THIS DOCUMENT IS A COPY OF THE FORM 10-Q FILED
ON MAY 15, 1996, WITH COPIES OF EXHIBITS FILED IN PAPER
FORMAT PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
Amendment No. 1 to Quarterly Report on Form 10-Q dated May 15, 1996.
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
----------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION A3 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-16560
Vanguard Cellular Systems, Inc.
(Exact name of registrant as specified in its charter)
North Carolina 56-1549590
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
2002 Pisgah Church Road, Suite 300
Greensboro, North Carolina 27455-3314
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (910) 282-3690
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ___.
The number of shares outstanding of the issuer's common stock as of April 15,
1996 was 41,313,443.
<PAGE>
VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
INDEX
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PART II. OTHER INFORMATION
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Item 6. Exhibits II-1
SIGNATURES II-2
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Item 6. EXHIBITS
(a) The exhibits to this Form 10-Q/A are listed in the accompanying Index to
Exhibits.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has fully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VANGUARD CELLULAR SYSTEMS, INC.
Date: May 22, 1996 By: /s/ Haynes G. Griffin
-----------------------------
Haynes G. Griffin
President
and
Chief Executive Officer
Date: May 22, 1996 By: /s/ Stephen L. Holcombe
----------------------------
Stephen L. Holcombe
Senior Vice President
and
Chief Financial Officer
(principal accounting and
principal financial officer)
II-2
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
* 4 (a) Articles of Incorporation of Registrant as amended through
July 25,1995, filed as Exhibit 1 to the Registrant's Form 8-A/A
dated July 25, 1995.
* 4 (b) Bylaws of Registrant (compilation of July 25, 1995), filed as
Exhibit 2 to the Registrant's Form 8-A/A dated July 25, 1995.
* 4(c) Specimen Common Stock Certificate, filed as Exhibit 2 to the
Registrant's Form 8-A/A dated July 25, 1995.
**4(d)(1) Second Amended and Restated Loan Agreement between Vanguard
Cellular Operating Corp. and various lenders led by The Bank of
New York and The Toronto-Dominion Bank as agents, dated as of
April 10, 1996.
**4(d)(2) VCOC Security Agreement between Vanguard Cellular Operating Corp.
and various lenders led by The Bank of New York and The
Toronto-Dominion Bank as Secured Party, dated as of April 10,
1996.
**4(d)(3) Second Amended and Restated Master Subsidiary Security Agreement
between certain subsidiaries of the Registrant and various lenders
led by The Bank of New York and The Toronto-Dominion Bank, as
Secured Party, dated as of April 10, 1996.
**4(d)(4) Assignment, Bill of Sale and Assumption Agreement by and between
Registrant and Vanguard Cellular Financial Corp., dated as of
April 10, 1996.
**4(e)(1) Indenture dated as of April 1, 1996 between Registrant and The Bank
of New York as Trustee.
**4(e)(2) First Supplemental Indenture, dated as of April 1, 1996 between
Registrant and The Bank of New York as Trustee.
***11 Calculation of fully diluted earnings per share for the three
months ended March 31, 1996 and 1995.
***27 Financial Data Schedule.
* Incorporated by reference to the statement or report indicated.
** Previously filed on May 15, 1996 under cover of Form SE pursuant to a
temporary hardship exemption in accordance with Rule 201 of Regulation S-T.
*** Previously filed on May 15, 1996 as Exhibits to Form 10-Q.
The following schedules to the Second Amended and Restated Loan Agreement, filed
as Exhibit 4(d)(1) hereto, have been omitted. The Registrant hereby undertakes
to furnish supplementally a copy of any such omitted schedule to the Commission
upon request.
Exhibit A Form of Assignment of Rights by Partner
Exhibit B Form of Borrower Pledge Agreement
Exhibit C Form of Certificate of Financial Condition
Exhibit D Form of Note Pledge Agreement
Exhibit E Form of Request for Advance
Exhibit F Form of Revolving Loan Note
Exhibit G Form of Security Agreement
Exhibit H Form of Subsidiary Guaranty
Exhibit I Form of Subsidiary Pledge Agreement
Exhibit J Form of Subsidiary Security Agreement
Exhibit K Form of Term Loan Note
Exhibit L Form of VCFC Assumption Agreement
Exhibit M Form of Borrower's Loan Certificate
Exhibit N Form of Subsidiary Loan Certificate
Exhibit O Form of Performance Certificate
Exhibit P Form of Assignment and Assumption Agreement
Schedule 1 Licenses
Schedule 2 Liens of Record as of the Agreement Date
Schedule 3 Subsidiaries
Schedule 4 Litigation
Schedule 5 Agreements with Affiliates
Schedule 6 Investments
The following schedules to the VCOC Security Agreement, filed as Exhibit
4(d)(2) hereto, have been omitted. The Registrant hereby undertakes to furnish
supplementally a copy of such omitted Schedule to the Commission upon request.
Exhibit A Licenses
Exhibit B Contracts
Exhibit C Leases
The following schedules to the Second Amended and Restated Master Subsidiary
Security Agreement, filed as Exhibit 4(d)(3) hereto, have been omitted. The
Registrant hereby undertakes to furnish supplementally a copy of any such
omitted Schedule to the Commission upon request.
Exhibit A Licenses
Exhibit B Contracts
Exhibit C Leases
The following schedules to the Assignment, Bill of Sale and Assumption Agreement
filed as Exhibit 4(d)(4) hereto, have been omitted. The Registrant hereby
undertakes to furnish supplementally a copy of any such omitted Schedule to the
Commission upon request.
Schedule A List of Personal Property Assigned
Schedule B List of Agreements Assigned
<PAGE>
THIS DOCUMENT IS A COPY OF THE EXHIBIT 4(d)(1) TO FORM 10-Q
FILED ON MAY 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
SECOND AMENDED AND RESTATED LOAN AGREEMENT
AMONG VANGUARD CELLULAR OPERATING CORP. (the "BORROWER");
THE FINANCIAL INSTITUTIONS PARTY HERETO AS LENDERS
(THE "LENDERS"); THE FINANCIAL INSTITUTIONS PARTY
HERETO AS CO-AGENTS (THE "CO-AGENTS");
THE BANK OF NEW YORK AND THE TORONTO-DOMINION BANK
AS MANAGING AGENTS (THE "MANAGING AGENTS");
THE BANK OF NEW YORK AS ADMINISTRATIVE AGENT
(THE "ADMINISTRATIVE AGENT");
THE TORONTO-DOMINION BANK AS DOCUMENTATION/REVIEW AGENT
(THE "DOCUMENTATION AGENT");
AND TORONTO DOMINION (TEXAS), INC.
AS COLLATERAL AGENT (THE "COLLATERAL AGENT")
INDEX
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Page
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ARTICLE 1 Definitions................................................................................. 3
Section 1.1 Defined Terms........................................................................ 3
Section 1.2 Interpretation....................................................................... 28
Section 1.3 Cross References..................................................................... 29
ARTICLE 2 Loans....................................................................................... 29
Section 2.1 The Loans............................................................................ 29
Section 2.2 Manner of Borrowing and Disbursement................................................. 29
Section 2.3 Interest............................................................................. 33
Section 2.4 Scheduled Commitment Reductions and
Repayment............................................................................ 34
Section 2.5 Fees................................................................................. 36
Section 2.6 Optional Prepayments; Revolving Loan
Commitment Reduction................................................................. 37
Section 2.7 Mandatory Prepayments................................................................ 38
Section 2.8 Notes; Loan Accounts................................................................. 40
Section 2.9 Manner of Payment.................................................................... 40
Section 2.10 Reimbursement........................................................................ 42
Section 2.11 Pro Rata Treatment................................................................... 42
Section 2.12 Capital Adequacy..................................................................... 43
Section 2.13 Lender Tax Forms..................................................................... 44
ARTICLE 3 Conditions Precedent........................................................................ 44
Section 3.1 Conditions Precedent to Effectiveness................................................ 44
Section 3.2 Conditions Precedent to Each Advance................................................. 48
ARTICLE 4 Representations and Warranties.............................................................. 48
Section 4.1 Representations and Warranties....................................................... 48
Section 4.2 Survival of Representations and
Warranties, etc...................................................................... 56
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i
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Page
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ARTICLE 5 General Covenants........................................................................... 56
Section 5.1 Preservation of Existence and Similar
Matters.............................................................................. 57
Section 5.2 Business; Compliance with Applicable
Law.................................................................................. 57
Section 5.3 Maintenance of Properties............................................................ 57
Section 5.4 Accounting Methods and Financial
Records.............................................................................. 57
Section 5.5 Insurance............................................................................ 58
Section 5.6 Payment of Taxes and Claims.......................................................... 58
Section 5.7 Visits and Inspections............................................................... 59
Section 5.8 Payment of Indebtedness; Loans....................................................... 59
Section 5.9 Use of Proceeds...................................................................... 59
Section 5.10 Real Estate.......................................................................... 59
Section 5.11 Indemnity............................................................................ 60
Section 5.12 Interest Rate Hedging................................................................ 61
Section 5.13 Covenants Regarding Formation of
Subsidiaries; Acquisitions and
Investments; Partnership Subsidiaries................................................ 61
Section 5.14 Payment of Wages..................................................................... 62
ARTICLE 6 Information Covenants....................................................................... 62
Section 6.1 Quarterly Financial Statements and
Information.......................................................................... 63
Section 6.2 Annual Financial Statements and
Information.......................................................................... 63
Section 6.3 Performance Certificates............................................................. 64
Section 6.4 Copies of Other Reports.............................................................. 65
Section 6.5 Notice of Litigation and Other Matters............................................... 65
ARTICLE 7 Negative Covenants.......................................................................... 67
Section 7.1 Indebtedness of the Borrower and its
Subsidiaries......................................................................... 67
Section 7.2 Limitation on Liens.................................................................. 68
Section 7.3 Amendment and Waiver................................................................. 68
Section 7.4 Liquidation, Merger, or Disposition of
Assets............................................................................... 68
Section 7.5 Limitation on Guaranties............................................................. 69
Section 7.6 Investments and Acquisitions......................................................... 69
Section 7.7 Restricted Payments and Purchases.................................................... 72
Section 7.8 Interest Coverage Ratio.............................................................. 73
Section 7.9 Fixed Charge Ratio................................................................... 73
Section 7.10 Consolidated Leverage Ratio.......................................................... 74
Section 7.11 Senior Leverage Ratio................................................................ 74
Section 7.12 Pro Forma Debt Service Ratio......................................................... 75
Section 7.13 Capital Expenditures................................................................. 75
Section 7.14 Affiliate Transactions............................................................... 75
</TABLE>
ii
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Page
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Section 7.15 Real Estate.......................................................................... 76
Section 7.16 ERISA Liabilities.................................................................... 76
Section 7.17 Unrestricted Subsidiaries............................................................ 76
Section 7.18 The VCS Subsidiary................................................................... 77
Section 7.19 Limitation on Upstream Dividends by
Subsidiaries......................................................................... 77
ARTICLE 8 Default..................................................................................... 78
Section 8.1 Events of Default.................................................................... 78
Section 8.2 Remedies............................................................................. 82
Section 8.3 Payments Subsequent to Declaration of
Event of Default..................................................................... 84
ARTICLE 9 The Agents.................................................................................. 85
Section 9.1 Appointment and Authorization........................................................ 85
Section 9.2 Interest Holders..................................................................... 85
Section 9.3 Consultation with Counsel............................................................ 85
Section 9.4 Documents............................................................................ 85
Section 9.5 Agents and Affiliates................................................................ 86
Section 9.6 Responsibility of the Managing Agents,
the Administrative Agent and the
Collateral Agent..................................................................... 86
Section 9.7 Collateral Agent..................................................................... 86
Section 9.8 Action by Managing Agents, the
Administrative Agent and the Collateral
Agent................................................................................ 86
Section 9.9 Notice of Default.................................................................... 87
Section 9.10 Responsibility Disclaimed............................................................ 87
Section 9.11 Indemnification...................................................................... 88
Section 9.12 Credit Decision...................................................................... 88
Section 9.13 Successor Administrative Agent,
Documentation Agent and Collateral
Agent................................................................................ 89
Section 9.14 Delegation of Duties................................................................. 90
Section 9.15 No Responsibilities of Co-Agents..................................................... 90
ARTICLE 10 Change in Circumstances Affecting Eurodollar
Advances.................................................................................... 90
Section 10.1 Eurodollar Basis Determination
Inadequate........................................................................... 90
Section 10.2 Illegality........................................................................... 90
Section 10.3 Increased Costs...................................................................... 91
Section 10.4 Effect On Other Advances............................................................. 93
ARTICLE 11 Miscellaneous............................................................................... 93
Section 11.1 Notices.............................................................................. 93
Section 11.2 Expenses............................................................................. 95
</TABLE>
iii
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Section 11.3 Waivers.............................................................................. 95
Section 11.4 Set-Off.............................................................................. 96
Section 11.5 Assignment........................................................................... 96
Section 11.6 Accounting Principles................................................................ 98
Section 11.7 Counterparts......................................................................... 98
Section 11.8 Governing Law........................................................................ 98
Section 11.9 Severability......................................................................... 99
Section 11.10 Interest............................................................................. 99
Section 11.11 Table of Contents and Headings....................................................... 99
Section 11.12 Amendment and Waiver.................................................................100
Section 11.13 Entire Agreement.....................................................................101
Section 11.14 Other Relationships..................................................................101
Section 11.15 Directly or Indirectly...............................................................101
Section 11.16 Reliance on and Survival of Various
Provisions...........................................................................101
Section 11.17 Senior Debt..........................................................................102
Section 11.18 Obligations Several..................................................................102
Section 11.19 Confidentiality......................................................................102
ARTICLE 12 Waiver of Jury Trial........................................................................102
Section 12.1 Waiver of Jury Trial.................................................................102
</TABLE>
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EXHIBITS
<S> <C> <C>
Exhibit A - Form of Assignment of Rights of Partner
Exhibit B - Form of Borrower Pledge Agreement
Exhibit C - Form of Certificate of Financial Condition
Exhibit D - Form of Note Pledge Agreement
Exhibit E - Form of Request for Advance
Exhibit F - Form of Revolving Loan Note
Exhibit G - Form of Security Agreement
Exhibit H - Form of Subsidiary Guaranty
Exhibit I - Form of Subsidiary Pledge Agreement
Exhibit J - Form of Subsidiary Security Agreement
Exhibit K - Form of Term Loan Note
Exhibit L - Form of VCFC Assumption Agreement
Exhibit M - Form of Borrower's Loan Certificate
Exhibit N - Form of Subsidiary Loan Certificate
Exhibit O - Form of Performance Certificate
Exhibit P - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 - Licenses
Schedule 2 - Liens of Record as of the Agreement Date
Schedule 3 - Subsidiaries
Schedule 4 - Litigation
Schedule 5 - Agreements with Affiliates
Schedule 6 - Investments
</TABLE>
v
<PAGE>
SECOND AMENDED AND RESTATED LOAN AGREEMENT
This Second Amended and Restated Loan Agreement (the "Agreement"), made
as of this 10th day of April, 1996 by and among VANGUARD CELLULAR OPERATING
CORP., a Delaware corporation (the "Borrower"), the financial institutions party
hereto as Lenders (together with such other financial institutions as may
hereafter become Lenders hereunder, the "Lenders"), the financial institutions
party hereto as Co-Agents (the "Co-Agents"), THE BANK OF NEW YORK and THE
TORONTO-DOMINION BANK, as Managing Agents (the "Managing Agents"), THE BANK OF
NEW YORK, as Administrative Agent (the "Administrative Agent"), THE TORONTO-
DOMINION BANK, as Documentation/Review Agent (the "Documentation Agent") and
TORONTO DOMINION (TEXAS), INC., as Collateral Agent.
WITNESSETH:
WHEREAS, Vanguard Cellular Systems, Inc., a North Carolina corporation
("Vanguard"), the Lenders, the Managing Agents, the Administrative Agent and the
Collateral Agent are parties to an Amended and Restated Loan Agreement dated as
of December 23, 1994, as amended by the First Amendment thereto dated as of
December 19, 1995 (collectively, the "Prior Loan Agreement"); and
WHEREAS, pursuant to an Assignment and Assumption Agreement, dated as
of the date hereof (the "Vanguard Assignment Agreement"), among Vanguard, the
Borrower, the Lenders, the Administrative Agent, Managing Agents and the
Collateral Agent, Vanguard transferred to the Borrower on or prior to the
Agreement Date (as defined herein) all of its Obligations under and as defined
in the Prior Loan Agreement and all of its assets to the Borrower or a wholly
owned Subsidiary of the Borrower; and
WHEREAS, the Borrower, pursuant to the Vanguard Assignment Agreement,
has assumed the Obligations (as defined in the Prior Loan Agreement) of
Vanguard; and
WHEREAS, the Managing Agents, the Administrative Agent, the Lenders and
the Collateral Agent have agreed to amend and restate the Prior Loan Agreement
in its entirety as set forth herein; and
WHEREAS, the Borrower acknowledges and agrees that the Security
Interest (as defined in the Prior Loan Agreement) granted to the Collateral
Agent for the benefit of the Agents and the Lenders pursuant to the Prior Loan
Agreement, shall remain outstanding and in full force and effect in accordance
with the Prior Loan Agreement and the other Loan Documents (as defined in the
Prior Loan Agreement) and shall continue to secure the Obligations (as defined
herein); and
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<PAGE>
WHEREAS, the Borrower acknowledges and agrees that (a) the Obligations
(as defined herein) represent, among other things, the amendment, restatement,
renewal, extension, consolidation and modification of the Obligations (as
defined in the Prior Loan Agreement) arising in connection with the Prior Loan
Agreement and the other Loan Documents (as defined in the Prior Loan Agreement);
(b) the parties hereto intend that the Prior Loan Agreement and the other Loan
Documents (as defined in the Prior Loan Agreement) and the Collateral (as
defined in the Prior Loan Agreement) pledged thereunder shall secure, without
interruption or impairment of any kind, all existing Indebtedness under the
Prior Loan Agreement and the other Loan Documents (as defined in the Prior Loan
Agreement) as so amended, restated, restructured, renewed, extended,
consolidated and modified hereunder, together with all other Obligations
hereunder; (c) all Liens evidenced by the Prior Loan Agreement and the other
Loan Documents (as defined in the Prior Loan Agreement) are hereby ratified,
confirmed and continued; and (d) the Loan Documents (as defined herein) are
intended to restructure, restate, renew, extend, consolidate, amend and modify
the Prior Loan Agreement and the other Loan Documents (as defined in the Prior
Loan Agreement); and
WHEREAS, the parties hereto intend that (a) the provisions of the Prior
Loan Agreement and the other Loan Documents (as defined in the Prior Loan
Agreement), as restructured, restated, renewed, extended, consolidated, amended
and modified hereby, are hereby superseded and replaced by the provisions hereof
and of the other Loan Documents (as defined herein); and (b) the Notes (as
hereinafter defined) amend, renew, extend, modify, replace, are substituted for
and supersede in their entirety, but do not extinguish the indebtedness arising
under, the promissory notes issued pursuant to the Prior Loan Agreement nor are
they intended to create or constitute a novation;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
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ARTICLE 1
Definitions
Section 1.1 Defined Terms. The following terms when used in this
Agreement shall have the following meanings:
"Acquisition" shall mean (whether by purchase, exchange, issuance of
stock or other equity or debt securities, merger, reorganization or any other
method) (a) any acquisition by the Borrower or any of its Subsidiaries of any
other Person, which Person shall then become consolidated with the Borrower or
any such Subsidiary in accordance with GAAP, or (b) any acquisition by the
Borrower or any of its Subsidiaries of all or any substantial part of the assets
of any other Person other than acquisitions of assets which constitute
Investments hereunder.
"Acquisition/Investment Basket" shall mean, subject to compliance with
all conditions set forth in this Agreement, (a) if (after giving effect to any
proposed Acquisition or Investment) the Consolidated Leverage Ratio is greater
than 5.50 to 1 or the Senior Leverage Ratio is greater than 4.00 to 1,
$125,000,000 and (b) if (after giving effect to any proposed Acquisition or
Investment) the Consolidated Leverage Ratio is equal to or less than 5.50 to 1
and the Senior Leverage Ratio is equal to or less than 4.00 to 1, $200,000,000.
"Adjusted Cash Flow" shall mean, as of any calculation date, the
product of (a) the sum of Cash Flow for the most recently completed two (2)
fiscal quarters, multiplied by (b) two (2). For purposes of measuring the Fixed
Charge Ratio pursuant to Section 7.9 hereof, for purposes of measuring the
Consolidated Leverage Ratio pursuant to Section 7.10 hereof, for purposes of
measuring the Senior Leverage Ratio pursuant to Section 7.11 hereof and for
purposes of measuring the Pro Forma Debt Service Ratio pursuant to Section 7.12
hereof, Adjusted Cash Flow shall be further adjusted to give effect to any
Acquisition, Investment or disposition of assets by the Borrower or any of its
Subsidiaries permitted hereunder for the calculation period during which such
transaction occurs, as if such Acquisition, Investment or disposition of assets
had been consummated on the first day of such calculation period, and assuming
that the Cash Flow allocated to the Borrower or the applicable Subsidiary with
respect to any such Acquisition or Investment was equal to the cash flow of the
seller (calculated in the same manner as Cash Flow hereunder) generated by such
Acquisition or Investment for the portion of such period preceding the
Borrower's operation thereof. For purposes of this definition, "calculation
period"
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<PAGE>
shall mean the period consisting of the two (2) most recently completed fiscal
quarters.
"Administrative Agent" shall mean The Bank of New York, in its capacity
as Administrative Agent for the Lenders.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at The Bank of New York, Agency Function
Administration, 18th Floor, One Wall Street, New York, New York 10286, or such
other office as may be designated pursuant to the provisions of Section 11.1 of
this Agreement.
"Advance" or "Advances" shall mean amounts advanced by the Lenders to
the Borrower pursuant to Article 2 hereof on the occasion of any borrowing.
"Affiliate" shall mean, with respect to a Person, (a) any other Person
directly or indirectly controlling, controlled by, or under common control with,
such first Person or (b) any other Person who is a director or executive officer
(i) of such specified Person, (ii) of any Subsidiary of such specified Person or
(iii) of any Person described in clause (a) above. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. "Affiliate" shall also mean any beneficial owner of shares
representing 10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants to purchase such
Voting Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to the first sentence hereof.
Unless otherwise specified, "Affiliate" shall mean an Affiliate of the Borrower.
"Agents" shall mean, collectively, the Managing Agents, the Co-Agents,
the Administrative Agent, the Documentation Agent and the Collateral Agent.
"Agreement" shall mean this Agreement, as amended, supplemented or
otherwise modified from time to time.
"Agreement Date" shall mean the date as of which this Agreement is
dated.
"Allowable Cellular System" shall mean, as of any date of
determination, any Cellular System, the geographical boundaries for which are
either within, or contiguous to, or within fifty
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(50) miles from, any boundary of any of the Borrower's or any of its
Subsidiaries' then existing Cellular Systems.
"Annual Capital Expenditures" shall mean, as of any calculation date,
the sum of the Capital Expenditures made by the Borrower and its Subsidiaries
during the most recently completed four (4) fiscal quarters.
