized,
including, without limitation, such Holder (or such fiduciary,
settler, beneficiary, member, partner, shareholder or possessor)
being or having been a citizen or resident of the country in which
the Issuers are organized or treated as a resident thereof, or
being or having been engaged in trade or business or present
therein, or having or having had a permanent establishment therein
or making or having made an election the effect of which is to
subject such Holder or beneficial owner (or such fiduciary,
settler, beneficiary, member, partner, shareholder or possessor) to
such tax assessment or other governmental charge;
(ii) the failure of such Holder or beneficial owner of a Note to comply
with any requirement under income tax treaties, statutes and
regulations or administrative practice of the country in which the
Issuers are organized, to establish entitlement to exemption from
or reduction of such tax, assessment or other governmental charge;
or
(iii) such Holder's present or former status as a personal holding
company or foreign personal holding company with respect to the
United States, a controlled foreign corporation or a passive
foreign investment company for United States tax purposes or a
corporation that accumulates earnings to avoid United States
federal income tax;
(b) any tax, assessment or other governmental charge which would not been so
imposed but for the presentation by the Holder of such Note for payment
on a date more than 10 days after the date on which such payment becomes
due and payable or a date on which payment thereof is duly provided for
and notice is given to Holders, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or governmental charge;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by deduction or withholding from payments of principal of
or interest on such Note;
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(e) any tax, assessment or other governmental charge which is payable by a
Holder that is not the beneficial owner of the Note, or a portion of the
Note, or that is a foreign or fiduciary partnership, but only to the
extent that a beneficial owner, settler with respect to such fiduciary or
member of the partnership would not have been entitled to the payment of
an Additional Amount had the beneficial owner or member received directly
its beneficial or distributive share of the payment;
(f) any tax, assessment or other governmental charge required to be withheld
by any Paying Agent from any payment of the principal of or interest on
any Note, if such payment can be made without such withholding by any
other paying agent; or
(g) any combination of items (a) through (f) above.
For the purposes of the foregoing, the holding of or the receipt
of any payment with respect to a Note will not constitute a connection between
the Holder (or between a fiduciary, settler, beneficiary, member, partner or
shareholder of, or a person having a power over, such Holder if such Holder is
an estate, a trust, a partnership or a corporation) and the country in which the
Issuers are organized.
Except as specifically provided herein, the Issuers shall not be
required to make any payment with respect to any tax, assessment or other
governmental charge imposed by any government or any political subdivision or
taxing authority thereof or therein.
References in the Indenture and this First Supplemental Indenture
to principal and/or interest shall be deemed also to refer to any Additional
Amounts which may be payable under this provision.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. Each of the following shall
constitute an "Event of Default" for purposes of the Indenture and this First
Supplemental Indenture:
(1) default in the payment of interest on the Notes when due and payable and,
other than with respect to the first four scheduled interest payments on
the Notes, continuance of such default for a period of 30 days;
(2) default in the performance of any covenant set forth in the Pledge
Agreement, or repudiation by the Issuers of any of their obligations
under the Pledge Agreement or the unenforceability of the Pledge
Agreement against the Issuers for any reason which
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in any one case or in the aggregate results in a material impairment of
the rights intended to be afforded thereby;
(3) default when due in the payment of principal of, or premium, if any, on
any Note;
(4) failure by the Issuers or any of their Restricted Subsidiaries for 30
days after written notice to them by the Trustee or by the Holders of at
least 25% in aggregate principal amount of the outstanding Notes to
comply with the provisions of Section 4.03, 4.04, 4.07 or 4.14 hereof;
(5) failure by the Issuers or any of their Restricted Subsidiaries to perform
or comply with the provisions of Section 5.01 hereof or of the Indenture;
(6) failure by the Issuers or any of their Restricted Subsidiaries for 60
days after written notice to them by the Trustee or by the Holders of at
least 25% in aggregate principal amount of the outstanding Notes to
comply with any other covenant set forth in the Notes, Indenture or this
First Supplemental Indenture;
(7) default under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness
for money borrowed by the Issuers or any of their Significant
Subsidiaries (or group of Restricted Subsidiaries that if treated as a
single subsidiary would constitute a Significant Subsidiary), or the
payment of which is guaranteed by the Issuers or any of their Significant
Subsidiaries (or group of Restricted Subsidiaries that if treated as a
single subsidiary would constitute a Significant Subsidiary), whether
that Indebtedness or guarantee now exists or is created after the date
hereof, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on that Indebtedness prior to the expiration
of the grace period provided in that Indebtedness on the date of such
default (a "Payment Default") or (b) results in the acceleration of that
Indebtedness prior to its express maturity, and, in each case, if the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated,
aggregates $10.0 million or more;
(8) failure by the Issuers or any of their Significant Subsidiaries (or group
of Restricted Subsidiaries that if treated as a single subsidiary would
constitute a Significant Subsidiary) to pay final judgments aggregating
in excess of $10.0 million, excluding amounts covered by insurance, which
judgments are not paid, discharged or stayed for a period of 60 days
after the date on which the right to appeal has expired.