"Applicable Law" shall mean, in respect of any Person, all provisions
of constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person, including, without limiting
the foregoing, the Licenses, the Communications Act and all Environmental Laws
and all orders, decisions, judgments and decrees of all courts and arbitrators
in proceedings or actions to which the Person in question is a party or by which
it is bound.
"Applicable Margin" shall mean the interest rate margin applicable to
Advances hereunder determined in accordance with Section 2.3(f) hereof.
"Asset Transfer Approval" shall mean the approval requested from the
FCC (and any applicable state regulatory body) by Vanguard for the transfer to
VCFC of all of Vanguard's right, title and interest in Eastern North Carolina
Cellular Joint Venture, a Delaware joint venture.
"Assignment of Rights by Partner" shall mean, collectively, any
Assignment of Rights by Partner between the Borrower, or any Subsidiary of the
Borrower which holds partnership interests in a Subsidiary of the Borrower, on
the one hand, and the Collateral Agent, on the other hand, each substantially in
the form of Exhibit A attached hereto.
"Authorized Signatory" shall mean such senior personnel of the Borrower
or any of its Subsidiaries, as applicable, as may be duly authorized and
designated in writing by the Borrower or any such Subsidiary, as applicable, to
execute documents, agreements and instruments on behalf of the Borrower or such
Subsidiary, as applicable.
"Board of Directors" shall mean, in respect of any Person which is a
corporation, the Board of Directors of such Person.
"Borrower" shall mean (a) prior to the effectiveness of the VCFC
Assumption Agreement, VCOC and (b) at all times thereafter, VCFC. As of the
Agreement Date, the Borrower is VCOC.
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"Borrower Pledge Agreement" shall mean each Borrower Pledge Agreement
between the Borrower and the Collateral Agent, each substantially in the form of
Exhibit B attached hereto, including, without limitation, that certain Borrower
Pledge Agreement of even date herewith.
"Business Day" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
London, England and New York, New York, as relevant to the determination to be
made or the action to be taken.
"Capital Expenditures" shall mean, in respect of any Person,
expenditures for the purchase of assets of long-term use which should be
capitalized in accordance with GAAP.
"Capital Stock" shall mean, with respect to any Person, any and all
shares or other equivalents (however designated) of corporate stock, partnership
interests or any other participation, right, warrant, option or other interest
in the nature of an equity interest in such Person, but excluding any debt
security convertible or exchangeable into such equity interest.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such lessee in accordance
with GAAP.
"Cash Flow" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis for any fiscal period, Net Income for such period (after
eliminating any extraordinary gains and losses, including gains and losses from
the sale of assets, and minority interests and equity in earnings (losses) of
non-consolidated entities), plus, to the extent deducted in determining Net
Income, the sum of each of the following for such period: (a) depreciation and
amortization allowances, (b) interest expense, (c) income tax expense, including
reserves for deferred taxes not payable currently and (d) all other non-cash
items.
"Cellular System" shall mean a cellular mobile radio telephone system
constructed and operated in an MSA or an RSA.
"Certificate of Financial Condition" shall mean a certificate,
substantially in the form of Exhibit C attached hereto, signed by the chief
financial officer of the Borrower, together with any schedules, exhibits or
annexes appended thereto.
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"Change of Control" shall mean the occurrence of any of the following
events:
(a) The Richardson Family shall at any time own directly less
than that amount of voting stock of Vanguard necessary to give them the power to
exercise voting rights with respect to at least fifteen percent (15%) of the
total votes of all shareholders of Vanguard on a fully-diluted basis;
(b) The Richardson Family and the directors and executive
officers of Vanguard holding such positions as of the Agreement Date shall at
any time own less than that amount of the voting stock of Vanguard necessary to
give them the power to exercise voting rights with respect to at least twenty
percent (20%) of the total votes of all shareholders of Vanguard on a
fully-diluted basis;
(c) Any two (2) members of the Management Group shall at any
time for any period of six (6) consecutive months cease to be active in the
direct management and the operations of Vanguard or the Borrower;
(d) Any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) other than one or more of the Permitted Holders is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 40% or more of the total voting power of the Voting
Stock (on a fully-diluted basis) of Vanguard;
(e) During any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of Vanguard (together with any new directors whose election by the
Board of Directors of Vanguard or whose nomination for election by the
shareholders of Vanguard was approved by a vote of 66 2/3% of the directors of
Vanguard then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of
Vanguard then in office;
(f) Vanguard consolidates or merges with or into any other
Person (other than one or more Permitted Holders) or any other Person (other
than one or more Permitted Holders) consolidates or merges with or into
Vanguard, in either case, other than a consolidation or merger (i) with a Wholly
Owned
-7-
<PAGE>
Subsidiary in which all of the Voting Stock of Vanguard outstanding immediately
prior to the effectiveness thereof is changed into or exchanged for
substantially the same consideration or (ii) pursuant to a transaction in which
the outstanding Voting Stock of Vanguard is changed into or exchanged for cash,
securities or other property with the effect that the "beneficial owners" (as
defined in Rule 13d-3 under the Exchange Act) of the outstanding Voting Stock
immediately prior to such transaction, beneficially own, directly or indirectly,
more than 50% of the total voting power of the fully diluted Voting Stock of the
surviving corporation immediately following such transaction in substantially
the same proportions as owned prior to such transaction;
(g) Vanguard sells, conveys, transfers or leases, directly or
indirectly, all or substantially all of its assets (other than to a Wholly Owned
Subsidiary or one or more Permitted Holders); or
(h) Vanguard shall cease to be the sole shareholder (directly
or indirectly) of the Borrower.
"Co-Agents" shall mean, collectively, CIBC, Inc., LTCB Trust Company,
NationsBank, N.A., The Bank of Nova Scotia and The First National Bank of
Boston.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property of any kind constituting
collateral for the Obligations under any of the Security Documents.
"Collateral Agent" shall mean Toronto Dominion (Texas), Inc., as
collateral agent for the Administrative Agent, the Documentation Agent, the
Managing Agents, the Co-Agents and the Lenders.
"Commitment Ratios" shall mean the percentages in which the Lenders are
severally bound to make Advances to the Borrower under the Revolving Loan
Commitment, which are set forth below (together with dollar amounts) as of the
Agreement Date. The Term Loan amounts which have been advanced by the Lenders as
evidenced by the Term Loan Notes are set forth below as of the Agreement Date.
-8-
<PAGE>
<TABLE>
<CAPTION>
Total Amount of
Term Loan Revolving Loan Dollar Commitment
Lender Outstandings Commitment Commitment Ratio
- ------ ------------ ------------ ---------- ------
<S> <C> <C>
The Toronto-Dominion Bank 24,074,074.07 25,925,925.93 50,000,000 7.40740741%
The Bank of New York 21,907,407.42 23,592,592.58 45,500,000 6.74074074%
CIBC, Inc. 21,666,666.67 23,333,333.33 45,000,000 6.66666667%
LTCB Trust Company 21,666,666.67 23,333,333.33 45,000,000 6.66666667%
NationsBank, N.A. 21,666,666.67 23,333,333.33 45,000,000 6.66666667%
The Bank of Nova Scotia 17,935,185.19 19,314,814.81 37,250,000 5.51851852%
Barclays Bank plc 14,444,444.44 15,555,555.56 30,000,000 4.44444444%
The First National Bank of Boston 10,712,962.96 11,537,037.04 22,250,000 3.29629630%
Bank of Montreal, Chicago Branch 12,037,037.04 12,962,962.96 25,000,000 3.70370370%
Banque Nationale de Paris 12,037,037.04 12,962,962.96 25,000,000 3.70370370%
Credit Lyonnais Cayman Island Branch 12,037,037.04 12,962,962.96 25,000,000 3.70370370%
The First National Bank of Maryland 12,037,037.04 12,962,962.96 25,000,000 3.70370370%
First Union National Bank of North Carolina 12,037,037.04 12,962,962.96 25,000,000 3.70370370%
Fleet National Bank 12,037,037.04 12,962,962.96 25,000,000 3.70370370%
Bank of Tokyo-Mitsubishi Trust Company 9,629,629.63 10,370,370.37 20,000,000 2.96296296%
Societe Generale 9,629,629.63 10,370,370.37 20,000,000 2.96296296%
ABN AMRO Bank N.V. 7,222,222.22 7,777,777.78 15,000,000 2.22222222%
Bank of Hawaii 7,222,222.22 7,777,777.78 15,000,000 2.22222222%
CoreStates Bank, N.A. 7,222,222.22 7,777,777.78 15,000,000 2.22222222%
Meridian Bank 7,222,222.22 7,777,777.78 15,000,000 2.22222222%
NatWest Bank N.A. 7,222,222.22 7,777,777.78 15,000,000 2.22222222%
Royal Bank of Canada 9,629,629.63 10,370,370.37 20,000,000 2.96296296%
The Sumitomo Trust & Banking Co., Ltd., 7,222,222.22 7,777,777.78 15,000,000 2.22222222%
New York Branch
Banque Paribas 7,222,222.22 7,777,777.78 15,000,000 2.22222222%
Union Bank of California, N.A. 4,814,814.81 5,185,185.19 10,000,000 1.48148149%
CoBank, ACB 4,814,814.81 5,185,185.19 10,000,000 1.48148149%
First Hawaiian Bank 4,814,814.81 5,185,185.19 10,000,000 1.48148149%
Fleet National Bank f/k/a Fleet National 4,814,814.81 5,185,185.19 10,000,000 1.48148149%
Bank of Connecticut ------------ ------------ ---------- -----------
TOTALS $325,000,000.00 $350,000,000.00 $675,000,000.00 100%
</TABLE>
-9-
<PAGE>
"Commitments" shall mean the Revolving Loan Commitment.
"Communications Act" shall mean the Communications Act of 1934 and any
similar or successor federal statute and the rules and regulations of the FCC
thereunder, all as the same may be in effect from time to time.
"Consolidated Leverage Ratio" shall mean, as of any calculation date,
the ratio of Total Consolidated Debt to Adjusted Cash Flow.
"Core Assets" shall mean all assets of the Borrower or any of its
Subsidiaries comprising the Mid-Atlantic Supersystem excluding those assets set
forth in clause (b) of the definition of Non-Core Assets.
"CPAC" shall mean Cellular Phone Assurance Company, Ltd., a Bermuda
corporation and Wholly-Owned Subsidiary of the Borrower which provides, through
a third party U.S. insurer, to the Borrower's and its other Subsidiaries'
wireless communications customers property insurance insuring the replacement
cost of, and service warranties for, such customers' cellular telephones, pagers
and other wireless communications equipment.
"Debt Service" shall mean, for any period, the amount of all principal
paid and GAAP Interest Expense of the Borrower and its Subsidiaries on a
consolidated basis in respect of Indebtedness for Money Borrowed (other than
voluntary prepayments of principal under the Term Loan or voluntary principal
payments under the Revolving Loans which are not required to be accompanied by
an identical reduction in the Revolving Loan Commitment).
"Default" shall mean any Event of Default and any of the events
specified in Section 8.1 hereof, regardless of whether there shall have occurred
any passage of time or giving of notice, or both, that would be necessary in
order to constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to the
sum of the otherwise applicable Interest Rate Basis plus two percent (2%), or if
no Interest Rate Basis is otherwise applicable, a simple per annum interest rate
equal to the sum of the Prime Rate Basis plus two percent (2%).
"Documentation Agent" shall mean The Toronto-Dominion Bank in its
capacity as Documentation/Review Agent.
"Environmental Laws" shall mean all applicable federal, state or local
laws, statutes, rules, regulations or ordinances,
-10-
<PAGE>
codes, common law, consent agreements, orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder relating to public health,
safety or the pollution or protection of the environment, including, without
limitation, those relating to releases, discharges, emissions, spills, leaching,
or disposals to air, water, land or ground water, to the withdrawal or use of
ground water, to the use, handling or disposal of polychlorinated biphenyls,
asbestos or urea formaldehyde, to the treatment, storage, disposal or management
of hazardous substances (including, without limitation, petroleum, crude oil or
any fraction thereof, or other hydrocarbons), pollutants or contaminants, or to
exposure to toxic, hazardous or other controlled, prohibited, or regulated
substances, including, without limitation, any such provisions under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
(42 U.S.C. ss. 9601 et seq.), as amended by the Superfund Amendments and
Reauthorization Act of 1986, as amended, or the Solid Waste Disposal Act, as
amended (42 U.S.C. ss. 6901 et seq.).
"Equivalent Owned POPs" shall mean, for each MSA or RSA served by any
Cellular System which is owned in whole or in part, directly or indirectly, by
the Borrower or any of its Subsidiaries, a number equal to the product of (a)
the number of POPs for each such MSA or RSA and (b) the percentage of ownership
of the Borrower (either directly or through its Subsidiaries) in the Cellular
System serving each such MSA or RSA.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect from time to time.
"ERISA Affiliate" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is a member of any group of organizations
(within the meaning of Code Section 414(b), 414(c), 414(m), or 414(o)) of which
the Borrower is a member.
"Eurodollar Advance" shall mean an Advance which the Borrower requests
to be made as a Eurodollar Advance or which is reborrowed as a Eurodollar
Advance, in accordance with the provisions of Section 2.2 hereof, which bears
interest at the Eurodollar Basis and which shall be in a principal amount of at
least $5,000,000.00 and in an integral multiple of $1,000,000.00.
"Eurodollar Basis" shall mean a simple per annum interest rate (rounded
upward, if necessary, to the nearest one-hundredth (1/100th) of one percent)
equal to the sum of (a) the quotient of (i) the Eurodollar Rate divided by (ii)
one minus the Eurodollar Reserve Percentage, stated as a decimal, plus (b) the
Applicable
-11-
<PAGE>
Margin as determined by Section 2.3(f) hereof. The Eurodollar Basis shall apply
to Interest Periods of one (1), two (2), three (3), six (6) and, subject to
availability, nine (9) and twelve (12) months and, once determined, shall remain
unchanged during the applicable Interest Period, except for changes to reflect
adjustments in the Eurodollar Reserve Percentage and the Applicable Margin. The
Borrower may elect an Interest Period of nine (9) or twelve (12) months for a
Eurodollar Advance unless the Administrative Agent has been notified by one (1)
or more Lenders that such Lender does not have available to it funds for its
portion of the proposed Advance which are not required for other purposes, that
such funds are not available to such Lender at a rate at or below the Eurodollar
Rate for such proposed Advance and Interest Period, or that such Lender does not
agree (in its sole discretion) to fund its portion of such Advance.
"Eurodollar Rate" shall mean, for any Interest Period, the average of
the interest rates per annum at which deposits in United States Dollars for such
Interest Period are offered to the Managing Agents in the Eurodollar market at
approximately 11:00 a.m. (New York, New York time) two (2) Business Days before
the first day of such Interest Period, in an amount approximately equal to the
principal amount of, and for a length of time approximately equal to the
Interest Period for, the Eurodollar Advance sought by the Borrower.
"Eurodollar Reserve Percentage" shall mean the percentage which is in
effect from time to time under Regulation D of the Board of Governors of the
Federal Reserve System, as such regulation may be amended from time to time, as
the maximum reserve requirement applicable with respect to Eurocurrency
Liabilities (as that term is defined in Regulation D), whether or not any Lender
has any such Eurocurrency Liabilities subject to such reserve requirement at
that time. The Eurodollar Basis for any Eurodollar Advance shall be adjusted as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the events specified in Section
8.1 hereof, provided that any requirement for notice or lapse of time has been
satisfied.
"Excess Cash Flow" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis, as of the end of any fiscal year of the
Borrower based on the audited financial statements required to be provided to
the Lenders under Section 6.2 hereof for such year, the remainder of (a) the sum
of (i) Cash Flow for such fiscal year, plus (ii) the amount of all cash payments
of capital contributions made during such year by minority investors in Cellular
Systems majority-owned by the
-12-
<PAGE>
Borrower or any of its Subsidiaries, minus (b) the sum of the following items
for such fiscal year: (i) Debt Service; (ii) Capital Expenditures; (iii) income
taxes paid; (iv) voluntary prepayments of principal under the Term Loan and, if
accompanied by a permanent reduction of the Revolving Loan Commitment, the
Revolving Loans, all pursuant to Section 2.6(b) hereof; (v) cash payments of
capital contributions made by the Borrower and its Subsidiaries to any Person
which is an Investment in a Cellular System permitted hereunder; and (vi)
Restricted Payments made pursuant to Section 7.7(c) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Facilities" shall mean the credit facilities made available to the
Borrower hereunder pursuant to the Term Loan Commitment (as defined in the Prior
Loan Agreement) and the Revolving Loan Commitment.
"Fair Market Value" shall mean, with respect to any shares of any
Person's common stock as of the date of the consummation of any Acquisition or
Investment, the closing price for such shares for the previous trading day, as
reported by the national stock exchange upon which such shares are traded. In
the event such closing price is unavailable, the Fair Market Value of such
Person's common stock shall be determined by an independent valuation firm of
recognized standing in the cellular telephone industry selected by the Managing
Agents.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the federal government administering the
Communications Act.
"FCC Approval" shall mean the approval requested from the FCC (and any
applicable state regulatory body) by Vanguard and/or the Borrower for the
transfer to VCFC of all of the issued and outstanding Capital Stock of VCOC and
all of the Obligations hereunder.
"Federal Funds Rate" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three (3)
-13-
<PAGE>
federal funds brokers of recognized standing selected by the Administrative
Agent.
"Final Maturity Date" shall mean the earlier of (a) the later to occur
of the Term Loan Maturity Date and the Revolving Loan Maturity Date, or (b) any
date on which all outstanding Obligations shall be due (whether by acceleration
or otherwise).
"Fixed Charge Ratio" shall mean, for any calculation date, the ratio of
(a) Adjusted Cash Flow to (b) Fixed Charges.
"Fixed Charges" shall mean for the Borrower and its Subsidiaries on a
consolidated basis with respect to the most recently completed four (4) fiscal
quarters, in each case after giving effect to any Interest Rate Hedge Agreements
and Eurodollar Advances, the sum of (a) Debt Service, plus (b) Capital
Expenditures, plus (c) income taxes paid, plus (d) all Restricted Payments and
Restricted Purchases made by the Borrower or any of its Subsidiaries, plus (e)
all cash payments of capital contributions made by the Borrower and its
Subsidiaries to any Person which is an Investment in a Cellular System permitted
hereunder is held, less (f) the amount of all cash payments of capital
contributions made by minority investors in Cellular Systems majority-owned by
the Borrower or any of its Subsidiaries.
"GAAP" shall mean generally accepted accounting principles in the
United States, consistently applied.
"GAAP Interest Expense" shall mean, for any period, all interest
expense (including imputed interest with respect to Capitalized Lease
Obligations) with respect to any Indebtedness for Money Borrowed of the Borrower
and its Subsidiaries on a consolidated basis during such period pursuant to the
terms of such Indebtedness for Money Borrowed, together with all payments made
pursuant to Section 7.7(d) hereof during such period and, together with all fees
payable in respect thereof, but excluding any such fees payable on or prior to
the Agreement Date and any amortization thereof, all as calculated in accordance
with GAAP.
-14-
<PAGE>
"Guaranty" or "Guaranteed," as applied to an obligation, shall mean and
include (a) a guaranty, direct or indirect, in any manner, of all or any part of
such obligation and (b) any agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, any
reimbursement obligations as to amounts drawn down by beneficiaries of
outstanding letters of credit.
"Indebtedness" shall mean, with respect to any Person, and without
duplication, (a) all items, except items of partners' equity or capital stock or
surplus or general contingency or deferred tax reserves, which in accordance
with GAAP would be included in determining total liabilities as shown on the
liability side of a balance sheet of such Person, including, without limitation,
secured non-recourse obligations of such Person, (b) all direct or indirect
obligations of any other Person secured by any Lien to which any property or
asset owned by such Person is subject, but only to the extent of the higher of
the fair market value or the book value of the property or asset subject to such
Lien if the obligation secured thereby shall not have been assumed, (c) to the
extent not otherwise included, all Capitalized Lease Obligations of such Person
and all obligations of such Person with respect to leases constituting part of a
sale and lease-back arrangement and (d) all reimbursement obligations
(contingent or otherwise) with respect to outstanding letters of credit.
"Indebtedness for Money Borrowed" shall mean, with respect to any
Person, Indebtedness for money borrowed and Indebtedness represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments, all
Indebtedness upon which interest charges are customarily paid, all Capitalized
Lease Obligations, all reimbursement obligations with respect to outstanding
letters of credit, all Indebtedness issued or assumed as full or partial payment
for property or services (other than trade payables arising in the ordinary
course of business, but only if and so long as such accounts are payable on
customary trade terms), whether or not any such notes, drafts, obligations or
Indebtedness represent Indebtedness for money borrowed, and, without
duplication, Guaranties of any of the foregoing. For purposes of this
definition, interest which is accrued but not paid on the scheduled due date for
such interest shall be deemed Indebtedness for Money Borrowed.
-15-
<PAGE>
"Indemnitee" shall have the meaning ascribed to it in Section 5.11
hereof.
"Inter(bullet)Act Investment" shall mean an Investment by the Borrower
or one or more of its Subsidiaries in Inter(bullet)Act Systems, Incorporated, a
North Carolina corporation, and a developer of interactive multi-media retail
marketing products, the aggregate amount of which Investment after the Agreement
Date shall not exceed $15,000,000.
"Interest Coverage Ratio" shall mean, as of any calculation date, the
ratio of Cash Flow for the most recently ended fiscal quarter of the Borrower to
GAAP Interest Expense for such quarter.
"Interest Period" shall mean (a) in connection with any Prime Rate
Advance, the period beginning on the date such Advance is made and ending on the
last day of the calendar quarter in which such Advance is made, provided,
however, that if a Prime Rate Advance is made on the last day of any calendar
quarter, it shall have an Interest Period ending on, and its Payment Date shall
be, the last day of the following calendar quarter, and (b) in connection with
any Eurodollar Advance, the term of such Advance selected by the Borrower or
otherwise determined in accordance with this Agreement. Notwithstanding the
foregoing, however, (i) any applicable Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day unless, with respect to Eurodollar Advances only, such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day, (ii) any applicable Interest Period, with
respect to Eurodollar Advances only, which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period is to end shall (subject to clause (i) above) end on the last day of such
calendar month, and (iii) no Interest Period shall extend beyond the applicable
Maturity Date or such earlier date as would interfere with the Borrower's
repayment obligations under Section 2.4 or Section 2.7 hereof. Interest shall be
due and payable with respect to any Advance as provided in Section 2.3 hereof.
"Interest Rate Basis" shall mean the Prime Rate Basis, or the
Eurodollar Basis, as appropriate.
"Interest Rate Hedge Agreements" shall mean any interest rate swap,
cap, collar, floor, caption or swaption agreements, or any similar arrangements
designed to hedge the risk of variable interest rate volatility or to reduce
interest costs, arising at any time between the Borrower, on the one hand, and
any one (1)
-16-
<PAGE>
or more of the Lenders, or any other Person (other than an Affiliate), on the
other hand, as such agreement or arrangement may be modified, supplemented and
in effect from time to time.
"Investment" shall mean, with respect to the Borrower or any of its
Subsidiaries, (a) any loan, advance or extension of credit (other than to
customers in the ordinary course of business) by such Person to, or any Guaranty
or other contingent liability with respect to the capital stock, Indebtedness or
other obligations of, or any contributions to the capital of, any other Person,
or any ownership, purchase or other acquisition by such Person of any interest
in any capital stock, limited partnership interest, general partnership
interest, or other securities of any such other Person, other than an
Acquisition, (b) any acquisition by the Borrower or any of its Subsidiaries of
any assets relating to the wireless communications business (other than the
cellular telephone business), and (c) all expenditures by the Borrower or any of
its Subsidiaries relating to the foregoing. "Investment" shall also include the
total cost of any future commitment or other obligation binding on any Person to
make an Investment or any subsequent Investment.
"Lenders" shall mean the financial institutions whose names appear as
"Lenders" on the signature pages hereof and any of their permitted assigns
hereunder following assignments made in accordance with Section 11.5 hereof; and
"Lender" shall mean any one of the foregoing Lenders.
"Licenses" shall mean any mobile telephone, cellular telephone,
microwave, paging or other license, authorization, certificate of compliance,
franchise, approval or permit, whether for the construction or the operation of
any Cellular System, granted or issued by the FCC and held by the Borrower or
any of its Subsidiaries, all of which are listed as of the Agreement Date on
Schedule 1 hereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, negative pledge or other agreement not to pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise, and
whether or not choate, vested or perfected.
"Loan Documents" shall mean this Agreement, the Notes, the Security
Documents, the Vanguard Assignment Agreement, the VCFC Assumption Agreement
(upon its execution), the Certificate of Financial Condition, all legal opinions
or reliance letters issued by counsel to the Borrower or any of its
Subsidiaries, all fee letters (including without limitation those referred to in
Section 2.5 hereof), all Requests for Advance, all Interest Rate
-17-
<PAGE>
Hedge Agreements between the Borrower, on the one hand, and the Administrative
Agent and the Lenders or affiliate of the Lenders, or any of them, on the other
hand (including Interest Rate Hedge Agreements entered into prior to the
Agreement Date), and all other documents and agreements executed or delivered in
connection with or contemplated by this Agreement.
"Loans" shall mean, collectively, the Term Loan and the Revolving
Loans.
"Majority Lenders" shall mean (i) at any time that there are no Loans
outstanding hereunder, Lenders the total of whose Commitment Ratios equals or
exceeds sixty-six and two-thirds percent (66-2/3%), or (ii) at any time that
there are Loans outstanding hereunder, Lenders the total of whose Loans
outstanding equals or exceeds sixty-six and two-thirds percent (66-2/3%) of the
total principal amount of the Loans then outstanding hereunder.
"Management Group" shall mean Stuart S. Richardson, Haynes G. Griffin,
Stephen R. Leeolou and L. Richardson Preyer, Jr.
"Managing Agents" shall mean The Bank of New York ("BNY") and The
Toronto-Dominion Bank ("TD"), acting in their capacities as managing agents for
the Lenders.
"Materially Adverse Effect" shall mean (a) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties, or business prospects of the Borrower and its
Subsidiaries on a consolidated basis, or (b) a material adverse effect upon the
binding nature, validity, or enforceability of this Agreement, the Security
Documents and the Notes, or upon the ability of the Borrower and its
Subsidiaries to perform the payment obligations or other material obligations
under this Agreement or any other Loan Document, or upon the value of the
Collateral or upon the rights, benefits or interests of the Lenders in and to
the Loans or the rights of the Collateral Agent and the Lenders in the
Collateral; in any case, whether resulting from any single act, omission,
situation, status, event or undertaking, or taken together with other such acts,
omissions, situations, statuses, events or undertakings.
"Maturity Date" shall mean (a) the Term Loan Maturity Date, or the
Revolving Loan Maturity Date, as the case may be, or (b) such earlier date as
payment of the Obligations shall be due (whether by acceleration or otherwise).
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<PAGE>
"Mid-Atlantic Supersystem" shall mean, collectively, (a) the Cellular
Systems owned in whole or in part by the Borrower and its Subsidiaries which are
located within the Commonwealth of Pennsylvania; Orange County, New York;
Poughkeepsie, New York; Binghamton and Elmira, New York; and (b) contiguous
MSA's or RSA's; provided that, for each such contiguous geographical territory,
the number of Equivalent Owned POPs equals or exceeds fifty percent (50%) of all
POPs for such territory.
"MSA" shall mean any "metropolitan statistical area" as defined and
modified by the FCC for the purpose of licensing public cellular radio
telecommunications service systems.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Necessary Authorizations" shall mean all approvals and licenses from,
and all filings and registrations with, any governmental or other regulatory
authority, including, without limiting the foregoing, the Licenses and all
approvals, licenses, filings and registrations under the Communications Act,
necessary in order to enable the Borrower and its Subsidiaries to own,
construct, maintain, and operate Cellular Systems and to invest in other Persons
who own, construct, maintain and operate Cellular Systems.
"Net Income" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis, for any period, net income determined in accordance with
GAAP.
"Net Proceeds" shall mean, with respect to any sale, lease, transfer or
other disposition of assets by the Borrower or any of its Subsidiaries, or any
issuance by the Borrower or any of its Subsidiaries of any capital stock or
other debt or equity securities permitted hereunder, the aggregate amount of
cash received for such assets or securities (including, without limitation, any
payments received for non-competition covenants and consulting or management
fees and any portion of the amount received evidenced by a seller promissory
note or other evidence of Indebtedness), net of (a) amounts reserved, if any,
for taxes payable with respect to any such transaction (after application of any
available losses, credits or other offsets), (b) reasonable and customary
transaction costs properly attributable to such transaction and payable by the
Borrower or any of its Subsidiaries (other than to an Affiliate) in connection
with such transaction including, without limitation, commissions and
underwriting discounts and (c) until actually received by the Borrower or any of
its Subsidiaries, any portion of the amount received held in escrow or evidenced
by a seller
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promissory note or non-compete agreement or covenant for which compensation is
paid over time. Upon receipt by the Borrower or any of its Subsidiaries of
amounts referred to in item (c) of the preceding sentence, such amounts shall
then be deemed to be "Net Proceeds."
"Net Proceeds Trust" shall have the meaning ascribed to such term in
Section 2.7(b)(ii) hereof.
"Non-Core Assets" shall mean the ownership interests of the Borrower
and its Subsidiaries in (a) all Cellular Systems other than those in the
Mid-Atlantic Supersystem and the Identified Acquisitions; (b) up to ten percent
(10%) of the number of Equivalent Owned POPs as of the Agreement Date relating
to the Mid-Atlantic Supersystem; and (c) any asset other than assets comprising
part of a Cellular System.
"Non-PCS Investments" shall mean, as of any date, all Investments
(including, without limitation, the Inter(bullet)Act Investment) other than
PCS Investments.
"Non-PCS Investment Availability" shall mean, as of any calculation
date, the positive difference, if any, of (a) the Non-PCS Investment Sublimit on
such date, minus (b) the sum of (i) the aggregate amount of all Non-PCS
Investments made from the Agreement Date through such calculation date and (ii)
the aggregate amount of all PCS Investments made from the Agreement Date through
such calculation date.
"Non-PCS Investment Sublimit" shall mean the sum of (a) $35,000,000.00
and (b) the aggregate amount of (i) any common stock issued by Vanguard the
proceeds of which are given as consideration for any Investment, plus (ii) the
Net Proceeds of any public or private offering of common stock of Vanguard the
proceeds of which are downstreamed to the Borrower; provided, however, that the
Non-PCS Investment Sublimit shall not exceed $50,000,000.00.
"Note Pledge Agreements" shall mean, collectively, any Note Pledge
Agreement in favor of the Collateral Agent for the benefit of the Lenders, given
by the Borrower or any Subsidiary of the Borrower, each substantially in the
form of Exhibit D attached hereto.
"Notes" shall mean, collectively, the Term Loan Notes and the Revolving
Loan Notes.
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"Obligations" shall mean (a) all payment and performance obligations of
every kind, nature and description of the Borrower, its Subsidiaries and any
other obligors to the Lenders or the Agents, or any of them, under this
Agreement and the other Loan Documents (including any interest, fees and other
charges on the Loans or otherwise under the Loan Documents that would accrue but
for the filing of a bankruptcy action with respect to the Borrower or any of its
Subsidiaries or any other such obligor, whether or not such claim is allowed in
such bankruptcy action), as they may be amended from time to time, or as a
result of making the Loans, whether such obligations are direct or indirect,
absolute or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, now existing or
hereafter arising, and (b) the obligation to pay an amount equal to the amount
of any and all damage which the Lenders or the Agents, or any of them, may
suffer by reason of a breach by the Borrower, any of its Subsidiaries, or any
other obligor, of any obligation, covenant or undertaking with respect to this
Agreement or any other Loan Document.
"Partnership Subsidiaries" shall mean each of the following
Subsidiaries: State College Celltelco, a District of Columbia general
partnership; Williamsport Cellular Telephone Company, a Delaware general
partnership; Eastern North Carolina Cellular Joint Venture, a Delaware joint
venture; and PA 10-East Partnership, a Maryland general partnership.
"Payment Date" shall mean the last day of any Interest Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PCS" shall mean any broadband personal communications services
authorized pursuant to 47 Code of Federal Regulations 24.1 et seq.
"PCS Acquisitions" shall mean, as of any date, all Acquisitions with
respect to PCS.
"PCS Investments" shall mean, as of any date, all Investments with
respect to PCS.
"Permitted Asset Sale" shall mean the sale by the Borrower or any of
its Subsidiaries of all or any part of the Non-Core Assets as permitted under
Section 7.4 hereof.
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"Permitted Holders" shall mean Haynes G. Griffin, Stephen R. Leeolou,
L. Richardson Preyer, Jr., Stuart S. Richardson, their estates, spouses,
ancestors, and lineal descendants, the legal representatives of any of the
foregoing and the trustee of any bona fide trust of which the foregoing are the
sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
voting securities representing at least 66-2/3% of the total voting power of
all classes of Capital Stock of such Person (exclusive of any matters as to
which class voting rights exist) and the Richardson Family.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien in favor of the Collateral Agent, for the benefit
of the Agents and the Lenders, given to secure the Obligations;
(b) (i) Liens on real estate for real estate taxes not yet
delinquent and (ii) Liens for taxes, assessments, judgments, governmental
charges or levies or claims the non-payment of which is being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves have been set aside on such Person's books in accordance with GAAP, but
only so long as no foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto and remain unstayed for a period of thirty (30)
days after their commencement;
(c) Liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not yet due or
being diligently contested in good faith, if reserves or appropriate provisions
shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) Restrictions on the transfer of assets imposed by any of
the Licenses as presently in effect or by the Communications Act, any state laws
and any regulations thereunder;
(f) Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its properties
which were not incurred in connection with Indebtedness or other extensions of
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credit and which do not in the aggregate materially detract from the value of
such properties or materially impair their use in the operation of the business
of such Person;
(g) Purchase money security interests, which are perfected
automatically by operation of law, only for the period (not to exceed twenty
(20) days) of automatic perfection under the law of the applicable jurisdiction,
and limited to Liens on assets so purchased;
(h) Liens reflected by Uniform Commercial Code financing
statements filed in respect of Capitalized Lease Obligations permitted hereunder
and true leases of the Borrower or any of its Subsidiaries;
(i) Any Liens of record which are listed as of the Agreement
Date on Schedule 2 attached hereto, which Liens secure Indebtedness in an amount
not to exceed $2,000,000.00 in the aggregate at any time; and
(j) Liens on the assets acquired with the Indebtedness
permitted under Section 7.1(h) hereof, provided that such Lien secures only the
Indebtedness incurred to purchase the asset covered thereby.
"Person" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, a government or any agency or political subdivision
thereof, or any other entity.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA or any other employee benefit plan maintained for
employees of any Person or any affiliate of such Person.
"POPs" shall mean, as of any calculation date, with respect to any RSA
or MSA, the population of such RSA or MSA as such number is published in the
most recent Donnelly Marketing Service Population Guide.
"Prime Rate" shall mean, at any time, the higher of (a) the average of
the rates of interest adopted by each of BNY and TD as the reference rate for
the determination of interest rates for loans of varying maturities in United
States dollars to United States residents of varying degrees of creditworthiness
and being quoted at such time by such Person as its "prime rate" or "prime
commercial lending rate," or (b) the Federal Funds Rate plus 1/2 of 1%. The
Prime Rate is not necessarily the lowest rate of interest charged to borrowers
of either of BNY or TD.
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"Prime Rate Advance" shall mean an Advance which the Borrower requests
to be made as a Prime Rate Advance or is reborrowed as a Prime Rate Advance, in
accordance with the provisions of Section 2.2 hereof, which bears interest at
the Prime Rate Basis and which shall be in a principal amount of at least
$2,000,000.00, and in an integral multiple of $500,000.00.
"Prime Rate Basis" shall mean a simple interest rate equal to the sum
of (a) the Prime Rate and (b) the Applicable Margin as determined by Section
2.3(f) hereof. The Prime Rate Basis shall be adjusted automatically as of the
opening of business on the effective date of each change in the Prime Rate to
account for such change, and shall also be changed to reflect adjustments in the
Applicable Margin.
"Pro Forma Debt Service" shall mean for the Borrower and its
Subsidiaries on a consolidated basis with respect to the next succeeding
complete four (4) fiscal quarter period following the calculation date, and
after giving effect to any Interest Rate Hedge Agreements and Eurodollar
Advances, the sum of the aggregate of all cash principal, GAAP Interest Expense,
fees and other payments payable by such Persons during such period in respect of
Indebtedness for Money Borrowed, other than repayments required under Section
2.7 hereof. For purposes of this definition, where interest payments for the
four-quarter period immediately succeeding the calculation date are not fixed by
way of Interest Rate Hedge Agreements, Eurodollar Advances, or otherwise for the
entire period, interest shall be calculated on such Indebtedness for Money
Borrowed for periods for which interest payments are not so fixed at the
Eurodollar Basis (based on the then current adjustment under Section 2.3(f)
hereof) for a Eurodollar Advance having an Interest Period of twelve (12) months
as determined on the date of calculation.
"Pro Forma Debt Service Ratio" shall mean, as of any calculation date,
the ratio of Adjusted Cash Flow to Pro Forma Debt Service.
"Rating Agencies" shall mean Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc., and Moody's Investors Service, Inc. or any
successor to the respective rating agency businesses thereof.
"Reportable Event" shall have the meaning set forth in Title IV of
ERISA.
"Request for Advance" shall mean a certificate designated as a "Request
for Advance," signed by an Authorized Signatory requesting an Advance hereunder,
which shall be in substantially the form of Exhibit E attached hereto, and
shall, among other things, (a) specify the date of the Advance, which shall be a
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Business Day, the amount of the Advance, the type of Advance, the Commitment
under which the Advance is being requested and, with respect to Eurodollar
Advances, the Interest Period selected by the Borrower, (b) state that there
shall not exist, on the date of the requested Advance and after giving effect
thereto, a Default, as of the date of such Advance and after giving effect
thereto and (c) as to Advances which will increase the principal amount of the
Loans then outstanding, specify the use of the proceeds of the Loans being
requested.
"Restricted Payment" shall mean (a) any direct or indirect
distribution, dividend or other payment to any Person (other than to the
Borrower or any wholly-owned Subsidiary of the Borrower) on account of any
general or limited partnership interest in, or shares of capital stock or other
securities of, the Borrower or any of its Subsidiaries (other than stock
dividends and stock splits), including, without limitation, any warrants or
other rights or options to acquire shares of capital stock, general or limited
partnership interests or other securities of the Borrower or any of its
Subsidiaries, or any prepayment or repurchase by the Borrower or any of its
Subsidiaries of subordinated debt of the Borrower or any of its Subsidiaries or
(b) any management or consulting fees.
"Restricted Purchase" shall mean any payment on account of the
purchase, redemption, defeasance or other acquisition or retirement of any
general or limited partnership interest in, or shares of capital stock or other
securities of, the Borrower or any of the Borrower's Subsidiaries, including,
without limitation, any warrants or other rights or options to acquire shares of
capital stock, general or limited partnership interests or other securities of
the Borrower or any of the Borrower's Subsidiaries.
"Revolving Loan Commitment" shall mean the several obligations of the
Lenders to advance the sum of up to $350,000,000.00 at any one time outstanding,
in accordance with their respective Commitment Ratios, to the Borrower pursuant
to the terms hereof, as such obligations may be reduced from time to time
pursuant to the terms hereof.
"Revolving Loans" shall mean, collectively, the amounts advanced by the
Lenders to the Borrower under the Revolving Loan Commitment, not to exceed the
amount of the Revolving Loan Commitment, and evidenced by the Revolving Loan
Notes.
"Revolving Loan Maturity Date" shall mean December 23, 2003 or such
earlier date as payment of the remaining outstanding
principal amount of the Revolving Loans or of all remaining
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outstanding Obligations shall be due (whether by acceleration or otherwise).
"Revolving Loan Notes" shall mean those certain amended and restated
reducing, revolving promissory notes in the aggregate original principal amount
of the Revolving Loan Commitment, one (1) issued to each of the Lenders by the
Borrower, each one substantially in the form of Exhibit F attached hereto and
any extensions, modifications, renewals or replacements of or amendments to any
of the foregoing.
"Richardson Family" shall mean, collectively, the descendants of
Lunsford Richardson, Sr., and any of their respective spouses, estates, lineal
descendants, heirs, executors, personal representatives, administrators, trusts
for any of their benefit and charitable foundations to which shares of the
Company's Capital Stock beneficially owned by any of the foregoing have been
transferred.
"RSA" shall mean any "rural service area" as defined and modified by
the FCC for the purpose of licensing public cellular radio telecommunications
service systems.
"Security Agreement" shall mean that certain Security Agreement of even
date herewith, between the Borrower and the Collateral Agent, substantially in
the form of Exhibit G attached hereto.
"Security Documents" shall mean the Borrower Pledge Agreement, the
Subsidiary Guaranty, the Subsidiary Pledge Agreements, the Security Agreement,
the Subsidiary Security Agreements, the Assignment of Rights by Partner, the
Note Pledge Agreements, the Vanguard Guaranty, the Vanguard Pledge Agreement,
any other agreement or instrument providing collateral for the Obligations,
whether now or hereafter in existence, and any filings, instruments, agreements
and documents related thereto or to this Agreement and providing Collateral for
any of the Obligations.
"Security Interest" shall mean all Liens in favor of the Collateral
Agent, for the benefit of the Lenders, or in favor of any Lender created
hereunder or under any of the Security Documents to secure the Obligations.
"Senior Leverage Ratio" shall mean, as of any calculation date, the
ratio of Total Debt to Adjusted Cash Flow.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation
of which more than fifty percent (50%) of the
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outstanding stock (other than directors' qualifying shares) having ordinary
voting power to elect a majority of its board of directors, regardless of the
existence at the time of a right of the holders of any class or classes of
securities of such corporation to exercise such voting power by reason of the
happening of any contingency, or any partnership of which more than fifty
percent (50%) of the outstanding partnership interests, is at the time owned
directly or indirectly by such Person, or by one (1) or more Subsidiaries of
such Person, or by such Person and one (1) or more Subsidiaries of such Person,
or (b) any entity which is directly or indirectly controlled or capable of being
controlled by such Person, or by one (1) or more Subsidiaries of such Person, or
by such Person and one or more Subsidiaries of such Person. "Subsidiaries" as
used herein shall mean the Subsidiaries of the Borrower. The Subsidiaries of the
Borrower as of the Agreement Date are set forth on Schedule 3 attached hereto,
except as otherwise noted thereon. For all purposes under this Agreement (except
as otherwise set forth herein), with respect to the Borrower, "Subsidiary" or
"Subsidiaries" shall not include any Unrestricted Subsidiary or the VCS
Subsidiary.
"Subsidiary Guaranty" shall mean each Subsidiary Guaranty in favor of
the Collateral Agent for the benefit of the Lenders, given by a Subsidiary of
the Borrower, each substantially in the form of Exhibit H attached hereto,
including, without limitation, that certain Second Amended and Restated Master
Subsidiary Guaranty of even date herewith.
"Subsidiary Pledge Agreement" shall mean each Subsidiary Pledge
Agreement between a Subsidiary of the Borrower having one (1) or more of its own
Subsidiaries (other than the Partnership Subsidiaries), on the one hand, and the
Collateral Agent, on the other hand, each substantially in the form of Exhibit I
attached hereto.
"Subsidiary Security Agreement" shall mean each Subsidiary Security
Agreement between each of the Borrower's Subsidiaries (other than the
Partnership Subsidiaries), on the one hand, and the Collateral Agent, on the
other hand, each substantially in the form of Exhibit J attached hereto,
including, without limitation, that certain Second Amended and Restated Master
Subsidiary Security Agreement of even date herewith.
"Term Loan" shall mean, collectively, the amounts advanced by the
Lenders to the Borrower as Term Loans prior to the Agreement Date and evidenced
by the Term Loan Notes.
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"Term Loan Maturity Date" shall mean December 23, 2003 or such earlier
date as payment of the remaining outstanding principal amount of the Term Loan
or of all remaining outstanding Obligations shall be due (whether by
acceleration or otherwise).
"Term Loan Notes" shall mean those certain amended and restated term
promissory notes in the aggregate original principal amount of $325,000,000.00,
one (1) issued to each of the Lenders by the Borrower, each one substantially in
the form of Exhibit K attached hereto, and any extensions, modifications,
renewals or replacements of or amendments to any of the foregoing.
"Total Consolidated Debt" shall mean, for Vanguard and its Subsidiaries
on a consolidated basis as of any date, the sum (without duplication) of (a) the
outstanding principal amount of the Loans, (b) Indebtedness secured by a Lien
permitted under subsection (i) of the definition of "Permitted Liens," and (c)
all other Indebtedness for Money Borrowed.
"Total Debt" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis as of any date, the sum (without duplication) of (a) the
outstanding principal amount of the Loans, (b) Indebtedness secured by a Lien
permitted under subsection (i) of the definition of "Permitted Liens," and (c)
all other Indebtedness for Money Borrowed.
"Unrestricted Subsidiaries" shall mean any Subsidiaries (as such term
is defined in the first sentence of the definition of "Subsidiary" herein) of
the Borrower which are designated as "Unrestricted Subsidiaries" in accordance
with Section 7.17 hereof. The financial condition and operations of any
Unrestricted Subsidiary shall not be consolidated with those of Vanguard and its
Subsidiaries for financial reporting and financial covenant purposes herein.
"Upstream Dividends" shall have the meaning set forth in Section 7.19
hereof.
"VCOC" shall mean Vanguard Cellular Operating Corp., a Delaware
corporation.
"VCFC" shall mean Vanguard Cellular Financial Corp., a North Carolina
corporation.
"VCFC Assumption Agreement" shall mean that certain VCFC Assumption
Agreement to be executed pursuant to Section 11.5(a) hereof by VCOC, VCFC, the
Agents and the Lenders, substantially in the form of Exhibit L attached hereto.
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"VCS Subsidiary" shall mean Vanguard Cellular Services, Inc., a
Delaware corporation, which is an indirect wholly-owned subsidiary of the
Borrower, and any of its subsidiaries. The financial condition and operations of
the VCS Subsidiary shall not be consolidated with those of Vanguard and its
Subsidiaries for financial covenant purposes herein.
"Vanguard" shall mean Vanguard Cellular Systems, Inc., a North Carolina
corporation.
"Vanguard Assignment Agreement" shall have the meaning ascribed to such
term in the Recitals hereto.