(9) an Issuer or any Significant Subsidiaries of an Issuer (or group of
Restricted Subsidiaries that if treated as a single subsidiary would
constitute a Significant Subsidiary):
(a) commences a voluntary case under any Bankruptcy Law;
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(b) consents to the entry of an order for relief against it in an
involuntary case under any Bankruptcy Law now or hereafter in effect;
(c) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of an Issuer or any Significant Subsidiary of an Issuer (or
group of Restricted Subsidiaries that if treated as a single
Subsidiary would constitute a Significant Subsidiary) or for all or
substantially all of the property and assets of an Issuer or any of
its Significant Subsidiaries (or group of Restricted Subsidiaries that
if treated as a single Subsidiary would constitute a Significant
Subsidiary); or
(d) effects a general assignment for the benefit of its creditors; or
(10) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law for:
(a) relief in respect of an Issuer or any Significant Subsidiary of an
Issuer (or group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary) in an involuntary case
under any Bankruptcy Law now or hereafter in effect;
(b) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of an Issuer or any
Significant Subsidiary of an Issuer (or group of Subsidiaries that if
treated as a single subsidiary would constitute a Significant
Subsidiary) or for all or substantially all of the property and assets
of an Issuer or any Significant Subsidiary (or group of Restricted
Subsidiaries that if treated as a single subsidiary would constitute a
Significant Subsidiary); or
(c) the winding up or liquidation of the affairs of an Issuer or any
Significant Subsidiary (or group of Restricted Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary);
and, in each case, the order or decree remains unstayed and in effect for a
period of 60 consecutive days.
SECTION 6.02. ACCELERATION. If an Event of Default, other than an
Event of Default specified in clause (9) or (10) above, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding, by written notice to the Issuers, and to
the Trustee if such notice is given by the Holders, may, and the Trustee at the
request of such Holders shall, declare, the principal of, premium, if any, and
accrued but unpaid interest on the Notes to be immediately due and payable. Upon
a declaration of acceleration, such principal, premium, if any, and accrued and
unpaid interest will be immediately due and payable. In the event of a
declaration of acceleration because an Event of Default set forth in clause
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(7) above has occurred and is continuing, such declaration of acceleration will
be automatically rescinded and annulled if the Indebtedness that is the subject
of such Event of Default has been discharged or the holders thereof have
rescinded their declaration of acceleration in respect of such Indebtedness, and
written notice of such discharge or rescission, as the case may be, shall have
been given to the Trustee by the Issuers and countersigned by the holders of
such Indebtedness or a trustee, fiduciary or agent for such holders, within 60
days after such declaration of acceleration in respect of the Notes, and no
other Event of Default has occurred during such 60-day period which has not been
cured or waived during such period. If an Event of Default specified in clause
(9) or (10) above occurs, the principal of, premium, if any, and accrued and
unpaid interest on the Notes then outstanding will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. The Holders of at least a majority in principal
amount of the outstanding Notes as to which the acceleration has occurred, by
written notice to the Issuers and to the Trustee, may waive all past defaults
and rescind and annul a declaration of acceleration and its consequences if,
among other things, (1) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and accrued and unpaid interest
on the Notes that have become due solely by such declaration of acceleration,
have been cured or waived and (2) the rescission, in the opinion of counsel,
would not conflict with any judgment or decree of a court of competent
jurisdiction.
Notwithstanding the foregoing, the Trustee shall have no
obligation to accelerate the Notes if in the best judgment of the Trustee
acceleration is not in the best interest of the Holders.