"Vanguard Debentures" shall mean those certain 9-3/8% Senior Debentures
due April 15, 2006 issued by Vanguard pursuant to the Vanguard Indenture in an
aggregate principal amount of $200,000,000, on or prior to the Agreement Date.
"Vanguard Guaranty" shall mean that certain Guaranty in favor of the
Collateral Agent for the benefit of the Lenders, given by Vanguard of even date
herewith.
"Vanguard Indenture" shall mean that certain Indenture dated as of
April 1, 1996 between Vanguard and The Bank of New York, as trustee, as
supplemented by First Supplemental Indenture dated as of April 1, 1996.
"Vanguard Pledge Agreement" shall mean that certain Pledge Agreement
between Vanguard and the Collateral Agent of even date herewith.
"Voting Stock" shall mean, with respect to a corporation, shall mean
all classes of Capital Stock of such corporation then outstanding and normally
entitled to vote in the election of directors.
"Wholly Owned Subsidiary" shall mean, at any time, a Subsidiary, all of
the Voting Stock of which (except directors' qualifying shares) is at the time
owned, directly or indirectly, by Vanguard.
Section 1.2 Interpretation. Each definition of an agreement in this
Article 1 shall, unless otherwise specified, include such agreement as modified,
amended, restated or supplemented from time to time in accordance herewith, and
except where the context otherwise requires, the singular shall include the
plural and vice versa. Except where otherwise specifically restricted, reference
to a party to this Agreement or any other Loan Document includes that party and
its successors and assigns.
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All capitalized terms used herein which are defined in Article 9 of the Uniform
Commercial Code in effect in the State of New York on the date hereof and which
are not otherwise defined herein shall have the same meanings herein as set
forth therein.
Section 1.3 Cross References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause in
such Article, Section or definition.
ARTICLE 2
Loans
Section 2.1 The Loans.
(a) Term Loans. Prior to the Agreement Date, the Lenders made
Term Loans to Vanguard which were assumed by the Borrower pursuant to the
Vanguard Assignment Agreement in the aggregate amount of $325,000,000. Advances
outstanding under the Term Loan Notes may be repaid and reborrowed as provided
in Section 2.2(b) and Section 2.2(c) hereof in order to effect changes in the
Interest Rate Bases applicable to the Advances thereunder, provided, however,
that there shall be no net increase in the aggregate principal amount
outstanding under the Term Loan Notes.
(b) Revolving Loans. The Lenders agree, severally in
accordance with their respective Commitment Ratios and not jointly, upon the
terms and subject to the conditions of this Agreement, to lend and relend to the
Borrower from time to time amounts which do not exceed in the aggregate at any
one time outstanding the amount of the Revolving Loan Commitment as in effect
from time to time. Advances under the Revolving Loan Commitment may be repaid
and then reborrowed as provided in Section 2.2(b) and Section 2.2(c) hereof.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Choice of Interest Rate, Etc. Any Advance hereunder shall,
at the option of the Borrower, be made as a Prime Rate Advance or a Eurodollar
Advance; provided, however, that at such time as there shall have occurred and
be continuing a Default, and the Administrative Agent shall have provided the
Borrower with written notice thereof, the Borrower shall not have
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the right to re-borrow any Eurodollar Advances and all subsequent Advances shall
be made as Prime Rate Advances. Any notice given to the Administrative Agent in
connection with a requested Advance hereunder shall be given to the
Administrative Agent prior to 11:00 a.m. (New York, New York time) in order for
such Business Day to count toward the minimum number of Business Days required.
(b) Prime Rate Advances.
(i) Advances. The Borrower shall give the
Administrative Agent in the case of Prime Rate Advances at least two
(2) Business Days' irrevocable prior written notice in the form of a
Request for Advance, or telephonic notice followed immediately by a
Request for Advance; provided, however, that the Borrower's failure to
confirm any telephonic notice with a Request for Advance shall not
invalidate any notice so given. Upon receipt of such notice from the
Borrower, the Administrative Agent shall promptly notify each Lender by
telephone or telecopy of the contents thereof.
(ii) Repayments and Reborrowings. Upon at least three
(3) Business Days' irrevocable prior written notice, the Borrower may
repay or prepay a Prime Rate Advance without regard to its Payment Date
and (i) reborrow all or a portion of the principal amount thereof as
one or more Prime Rate Advances, (ii) reborrow all or a portion of the
principal thereof as one or more Eurodollar Advances, or (iii) not
reborrow all or any portion of such Prime Rate Advance. On the date
indicated by the Borrower, such Prime Rate Advance shall be so repaid
and, as applicable, reborrowed.
(c) Eurodollar Advances.
(i) Advances. The Borrower shall give the
Administrative Agent in the case of Eurodollar Advances at least three
(3) Business Days' irrevocable prior written notice in the form of a
Request for Advance, or telephonic notice followed immediately by a
Request for Advance; provided, however, that the Borrower's failure to
confirm any telephonic notice with a Request for Advance shall not
invalidate any notice so given. The Administrative Agent, whose
determination shall be conclusive, shall determine the available
Eurodollar Bases and shall notify the Borrower of such Eurodollar
Bases. The Borrower shall promptly notify the Administrative Agent by
telephone or telecopy and shall immediately confirm any such telephonic
notice in writing,
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of its selection of a Eurodollar Basis and Interest Period for such
Advance. Upon receipt of such notice from the Borrower, the
Administrative Agent shall promptly notify each Lender by telephone or
telecopy of the contents thereof.
(ii) Repayments and Reborrowings. At least three (3)
Business Days prior to each Payment Date for a Eurodollar Advance, the
Borrower shall give the Administrative Agent written notice specifying
whether all or a portion of any Eurodollar Advance outstanding on the
Payment Date (i) is to be repaid and then reborrowed in whole or in
part as one (1) or more Eurodollar Advances, (ii) is to be repaid and
then reborrowed in whole or in part as a Prime Rate Advance, or (iii)
is to be repaid and not reborrowed. Upon such Payment Date such
Eurodollar Advance will, subject to the provisions hereof, be so repaid
and, as applicable, reborrowed.
(d) Notification of Lenders. Upon receipt of a Request for
Advance, or a notice from the Borrower with respect to any outstanding Advance
prior to the Payment Date for such Advance, the Administrative Agent shall
promptly notify each Lender by telephone or telecopy of the contents thereof and
the amount of such Bank's portion of such Advance. Each Lender shall, not later
than 12:00 noon (New York, New York time) on the date of borrowing specified in
such notice, make available to the Administrative Agent at the Administrative
Agent's Office, or at such account as the Administrative Agent shall designate,
the amount of its ratable portion of any Advance which represents an additional
borrowing hereunder in immediately available funds.
(e) Disbursement.
(i) Prior to 2:00 p.m. (New York, New York time) on
the date of an Advance hereunder, the Administrative Agent shall,
subject to the satisfaction of the conditions set forth in Article 3,
disburse the amounts made available to the Administrative Agent by the
Lenders in like funds by (a) transferring the amounts so made available
by wire transfer pursuant to the Borrower's instructions, or (b) in the
absence of such instructions, crediting the amounts so made available
to the account of the Borrower maintained with the Administrative
Agent.
(ii) Unless the Administrative Agent shall have
received notice from a Lender prior to 12:00 noon (New York, New York
time) on the date of any Advance that such Lender will not make
available to the Administrative Agent such
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Lender's ratable portion of such Advance, the Administrative Agent may
assume that such Lender has made or will make such portion available
to the Administrative Agent on the date of such Advance and the
Administrative Agent may in its sole discretion and in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent such Lender does not make
such ratable portion available to the Administrative Agent, such
Lender agrees to repay to the Administrative Agent on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the Federal
Funds Rate plus one percent (1%).
(iii) If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Lender's portion of the applicable Advance for
purposes of this Agreement. If such Lender does not repay such
corresponding amount immediately upon the Administrative Agent's demand
therefor, the Administrative Agent shall notify the Borrower and the
Borrower shall immediately pay such corresponding amount to the
Administrative Agent, with interest at the Interest Rate Basis
applicable to the underlying Advance. The failure of any Lender to fund
its portion of any Advance shall not relieve any other Lender of its
obligation hereunder to fund its respective portion of the Advance on
the date of such borrowing, but no Lender shall be responsible for any
such failure of any other Lender.
(iv) In the event that, at any time no Default then
exists and the conditions precedent to borrowing in Article 3 hereof
have been satisfied, a Lender for any reason fails or refuses to fund
its portion of an Advance, then, until such time as such Lender has
funded its portion of such Advance (which late funding shall not
absolve such Lender from any liability it may have to the Borrower), or
all other Lenders have received payment in full (whether by repayment
or prepayment) of the principal and interest due in respect of such
Advance, such non-funding Lender shall not have the right (i) to vote
regarding any issue on which voting is required or advisable under this
Agreement or any other Loan Document calling for less than one hundred
percent (100%) Lender consent, and the amount of the Loans of such
Lender shall not be counted as outstanding for purposes of determining
"Majority Lenders" hereunder, or (ii) to receive payments of principal,
interest or fees from the Borrower in respect of its unfunded Advances.
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Section 2.3 Interest.
(a) On Prime Rate Advances. Interest on each Prime Rate
Advance shall be computed on the basis of a year of 365/366 days for the actual
number of days elapsed and shall be payable at the Prime Rate Basis for such
Advance, in arrears on each applicable Payment Date. Interest on Prime Rate
Advances then outstanding shall also be due and payable on the applicable
Maturity Date.
(b) On Eurodollar Advances. Interest on each Eurodollar
Advance shall be computed on the basis of a 360-day year for the actual number
of days elapsed and shall be payable at the Eurodollar Basis for such Advance,
in arrears on the applicable Payment Date, and, in addition, if the Interest
Period for a Eurodollar Advance exceeds three (3) months, interest on such
Eurodollar Advance shall also be due and payable in arrears on every three-month
anniversary of the beginning of such Interest Period. Interest on Eurodollar
Advances then outstanding shall also be due and payable on the applicable
Maturity Date.
(c) Interest if no Notice of Selection of Interest Rate Basis.
If the Borrower fails to give the Administrative Agent timely notice of its
selection of a Eurodollar Basis, or if for any reason a determination of a
Eurodollar Basis for any Advance is not timely concluded, the Prime Rate Basis
shall apply to such Advance.
(d) Interest Upon Default. Immediately upon the occurrence of
an Event of Default, the outstanding principal balance of the Loans shall bear
interest at the Default Rate. Such interest shall be payable on demand, and
shall accrue until the earliest of (a) waiver or cure (to the satisfaction of
the Lenders required under Section 11.12 hereof to waive) of the applicable
Default, (b) agreement by the Majority Lenders to rescind the charging of
interest at the Default Rate, or (c) payment in full of the Obligations.
(e) Eurodollar Advance Contracts. At no time may the number of
outstanding Eurodollar Advances exceed seven (7).
(f) Applicable Margin. With respect to any Advance hereunder,
the Applicable Margin shall be the interest rate margin determined by the
Administrative Agent based upon the Consolidated Leverage Ratio for the most
recent fiscal quarter end, effective as of the second Business Day after the
financial statements referred to in Section 6.1 or 6.2 hereof, as applicable,
are required to be furnished by the Borrower to the
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Administrative Agent and each Lender for the fiscal quarter most recently ended,
expressed as a per annum rate of interest as follows:
<TABLE>
<CAPTION>
Prime Rate Eurodollar
Consolidated Advance Advance
Leverage Ratio Applicable Margin Applicable Margin
<S> <C> <C>
7.00:1 or greater 0.500% 1.750%
6.00:1 or greater but
less than 7.00:1 0.250% 1.500%
5.00:1 or greater but
less than 6.00:1 0.125% 1.375%
4.00:1 or greater but
less than 5.00:1 0.000% 1.125%
Less than 4.00:1 0.000% 1.000%
</TABLE>
In the event that the Borrower fails to timely provide the financial statements
referred to above in accordance with the terms of Section 6.1 or 6.2 hereof, as
applicable, and without prejudice to any additional rights under Section 8.2
hereof, the Consolidated Leverage Ratio shall be deemed to be equal to 7.00:1
until the actual delivery of such statements.
Section 2.4 Scheduled Commitment Reductions and Repayment.
(a) Term Loan. Commencing March 31, 1998, and on the last day
of each calendar quarter thereafter, principal amounts outstanding under the
Term Loan Notes shall be repaid as set forth below:
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
Percentage of Principal
Amount of Term Loan
Outstanding as of
March 30, 1998 to be
Dates of Repayment Repaid Each Quarter
March 31, 1998, June 30, 1998,
September 30, 1998 and 1.875%
December 31, 1998
March 31, 1999, June 30, 1999,
September 30, 1999 and 3.125%
December 31, 1999
March 31, 2000, June 30, 2000,
September 30, 2000 and 3.750%
December 31, 2000
March 31, 2001, June 30, 2001,
September 30, 2001 and 5.000%
December 31, 2001
March 31, 2002, June 30, 2002,
September 30, 2002 and 5.625%
December 31, 2002
March 31, 2003, June 30, 2003,
September 30, 2003 and 5.625%
December 23, 2003
Any remaining unpaid principal and interest under the Term Loan Notes shall be
due and payable in full on the Term Loan Maturity Date.
(b) Revolving Loan. Commencing March 31, 1998, and at the end
of each calendar quarter thereafter, the Revolving Loan Commitment as in effect
on March 30, 1998, shall be automatically reduced by the percentages set forth
below:
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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Quarterly Percentage
Reduction of Revolving Loan
Commitment In Effect on
Dates of Reduction March 30, 1998
March 31, 1998, June 30, 1998,
September 30, 1998 and 1.875%
December 31, 1998
March 31, 1999, June 30, 1999,
September 30, 1999 and 3.125%
December 31, 1999
March 31, 2000, June 30, 2000,
September 30, 2000 and 3.750%
December 31, 2000
March 31, 2001, June 30, 2001,
September 30, 2001 and 5.000%
December 31, 2001
March 31, 2002, June 30, 2002,
September 30, 2002 and 5.625%
December 31, 2002
March 31, 2003, June 30, 2003,
September 30, 2003 and 5.625%
December 23, 2003
The Borrower shall make a repayment of the Revolving Loans outstanding, together
with accrued interest thereon, on or before the effective date of each reduction
in the Revolving Loan Commitment under this Section 2.4(b), such that the
aggregate principal amount of the Revolving Loans outstanding at no time exceeds
the Revolving Loan Commitment as so reduced. In addition, any remaining unpaid
principal and interest under the Revolving Loan Commitment shall be due and
payable in full on the Revolving Loan Maturity Date.
Section 2.5 Fees. The Borrower agrees to pay to the Lenders, including
the Agents in their capacities as Lenders, such fees as are mutually agreed upon
and as are described in fee letters dated as of the Agreement Date, one between
the Borrower and each of the Lenders. All of such fees are due and payable and
shall be paid not later than the Agreement Date. In addition, the Borrower
agrees to pay each of the Lenders, in accordance with their respective
Commitment Ratios, a commitment
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fee on the aggregate unborrowed balance of the Revolving Loan Commitment, for
each day from the Agreement Date until the Revolving Loan Maturity Date, at a
rate of one-half of one percent (1/2%) per annum. Such commitment fee shall be
computed on the basis of a year of 365/366 days for the actual number of days
elapsed, shall be payable quarterly in arrears on the last day of each calendar
quarter, commencing on June 30, 1996, shall be fully earned when due, and shall
be non-refundable when paid. A final payment of any commitment fee then payable
shall also be due and payable on the Revolving Loan Maturity Date.
Section 2.6 Optional Prepayments; Revolving Loan Commitment Reduction.
(a) Prepayment of Advances. The principal amount of any Prime
Rate Advance may be prepaid in full or in part at any time, without penalty and
without regard to the Payment Date for such Advance, upon three (3) Business
Days' prior written notice to the Administrative Agent of such prepayment.
Eurodollar Advances may be prepaid prior to the applicable Payment Date, upon
three (3) Business Days' prior written notice to the Administrative Agent,
provided that the Borrower shall reimburse the Lenders and the Administrative
Agent, on demand, for any loss or out-of-pocket expense incurred by any Lender
or the Administrative Agent in connection with such prepayment, as set forth in
Section 2.10 hereof. Partial prepayments shall be in a principal amount of not
less than $2,000,000.00, and in an integral multiple of $500,000.00.
(b) Prepayment of Loans. Amounts permanently prepaid on the
Loans whether by way of refinancing, prepayment of Advances under the Term Loan,
prepayment of Advances under the Revolving Loan Commitment accompanied by a
corresponding reduction in the Revolving Loan Commitment or otherwise, shall be
applied to principal, first, to prepay the outstanding principal amount of the
Term Loan pro rata over the repayment schedule set forth in Section 2.4(a)
hereof, and, second, to permanently reduce the Revolving Loan Commitment by an
amount equal to the remaining amount of such prepayment, pro rata over the
Revolving Loan Commitment reduction schedule set forth in Section 2.4(b) hereof,
and to prepay the principal amount outstanding under the Revolving Loan
Commitment to the extent necessary to prevent the Revolving Loans outstanding
from exceeding the Revolving Loan Commitment as so reduced. Amounts applied to
the Revolving Loans shall permanently reduce the Revolving Loan Commitment in an
equal amount. Each such prepayment shall be accompanied by a payment of all
accrued but unpaid interest and fees with respect to the amount so prepaid. A
notice of prepayment shall be irrevocable. Upon receipt of any notice of
prepayment, the
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Administrative Agent shall promptly notify each Lender of the contents thereof
by telephone or telecopy and of such Lender's ratable portion of the prepayment.
Any portion of the Loans which is permanently prepaid may not be reborrowed.
(c) Revolving Loan Commitment Reduction. The Borrower may
without penalty (but subject to Section 2.10 hereof) at any time terminate or
permanently reduce all or any part of the Revolving Loan Commitment by giving
the Administrative Agent and the Lenders at least ten (10) Business Days' prior
written notice thereof; provided, however, that any reduction shall reduce the
Revolving Loan Commitment in a principal amount of at least $2,000,000.00 and in
an integral multiple of $500,000.00. The Borrower shall make any required
repayment or prepayment of Advances outstanding under the Revolving Loan
Commitment, plus accrued interest on such portion of the Revolving Loans and any
accrued fees in respect thereof, on or before the effective date of the
reduction of the Revolving Loan Commitment, so that the principal amount of the
Revolving Loans outstanding after such repayment or prepayment does not exceed
the Revolving Loan Commitment as so reduced. The Borrower shall not have any
right to rescind any termination or reduction pursuant to this Section 2.6(c).
Reductions in the Revolving Loan Commitment after March 30, 1998 pursuant to
this Section 2.6(c) shall be applied pro rata over the Revolving Loan Commitment
reduction schedule set forth in Section 2.4(b) hereof.
Section 2.7 Mandatory Prepayments. In addition to the scheduled
repayments and Revolving Loan Commitment reductions provided for in Section 2.4
hereof, the Borrower shall prepay the Obligations as follows:
(a) Repayment From Excess Cash Flow. On or prior to April 30,
1998 and on or prior to each April 30th thereafter during the term of this
Agreement, the Borrower shall make an additional prepayment of the outstanding
principal amount of the Loans in an amount equal to fifty percent (50%) of the
Excess Cash Flow for the most recently ended calendar year, commencing with the
calendar year ending December 31, 1997. Amounts so prepaid shall be applied to
the Term Loan or to reduce the Revolving Loan Commitment in the order of
priority set forth in Section 2.6(b) hereof. Accrued interest on the principal
amount of the Loans being prepaid pursuant to this Section 2.7(a) to the date of
such prepayment will be paid by the Borrower concurrently with such principal
prepayment.
(b) Repayment From Permitted Asset Sales. Except with respect
to Permitted Asset Sales having Net Proceeds of not more than $500,000.00 with
respect to any single transaction or
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related series of transactions and having Net Proceeds of not more than
$5,000,000.00 in the aggregate during the term of this Agreement, the Net
Proceeds from any Permitted Asset Sale shall be applied as follows:
(i) Except as otherwise provided in Section
2.7(b)(ii) hereof, to permanently reduce the outstanding principal
amount of the Term Loan and to reduce the Revolving Loan Commitment in
the order of priority set forth in Section 2.6(b) hereof. Such Net
Proceeds shall be paid by the Borrower to the Administrative Agent, for
the benefit of the Lenders, on the Business Day following the date of
such Permitted Asset Sale; or
(ii) At the Borrower's election, so long as no
Default then exists or would be caused thereby, to purchase one or more
Allowable Cellular Systems, the aggregate purchase price of which does
not exceed the sum of such Net Proceeds plus Advances otherwise
available for Acquisitions hereunder, so long as the Borrower or one
(1) of its Subsidiaries shall have consummated the acquisition of such
Allowable Cellular System or Systems, in one (1) or more transactions,
not more than 330 days following the date of such Permitted Asset Sale,
and, if the Consolidated Leverage Ratio at the time any such
transaction(s) is consummated is greater than or equal to 7.5:1, so
long as the purchase price for any such Allowable Cellular System is
less than $175.00 per POP. In the event the Borrower elects to exercise
its right under this Section 2.7(b)(ii), the Borrower shall so notify
the Administrative Agent not less than five (5) Business Days prior to
the proposed date of the closing of the Permitted Asset Sale and shall,
upon its or any Subsidiary's receipt of any Net Proceeds with respect
to such Permitted Asset Sale, remit such Net Proceeds to the
Administrative Agent. The amount so remitted shall be used, first, to
pay the outstanding principal under the Revolving Loans (but the amount
so prepaid shall not reduce the Revolving Loan Commitment) and second,
to the extent of any excess, to be held in trust in an interest-bearing
account with the Administrative Agent (the "Net Proceeds Trust") for
the benefit of the Borrower, to be applied to the ultimate purchase of
the Allowable Cellular System or Systems, as hereinafter provided. Any
such payment of principal of the Revolving Loans shall be accompanied
by a payment of all accrued but unpaid interest and fees in respect of
the principal amount so paid. The Borrower or one (1) of its
Subsidiaries shall consummate such purchase(s) of the Allowable
Cellular System or Systems not more than 330 days following the
applicable Permitted Asset Sale. To the
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<PAGE>
extent that the Borrower or one (1) of its Subsidiaries shall not have
consummated any such purchase(s) as of the 330th day following such
Permitted Asset Sale (for whatever reason, including the occurrence of
a Default), or the aggregate purchase price of all such Allowable
Cellular Systems purchased within 330 days following the applicable
Permitted Asset Sale shall be less than the Net Proceeds of such
Permitted Asset Sale, any funds held in the Net Proceeds Trust shall be
applied by the Administrative Agent in the manner set forth in Section
2.7(b)(i) hereof and, to the extent that Net Proceeds had been used to
repay outstanding Revolving Loans, the Borrower shall cause to be
reduced, in an identical aggregate amount, the principal amount
outstanding under the Term Loan and the Revolving Loan Commitment in
the manner set forth in Section 2.7(b)(i) hereof, whether by requesting
an Advance under the Revolving Loan Commitment or otherwise.
Section 2.8 Notes; Loan Accounts.
(a) The Loans shall be repayable in accordance with the terms
and provisions set forth herein and shall be evidenced by the Notes. One (1)
Term Loan Note and one (1) Revolving Loan Note shall be payable to the order of
each Lender for each Facility, in accordance with their respective Commitment
Ratios. The Notes shall be issued by the Borrower to the Lenders and shall be
duly executed and delivered by one (1) or more Authorized Signatories of the
Borrower.
(b) Each Lender may open and maintain on its books in the name
of the Borrower a loan account with respect to the Loans and interest thereon.
Each Lender which opens such a loan account shall debit such loan account for
the principal amount of each Advance made by it and accrued interest thereon,
and shall credit such loan account for each payment on account of principal of
or interest on its Loans. The records of a Lender with respect to the loan
account maintained by it shall be prima facie evidence of the Loans and accrued
interest thereon, but the failure of any Lender to make any such notations or
any error or mistake in such notations shall not affect the Borrower's repayment
obligations with respect to such Loans.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Loans, commitment fees and any
other amount owed to the Lenders or the Administrative Agent or any of them
under this Agreement or the Notes shall be made not later than 1:00 p.m. (New
York, New York
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<PAGE>
time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office, for the account of
the Lenders or the Administrative Agent, as the case may be, in lawful money of
the United States of America in immediately available funds. Any payment
received by the Administrative Agent after 1:00 p.m. (New York, New York time)
shall be deemed received on the next Business Day. Receipt by the Administrative
Agent of any payment intended for any Lender or Lenders hereunder prior to 1:00
p.m. (New York, New York time) on any Business Day shall be deemed to constitute
receipt by such Lender or Lenders on such Business Day. In the case of a payment
for the account of a Lender, the Administrative Agent will promptly thereafter
distribute the amount so received in like funds to such Lender. If the
Administrative Agent shall not have received any payment from the Borrower as
and when due, the Administrative Agent will promptly notify the Lenders
accordingly.
(b) The Borrower agrees to pay principal, interest, fees and
all other amounts due hereunder, under the Notes or under any other Loan
Document without set-off or counterclaim or any deduction whatsoever and free
and clear of all taxes, levies and withholding. If the Borrower is required by
Applicable Law to deduct any taxes from or in respect of any sum payable to any
Agent or any Lender hereunder, under any Note or under any other Loan Document:
(i) the sum payable hereunder or thereunder, as applicable, shall be increased
to the extent necessary to provide that, after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.9(b)), such Agent or such Lender, as applicable, receives an amount equal to
the sum it would have received had no such deductions been made; (ii) the
Borrower shall make such deductions from such sums payable hereunder or
thereunder, as applicable, and pay the amount so deducted to the relevant taxing
authority as required by Applicable Law; and (iii) the Borrower shall provide
such Agent or such Lender, as applicable, with evidence satisfactory to such
Agent or such Lender, as applicable, that such deducted amounts have been paid
to the relevant taxing authority.
(c) Prior to the declaration of an Event of Default under
Section 8.2 hereof, if some but less than all amounts due from the Borrower are
received by the Administrative Agent with respect to the Obligations, the
Administrative Agent shall distribute such amounts in the following order of
priority, all on a pro rata basis to the Lenders: (i) to the payment on a pro
rata basis of any fees or expenses then due and payable to the Agents, the
Lenders, or any of them; (ii) to the payment of interest then due and payable on
the Loans; (iii) to the payment of all other amounts not otherwise referred to
in this
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<PAGE>
Section 2.9(c) then due and payable to the Agents or the Lenders, or any of
them, hereunder or under the Notes or any other Loan Document; and (iv) to the
payment of principal then due and payable on the Notes.
(d) Subject to any contrary provisions in the definition of
Interest Period, if any payment under this Agreement or any of the other Loan
Documents is specified to be made on a day which is not a Business Day, it shall
be made on the next Business Day, and such extension of time shall in such case
be included in computing interest and fees, if any, in connection with such
payment.
Section 2.10 Reimbursement.
(a) Whenever any Lender shall sustain or incur any losses or
out-of-pocket expenses in connection with (i) failure by the Borrower to borrow
or reborrow any Eurodollar Advance after having given notice of its intention to
borrow or reborrow in accordance with Section 2.2 hereof (whether by reason of
the Borrower's election not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3 hereof), or (ii) prepayment of any Eurodollar
Advance in whole or in part for any reason, the Borrower agrees to pay to such
Lender, upon such Lender's demand, an amount sufficient to compensate such
Lender for all such losses and out-of-pocket expenses. Such Lender's good faith
determination of the amount of such losses or out-of-pocket expenses, as set
forth in writing and accompanied by calculations in reasonable detail
demonstrating the basis for its demand, shall be presumptively correct.
(b) Losses subject to reimbursement hereunder shall include,
without limiting the generality of the foregoing, expenses incurred by any
Lender or any participant of such Lender permitted hereunder in connection with
the re-employment of funds prepaid, repaid, not borrowed, or paid, as the case
may be.
Section 2.11 Pro Rata Treatment.
(a) Advances. Each Advance shall be made pro rata on the basis
of the respective Commitment Ratios of the Lenders.
(b) Payments. Each payment and prepayment of principal of the
Loans and, except as provided in Article 10 hereof, each payment of interest on
the Loans, shall be made to the Lenders pro rata on the basis of their
respective unpaid principal amounts outstanding under the applicable Facility
immediately prior to such payment or prepayment. If any Lender shall obtain any
payment (whether involuntary, through the
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exercise of any right of set-off, or otherwise)v on account of the Loans made
by it in excess of its ratable share of the Loans based upon its Commitment
Ratio, such Lender shall forthwith purchase from the other Lenders such
participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 2.11(b) may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.12 Capital Adequacy. If after the date hereof, the adoption
of any Applicable Law regarding the capital adequacy of banks or bank holding
companies, or any change in Applicable Law (whether adopted before or after the
Agreement Date) or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender with any
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on any Lender's capital as a
consequence of its obligations hereunder with respect to the Loans and the
Commitments to a level below that which it could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy immediately before such adoption, change or
compliance and assuming that such Lender's capital was fully utilized prior to
such adoption, change or compliance) by an amount reasonably deemed by such
Lender to be material, then, upon demand by such Lender, the Borrower shall
promptly pay to such Lender such additional amounts as shall be sufficient to
compensate such Lender for such reduced return, together with interest on such
amount from the fourth (4th) day after the date of demand, until payment in full
thereof at the Default Rate. A certificate of such Lender setting forth the
amount to be paid to such Lender by the Borrower as a result of any event
referred to in this paragraph and supporting calculations in reasonable detail
shall be presumptively correct.
Section 2.13 Lender Tax Forms. On or prior to the Agreement Date and on
or prior to the first (1st) Business Day of
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each calendar year thereafter, each Lender which is organized in a jurisdiction
other than the United States shall, to the extent permissible under Applicable
Law, provide the Administrative Agent and the Borrower with two (2) properly
executed originals of Form 4224 or 1001 (or any successor form) prescribed by
the Internal Revenue Service or other documents satisfactory to the Borrower and
the Administrative Agent and properly executed Internal Revenue Service Form W-8
or W-9, as the case may be, certifying (i) as to such Lender's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to such Lender hereunder and under the Notes
or (ii) that all payments to be made to such Lender hereunder and under the
Notes are subject to such taxes at a rate reduced to zero by an applicable tax
treaty. Each such Lender agrees to provide the Administrative Agent and the
Borrower with new forms prescribed by the Internal Revenue Service upon the
expiration or obsolescence of any previously delivered form, or after the
occurrence of any event requiring a change in the most recent forms delivered by
it to the Administrative Agent and the Borrower.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Effectiveness. The terms and
conditions of this Agreement shall become operative and effective upon
fulfillment of each of the following conditions:
(a) The Managing Agents shall have received each of the
following, in form and substance satisfactory to each of them:
(i) duly executed Revolving Loan Notes;
(ii) duly executed Term Loan Notes;
(iii) duly executed Borrower Pledge Agreement,
together with appropriate stock certificates and stock powers;
(iv) duly executed Security Agreement, together with
appropriate UCC financing statement forms;
(v) duly executed Second Amended and Restated Master
Subsidiary Security Agreement, executed and delivered by each
Subsidiary of the Borrower (other than
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the Partnership Subsidiaries), together with appropriate UCC financing
statement forms;
(vi) duly executed Second Amended and Restated Master
Subsidiary Guaranty executed and delivered by each Subsidiary of the
Borrower (other than the Partnership Subsidiaries);
(vii) duly executed Note Pledge Agreements, together
with appropriate notes;
(viii) copies of insurance binders or certificates
covering the assets of the Borrower and its Subsidiaries and otherwise
meeting the requirements of Section 5.5 hereof;
(ix) legal opinions of (i) Richard C. Rowlenson,
Senior Vice President and General Counsel; (ii) Schell, Bray, Aycock,
Abel & Livingston, North Carolina counsel; (iii) Latham & Watkins, FCC
counsel; and (iv) Read and Laniado, New York regulatory counsel; each
as counsel to Vanguard, the Borrower and its Subsidiaries, addressed to
each Lender and the Managing Agents, and dated as of the Agreement
Date;
(x) opinion of Powell, Goldstein, Frazer & Murphy,
special counsel to the Managing Agents, addressed to the Managing
Agents and the Lenders and dated as of the Agreement Date, and the
Managing Agents hereby instruct such counsel to deliver such opinion to
the Administrative Agent and the Lenders; and
(xi) duly executed Certificate of Financial Condition
for the Borrower and its Subsidiaries on a consolidated basis, given by
the chief financial officer of the Borrower;
(xii) copies of the most recent quarterly and annual
financial statements of Vanguard and its Subsidiaries which have been
provided to each Lender and each Managing Agent pursuant to Section 6.1
and Section 6.2 of the Prior Loan Agreement, certified by the chief
financial officer of the Borrower;
(xiii) any required FCC consents or other required
consents to the closing of this Agreement or the Vanguard Assignment
Agreement or to the execution, delivery and performance of this
Agreement and the other Loan Documents,
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each of which shall be in form and substance satisfactory to the
Managing Agents and the Lenders;
(xiv) the loan certificate of the Borrower, in
substantially the form attached hereto as Exhibit M, including a
certificate of incumbency with respect to each Authorized Signatory,
together with appropriate attachments which shall include, without
limitation, the following items: (A) a copy of the Certificate or
Articles of Incorporation of the Borrower, certified to be true,
complete and correct by the Delaware Secretary of State, (B)
certificates of good standing or foreign qualification for the Borrower
issued by the Secretary of State or similar state official for each
state in which the Borrower is required to qualify to do business, (C)
a true, complete and correct copy of the By-Laws of the Borrower, as in
effect on the Agreement Date, (D) a true, complete and correct copy of
the resolutions of the Borrower authorizing it to execute, deliver and
perform this Agreement and the other Loan Documents and (E) a true,
complete and correct copy of any shareholders' agreements or voting
trust agreements in effect with respect to the stock of the Borrower;
(xv) duly executed Vanguard Pledge Agreement,
together with appropriate stock certificates and stock powers;
(xvi) duly executed Vanguard Guaranty;
(xvii) duly executed Vanguard Assignment Agreement;
(xviii) a loan certificate of Vanguard, including a
certificate of incumbency with respect to each authorized signatory of
Vanguard, together with appropriate attachments which shall include,
without limitation, the following items: (A) a copy of the Certificate
of Incorporation of Vanguard, certified to be true, complete and
correct by the North Carolina Secretary of State, (B) certificates of
good standing or foreign qualification for Vanguard issued by the
Secretary of State or similar state official for each state in which
Vanguard is required to qualify to do business, (C) a true, complete
and correct copy of the By-Laws of Vanguard, as in effect on the
Agreement Date, (D) a true, complete and correct copy of the
resolutions of Vanguard authorizing it to execute, deliver and perform
the Loan Documents and (E) a true, complete and correct copy of any
shareholders' agreements
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or voting trust agreements in effect with respect to the stock of
Vanguard;
(xix) UCC-1 lien and judgment search results with
respect to the Borrower and Vanguard;
(xx) a copy of the Certificate of Incorporation of
VCFC certified to be true, complete and correct by the North Carolina
Secretary of State;
(xxi) a copy of the requests for FCC Approval as
filed with the FCC certified to be true, complete and correct by the
general counsel of Vanguard and the Borrower; and
(xxii) a copy of the requests for Asset Transfer
Approval as filed with the FCC certified to be true, complete and
correct by the general counsel of Vanguard; and
(xxiii) all such other documents as either Managing
Agent or any Lender may reasonably request, certified by an appropriate
governmental official or an Authorized Signatory if so requested.
(b) The Managing Agents and the Lenders shall have received
evidence satisfactory to them that all Necessary Authorizations, including all
necessary consents to the closing of this Agreement, have been obtained or made,
are in full force and effect and are not subject to any pending or threatened
reversal or cancellation and the Managing Agents and the Lenders shall have
received a certificate of an Authorized Signatory so stating.
(c) The Managing Agents, the Lenders and Powell, Goldstein,
Frazer & Murphy, special counsel to Managing Agents, shall have received payment
of all fees due and payable on the Agreement Date, together with a payment of
all accrued but unpaid interest and fees under the Prior Loan Agreement.
(d) There shall have occurred no Materially Adverse Effect and
no event which, in the reasonable opinion of the Managing Agents, may be
expected to have a Materially Adverse Effect.
(e) The Managing Agents shall have received evidence
reasonably satisfactory to them that the Vanguard Debentures Offering has been
completed on terms and conditions satisfactory to all the Banks (including,
without limitation, the absence of
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any cross-default to this Agreement other than with respect to a payment default
at final maturity or following any acceleration of the Loans), and that
$186,000,000 has been applied to repay the Loans.
(f) The Managing Agents shall have received compliance
calculations in form and substance satisfactory to them demonstrating pro forma
compliance with Sections 7.8, 7.10, 7.11, 7.12 and 7.13 hereof both before and
after giving effect to the Vanguard Debentures.
Section 3.2 Conditions Precedent to Each Advance. The obligation of the
Lenders to make each Advance is subject to the fulfillment of each of the
following conditions immediately prior to or contemporaneously with such
Advance:
(a) All of the representations and warranties under this
Agreement (including, without limitation, all representations and warranties
with respect to the Borrower's Subsidiaries), which, pursuant to Section 4.2
hereof, are made at and as of the time of such Advance, and under the other Loan
Documents, shall be true and correct at such time in all material respects, both
before and after giving effect to the application of the proceeds of such
Advance and after giving effect to any updates to information provided to the
Lenders in accordance with the terms of such representations and warranties and
no Default shall then exist or be caused thereby;
(b) With respect to Advances which, if funded, would increase
the aggregate principal amount of Loans outstanding hereunder, the
Administrative Agent and the Lenders shall have received a duly executed Request
for Advance;
(c) Each of the Managing Agents and the Lenders shall have
received all such other certificates, reports, statements, opinions of counsel
or other documents as the Managing Agents or any Lender may reasonably request;
(d) With respect to any Advance relating to any Acquisition,
Investment, or the formation of any Subsidiary which is permitted hereunder, the
Managing Agents and the Lenders shall have received such documents and
instruments relating to such Acquisition, Investment, or formation of a new
Subsidiary as are described in Section 5.13 hereof or otherwise required herein;
and
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(e) There shall have occurred no Materially Adverse Effect and
no event which, in the reasonable opinion of the Managing Agents, may be
expected to have a Materially Adverse Effect.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby agrees,
represents and warrants in favor of each Agent and each Lender that:
(a) Organization; Ownership; Power; Qualification. The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation. The Borrower has the corporate
power and authority to own its properties and to carry on its business as now
being and hereafter proposed to be conducted. The Borrower's sole shareholder is
Vanguard. Each Subsidiary of the Borrower is a corporation or partnership, as
applicable, duly organized, validly existing and in good standing under the laws
of the state of its formation and has the corporate or partnership power (as
applicable) and authority to own its properties and to carry on its business as
now being and hereafter proposed to be conducted. The Borrower and each of its
Subsidiaries are duly qualified, in good standing and authorized to do business
in each jurisdiction in which the character of their respective properties or
the nature of their respective businesses requires such qualification or
authorization.
(b) Authorization; Enforceability. The Borrower has the
corporate power and has taken all necessary corporate action to authorize it to
borrow hereunder, to execute, deliver and perform this Agreement and each of the
other Loan Documents to which it is a party in accordance with their respective
terms and to consummate the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by the Borrower and is, and each
of the other Loan Documents to which the Borrower is party is, a legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject, as to enforcement of remedies, to the
following qualifications: (i) an order of specific performance and an injunction
are discretionary remedies and, in particular, may not be available where
damages are considered an adequate remedy at law and (ii) enforcement may be
limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction
and other similar laws affecting enforcement of creditors' rights generally
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(insofar as any such law relates to the bankruptcy, insolvency or similar event
of the Borrower).
(c) Subsidiaries: Authorization; Enforceability. The
Borrower's Subsidiaries, the VCS Subsidiary and the Unrestricted Subsidiaries
and the Borrower's direct and indirect ownership thereof are as set forth as of
the Agreement Date on Schedule 3 attached hereto and the Borrower has the
unrestricted right to vote the issued and outstanding ownership interests of the
Subsidiaries shown thereon; such ownership interests of such Subsidiaries and
the Unrestricted Subsidiaries have been duly authorized and issued and are fully
paid and nonassessable. Each Subsidiary of the Borrower has the corporate or
partnership power and has taken all necessary corporate or partnership action to
authorize it to execute, deliver and perform each of the Loan Documents to which
it is a party in accordance with their respective terms and to consummate the
transactions contemplated by this Agreement and by such Loan Documents. Each of
the Loan Documents to which any Subsidiary of the Borrower is party is a legal,
valid and binding obligation of such Subsidiary enforceable against such
Subsidiary in accordance with its terms, subject, as to enforcement of remedies,
to the following qualifications: (i) an order of specific performance and an
injunction are discretionary remedies and, in particular, may not be available
where damages are considered an adequate remedy at law and (ii) enforcement may
be limited by bankruptcy, insolvency, liquidation, reorganization,
reconstruction and other similar laws affecting enforcement of creditors' rights
generally (insofar as any such law relates to the bankruptcy, insolvency or
similar event of any such Subsidiary).
(d) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance, in accordance with their
respective terms, by the Borrower of this Agreement and the Notes, and by the
Borrower and its Subsidiaries of each of the other Loan Documents to which they
are respectively party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) require any consent or approval,
governmental or otherwise, not already obtained, (ii) violate any Applicable Law
respecting the Borrower or any Subsidiary of the Borrower, (iii) conflict with,
result in a breach of, or constitute a default under the certificate or articles
of incorporation or by-laws, as amended, of the Borrower or of any Subsidiary of
the Borrower, or under any indenture, agreement, or other instrument, including,
without limitation, the Licenses, to which the Borrower or any of its
Subsidiaries is a party or by which any of them or any of their respective
properties may be bound, or (iv) result in or require the creation or imposition
of any Lien upon or with respect to
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any property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries, except for Permitted Liens.
(e) Business. The Borrower, together with its Subsidiaries, is
primarily engaged in the business of owning, operating and investing in Cellular
Systems and other wireless communications and related businesses. The
Unrestricted Subsidiaries are engaged solely in the business of owning,
operating and investing in wireless communications businesses.
(f) Licenses; Necessary Authorizations. The Licenses have been
duly authorized by the grantors thereof and are in full force and effect. The
Borrower and its Subsidiaries are in compliance in all material respects with
all of the provisions thereof. The Borrower and its Subsidiaries have secured
all Necessary Authorizations and all such Necessary Authorizations are in full
force and effect. Neither any License nor any Necessary Authorization is the
subject of any pending or, to the best of the Borrower's knowledge, threatened
revocation.
(g) Compliance with Law. The Borrower and its Subsidiaries,
the VCS Subsidiary and the Unrestricted Subsidiaries are in substantial
compliance with all material Applicable Law.
(h) Title to Assets. The Borrower has good, legal and
marketable title to, or a valid leasehold interest in, all of its assets. Each
of the Borrower's Subsidiaries has good, legal and marketable title to, or a
valid leasehold interest in, all of its assets. None of such properties or
assets is subject to any Liens, except for Permitted Liens. Except for financing
statements evidencing Permitted Liens, no financing statement under the Uniform
Commercial Code as in effect in any jurisdiction and no other filing which names
the Borrower or any of its Subsidiaries as debtor or which covers or purports to
cover any of the assets of the Borrower or any of its Subsidiaries is currently
effective and on file in any state or other jurisdiction, and neither the
Borrower nor any of its Subsidiaries has signed any such financing statement or
filing or any security agreement authorizing any secured party thereunder to
file any such financing statement or filing.
(i) Litigation. There is no action, suit, proceeding or
investigation pending against, or, to the best of the Borrower's knowledge,
threatened against or in any other manner relating adversely to, the Borrower,
any of its Subsidiaries, the VCS Subsidiary or any Unrestricted Subsidiary, or
any of their respective properties, including without limitation the Licenses,
in any court or before any arbitrator of any kind or before or by
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any governmental body (including without limitation the FCC), except for
collection suits initiated by the Borrower, any Subsidiary of the Borrower, the
VCS Subsidiary or any Unrestricted Subsidiary with respect to any Indebtedness
of any customer of such Person to such Person of $20,000.00 or less, or as
otherwise described on Schedule 4 attached hereto as of the Agreement Date or as
subsequently disclosed to the Administrative Agent and the Lenders pursuant to
Section 6.5 hereof; and, except as expressly set forth on Schedule 4, no such
action, suit, proceeding or investigation (i) calls into question the validity
or enforceability of this Agreement or any other Loan Document, (ii) challenges
the continued possession and use of any License granted by the FCC, by the
Borrower, its Subsidiaries, or any Person in which the Borrower has, directly or
indirectly, an Investment, or (iii) is reasonably likely to result in an adverse
decision to the Borrower or any Subsidiary of the Borrower or the VCS Subsidiary
or any Unrestricted Subsidiary, which adverse decision would have a Materially
Adverse Effect.
(j) Taxes. All federal, state and other tax returns of the
Borrower, each of its Subsidiaries, the VCS Subsidiary and each Unrestricted
Subsidiary required by law to be filed have been duly filed and all federal,
state and other taxes, including, without limitation, withholding taxes,
assessments and other governmental charges or levies required to be paid by the
Borrower, any of its Subsidiaries, the VCS Subsidiary or any Unrestricted
Subsidiary or imposed upon the Borrower, any of its Subsidiaries, the VCS
Subsidiary or any Unrestricted Subsidiary or any of their respective properties,
income, profits or assets, which are due and payable, have been paid, except any
such taxes (i) (x) the payment of which the Borrower, any of its Subsidiaries,
the VCS Subsidiary or any Unrestricted Subsidiary is diligently contesting in
good faith by appropriate proceedings, (y) for which adequate reserves have been
provided on the books of the Borrower or the Subsidiary of the Borrower or the
VCS Subsidiary or Unrestricted Subsidiary involved in accordance with GAAP and
(z) as to which no Lien other than a Permitted Lien has attached and no
foreclosure, distraint, sale or similar proceedings have been commenced, or (ii)
which may result from audits not yet conducted. The charges, accruals and
reserves on the books of the Borrower, each of its Subsidiaries, the VCS
Subsidiary and of each Unrestricted Subsidiary in respect of taxes are, in the
judgment of the Borrower, adequate.