ARTICLE 7
INTEREST RESERVE
SECTION 7.01. INTEREST RESERVE; SECURITY. The due and punctual
payment of the principal of, premium, if any, and interest on the Notes when and
as the same shall be due and payable, whether on an interest payment date, at
maturity, by acceleration, repurchase, redemption or otherwise, and interest on
the overdue principal of, premium, if any, and interest on the Notes and
performance of all other obligations of the Issuers and any Guarantors to the
Holders of Notes or the Trustee under the Indenture, this First Supplemental
Indenture, the Notes and the Note Guarantees, according to the terms hereunder
or thereunder, shall be secured by the Pledged Securities, as provided in the
Pledge Agreement which the Issuers and the Guarantor have entered into
simultaneously with the execution of this First Supplemental Indenture for the
benefit of the Holders of Notes. Each Holder of Notes, by its acceptance
thereof, consents and agrees to the terms of the Pledge Agreement as the same
may be in effect or may be amended from time to time in accordance with its
terms and authorizes and directs the Trustee to enter into the Pledge Agreement
and to perform its obligations and exercise its rights thereunder in accordance
therewith. The Issuers and the Guarantor
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shall deliver to the Trustee copies of all documents executed pursuant to the
Indenture, this First Supplemental Indenture and the Pledge Agreement and shall
do or cause to be done all such acts and things as may be necessary or proper,
or as may be required by the provisions of the Pledge Agreement to assure and
confirm to the Trustee the security interest in the Pledged Securities
contemplated hereby, by the Pledge Agreement, or any part thereof, as from time
to time constituted, so as to render the same available for the security and
benefit of this First Supplemental Indenture and of the Notes and the Note
Guarantees secured hereby, according to the intent and purposes herein and
therein expressed. The Issuers shall take, or shall cause their Restricted
Subsidiaries to take, upon request of the Trustee, any and all actions
reasonably required to cause the Pledge Agreement to create and maintain, as
security for the obligations of the Issuers hereunder, a valid and enforceable
perfected Lien on the Pledged Securities, subject to Liens permitted by the
Pledge Agreement.
SECTION 7.02. RECORDING AND OPINIONS. The Issuers and the
Guarantor will cause the Pledge Agreement and any financing statements, and all
amendments or supplements to each of the foregoing and any other similar
security documents as necessary, to be registered, recorded and filed and/or
re-recorded, re-filed and renewed in such manner and in such place or places, if
any, as may be required by law in order fully to preserve and protect the Lien
securing the obligations under the Notes and the Note Guarantees pursuant to the
Pledge Agreement.
The Issuers and any other obligor shall furnish to the Trustee:
(a) promptly after the execution and delivery of this First
Supplemental Indenture, and promptly after the execution and delivery of any
other instrument of further assurance or amendment, an Opinion of Counsel in the
United States either (i) stating that, subject to customary assumptions and
exclusions, in the opinion of such counsel, the Indenture, this First
Supplemental Indenture, the Pledge Agreement and all other instruments of
further assurance or amendment have been properly recorded, registered and filed
to the extent necessary to make effective the Liens intended to be created by
the Pledge Agreement and reciting the details of such action or referring to
prior Opinions of Counsel in which such details are given or (ii) stating that,
subject to customary assumptions and exclusions, in the opinion of such counsel,
no such action is necessary to make any other Lien created under any of the
Pledge Agreement effective as intended by such Pledge Agreement; and
(b) within 30 days after January 1, in each year beginning with
the year 2000, an Opinion of Counsel, dated as of such date, either (i) stating
that, subject to customary assumptions and exclusions, in the opinion of such
counsel, such action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of the Indenture, this First
Supplemental Indenture and all supplemental indentures, financing statements,
continuation statements or other instruments of further assurance as is
necessary to maintain the Lien of this First Supplemental Indenture and the
Pledge Agreement until the next Opinion of Counsel is required to be rendered
pursuant to this paragraph and reciting the details of such action or referring
to prior
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Opinions of Counsel in which such details are given or (ii) stating that,
subject to customary assumptions and exclusions, in the opinion of such counsel,
no such action is necessary to maintain such Lien, until the next Opinion of
Counsel is required to be rendered pursuant to this paragraph.
(c) The Issuers shall furnish to the Trustee the certificates or
opinions, as the case may be, required by TIA Section 314(d). Such certificates
or opinions will be subject to the terms of TIA Section 314(e).
SECTION 7.03. RELEASE OF THE PLEDGED SECURITIES.