(k) Financial Statements. The Borrower has furnished or caused
to be furnished to the Managing Agents and the Lenders a Form 10-K for Vanguard
and its Subsidiaries on a consolidated basis for the fiscal year ended December
31, 1995 and audited financial statements for the fiscal year ended December 31,
1995,
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all of which, together with other financial statements furnished to the Lenders
subsequent to the Agreement Date are, to the best knowledge of the Borrower,
complete and correct in all material respects and present fairly in accordance
with GAAP the financial condition of Vanguard and its Subsidiaries on a
consolidated basis on and as at such dates and the results of operations for the
periods then ended (subject, in the case of unaudited financial statements, to
normal year-end adjustments). Neither the Borrower nor any of its Subsidiaries
has any material liabilities, contingent or otherwise, other than as disclosed
in the financial statements referred to in the preceding sentence or as set
forth or referred to in this Agreement, and there are no material unrealized
losses of the Borrower or any of its Subsidiaries and no anticipated losses of
the Borrower or any of its Subsidiaries other than those which have been
previously disclosed in writing to the Administrative Agent and the Lenders and
identified as such.
(l) No Adverse Change. Since December 31, 1993, there has
occurred no event which has had or which could have a Materially Adverse Effect.
(m) ERISA. The Borrower and each Subsidiary of the Borrower
and each of their respective Plans are in compliance with ERISA and the Code and
neither the Borrower nor any of its Subsidiaries has incurred any accumulated
funding deficiency with respect to any such Plan within the meaning of ERISA or
the Code. The Borrower, each of its Subsidiaries, and each other ERISA Affiliate
have complied with all requirements of Section 4980B of the Code and Sections
601 through 609 of ERISA. Neither the Borrower nor any of its Subsidiaries has
made any promises of retirement or other benefits to employees, except as set
forth in their respective Plans, in written agreements with such employees, or
in the Borrower's employee handbook and memoranda to employees. Neither the
Borrower nor any of its Subsidiaries has incurred any material liability to PBGC
in connection with any such Plan. The assets of each such Plan which is subject
to Title IV of ERISA are sufficient to provide the benefits under such Plan, the
payment of which PBGC would guarantee if such Plan were terminated, and such
assets are also sufficient to provide all other "benefit liabilities" (as
defined in Section 4041 of ERISA) due under such Plan upon termination. No
Reportable Event has occurred and is continuing with respect to any such Plan.
No such Plan or trust created thereunder, or party in interest (as defined in
Section 3(14) of ERISA), or any fiduciary (as defined in Section 3(21) of
ERISA), has engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) which would subject such Plan
or any other Plan of the Borrower or any of its
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Subsidiaries, any trust created thereunder, or any such party in interest or
fiduciary, or any party dealing with any such Plan or any such trust, to the tax
or penalty on "prohibited transactions" imposed by Section 502 of ERISA or
Section 4975 of the Code. Neither the Borrower nor any of its Subsidiaries is a
participant in or is obligated to make any payment to a Multiemployer Plan.
Neither the Borrower nor any of its Subsidiaries (1) has had either a complete
withdrawal or a partial withdrawal under Section 4201 et. seq. of ERISA from a
Multiemployer Plan which had "unfunded vested benefits" within the meaning of
Section 4211 of ERISA or (2) has ever received a notice and demand from the plan
sponsor of a Multiemployer Plan under Section 4219(b)(1) of ERISA. For purposes
of this Section 4.1(m), the term "Subsidiaries" shall include the VCS Subsidiary
and the Unrestricted Subsidiaries.
(n) Compliance with Regulations G, T, U and X. Neither the
Borrower nor any Subsidiary of the Borrower nor any Unrestricted Subsidiary is
engaged principally in or has as one of its important activities the business of
purchasing or carrying, or extending credit for the purpose of purchasing or
carrying, any margin stock within the meaning of Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System; nor will any proceeds of
the Loans be used for such purpose, other than Investments permitted hereunder
in Geotek Communications, Inc., a Delaware corporation, which shall be made, if
at all, in compliance with the provisions of such Regulations G, T, U and X. Not
more than twenty-five percent (25%) (or such greater percentage as provided in
the exclusions from the definition of "indirectly secured" contained in such
Regulations G, T, U and X in effect at the time of the making of such Advance)
of the value of the assets of the Borrower and its Subsidiaries is derived from
assets constituting margin stock.
(o) Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Borrower and its Subsidiaries of this Agreement nor the issuance of the
Notes violates any provision of such Act or requires any consent, approval or
authorization of, or registration with, the Securities and Exchange Commission
or any other governmental or public body or authority pursuant to any provisions
of such Act.
(p) Governmental Regulation. Neither the Borrower nor any of
its Subsidiaries is required to obtain any consent, approval, authorization,
permit or license which has not already been obtained from, or effect any filing
or registration which has not already been effected with, any federal, state or
local
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regulatory authority in connection with the execution and delivery of this
Agreement. Neither the Borrower nor any of its Subsidiaries is required to
obtain any consent, approval, authorization, permit or license which has not
already been obtained from, or effect any filing or registration which has not
already been effected with, any federal, state or local regulatory authority in
connection with the performance, in accordance with their respective terms, of
this Agreement or any other Loan Document.
(q) Absence of Default, Etc. The Borrower and its Subsidiaries
are in compliance in all respects with all of the provisions of their respective
Certificates or Articles of Incorporation, By-Laws and Partnership Agreements,
and no event has occurred or failed to occur (including, without limitation, any
matter which could create a Default by cross-default) which has not been
remedied or waived, the occurrence or non-occurrence of which constitutes, or
with the passage of time or giving of notice or both would constitute, (i) an
Event of Default or (ii) a material default by the Borrower or any of its
Subsidiaries under any indenture, agreement or other instrument relating to
Indebtedness of the Borrower or any of its Subsidiaries in the amount of
$1,000,000.00 or more, any License, or any judgment, decree or order to which
the Borrower or any of its Subsidiaries is a party or by which the Borrower or
any of its Subsidiaries or any of their respective properties may be bound or
affected. Neither the Borrower nor any of its Subsidiaries is a party to or
bound by any contract or agreement continuing after the Agreement Date, or is
bound by any Applicable Law, that could have a Materially Adverse Effect or
result in the loss of any License issued by the FCC.
(r) Accuracy and Completeness of Information. All information,
reports, prospectuses and other papers and data relating to the Borrower or any
of its Subsidiaries, any Unrestricted Subsidiary or the VCS Subsidiary and
furnished by or on behalf of the Borrower or any of its Subsidiaries, any
Unrestricted Subsidiary or the VCS Subsidiary to the Managing Agents or the
Lenders were, at the time furnished, true, complete and correct in all material
respects to the extent necessary to give the Managing Agents and the Lenders
true and accurate knowledge of the subject matter. No fact or situation is
currently known to the Borrower which has had or which could reasonably be
expected to have a Materially Adverse Effect.
(s) Agreements with Affiliates and Management Agreements.
Except as set forth as of the Agreement Date on Schedule 5 attached hereto, and
except for agreements or arrangements with Affiliates wherein the Borrower or
one or more
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of its Subsidiaries provides services to such Affiliates for fair consideration,
neither the Borrower nor any of its Subsidiaries has (i) any written agreements
or binding arrangements of any kind with any Affiliate (other than the Borrower
or any of its Subsidiaries) or (ii) any management or consulting agreements of
any kind with any Affiliate (other than the Borrower or any of its
Subsidiaries), other than employment agreements.
(t) Payment of Wages. The Borrower and each of its
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended, in
all material respects, and the Borrower and each of its Subsidiaries have paid
all minimum and overtime wages required by law to be paid to their respective
employees.
(u) Priority. The Security Interest is a valid and perfected
first priority security interest in the Collateral in favor of the Collateral
Agent, for the benefit of itself and the Lenders, securing, in accordance with
the terms of the Security Documents, the outstanding Obligations, and the
Collateral is subject to no Liens other than Permitted Liens. The Liens created
by the Security Documents are enforceable as security for the outstanding
Obligations in accordance with their terms with respect to the Collateral
subject, as to enforcement of remedies, to the following qualifications: (i) an
order of specific performance and an injunction are discretionary remedies and,
in particular, may not be available where damages are considered an adequate
remedy at law and (ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar laws affecting
enforcement of creditors' rights generally (insofar as any such law relates to
the bankruptcy, insolvency or similar event of the Borrower or any of its
Subsidiaries, as the case may be).
(v) Indebtedness. Except as shown on the audited financial
statements of Vanguard and its Subsidiaries for the fiscal year ended December
31, 1995, and except for the Advances hereunder, neither the Borrower nor any of
its Subsidiaries has outstanding, as of the Agreement Date, any Indebtedness for
Money Borrowed.
(w) Investments. All Investments of the Borrower and its
Subsidiaries are shown as of the Agreement Date on Schedule 6 attached hereto.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement shall be deemed to be
made, and shall be true and correct, at and as of the Agreement Date and on the
date of each Advance except to the extent relating specifically to an earlier
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date or time period. All representations and warranties made under this
Agreement shall survive, and not be waived by, the execution hereof by the
Lenders and the Agents, any investigation or inquiry by any Lender or any Agent,
or the making of any Advance under this Agreement.
ARTICLE 5
General Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower shall have the right to borrow hereunder (whether or not the conditions
to borrowing have been or can be fulfilled), and unless the Majority Lenders, or
such greater number of Lenders as may be expressly provided herein, shall
otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
will, and will cause each of its Subsidiaries to:
(i) preserve and maintain its existence, rights,
franchises, licenses and privileges in the state of its incorporation,
including, without limiting the foregoing, the Licenses and all other
Necessary Authorizations; and
(ii) qualify and remain qualified and authorized to
do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification or
authorization.
Section 5.2 Business; Compliance with Applicable Law. The Borrower
will, and will cause each of its Subsidiaries to, (a) engage primarily in the
business of owning, operating and investing in Cellular Systems and other
wireless communications and related businesses and (b) comply with the
requirements of all Applicable Law. The Borrower will cause each Unrestricted
Subsidiary to (a) engage solely in the business of owning, operating and
investing in wireless communication businesses, and (b) comply in all material
respects with the requirements of all Applicable Law. The Borrower will cause
the VCS Subsidiary to comply in all material respects with the requirements of
all Applicable Law.
Section 5.3 Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, maintain or cause to be maintained in the
ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties used in their respective
businesses (whether owned
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or held under lease), other than obsolete equipment or unused assets and from
time to time make or cause to be made all needed and appropriate repairs,
renewals, replacements, additions, betterments and improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The Borrower
will, and will cause each of its Subsidiaries on a consolidated basis with the
Borrower to, and will cause the Unrestricted Subsidiaries separately to,
maintain a system of accounting established and administered in accordance with
GAAP, keep adequate records and books of account in which complete entries will
be made in accordance with GAAP and reflecting all transactions required to be
reflected by GAAP and keep accurate and complete records of their respective
properties and assets. The Borrower and its Subsidiaries will maintain a fiscal
year ending on December 31.
Section 5.5 Insurance. The Borrower will, and will cause each of its
Subsidiaries and the Unrestricted Subsidiaries to:
(a) Maintain insurance including, but not limited to, business
interruption coverage and public liability coverage insurance from responsible
companies in such amounts and against such risks to the Borrower and each of its
Subsidiaries and the Unrestricted Subsidiaries as is prudent and reasonably
acceptable to the Managing Agents (including, without limitation, larceny,
embezzlement, or other criminal misappropriation insurance).
(b) Keep their respective assets insured by insurers on terms
and in a manner reasonably acceptable to the Managing Agents against loss or
damage by fire, theft, burglary, loss in transit, explosions and hazards insured
against by extended coverage, in amounts which are prudent for the cellular
telephone and wireless communications industry and reasonably satisfactory to
the Managing Agents, all premiums thereon to be paid by the Borrower and its
Subsidiaries and the Unrestricted Subsidiaries.
(c) Require that each insurance policy relating to the
Borrower or any of its Subsidiaries provide for at least thirty (30) days' prior
written notice to the Collateral Agent of any termination of or proposed
cancellation or nonrenewal of such policy, and name the Collateral Agent as
additional named loss payee and additional insured to the extent of the
Obligations.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will
cause each of its Subsidiaries, the VCS Subsidiary and each Unrestricted
Subsidiary to, pay and discharge all taxes, including, without limitation,
withholding taxes, assessments and governmental charges or levies required to be
paid by them or
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imposed upon them or their income or profits or upon any properties belonging to
them, prior to the date on which penalties attach thereto, and all lawful claims
for labor, materials and supplies which, if unpaid, might become a Lien or
charge upon any of their properties; except that no such tax, assessment,
charge, levy or claim need be paid which is being diligently contested in good
faith by appropriate proceedings and for which adequate reserves shall have been
set aside on the appropriate books in accordance with GAAP, but only so long as
such tax, assessment, charge, levy or claim does not become a Lien or charge
other than a Permitted Lien and no foreclosure, distraint, sale or similar
proceedings shall have been commenced. The Borrower will, and will cause each of
its Subsidiaries, the VCS Subsidiary and each Unrestricted Subsidiary to, timely
file all information returns required by federal, state or local tax
authorities.
Section 5.7 Visits and Inspections. The Borrower will, and will cause
each of its Subsidiaries to, permit representatives of any of the Agents and any
of the Lenders, upon reasonable notice, to (i) visit and inspect the properties
of the Borrower or any of its Subsidiaries during business hours, (ii) inspect
and make extracts from and copies of their respective books and records and
(iii) discuss with their respective principal officers their respective
businesses, assets, liabilities, financial condition, results of operations and
business prospects. The Borrower and each of its Subsidiaries will also permit
representatives of any of the Agents and any of the Lenders to discuss with
their respective auditors their respective businesses, assets, liabilities,
financial condition, results of operations and business prospects.
Section 5.8 Payment of Indebtedness; Loans. Subject to any provisions
herein or in any other Loan Document, the Borrower will, and will cause each of
its Subsidiaries to, pay any and all of their respective Indebtedness when and
as it becomes due, other than (i) amounts diligently disputed in good faith and
for which adequate reserves have been set aside in accordance with GAAP and (ii)
trade payables, which shall be paid in a manner consistent with past practice.
Section 5.9 Use of Proceeds. The Borrower will use the aggregate
proceeds of all Advances (i) to refinance existing Indebtedness for Money
Borrowed, (ii) to fund Capital Expenditures, (iii) to acquire Allowable Cellular
Systems and to make Investments as permitted hereunder and (iv) for working
capital and other general corporate purposes. No proceeds of Advances hereunder
shall be used for the purpose of purchasing or carrying or extending credit
for the purpose of purchasing or
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carrying any margin stock within the meaning of Regulations G, T, U and
X of the Board of Governors of the Federal Reserve System other than
Investments in Geotek Communications, Inc., a Delaware corporation,
permitted hereunder, which shall be made, if at all, in compliance with the
provisions of such Regulations G, T, U and X.
Section 5.10 Real Estate. Subject to Section 7.14 hereof, the Borrower
will, and will cause its Subsidiaries to, grant a mortgage securing the
Obligations to the Collateral Agent, in form and substance reasonably
satisfactory to the Managing Agents, covering any parcel of real estate having a
fair market value, exclusive of equipment, in excess of $1,000,000.00 acquired
by the Borrower or any of its Subsidiaries after the Agreement Date. The
Borrower will, and will cause its Subsidiaries to, deliver to the Collateral
Agent all documentation, including opinions of counsel and policies of title
insurance, which in the reasonable opinion of the Managing Agents are
appropriate with respect to each such grant, including any Phase I environmental
audit requested by the Lenders.
Section 5.11 Indemnity. The Borrower, for itself and on behalf of each
of its Subsidiaries agrees, jointly and severally, to indemnify and hold
harmless each Lender and each Agent, and each of their respective affiliates,
employees, representatives, officers and directors (any of the foregoing shall
be an "Indemnitee") from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, attorneys' fees and expenses
(as such fees and expenses are incurred), and other expenses (including fees and
expenses of experts, agents and consultants) and demands by any party, including
the costs of investigating and defending such claims, whether or not the
Borrower, any Subsidiary or the Person seeking indemnification is the prevailing
party (a) resulting from any breach or alleged breach by the Borrower or any
Subsidiary of the Borrower of any representation or warranty made hereunder or
under any other Loan Document; or (b) arising out of (i) the Commitments or
otherwise under this Agreement or under any other Loan Document, including the
use of the proceeds of Loans hereunder in any fashion by the Borrower or the
performance of their respective obligations under the Loan Documents by the
Borrower or any of its Subsidiaries, (ii) allegations of any participation by
the Lenders or the Agents, or any of them, in the affairs of the Borrower or any
of its Subsidiaries, any Unrestricted Subsidiary or the VCS Subsidiary, or
allegations that any of them has any joint liability with the Borrower or any of
its Subsidiaries, any Unrestricted Subsidiary or the VCS Subsidiary for any
reason, (iii) any claims against the Lenders or the Agents, or any of them, by
any shareholder or other investor in or lender to the
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Borrower or any Subsidiary of the Borrower, by any brokers or finders or
investment advisers or investment bankers retained by the Borrower or by any
other third party, arising out of the Commitments or otherwise under this
Agreement; or (c) in connection with taxes, fees and other charges payable in
connection with the Loans, or the execution, delivery and enforcement of this
Agreement, the Security Documents, the other Loan Documents and any amendments
thereto or waivers of any of the provisions thereof; except to the extent that
the Person seeking indemnification hereunder is determined in such case to have
acted in breach hereof (in such a manner as to give rise to the claims,
liabilities, obligations, losses, damages, penalties, actions, attorneys' fees
and expenses and other expenses and demands for which indemnification is being
sought) or with gross negligence or willful misconduct, in any case, by a final,
non-appealable judicial order of a court of competent jurisdiction. The
obligations of the Borrower and the Subsidiaries under this Section 5.11 are in
addition to, and shall not otherwise limit, any liabilities which the Borrower
or any Subsidiary might otherwise have in connection with any warranties or
similar obligations of the Borrower in any other agreement or instrument or for
any other reason.
Section 5.12 Interest Rate Hedging. Within forty-five (45) days after
the last day of each fiscal quarter, the Borrower shall have entered into, and
shall maintain during the term of this Agreement, one or more Interest Rate
Hedge Agreements which result in the fixing of a limit on the Borrower's
interest obligations on an aggregate principal amount of not less than fifty
percent (50%) of the principal amount of Total Debt. Such Interest Rate Hedge
Agreements shall provide interest rate protection on terms reasonably acceptable
to the Managing Agents, such terms to include consideration of the
creditworthiness of the other party to the proposed Interest Rate Hedge
Agreement. All obligations of the Borrower to any of the Agents or any of the
Lenders or any affiliate of any such Lender pursuant to any Interest Rate Hedge
Agreement shall rank pari passu with all other Obligations.
Section 5.13 Covenants Regarding Formation of Subsidiaries;
Acquisitions and Investments; Partnership Subsidiaries. At the time of any
Acquisition or Investment permitted hereunder, or the formation of any new
Subsidiary of the Borrower or any of its Subsidiaries which is permitted under
this Agreement, the Borrower will, and will cause its Subsidiaries, as
appropriate, to (a) in the case of the formation or Acquisition of a new
Subsidiary, provide to the Collateral Agent an executed Subsidiary Security
Agreement for such new Subsidiary, in substantially the form of Exhibit J
attached hereto, together
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with appropriate UCC-1 financing statements, as well as an executed Subsidiary
Guaranty for such new Subsidiary, in substantially the form of Exhibit H
attached hereto, which shall constitute both Security Documents and Loan
Documents for purposes of this Agreement, as well as a loan certificate for such
new Subsidiary, substantially in the form of Exhibit N attached hereto, together
with appropriate attachments; (b) in the case of any Acquisition or Investment
(other than (i) Investments in Geotek Communications, Inc. permitted hereunder
and (ii) Investments having a fair market value as of the date any such
Investment is made of not more than $250,000.00 with respect to any single
Investment and an aggregate fair market value for all such Investments
(determined as of the date each such Investment is made) of not more than
$2,500,000.00 during the term of this Agreement) or the formation of any new
Subsidiary, pledge to the Collateral Agent all of the stock or partnership
interests (or other instruments or securities evidencing ownership) of any such
Subsidiary or Person which is acquired or formed, legally or beneficially owned
by the Borrower or any of the Borrower's Subsidiaries, as the case may be, and
any promissory note evidencing any Investment made as a loan or advance to any
Person, as additional Collateral for the Obligations to be held by the
Collateral Agent in accordance with the terms of an extant Borrower Pledge
Agreement, an extant Subsidiary Pledge Agreement, or a new Borrower Pledge
Agreement or Subsidiary Pledge Agreement in substantially the forms of Exhibits
B and I, respectively, attached hereto, or an Assignment of Rights by Partner in
substantially the form of Exhibit A attached hereto, or a Note Pledge Agreement
substantially in the form of Exhibit D attached hereto, and execute and deliver
to the Collateral Agent all such documentation for such pledge as, in the
reasonable opinion of the Managing Agents, is appropriate; and (c) in any case,
provide all other documentation, including one or more opinions of counsel
satisfactory to the Managing Agents which in their reasonable opinion is
appropriate with respect to such Acquisition, Investment or the formation of
such Subsidiary. In addition, at such time as any Partnership Subsidiary becomes
wholly-owned by the Borrower, whether directly or through one or more of its
Subsidiaries, such Partnership Subsidiary shall be treated as an Acquisition of
a new Subsidiary pursuant to this Section 5.13 unless, by merger or by operation
of law, its assets and liabilities are assumed by a Subsidiary which is not a
Partnership Subsidiary, and which Subsidiary has already executed a Subsidiary
Guaranty and a Subsidiary Security Agreement and whose ownership interests are
already pledged to the Collateral Agent as Collateral for the Obligations
pursuant to an extant Borrower Pledge Agreement, an extant Subsidiary Pledge
Agreement or an Assignment of Rights by Partner. Any document, agreement or
instrument executed or issued pursuant to
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this Section 5.13 shall be a "Loan Document" and/or "Security Document,"
as applicable, for purposes of this Agreement.
Section 5.14 Payment of Wages. The Borrower and each of its
Subsidiaries shall at all times comply, in all material respects, with the
requirements of the Fair Labor Standards Act, as amended, including, without
limitation, the provisions of such Act relating to the payment of minimum and
overtime wages as the same may become due from time to time.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Majority Lenders shall
otherwise consent in writing, the Borrower will furnish or cause to be furnished
to each Lender and each Managing Agent, at their respective offices:
Section 6.1 Quarterly Financial Statements and Information. Within
forty-five (45) days after the last day of each of the first three (3) quarters
of each fiscal year of the Borrower, (a) for Vanguard and its Subsidiaries and
the VCS Subsidiary on a consolidated basis, a balance sheet as at the end of
such quarter and as of the end of the preceding fiscal year, and the related
statements of operations for such quarter and the elapsed portion of the year
ended with the last day of such quarter and the related statements of cash flows
for the elapsed portion of the year ended with the last day of such quarter, and
(b) for each Unrestricted Subsidiary, a balance sheet as at the end of such
quarter and as of the end of the preceding fiscal year, and the related
statements of cash flows for the elapsed portion of the year ended with the last
day of such quarter, each of which shall set forth in comparative form such
figures as at the end of and for such quarter and appropriate prior period, to
the extent set forth in Vanguard's Form 10-Q as filed with the Securities and
Exchange Commission for such quarter, and shall be certified by the chief
financial officer of the Borrower, to be, in his or her opinion, complete and
correct in all material respects and to present fairly, in accordance with GAAP,
the financial condition of Vanguard on a consolidated basis with its
Subsidiaries and the VCS Subsidiary, and each Unrestricted Subsidiary, as
applicable, as at the end of such period and the results of operations for such
period, and for the elapsed portion of the year ended with the last day of such
period, subject only to normal year-end adjustments.
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Section 6.2 Annual Financial Statements and Information. Within ninety
(90) days after the end of each fiscal year of the Borrower, (a) for Vanguard
and its Subsidiaries and the VCS Subsidiary on a consolidated basis an audited
balance sheet, as of the end of such fiscal year and the related audited
statements of operations for such fiscal year and for the previous two (2)
fiscal years, the related audited statements of changes in shareholders' equity
for such fiscal year and for the previous two (2) fiscal years, and related
audited statements of cash flows of such fiscal year and for the previous two
(2) fiscal years, and (b) for the Unrestricted Subsidiaries individually, or on
a consolidated basis with each other, an audited balance sheet as of the end of
such fiscal year and the related audited statements of operations for such
fiscal year and for the previous two (2) fiscal years, if available, the related
audited statements of changes in shareholders' equity for such fiscal year and
for the previous two (2) fiscal years, if available, and the related audited
cash flows for such fiscal year and for the previous two (2) fiscal years, if
available, each of which shall be accompanied by an unqualified opinion of
Arthur Andersen & Co. or other independent certified public accountants of
recognized national standing acceptable to the Managing Agents, together with a
statement of such accountants that in connection with their audit, nothing came
to their attention that caused them to believe that a Default has occurred with
respect to the terms, covenants, provisions or conditions of Articles 7 and 8
hereof insofar as they relate to accounting matters.
Section 6.3 Performance Certificates. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate
of the president or chief financial officer of the Borrower as to its financial
performance, in substantially the form attached hereto as Exhibit O:
(a) setting forth as and at the end of such quarterly period
or fiscal year, as the case may be, the arithmetical calculations required to
establish (i) any interest rate adjustment, as provided for in Section 2.3(f)
hereof and (ii) whether or not the Borrower was in compliance with the
requirements of Sections 5.12, 7.7, 7.8, 7.9, 7.10, 7.11, 7.12 and 7.13 hereof;
(b) setting forth on a consolidated basis for the Borrower and
its Subsidiaries for each such fiscal quarter (i) the number of cellular
telephone subscribers at the beginning of the quarter, (ii) the number of gross
new cellular telephone subscribers added and deactivated cellular telephone
subscribers lost during the quarter and (iii) the number of cellular telephone
subscribers at the end of the quarter;
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(c) stating that, to the best of his or her knowledge, no
Default has occurred as at the end of such quarterly period or year, as the case
may be, or, if a Default has occurred, disclosing each such Default and its
nature, when it occurred, whether it is continuing and the steps being taken by
the Borrower with respect to such Default; and
(d) summarizing the nature and individual and aggregate dollar
amounts of all Investments and Acquisitions made by the Borrower or any of its
Subsidiaries since the Agreement Date and stating that each such Investment or
Acquisition was made in accordance with the terms and conditions set forth in
Section 7.6 hereof.
Section 6.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all reports, if
any, submitted to the Borrower by the Borrower's independent public accountants
regarding the Borrower, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 6.2 hereof.
(b) Promptly upon receipt thereof, copies of any material
adverse notice or report regarding any License from the FCC.
(c) From time to time and promptly upon each request, such
data, certificates, reports, statements, opinions of counsel prepared for the
Agents and the Lenders, or any of them, documents or further information
regarding the business, assets, liabilities, financial condition, projections,
results of operations or business prospects of the Borrower or any of its
Subsidiaries, any Unrestricted Subsidiary or the VCS Subsidiary, as any Agent or
any Lender may reasonably request.
(d) Annually, a certificate of insurance indicating that the
requirements of Section 5.5 hereof remain satisfied for such fiscal year.
(e) Promptly following the making of any Investment or
Acquisition by the Borrower or any of its Subsidiaries, a brief description,
including the nature and dollar amount, of such Investment or Acquisition,
together with a certificate of an Authorized Signatory stating that such
Investment or Acquisition was made in accordance with the terms and conditions
set forth in Section 7.6 hereof.
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(f) Promptly following the filing thereof, any filings made by
Vanguard with the SEC or any reports provided by Vanguard to its shareholders.
Section 6.5 Notice of Litigation and Other Matters. Notice specifying
the nature and status of any of the following events, promptly, but in any event
not later than ten (10) days after any officer of the Borrower becomes aware of
the occurrence of any of the following events:
(i) the commencement of all proceedings and
investigations by or before any governmental body and all actions and
proceedings in any court or before any arbitrator in which the recovery
sought against the Borrower or any of its Subsidiaries is greater than
or equal to $100,000.00, or which, to the extent known to the Borrower,
in any other way relate materially adversely to the Borrower, any
Subsidiary of the Borrower, any Unrestricted Subsidiary, the VCS
Subsidiary, or any of their respective properties, assets or businesses
or any License;
(ii) any material adverse change with respect to the
business, assets, liabilities, financial condition, results of
operations or business prospects of the Borrower or any Subsidiary of
the Borrower or any Unrestricted Subsidiary other than changes in the
ordinary course of business which have not had and could not have a
Materially Adverse Effect;
(iii) any material amendment or change to the
financial projections provided to the Lenders by the Borrower prior to
the Agreement Date;
(iv) any Default or the occurrence or non-occurrence
of any event (A) which constitutes, or which with the passage of time
or giving of notice or both would constitute a default by the Borrower
or any Subsidiary of the Borrower or Vanguard under any material
agreement other than this Agreement to which the Borrower or any
Subsidiary of the Borrower or Vanguard is party or by which any of
their respective properties may be bound, or (B) which could have a
Materially Adverse Effect, giving in each case the details thereof and
specifying the action proposed to be taken with respect thereto;
(v) the occurrence of any Reportable Event or a
"prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) with respect to any Plan of the
Borrower or any of its
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Subsidiaries or the institution or threatened institution by PBGC of
proceedings under ERISA to terminate or to partially terminate any
such Plan or the commencement or threatened commencement of any
litigation regarding any such Plan or naming it or the trustee of any
such Plan with respect to such Plan;
(vi) the occurrence of any event subsequent to the
Agreement Date which, if such event had occurred prior to the Agreement
Date, would have constituted an exception to the representation and
warranty in Section 4.1(m) of this Agreement; and
(vii) the change of any rating assigned by any of the
Rating Agencies to the Vanguard Debentures.
ARTICLE 7
Negative Covenants
So long as any of the Obligations is outstanding and unpaid or the
Borrower has a right to borrow from the Lenders hereunder (whether or not the
conditions to borrowing have been or can be fulfilled) and unless the Majority
Lenders, or such greater number of Lenders as may be expressly provided herein,
shall otherwise give their prior consent in writing:
Section 7.1 Indebtedness of the Borrower and its Subsidiaries. The
Borrower shall not, and shall not permit any of its Subsidiaries to, create,
assume, incur or otherwise become or remain obligated in respect of, or permit
to be outstanding, any Indebtedness except and so long as no Default then exists
or would be caused thereby:
(a) The Obligations;
(b) Current accounts payable, accrued expenses and customer
advance payments incurred in the ordinary course of business;
(c) Capitalized Lease Obligations in an amount for the
Borrower on a consolidated basis with its Subsidiaries not in excess, together
with the Indebtedness permitted under subsections (e) and (h) of this Section
7.1, of $10,000,000.00 in the aggregate at any one time outstanding;
(d) Unsecured Indebtedness for Money Borrowed which is subject
to terms and conditions acceptable to and agreed to in
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writing by the Majority Lenders, and which is subordinated to the prior payment
and performance in full of the Obligations pursuant to terms and conditions
acceptable to and agreed to in writing by the Majority Lenders;
(e) Indebtedness secured by Permitted Liens, provided that the
aggregate amount of Capitalized Lease Obligations secured or deemed to be
secured by such Permitted Liens does not exceed the threshold for Capital Lease
Obligations set forth in Section 7.1(c) above, and so long as such Indebtedness
secured by Permitted Liens, when added to all Indebtedness permitted under
subsections (c) and (h) of this Section 7.1, does not exceed $10,000,000.00 in
the aggregate;
(f) Obligations under Interest Rate Hedge Agreements required
pursuant to Section 5.12 hereof;
(g) Indebtedness of the Borrower or any of its Subsidiaries to
the Borrower or any other Subsidiary and Indebtedness expressly permitted under
Section 7.5 and Section 7.17 hereof; and
(h) Other Indebtedness which, together with the Capitalized
Lease Obligations and other Indebtedness referred to in subsections (c) and (e)
above, does not exceed $10,000,000.00 in the aggregate at any one time
outstanding; provided such additional Indebtedness is either (a) purchase money
Indebtedness of the Borrower or any of its Subsidiaries that, within thirty (30)
days of such purchase, is incurred or assumed to finance part or all of (but not
more than) the purchase price of a tangible asset in which neither the Borrower
nor such Subsidiary had at any time prior to such purchase any interest other
than a security interest or an interest as lessee under an operating lease, or
(b) Indebtedness to finance the purchase of subscriber equipment, such as
cellular mobile telephones, cellular portable telephones, speakers, mounting
hardware, subscriber test equipment and similar equipment purchased by the
Borrower or a Subsidiary in the ordinary course of business of such Person, to
the extent that the subscriber equipment financed thereby (x) has been sold to
customers of the Borrower or any Subsidiary and (y) the sales price thereof to
any such customer has been financed by the Borrower or such Subsidiary.
Section 7.2 Limitation on Liens. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, assume, incur or permit to exist or
to be created, assumed, incurred or permitted to exist, directly or indirectly,
any Lien on any of its properties or assets, whether now owned or hereafter
acquired, except for Permitted Liens.
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Section 7.3 Amendment and Waiver. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any amendment of, or agree to or
accept or consent to any waiver of any of the material provisions of its
articles or certificate of incorporation, by-laws or partnership agreement, as
appropriate, which amendment or waiver is adverse to the interests of the
Lenders, or any amendment of any document relating to any subordinated debt of
the Borrower or any of its Subsidiaries.
Section 7.4 Liquidation, Merger, or Disposition of Assets.
(a) Disposition of Assets. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time sell, lease, abandon, or
otherwise dispose of any Core Assets without the prior written consent of the
Majority Lenders. The Borrower shall not, and shall not permit any of its
Subsidiaries to, sell, lease, abandon, transfer, assign, swap, or otherwise
dispose of any Non-Core Asset (other than obsolete or immaterial Non-Core Assets
disposed of in the ordinary course of business) unless:
(i) the Net Proceeds therefrom are applied as
provided in Section 2.7(b) hereof;
(ii) the aggregate number of Equivalent Owned POPs
corresponding to all Permitted Asset Sales does not exceed (A) fifteen
percent (15%) during any fiscal year of the Borrower or (B) thirty
percent (30%) in the aggregate during the term of this Agreement of the
total number of Equivalent Owned POPs existing as of the Agreement
Date, after giving effect to the proposed disposition of such Non-Core
Asset, but excluding exchanges of assets permitted under Section
2.7(b)(ii) hereof; and
(iii) no Default then exists or would be caused
thereby.
(b) Liquidation or Merger. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time liquidate or dissolve itself
(or suffer any liquidation or dissolution) or otherwise wind up, or enter into
any merger, other than (so long as no Default then exists or would be caused
thereby) (i) a merger among the Borrower and one or more of its Subsidiaries,
provided the Borrower is the surviving corporation, or (ii) a merger between or
among two (2) or more Subsidiaries of the Borrower, or (iii) an Acquisition
permitted hereunder effected by a merger in which the Borrower or a Subsidiary
of the Borrower is the surviving corporation.
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Section 7.5 Limitation on Guaranties. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time Guaranty, assume, be
obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) a guaranty by endorsement of
negotiable instruments for collection in the ordinary course of business, or (b)
obligations under agreements of the Borrower or any of its Subsidiaries entered
into in connection with leases of real property or the acquisition of services,
supplies and equipment in the ordinary course of business of the Borrower or any
of its Subsidiaries, or (c) as may be contained in any Loan Document including,
without limitation, any Subsidiary Guaranty.
Section 7.6 Investments and Acquisitions. The Borrower shall not, and
shall not permit any of its Subsidiaries to, make any loan or advance, or make
any Investment or otherwise acquire for consideration evidences of Indebtedness,
capital stock or other securities of any Person, or make any Acquisition, except
that so long as no Default then exists or would be caused thereby:
(a) The Borrower and its Subsidiaries may, directly or through
a brokerage account (i) purchase marketable, direct obligations of the United
States of America, its agencies and instrumentalities maturing within three
hundred sixty-five (365) days of the date of purchase, (ii) purchase commercial
paper issued by corporations, each of which shall have a combined net worth of
at least $100,000,000.00 and each of which conducts a substantial part of its
business in the United States of America, maturing within two hundred seventy
(270) days from the date of the original issue thereof, and rated "P-2" or
better by Moody's Investors Service, Inc. or "A-2" or better by Standard and
Poor's Ratings Group and (iii) purchase repurchase agreements, bankers'
acceptances, and certificates of deposit maturing within three hundred
sixty-five (365) days of the date of purchase which are issued by, or time
deposits or money market deposit accounts maintained with, a United States
national or state bank the deposits of which are insured by the Federal Deposit
Insurance Corporation or the Federal Savings and Loan Insurance Corporation and
having capital, surplus and undivided profits totaling more than $100,000,000.00
and rated "A" or better by Moody's Investors Service, Inc. or Standard and
Poor's Ratings Group;
(b) The Borrower and its Subsidiaries may make Acquisitions of
Allowable Cellular Systems as permitted by Section 2.7(b)(ii) hereof;
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(c) The Borrower may make Acquisitions of Allowable Cellular
Systems, the purchase price of which is paid with common stock issued by
Vanguard;
(d) In addition to any other Acquisitions or Investments made
under Section 7.6(a), 7.6(b), 7.6(c) or 7.6(e) hereof, the Borrower and its
Subsidiaries may make (i) Investments in assets or ventures involving cellular
telephone and other wireless communications businesses (other than Allowable
Cellular Systems) and/or (ii) Acquisitions of Allowable Cellular Systems and/or
(iii) the Inter(bullet)Act Investment for cash or in exchange for common stock
issued by Vanguard and/or (iv) PCS Investments and/or (v) PCS Acquisitions,
in an amount in the aggregate for all such Investments and Acquisitions
after the Agreement Date not to exceed the Acquisition/Investment Basket;
provided, however, that (A) no individual Acquisition of an Allowable
Cellular System shall be made for an aggregate purchase price of $75,000,000 or
more without the consent of the Majority Lenders; (B) the aggregate purchase
price paid for any Non-PCS Investment shall not exceed the Non-PCS Investment
Availability as measured at the time of such Investment; (C) the aggregate
purchase price after the Agreement Date of all PCS Acquisitions and all PCS
Investments when added to all Non-PCS Investments shall not exceed $75,000,000
without the prior consent of the Majority Lenders; (D) PCS Investments and PCS
Acquisitions may only be made in the geographic area included within the
Allowable Cellular Systems as measured at the time of such Investment or
Acquisition; (E) the Borrower complies with Section 7.6(f) below; and (F)
simultaneously with the making by the Borrower or any of its Subsidiaries of
any Acquisition or Investment which when added to the aggregate amount of
Acquisitions and Investments (including the Inter(bullet)Act Investment) made by
them prior to the date of such Acquisition or Investment, causes the
aggregate amount of Acquisitions and Investments (including the Inter(bullet)Act
Investment made by them) collectively, during the term of this Agreement to
exceed $125,000,000, the Borrower shall certify to the Agents and the Lenders
that, after giving effect to the proposed Acquisition or Investment, (X) the
Consolidated Leverage Ratio is less than or equal to the lesser of (1) 5.50 to
1 and (2) the required Consolidated Leverage Ratio under Section 7.10(b)
hereof on such date and (Y) the Senior Leverage Ratio is equal to or less than
the lesser of (1) 4.00 to 1 and (2) the required Senior Leverage Ratio under
Section 7.11(b) hereof on such date. The value of any common stock issued by
Vanguard the proceeds of which are given as consideration for any Investment
by the Borrower or any of its Subsidiaries shall be deemed to be the Fair
Market Value of such stock;
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(e) In addition to any other Investments made under Sections
7.6(a), 7.6(b), 7.6(c) or 7.6(d) hereof, the Borrower and its Subsidiaries may
make Investments in ventures involving cellular telephone and other wireless
communications businesses (other than Allowable Cellular Systems) at any time,
pursuant to capital calls by Persons in which the Borrower or one of its
Subsidiaries has an Investment permitted hereunder, so long as the difference
between (i) the aggregate amount of all capital contributions made by the
Borrower or any Subsidiary during the term of this Agreement pursuant to any
such capital call by any Person of which the Borrower and the Subsidiaries own,
in the aggregate, less than or equal to fifty percent (50%) of the issued and
outstanding ownership interests, minus (ii) the aggregate amount of all capital
contributions received during the term of this Agreement from Persons other than
the Borrower or any Subsidiary in respect of capital calls by any other Person
of which the Borrower and the Subsidiaries own, in the aggregate, more than
fifty percent (50%) of the issued and outstanding ownership interests, does not
exceed $5,000,000.00 at any time (independent of any other limitation on
Investments hereunder).
(f) No Acquisition or Investment under Section 7.6(b) through
(e) hereof shall be permitted unless: (i) the Borrower shall have demonstrated
to the Agents and the Lenders in writing the Borrower's pro forma compliance
with Sections 7.8, 7.9, 7.10, 7.11, 7.12 and 7.13 hereof, after giving effect to
such Acquisition or Investment, and shall have certified to the Managing Agents
and the Lenders that such Acquisition or Investment shall not have a Materially
Adverse Effect, (ii) with respect to any Acquisition or Investment of more than
$2,000,000.00, the Borrower shall provide the Lenders, not less than thirty (30)
days with respect to Acquisitions or ten (10) days with respect to Investments,
prior to the proposed closing thereof, all material information pertaining to
such Acquisition or Investment and a certificate signed by the chief financial
officer of the Borrower, certifying the Borrower's pro forma compliance with the
covenants listed in (i) hereof, together with any calculations necessary to
demonstrate such compliance and (iii) the Borrower shall certify to the Lenders
in writing that it owns a majority interest in all Allowable Cellular Systems
acquired as permitted hereunder, after giving effect to such Acquisition or
Investment.
Any Investment, the proceeds of which shall be used, directly or
indirectly, for the purchase of PCS assets or interests in PCS ventures, shall
be made in or paid to an Unrestricted Subsidiary to the extent that the
acquisition of any such PCS asset has been or will be financed by, or any such
PCS venture has or will obtain financing from, directly or
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indirectly, any governmental entity, which financing, in either case, is
secured, directly or indirectly, by a Lien on any License or any other assets of
such venture or other Person making such acquisition, or which financing
constitutes any type of conditional sales arrangement.
Section 7.7 Restricted Payments and Purchases. The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly declare
or make any Restricted Payment or Restricted Purchase, except that (a) so long
as no Default then exists or would be caused thereby, on April 30, 1998 and on
each April 30th thereafter, up to twenty-five percent (25%) of Excess Cash Flow
for the preceding fiscal year of the Borrower may be used by the Borrower to pay
dividends to its shareholders, provided that the Borrower shall provide the
Lenders with a certificate, signed by the chief financial officer of the
Borrower, demonstrating pro forma compliance with the terms of this Section 7.7,
after giving effect to such dividend payments; (b) so long as no Default then
exists or would be caused thereby, the Borrower may make loans to employees, so
long as (i) the outstanding amount of such payments or loans does not exceed
$200,000.00 in the aggregate at any time and (ii) no such loans to an employee
are permitted to remain unreimbursed or unpaid by any such employee for more
than two (2) years; (c) so long as no Default then exists or would be caused
thereby, the Borrower may make distributions to any partner of any Partnership
Subsidiary, which partner holds a minority position with respect to such
Partnership Subsidiary, as required by the applicable Partnership Subsidiary's
partnership agreement, subject to the limitations set forth in Section 7.6(e)
hereof and so long as such partner is not an Affiliate; and (d) so long as no
Default then exists or would be caused thereby, the Borrower may make
distributions to Vanguard solely for the purpose of making payments of current
scheduled payments of accrued interest with respect to the Vanguard Debentures
Offering, which payments shall not exceed the scheduled payments of accrued
interest as set forth in the Vanguard Indenture; and (e) pay expenses of
Vanguard related solely to its operating obligations in an amount not to exceed
$1,250,000 for any fiscal year.
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Section 7.8 Interest Coverage Ratio. The Borrower shall not at any time
permit the Interest Coverage Ratio to be less than the ratios set forth below
during the periods indicated:
Period Ratio
Agreement Date through
December 30, 1996 1.25:1
December 31, 1996 through
December 30, 1998 1.50:1
December 31, 1998 and
thereafter 2.00:1
Section 7.9 Fixed Charge Ratio. The Borrower shall not at any time
permit the Fixed Charge Ratio to be less than the ratios set forth below during
the periods indicated:
Period Ratio
January 1, 1998 through
December 31, 1998 1.00:1
January 1, 1999 and
thereafter 1.05:1
Section 7.10 Consolidated Leverage Ratio. (a) Prior to any Acquisition
or Investment pursuant to Section 7.6(d)(F) hereof, the Borrower shall not at
any time permit the Consolidated Leverage Ratio to exceed the ratios set forth
below during the periods indicated:
Period Ratio
Agreement Date through
June 29, 1996 8.00:1
June 30, 1996 through
September 29, 1996 7.50:1
September 30, 1996 through
June 29, 1997 6.50:1
June 30, 1997 through
December 30, 1997 6.00:1
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Period Ratio
December 31, 1997 through
June 29, 1999 5.50:1
June 30, 1999 and
thereafter 5.00:1
(b) At all times after any Acquisition or Investment pursuant to
Section 7.6(d)(F) hereof, the Borrower shall not at any time permit the
Consolidated Leverage Ratio to exceed (i) from the date of any such Acquisition
or Investment through June 29, 1999, 5.50:1 and (ii) from June 30, 1999 and
thereafter, 5.00:1.
Section 7.11 Senior Leverage Ratio. (a) Prior to any Acquisition or
Investment pursuant to Section 7.6(d)(F) hereof, the Borrower shall not at any
time permit the Senior Leverage Ratio to exceed the ratios set forth below
during the periods indicated:
Period Ratio
Agreement Date through
June 29, 1996 6.00:1
June 30, 1996 through
September 29, 1996 5.50:1
September 30, 1996 through
June 29, 1997 5.00:1
June 30, 1997 through
June 29, 1998 4.00:1
June 30, 1998 and
thereafter 3.50:1
(b) At all times after any Acquisition or Investment pursuant to
Section 7.6(d)(F) hereof, the Borrower shall not at any time permit the Senior
Leverage Ratio to exceed (i) from the date of such Acquisition or Investment
through June 29, 1998, 4.00:1 and (ii) from June 30, 1998 and thereafter,
3.50:1.
Section 7.12 Pro Forma Debt Service Ratio. The Borrower shall not at
any time permit the Pro Forma Debt Service Ratio to be less than 1.15:1.