(a) Subject to subsections (b), (c) and (d) of this Section 7.03,
Pledged Securities may be released from the Lien and security interest created
by the Indenture, this First Supplemental Indenture and the Pledge Agreement at
any time or from time to time upon the request of the Issuers pursuant to an
Officers' Certificate certifying that all terms for release and conditions
precedent hereunder and under the Pledge Agreement have been met and specifying
(i) the identity of the Pledged Securities to be released and (ii) the provision
of this First Supplemental Indenture which authorizes such release. The Trustee
shall release (at the sole cost and expense of the Issuers) (i) all Pledged
Securities (except as provided in Article 8 of the Indenture and, in particular,
the funds in the trust fund described in Section 8.04 thereof) upon discharge or
defeasance of this First Supplemental Indenture in accordance with Article 8
thereof; (ii) all Pledged Securities upon the payment in full of all obligations
of the Issuers with respect to the Notes; and (iii) Pledged Securities that are
expressly required to be released by the Pledge agreement. Upon receipt of such
Officers' Certificate the Trustee shall execute, deliver or acknowledge any
necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Pledged Securities permitted to be released pursuant
to this First Supplemental Indenture or the Pledge Agreement. The Trustee is
hereby authorized and shall, from time to time upon request of the Issuers,
execute and deliver UCC-3 partial release or termination statements and such
other documents evidencing release of Pledged Securities available for release
pursuant to clauses (i) through (iii) above.
(b) Except pursuant to Section 7.03(a), no Pledged Securities
shall be released from the Lien and security interest created by the Pledge
Agreement pursuant to the provisions of the Pledge Agreement unless there shall
have been delivered to the Trustee the certificate required by this Section
7.03.
(c) The Trustee may release Pledged Securities from the Lien and
security interest created by the Indenture, this First Supplemental Indenture
and the Pledge Agreement upon the sale or disposition of Pledged Securities
pursuant to the Trustee's powers, rights and duties with respect to remedies
provided under the Pledge Agreement.
(d) The release of any Pledged Securities from the terms of the
Indenture, this First Supplemental Indenture and the Pledge Agreement shall not
be
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deemed to impair the security under this First Supplemental Indenture in
contravention of the provisions hereof if and to the extent the Pledged
Securities are released pursuant to the terms hereof. To the extent applicable,
the Issuers shall cause TIA Section 313(b), relating to reports, and TIA Section
314(d), relating to the release of property or securities from the Lien and
security interest of the Pledge Agreement and relating to the substitution
therefor of any property or securities to be subjected to the Lien and security
interest of the Pledge Agreement to be satisfied. Any certificate or opinion
required by TIA Section 314(d) may be made by an Officer of each Issuer except
in cases where TIA Section 314(d) requires that such certificate or opinion be
made by an independent Person, which Person shall be an independent engineer,
appraiser or other expert selected or approved by the Trustee in the exercise of
reasonable care.
SECTION 7.04. CERTIFICATES OF THE ISSUERS. The Issuers shall
furnish to the Trustee, prior to each proposed release of Pledged Securities
pursuant to the Pledge Agreement (i) all documents required by TIA Section
314(d) and (ii) an Opinion of Counsel in the United States, which may be
rendered by internal counsel to the Company, to the effect that, subject to
customary assumptions and exclusions, such accompanying documents constitute all
documents required by TIA Section 314(d). The Trustee may, to the extent
permitted by Sections 7.01 and 7.02 of the Indenture, accept as conclusive
evidence of compliance with the foregoing provisions the appropriate statements
contained in such documents and such Opinion of Counsel.
SECTION 7.05. AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE
UNDER THE PLEDGE AGREEMENT. Subject to the provisions of Section 7.01 and 7.02
of the Indenture, the Trustee may, in its sole discretion and without the
consent of the Holders of Notes, on behalf of the Holders of Notes, take all
actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Pledge Agreement and (b) collect and receive any and all amounts
payable in respect of the Obligations of the Issuers hereunder, including but
not limited to the appointment and approval of collateral agents and the
appointment and approval of an insurance trustee. The Trustee shall have power
to institute and maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Pledged Securities by any acts that may be
unlawful or in violation of the Pledge Agreement or this Indenture, and such
suits and proceedings as the Trustee may deem expedient to preserve or protect
its interests and the interests of the Holders of Notes in the Pledged
Securities (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Holders of Notes or of the Trustee).
SECTION 7.06. TRUSTEE'S DUTIES. The powers and duties conferred
upon the Trustee by this Article 7 are solely to protect the Pledged Securities
and shall not impose any duty upon the Trustee to exercise any such powers and
duties, except as expressly provided in this First Supplemental Indenture. The
Trustee shall be under no duty to either Issuer or any Guarantor whatsoever to
make or give any presentment,
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demand for performance, notice or nonperformance, protest, notice of protest,
notice of dishonor, or other notice or demand in connection with any Pledged
Securities, or to take any steps necessary to preserve this First Supplemental
Indenture. The Trustee shall not be liable to either Issuer or any Guarantor for
failure to collect or realize upon any or all of the Pledged Securities, or for
any delay in doing so, nor shall the Trustee be under any duty to either Issuer
or any Guarantor to take any action whatsoever with regard thereto. The Trustee
shall have no duty to either Issuer, the Guarantor or any Holder to comply with
any recording, filing or other legal requirements necessary to establish or
maintain the validity, priority or enforceability of the Liens in, or the
Trustee's rights in or to, any of the Pledged Securities.
SECTION 7.07. AUTHORIZATION OF RECEIPT OF FUNDS BY THE TRUSTEE
UNDER THE PLEDGE AGREEMENT. Upon an Event of Default and so long as such Event
of Default continues, the Trustee may exercise in respect of the Pledged
Securities, in addition to the other rights and remedies provided for herein, in
the Pledge Agreement or otherwise available to it, all of the rights and
remedies of a secured party under the Uniform Commercial Code or other
applicable law, and the Trustee may also upon obtaining possession of the
Pledged Securities as set forth herein, without notice to the Issuers, except as
specified below, sell the Pledged Securities or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
the Trustee's offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Trustee may deem commercially reasonable. The
Issuers acknowledge and agree that any such private sale may result in prices
and other terms less favorable to the seller than if such a sale were a public
sale. The Issuers agree that, to the extent notice of sale shall be required by
law, at least 10 days' notice to the Issuers of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Trustee shall not be obligated to make any sale
regardless of notice of sale having been given. The Trustee may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
Any cash that is Pledged Securities held by the Trustee and all cash
proceeds received by the Trustee in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Securities shall be
applied (unless otherwise provided for in the Pledge Agreement and after payment
of any and all amounts payable to the Trustee pursuant to this Indenture), as
the Trustee shall determine or as the Holders of the Notes shall direct pursuant
to Section 6.05 of the Indenture, (i) against the obligations for the ratable
benefit of the Holders of the Notes, (ii) to maintain, repair or otherwise
protect the Pledged Securities or (iii) to take such other action to protect the
other rights of the Holders of the Notes or to take any other appropriate action
or remedy for the benefit of the Holders of the Notes. Any surplus of such cash
or cash proceeds held by the Trustee and remaining after payment in full of all
the obligations shall be paid over to the Issuers or to whomsoever may be
lawfully entitled to receive such surplus or as a court of competent
jurisdiction may direct.
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SECTION 7.08. TERMINATION OF SECURITY INTEREST. Upon the payment
in full of all interest payable on the first four scheduled interest payment
dates, the Trustee shall (at the request of the Issuers accompanied by (i) an
Officers' Certificate of each of the Issuers to the Trustee stating that such
interest payments have been paid in full, and (ii) instructions from the Issuers
to the Trustee to release the Liens pursuant to this First Supplemental
Indenture and the Pledge Agreement) release the Liens securing the Pledged
Securities.
SECTION 7.09. COOPERATION OF TRUSTEE. In the event the Issuers or
any Guarantor pledge or grant a security interest in additional Pledged
Securities, the Trustee shall cooperate with the Issuers or such Guarantor in
reasonably and promptly agreeing to the form of, and executing as required, any
instruments or documents necessary to make effective the security interest in
the Pledged Securities to be so substituted or pledged. To the extent
practicable, the terms of any security agreement or other instrument or document
necessitated by any such substitution or pledge shall be comparable to the
provisions of the existing Pledge Agreement. Subject to, and in accordance with
the requirements of this Article 7 and the terms of the Pledge Agreement, in the
event that the Issuers or any Guarantor engages in any transaction pursuant to
Section 7.03, the Trustee shall cooperate with the Issuers or such Guarantor in
order to facilitate such transaction in accordance with any reasonable time
schedule proposed by the Issuers, including by delivering and releasing the
Pledged Securities in a prompt and reasonable manner.
SECTION 7.10. COLLATERAL AGENT. The Trustee may, from time to
time, appoint one or more Collateral Agents hereunder. Each of such Collateral
Agents may be delegated any one or more of the duties or rights of the Trustee
hereunder or under the Pledge Agreement or one or more Credit Facilities or
which are specified in the Pledge Agreement or such Credit Facilities, including
without limitation, the right to hold any Pledged Securities in the name of,
registered to, or in the physical possession of, such Collateral Agent, for the
rateable benefit of the Holders of the Notes. Each such Collateral Agent shall
have such rights and duties as may be specified in an agreement between the
Trustee and such Collateral Agent. The Trustee and any Collateral Agent shall be
authorized hereunder to give any acknowledgment reasonably requested by any
party under one or more Credit Facilities to confirm the rights and obligations
of the parties under such Credit Facilities.
ARTICLE 8
NOTE GUARANTEES
SECTION 8.01. SUBSIDIARY GUARANTEES. Subject to this Article 8,
each of the Guarantors hereby, jointly and severally, unconditionally guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, this First Supplemental Indenture, the Notes or
the obligations of the Issuers hereunder or thereunder, that: (a) the principal
of premium, if any, and interest on the Notes will be
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promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Issuers to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration pursuant to Section 6.02 hereof or otherwise. Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately. Each Guarantor agrees that this is a guarantee of
payment and not a guarantee of collection.
Each Guarantor hereby agrees that its obligations with regard to
this Note Guarantee shall be joint and several, unconditional, irrespective of
the validity or enforceability of the Notes or the obligations of the Issuers
under the Indenture, this First Supplemental Indenture, the absence of any
action to enforce the same, the recovery of any judgment against the Issuers or
any other obligor with respect to the Indenture, this First Supplemental
Indenture, the Notes or the obligations of the Issuers under the Indenture, this
First Supplemental Indenture or the Notes, any action to enforce the same or any
other circumstances (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a Guarantor. Each
Guarantor further, to the extent permitted by law, waives and relinquishes all
claims, rights and remedies accorded by applicable law to guarantors and agrees
not to assert or take advantage of any such claims, rights or remedies,
including but not limited to: (a) any right to require any of the Trustee, the
Holders or the Issuers (each a "Benefited Party"), as a condition of payment or
performance by such Guarantor, to (1) proceed against the Issuers, any other
guarantor (including any other Guarantor) of the obligations under the Note
Guarantees or any other Person, (2) proceed against or exhaust any security held
from the Issuers, any such other guarantor or any other Person, (3) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Benefited Party in favor of the Issuers or any other Person, or (4)
pursue any other remedy in the power of any Benefited Party whatsoever; (b) any
defense arising by reason of the incapacity, lack of authority or any disability
or other defense of the Issuers including any defense based on or arising out of
the lack of validity or the unenforceability of the obligations under the Note
Guarantees or any agreement or instrument relating thereto or by reason of the
cessation of the liability of the Issuers from any cause other than payment in
full of the obligations under the Note Guarantees; (c) any defense based upon
any statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in other respects more burdensome than that of
the principal; (d) any defense based upon any Benefited Party's errors or
omissions in the administration of the obligations under the Note Guarantees,
except behavior which amounts to bad faith; (e)(1) any principles or provisions
of law, statutory or otherwise, which are or might be in conflict with the terms
of the Note Guarantees and any legal or equitable discharge of such Guarantor's
obligations hereunder, (2) the benefit of any statute of limitations
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affecting such Guarantor's liability hereunder or the enforcement hereof, (3)
any rights to set-offs, recoupments and counterclaims and (4) promptness,
diligence and any requirement that any Benefited Party protect, secure, perfect
or insure any security interest or lien or any property subject thereto; (f)
notices, demands, presentations, protests, notices of protest, notices of
dishonor and notices of any action or inaction, including acceptance of the Note
Guarantees, notices of default under the Notes or any agreement or instrument
related thereto, notices of any renewal, extension or modification of the
obligations under the Note Guarantees or any agreement related thereto, and
notices of any extension of credit to the Issuers and any right to consent to
any thereof; (g) to the extent permitted under applicable law, the benefits of
any "One Action" rule and (h) any defenses or benefits that may be derived from
or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of the Note Guarantees. Except as
set forth in Section 8.6, each Guarantor hereby covenants that its Note
Guarantee will not be discharged except by complete performance of the
obligations contained in its Note Guarantee, the Indenture and this First
Supplemental Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Issuers, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Issuers or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect.
Each Guarantor agrees that it shall not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Section 6.02
hereof for the purposes of this Note Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby and (y) in the event of any declaration of
acceleration of such obligations as provided in Section 6.02 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Note Guarantee.
SECTION 8.02. ADDITIONAL GUARANTEES. If any Restricted Subsidiary
becomes obligated pursuant to Section 4.10 hereof, then the Issuers shall cause
any such Restricted Subsidiary to, within five Business Days of the date on
which any such Restricted Subsidiary became so obligated, (a) execute and
deliver to the Trustee a Supplemental Indenture in form reasonably satisfactory
to the Trustee pursuant to which such Restricted Subsidiary shall
unconditionally guarantee, on a senior unsecured basis, all of the Issuers'
obligations under the Notes, the Indenture and this First Supplemental Indenture
on the terms set forth herein and therein and (b) deliver to the Trustee an
Opinion of Counsel that, subject to customary assumptions and exclusions, such
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supplemental indenture has been duly executed and delivered by such Restricted
Subsidiary. Any Restricted Subsidiary that becomes a Guarantor shall remain a
Guarantor unless (i) designated an Unrestricted Subsidiary by the Issuers in
accordance with this First Supplemental Indenture; (ii) is otherwise released
from its obligations as a Guarantor pursuant to Section 8.06 hereof; or (iii)
the circumstances giving rise to the obligation to provide a guarantee under
Section 4.10 no longer exist.
SECTION 8.03. LIMITATION ON GUARANTOR LIABILITY. Each Guarantor,
and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Note Guarantee.
To effectuate the foregoing intention, the Trustee, the Holders and the
Guarantors hereby irrevocably agree that the obligations of such Guarantor under
this Article 8 shall be limited to the maximum amount as will, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 8, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.
SECTION 8.04. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 11.01 hereof,
each Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form included in Exhibit D shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 hereof shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
SECTION 8.05. MERGER AND CONSOLIDATION OF GUARANTORS. Except as
otherwise provided in Section 8.06 hereof, no Guarantor may consolidate with or
merge with or into (whether or not such Guarantor is the surviving Person)
another Person whether or not affiliated with such Guarantor unless:
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(a) subject to Section 8.06 hereof, the Person formed by or
surviving any such consolidation or merger (if other than a Guarantor or an
Issuer) unconditionally assumes all the obligations of such Guarantor, pursuant
to a supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, the Indenture, this First Supplemental Indenture, and
the Note Guarantee on the terms set forth herein or therein; and
(b) the Guarantor complies with the requirements of Article 5
hereof.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Issuers and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under the Indenture, this First Supplemental Indenture as
the Note Guarantees theretofore and thereafter issued in accordance with the
terms of the Indenture and this First Supplemental Indenture as though all of
such Note Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a)
and (b) above, nothing contained in this Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or into an Issuer or
another Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to an Issuer or another
Guarantor.
SECTION 8.06. RELEASE. In the event of a sale or other
disposition of all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all to the capital
stock of any Guarantor, in each case to a Person that is not (either before or
after giving effect to such transactions) a Restricted Subsidiary of the
Issuers, then such Guarantor (in the event of a sale or other disposition, by
way of merger, consolidation or otherwise, of all of the capital stock of such
Guarantor) or the corporation acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
will be released and relieved of any obligations under its Note Guarantee;
provided, however, that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.07 hereof. Upon delivery by the Issuers
to the Trustee of an Officers' Certificate and an Opinion of Counsel to the
effect that such sale or other disposition was made by the Issuers in accordance
with the provisions of the Indenture and this First Supplemental Indenture,
including without limitation Section 4.07 hereof, the Trustee shall execute any
documents
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reasonably required in order to evidence the release of any Guarantor from its
obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
and this First Supplemental Indenture as provided in this Article 8.
ARTICLE 9
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE. The Issuers may, at the option of their respective Boards of
Directors evidenced by a resolution set forth in an Officers' Certificate, at
any time, elect to have either Section 9.02 or 9.03 hereof be applied to all
outstanding Notes upon compliance with the conditions set forth below in this
Article Nine. The provisions of this Article 9 shall modify and replace in their
entirety the corresponding provisions of Article 8 of the Indenture.
SECTION 9.02. LEGAL DEFEASANCE AND DISCHARGE. Upon Issuers'
exercise under Section 9.01 hereof of the option applicable to this Section
9.02, the Company shall, subject to the satisfaction of the conditions set forth
in Section 9.04 hereof, be deemed to have been discharged from their obligations
with respect to all outstanding Notes on the date the conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Issuers shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 9.05
hereof and the other Sections of this First Supplemental Indenture referred to
in (a) and (b) below, and to have satisfied all its other obligations under such
Notes and this First Supplemental Indenture (and the Trustee, on demand of and
at the expense of the Issuers, shall execute proper instruments acknowledging
the same), except for the following provisions which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
9.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest on such Notes when such payments
are due, (b) the Issuers' obligations with respect to such Notes under Article 2
of the Indenture, Article 2 of this First Supplemental Indenture and Section
4.02 of the Indenture, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Issuers' obligations in connection therewith and
(d) this Article Nine. Subject to compliance with this Article Nine, the Issuers
may exercise their option under this Section 9.02 notwithstanding the prior
exercise of its option under Section 9.03 hereof.
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SECTION 9.03. COVENANT DEFEASANCE. Upon the Issuers' exercise
under Section 9.01 hereof of the option applicable to this Section 9.03, the
Issuers shall, subject to the satisfaction of the conditions set forth in
Section 9.04 hereof, be released from its obligations under the covenants
contained in Sections 4.01, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10,
4.11, 4.12, 4.13 and 4.14, hereof, and the operation of Section 5.01(5) hereof,
with respect to the outstanding Notes on and after the date the conditions set
forth in Section 9.04 are satisfied (hereinafter, "Covenant Defeasance"), and
the Notes shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Issuers may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this First Supplemental
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Issuer's exercise under Section 9.01 hereof of the option applicable to this
Section 9.03 hereof, subject to the satisfaction of the conditions set forth in
Section 9.04 hereof, Sections 6.01(4) through 6.01(8) hereof shall not
constitute Events of Default.
SECTION 9.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. The
following shall be the conditions to the application of either Section 9.02 or
9.03 hereof to the outstanding Notes. In order to exercise either Legal
Defeasance or Covenant Defeasance:
(a) the Issuers must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as shall be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
outstanding Notes on the stated date for payment thereof or on the applicable
redemption date, as the case may be, and the Issuers must specify whether the
Notes are being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (A) the Issuers have
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this First Supplemental Indenture, there has
been a change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the outstanding Notes shall not recognize income, gain or loss for
federal income tax purposes as a result of such Legal Defeasance and shall be
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subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 9.03 hereof, the Issuers
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and shall be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall occur under Sections 6.01(9) or
6.01(10) hereof at any time in the period ending on the 91st day after the date
of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Issuers or any of their
Restricted Subsidiaries is a party or by which the Issuers or any of their
Restricted Subsidiaries are bound;
(f) the Issuers shall have delivered to the Trustee an Opinion of Counsel
(which may be subject to customary exceptions) to the effect that on the 123rd
day following the deposit, the trust funds shall not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Issuers shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuers with the intent
of preferring the Holders over any other creditors of the Issuers or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Issuers; and
(h) the Issuers shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been satisfied.
SECTION 9.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST, OTHER MISCELLANEOUS PROVISIONS.: Subject to Section 9.06 hereof,
all money and non-callable Government Securities (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 9.05, the "Trustee") pursuant to Section 9.04
hereof in respect of the outstanding Notes shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Notes and this First
Supplemental Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
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The Issuers shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable U.S.
Government Securities deposited pursuant to Section 9.04 hereof 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 the outstanding Notes.
Anything in this Article Nine to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 9.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 9.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 9.06. REPAYMENT TO ISSUERS. Any money deposited with the
Trustee or any Paying Agent, or then held by Issuers, in trust for the payment
of the principal of, premium, if any, or interest on any Note 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 Issuers on its request or (if
then held by the Issuers) shall be discharged from such trust; and the Holder of
such Note shall thereafter, as an unsecured creditor, look only to the Issuers
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuers as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Issuers cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Issuers.
SECTION 9.07. REINSTATEMENT. If the Trustee or Paying Agent is
unable to apply any United States dollars or non-callable Government Securities
in accordance with Section 9.02 or 9.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Issuers'
obligations under this First Supplemental Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
9.02 or 9.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 9.02 or 9.03 hereof, as the
case may be; provided, however, that, if the Issuers make any payment of
principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Issuers shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.08. RATIFICATION OF INDENTURE. Except as expressly
supplemented, modified or amended hereby, the Indenture continues in full force
and effect and is in all respects confirmed and preserved.
SECTION 10.09. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
SECTION 10.10. COUNTERPART ORIGINALS. The parties may sign any
number of copies of this First Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.
[Signatures on following page]
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SIGNATURES
Dated as of February 7, 2000
METRICOM, INC.
By:
------------------------------
Name:
Title:
METRICOM FINANCE, INC.
By:
------------------------------
Name:
Title:
BANK ONE TRUST COMPANY, N.A.,
AS TRUSTEE
By:
------------------------------
Name:
E-1