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Section 7.13 Capital Expenditures. The Borrower shall not permit the
aggregate Capital Expenditures for the Borrower and its Subsidiaries to exceed
the following as of the end of fiscal years indicated:
Total
Capital
Period Expenditures
At December 31, 1996 $150,000,000.00
At December 31, 1997 $125,000,000.00
To the extent not used in any calendar year, an amount equal to (a) the lesser
of the unused Total Capital Expenditure availability (exclusive of any carry
forwards from prior periods) for such calendar year and (b) 25% of the Total
Capital Expenditure limit shown above (exclusive of any carry forwards from
prior periods) for such calendar year, may be carried forward to the next
succeeding calendar year.
Section 7.14 Affiliate Transactions. Except as specifically provided
herein (including, without limitation, Section 7.7 hereof) and as may be
described on Schedule 6 attached hereto, the Borrower shall not, and shall not
permit any of its Subsidiaries to, at any time engage in any transaction with an
Affiliate, or make an assignment or other transfer of any of its properties or
assets to any Affiliate, on terms less advantageous to the Borrower or such
Subsidiary than would be the case if such transaction had been effected with a
non-Affiliate.
Section 7.15 Real Estate. The Borrower and its Subsidiaries may, in the
aggregate, purchase up to $5,000,000.00 of real estate during the term of this
Agreement, provided that such real estate is acquired in conjunction with an
Acquisition permitted under Section 7.6 hereof or otherwise for use in the
cellular telephone business of the Borrower or any of its Subsidiaries. Neither
the Borrower nor any of its Subsidiaries shall purchase or become obligated to
purchase any other real estate.
Section 7.16 ERISA Liabilities. The Borrower shall not, and shall not
permit any of its Subsidiaries to, (i) permit the assets of any of their
respective Plans to be less than the amount necessary to provide all accrued
benefits under such Plans, or (ii) enter into any Multiemployer Plan.
Section 7.17 Unrestricted Subsidiaries. From time to time the Borrower
may form or otherwise acquire one or more additional
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Unrestricted Subsidiaries, provided that the Borrower provides the Managing
Agents with notice of its intent to form or acquire an Unrestricted Subsidiary
making reference to this Section 7.17, together with the following information
with respect to each such Unrestricted Subsidiary, not less than ten (10) days
prior to such formation or acquisition: (a) the name and state of incorporation
or formation of such Unrestricted Subsidiary, (b) the intended purpose for and
business to be conducted by such Unrestricted Subsidiary, (c) the amount and
nature of any investment to be made in such Unrestricted Subsidiary by the
Borrower or any of its Subsidiaries, and (d) such additional information as the
Managing Agents may reasonably require with respect thereto. The Borrower shall
not permit any Unrestricted Subsidiary to: (x) create, assume, incur or
otherwise become or remain obligated in respect of or permit to be outstanding
any Indebtedness, other than (1) Indebtedness in favor of governmental entities
the proceeds of which are or will be used for the purchase of personal
communication services assets or interests in personal communication services
ventures, (2) Indebtedness arising in respect of intercompany loans and advances
among the Unrestricted Subsidiaries, and (3) Indebtedness arising in respect of
Investments permitted hereby; or (y) create, assume, incur or permit to exist or
to be created, assumed, incurred or permitted to exist, directly or indirectly,
any Lien on any of its properties or assets, whether now owned or hereafter
acquired, except for Liens in favor of governmental entities securing
Indebtedness of the type described in clause (x) above. In addition, the
Borrower shall not and shall not permit any of its Subsidiaries or any
Unrestricted Subsidiary to: (i) pledge or permit the pledge of the capital stock
or other ownership interests of any Unrestricted Subsidiary to any Person (other
than to the Collateral Agent as additional Collateral for the Obligations); (ii)
make any loan or advance to, or Guaranty any obligations of, any Unrestricted
Subsidiary or otherwise acquire for consideration evidences of Indebtedness,
capital stock or other securities of any Unrestricted Subsidiary, other than
Investments permitted by Section 7.6 hereof and other than intercompany loans
and advances among the Unrestricted Subsidiaries; or (iii) transfer any assets
to any Unrestricted Subsidiary. The Borrower shall not permit the net worth of
any Unrestricted Subsidiary, after giving effect to all contingent liabilities
and as otherwise determined in accordance with GAAP, to be less than zero at any
time.
Section 7.18 The VCS Subsidiary. The Borrower shall not permit the VCS
Subsidiary to incur Indebtedness or to create Liens on its assets; nor shall the
Borrower pledge or permit the pledge of the stock of the VCS Subsidiary to any
Person (other than to the Collateral Agent as additional Collateral for the
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Obligations); nor shall the Borrower or any of its Subsidiaries lend or
invest any funds in or transfer any assets to the VCS Subsidiary or Guaranty any
obligations of the VCS Subsidiary. The Borrower shall not permit the net worth
of the VCS Subsidiary, after giving effect to all contingent liabilities and as
otherwise determined in accordance with GAAP, to be less than zero at any time.
The Borrower and its Subsidiaries may borrow and repay up to $5,000,000 from the
VCS Subsidiary on a short-term basis, provided, however, that (i) the rate of
any interest payable to the VCS Subsidiary in respect of such Indebtedness shall
not exceed the blended rate payable on the Loans, (ii) no repayment of such
Indebtedness or payment of any interest thereon shall be made at such time as
there exists any Default, or at such time as any Default would be caused thereby
and (iii) the VCS Subsidiary has entered into a subordination agreement in form
and substance reasonably satisfactory to the Majority Lenders.
Section 7.19 Limitation on Upstream Dividends by Subsidiaries. The
Borrower shall not permit any Subsidiary (other than CPAC) to enter into or
agree, or otherwise become subject, to any agreement, contract or other
arrangement with any Person pursuant to the terms of which (a) such Subsidiary
is or would be prohibited from declaring or paying any cash dividends or
distributions on any class of its stock or any partnership interests owned
directly or indirectly by the Borrower or from making any other distribution on
account of any class of any such stock or any such partnership interests (herein
referred to as "Upstream Dividends") or (b) the declaration or payment of
Upstream Dividends by a Subsidiary to the Borrower or to another Subsidiary, on
an annual or cumulative basis, is or would be otherwise limited or restricted.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made or deemed to be made
under this Agreement or any other Loan Document shall prove incorrect or
misleading in any material respect when made or deemed to be made pursuant to
Section 4.2 hereof;
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(b) The Borrower shall default in the payment of: (i) any
interest under any of the Notes or fees or other amounts payable to the Lenders
and the Administrative Agent (except as provided in clause (b)(ii) below), or
any of them, when due, and such Default shall not be cured by payment in full
within three (3) Business Days from the due date; or (ii) any principal under
any of the Notes when due (including, without limitation, pursuant to Section
2.7 hereof);
(c) The Borrower shall default (i) in the performance or
observance of any agreement or covenant contained in Section 5.9, Section 6.5,
or Article 7 hereof; (ii) in the performance or observance of any other negative
covenant contained in any of the other Loan Documents; or (iii) in providing any
financial statement or report under Article 6, and, with respect to this clause
(iii) only, such default shall not be cured by delivery thereof within a period
of fifteen (15) days from the occurrence of such default;
(d) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1, and such default shall
not be cured within a period of thirty (30) days from the occurrence of such
default;
(e) There shall occur any default in the performance or
observance of any agreement or covenant contained in any of the Loan Documents
(other than this Agreement or as otherwise provided in this Section 8.1) by the
Borrower, any of its Subsidiaries, or any other obligor thereunder, which shall
not be cured within a period of thirty (30) days from the occurrence of such
default;
(f) There shall be entered and remain unstayed a decree or
order for relief in respect of Vanguard, the Borrower or any of the Borrower's
Subsidiaries under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official of Vanguard, the Borrower or any of
the Borrower's Subsidiaries, or of any substantial part of their respective
properties; or ordering the winding-up or liquidation of the affairs of
Vanguard, the Borrower or any of the Borrower's Subsidiaries; or an involuntary
petition shall be filed against Vanguard, the Borrower or any of the Borrower's
Subsidiaries and a temporary stay entered, and (i) such petition and stay shall
not be diligently contested, or (ii) any such petition and stay shall continue
undismissed for a period of thirty (30) consecutive days;
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(g) Vanguard, the Borrower or any of the Borrower's
Subsidiaries shall file a petition, answer or consent seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other applicable Federal or state bankruptcy law or other similar law, or
Vanguard, the Borrower or any of the Borrower's Subsidiaries shall consent to
the institution of proceedings thereunder or to the filing of any such petition
or to the appointment of or taking of possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of
Vanguard, the Borrower or any of the Borrower's Subsidiaries or of any
substantial part of their respective properties, or Vanguard, the Borrower or
any of the Borrower's Subsidiaries shall fail generally or admit in writing
their inability to pay their respective debts as they become due, or Vanguard,
the Borrower or any of the Borrower's Subsidiaries shall take any action in
furtherance of any such action;
(h) A judgment not covered by insurance shall be entered by
any court against Vanguard, the Borrower or any of the Borrower's Subsidiaries
for the payment of money which exceeds singly or in the aggregate with other
such judgments, $5,000,000.00, or a warrant of attachment or execution or
similar process shall be issued or levied against property of Vanguard, the
Borrower or any of the Borrower's Subsidiaries which, together with all other
such property of Vanguard, the Borrower or any of the Borrower's Subsidiaries
subject to other such process, exceeds in value $5,000,000.00 in the aggregate,
and if, within thirty (30) days after the entry, issue or levy thereof, such
judgment, warrant or process shall not have been paid or discharged or stayed
pending appeal, or if, after the expiration of any such stay, such judgment,
warrant or process shall not have been paid or discharged;
(i) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by the Borrower or any of its Subsidiaries, or to which the
Borrower or any of its Subsidiaries has any liabilities, or any trust created
thereunder; or a trustee shall be appointed by a United States District Court to
administer any such Plan; or PBGC shall institute proceedings to terminate any
such Plan; or the Borrower or any of its Subsidiaries shall incur any liability
to PBGC in connection with the termination of any such Plan; or any Plan or
trust created under any Plan of the Borrower or any of its Subsidiaries shall
engage in a "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) which would subject any such Plan, any trust
created thereunder, any trustee or administrator thereof, or any party
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dealing with any such Plan or trust to the tax or penalty on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code;
(j) Any event shall occur which has a Materially Adverse
Effect;
(k) There shall occur (i) any acceleration of the maturity, or
any failure to pay at final maturity, of any Indebtedness of the Borrower or any
of the Borrower's Subsidiaries in an aggregate principal amount exceeding
$1,000,000.00; (ii) any event of default which would permit such acceleration of
such Indebtedness and which event of default has not been cured within any
applicable cure period or waived in writing prior to any declaration of an Event
of Default or acceleration of the Loans hereunder; or (iii) any material default
under any Interest Rate Hedge Agreement having a notional principal amount of
$1,000,000.00 or more;
(l) The FCC shall deliver to the Borrower or any of its
Subsidiaries an order to show cause why an order of revocation should not be
issued based upon any alleged attribution of alien ownership (within the meaning
of 47 U.S.C. ss. 310(b) and any interpretation of the FCC thereunder) to the
Borrower or any of its Subsidiaries and (i) such order shall not have been
rescinded within thirty (30) days after such delivery or (ii) in the reasonable
judgment of the Majority Lenders, proceedings by or before the FCC related to
such order are reasonably likely to result in one or more orders of revocation
and would constitute an Event of Default under Section 8.1(m) hereof; or
(m) One or more Licenses shall be terminated or revoked such
that the Borrower and its Subsidiaries are no longer able to operate the related
Cellular System or Systems or portion thereof and retain the revenue received
therefrom or any such License shall fail to be renewed at the stated expiration
thereof such that the Borrower and its Subsidiaries are no longer able to
operate the related Cellular System or Systems or portion thereof and retain the
revenue received therefrom, and the overall effect of such termination,
revocation or failure to renew would be to reduce annual Cash Flow (determined
as at the last day of the most recently ended fiscal year of the Borrower) by
five percent (5%) or more;
(n) Any Loan Document which is a contract or any Note or the
Subsidiary Guaranty, or any material provision thereof, shall at any time and
for any reason be declared by a court of competent jurisdiction to be null and
void, or a proceeding shall
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be commenced by the Borrower or any of the Borrower's Subsidiaries, or by
any governmental authority having jurisdiction over the Borrower or any of the
Borrower's Subsidiaries, seeking to establish the invalidity or unenforceability
thereof (exclusive of questions of interpretation of any provision thereof), or
the Borrower or any of the Borrower's Subsidiaries shall deny that it has any
liability or obligation for the payment of principal or interest purported to be
created under any Loan Document;
(o) Any Security Document shall for any reason fail or cease
(except by reason of lapse of time) to create a valid and perfected and
first-priority Lien on or security interest in any portion of the Collateral
purported to be covered thereby;
(p) The occurrence of a Change of Control;
(q) There shall occur any default under the Vanguard
Debentures or the Vanguard Indenture [which default has not been cured within
any applicable cure period or waived in writing prior to any declaration of an
Event of Default or acceleration of the Loans hereunder];
(r) Vanguard shall make any acquisition of or investment in
any assets or interests of any Person or incur any Indebtedness (excluding
expenses incurred by Vanguard solely as a result of its operating obligations to
the extent the payment of which would be permitted pursuant to Section 7.7(e)
hereof) other than the Vanguard Debentures;
(s) There shall be any amendment or supplemental indenture,
other than an amendment or supplemental indenture to cure any ambiguity or to
cure, correct or supplement any defect or inconsistent provision, to the
Vanguard Debentures or the Vanguard Indenture without Majority Lender consent;
or
(t) The Borrower shall fail, on or prior to October 1, 1996,
to obtain the final Asset Transfer Approval and effectuate the transfer of
assets to VCFC contemplated therein.
Section 8.2 Remedies.
(a) If an Event of Default specified in Section 8.1 hereof
(other than an Event of Default under Section 8.1(f) or Section 8.1(g) hereof)
shall have occurred and shall be continuing, the Collateral Agent, at the
request of the Majority Lenders, shall formally declare that an Event of Default
has occurred, and (i) terminate the Commitments and (ii) declare the principal
of and interest on the Loans and the Notes and all
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other Obligations owed to the Lenders and the Agents under this Agreement and
the other Loan Documents to be forthwith due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived,
anything in this Agreement or in the other Loan Documents to the contrary
notwithstanding, and the Commitments shall thereupon forthwith terminate.
(b) Upon the occurrence and continuance of an Event of Default
specified in Section 8.1(f) or Section 8.1(g) hereof, all principal, interest
and other amounts due hereunder and under the Notes, and all other Obligations,
shall thereupon and concurrently therewith become due and payable and the
Commitments shall forthwith terminate and the principal amount of the Loans
outstanding hereunder shall bear interest at the Default Rate, all without any
action by the Agents or the Lenders or the Majority Lenders, or any of them, and
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or in the other Loan Documents
to the contrary notwithstanding.
(c) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, above, the Agents and the Lenders shall have all
of the post-default rights granted to them, or any of them, as applicable under
the Loan Documents and under Applicable Law.
(d) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Collateral Agent shall have the right (but
not the obligation) upon the request of each of the Lenders to operate the
Cellular Systems of the Borrower and its Subsidiaries in accordance with the
terms of the Licenses and pursuant to the terms and subject to any limitations
contained in the Security Documents and, within guidelines established by the
Majority Lenders, to make any and all payments and expenditures necessary or
desirable in connection therewith, including, without limitation, payment of
wages as required under the Fair Labor Standards Act, as amended, and of any
necessary withholding taxes to state or federal authorities. In the event the
Majority Lenders fail to agree upon the guidelines referred to in the preceding
sentence within six (6) Business Days after the Collateral Agent has begun to
operate any Cellular System, the Collateral Agent may, after giving three (3)
days' prior written notice to the Lenders of its intention to do so, make such
payments and expenditures as it deems reasonable and advisable in its sole
discretion to maintain the normal day-to-day operation of such Cellular Systems.
Such payments and expenditures in excess of receipts shall constitute Advances
under the Revolving Loan Commitment, not in excess of the
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available amount of the Revolving Loan Commitment. Advances made pursuant to
this Section 8.2(d) shall bear interest as provided in Section 2.3(d) hereof and
shall be payable on demand. The making of one (1) or more Advances under this
Section 8.2(d) shall not create any obligation on the part of the Lenders to
make any additional Advances hereunder. No exercise by the Collateral Agent of
the rights granted to it under this Section 8.2(d) shall constitute a waiver of
any other rights and remedies granted to the Agents and the Lenders, or any of
them, under this Agreement or the other Loan Documents or at law. The Borrower
hereby irrevocably appoints the Collateral Agent, as agent for the Lenders, the
true and lawful attorney of the Borrower, in its name and stead and on its
behalf, to execute, receipt for or otherwise act in connection with any and all
contracts, instruments or other documents in connection with the completion and
operation of the Cellular Systems in the exercise of the Collateral Agent's and
the Lenders' rights under this Section 8.2(d). Such power of attorney is coupled
with an interest and is irrevocable. The rights of the Collateral Agent under
this Section 8.2(d) shall be subject to its prior compliance with the
Communications Act and the FCC rules and policies promulgated thereunder to the
extent applicable to the exercise of such rights.
(e) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Collateral Agent, upon request of the
Majority Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Subsidiaries, and the Borrower,
for itself and on behalf of its Subsidiaries, hereby consents to such rights and
such appointment and hereby waives any objection the Borrower or any Subsidiary
may have thereto or the right to have a bond or other security posted by the
Collateral Agent on behalf of the Lenders, in connection therewith. The rights
of the Collateral Agent under this Section 8.2(e) shall be subject to its prior
compliance with the Communications Act and the FCC rules and policies
promulgated thereunder to the extent applicable to the exercise of such rights.
(f) The rights and remedies of the Agents and the Lenders
hereunder shall be cumulative and not exclusive.
Section 8.3 Payments Subsequent to Declaration of Event of Default.
Subsequent to the acceleration of the Loans under Section 8.2 hereof, payments
and prepayments under this Agreement made to any of the Agents and the Lenders
or otherwise received by any of such Persons (from realization on Collateral for
the Obligations or otherwise) shall be paid over to the Administrative Agent (if
necessary) and distributed by the
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Administrative Agent as follows: first, to the Collateral Agent's, the
Documentation Agent's, the Administrative Agent's and the Managing Agents'
reasonable costs and expenses, if any, incurred in connection with the
collection of such payment or prepayment, including, without limitation, any
reasonable costs incurred by any of them in connection with the sale or
disposition of any Collateral for the Obligations; second, to the Lenders for
any fees hereunder or under any of the other Loan Documents then due and
payable; third, to damages incurred by any Agent or any Lender by reason of any
breach hereof or of any other Loan Document; fourth, to the Lenders pro rata on
the basis of their respective unpaid principal amounts (except as provided in
Section 2.2(e) hereof), to the payment of any unpaid interest which may have
accrued on the Obligations; fifth, to the Lenders pro rata on the basis of their
respective unpaid principal amounts until all Advances have been paid in full
(and, for purposes of this clause, obligations under Interest Rate Hedge
Agreements with the Lenders or any of them shall be deemed to be Advances and
shall be paid on a pro rata basis with the Advances); sixth, to the Agents and
the Lenders pro rata on the basis of their respective unpaid amounts, to the
payment of any other unpaid Obligations; and seventh, upon satisfaction in full
of all Obligations, to the Borrower or as otherwise required by law.
ARTICLE 9
The Agents
Section 9.1 Appointment and Authorization. Each Lender hereby
irrevocably appoints and authorizes, and any transferee of any of its interest
in its Loans and in its Notes shall be deemed to have irrevocably appointed and
authorized, the Administrative Agent, the Documentation Agent, the Managing
Agents and the Collateral Agent to take such actions as its agents on its behalf
and to exercise such powers hereunder as are delegated by the terms hereof,
together with such powers as are reasonably incidental thereto. Neither the
Collateral Agent, the Administrative Agent, the Documentation Agent, any
Managing Agent nor any Co-Agent, nor any of their respective directors,
officers, employees or agents, shall be liable for any action taken or omitted
to be taken by it or them hereunder or in connection herewith, except for its or
their own gross negligence or willful misconduct.
Section 9.2 Interest Holders. The Agents may treat each Lender, or the
Person designated in the last notice filed with the Administrative Agent, as the
holder of all of the interests
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of such Lender in its Loans and in its Notes until written notice of transfer,
signed by such Lender (or the person designated in the last notice filed with
the Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
Section 9.3 Consultation with Counsel. The Managing Agents, the
Collateral Agent, the Documentation Agent and the Administrative Agent may
consult with Powell, Goldstein, Frazer & Murphy, Atlanta, Georgia, special
counsel to the Managing Agents, or with other legal counsel selected by them and
shall not be liable for any action taken or suffered by them in good faith in
consultation with the Majority Lenders and in reasonable reliance on such
consultations.
Section 9.4 Documents. The Managing Agents, the Collateral Agent, the
Documentation Agent and the Administrative Agent shall be under no duty to
examine, inquire into, or pass upon the validity, effectiveness or genuineness
of this Agreement, any Note, any other Loan Document, or any instrument,
document or communication furnished pursuant hereto or thereto or in connection
herewith or therewith, and the Managing Agents, the Collateral Agent, the
Documentation Agent and the Administrative Agent shall be entitled to assume
that they are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be.
Section 9.5 Agents and Affiliates. With respect to the Commitments and
the Loans, the Agents shall have the same rights and powers hereunder as any
other Lender and the Agents and Affiliates of the Agents may accept deposits
from, lend money to and generally engage in any kind of business with the
Borrower, any of its Subsidiaries or any Affiliates of, or persons doing
business with, the Borrower, as if they were not affiliated with the Agents and
without any obligation to account therefor.
Section 9.6 Responsibility of the Managing Agents, the Administrative
Agent and the Collateral Agent. The duties and obligations of the Managing
Agents, the Administrative Agent and the Collateral Agent under this Agreement
are only those expressly set forth in this Agreement. Each Managing Agent, the
Administrative Agent and the Collateral Agent shall be entitled to assume that
no Default has occurred and is continuing unless it has actual knowledge, or has
been notified by the Borrower, of such fact, or has been notified by a Lender in
writing that such Lender considers that a Default has occurred and is continuing
and such Lender shall specify in detail the nature thereof in writing. Each
Managing Agent, the Administrative Agent and the
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Collateral Agent shall not be liable hereunder for any action taken or omitted
to be taken except for its own gross negligence or willful misconduct. The
Administrative Agent shall provide each Lender with copies of such documents
received from the Borrower as such Lender may reasonably request.
Section 9.7 Collateral Agent. The Collateral Agent is hereby authorized
to act on behalf of the Lenders, in its own capacity and through other agents
and sub-agents appointed by it, under the Security Documents, provided that the
Collateral Agent shall not agree to the release of any collateral, or any
property encumbered by any mortgage, pledge or security interest except in
compliance with Section 11.12 hereof.
Section 9.8 Action by Managing Agents, the Administrative Agent and the
Collateral Agent.
(a) The Managing Agents, the Administrative Agent and the
Collateral Agent shall be entitled to use their discretion with respect to
exercising or refraining from exercising any rights which may be vested in them
or any of them by, and with respect to taking or refraining from taking any
action or actions which they may be able to take under or in respect of, this
Agreement or any other Loan Document, unless the Administrative Agent, either
Managing Agent or the Collateral Agent shall have been instructed by the
Majority Lenders or all Lenders, as applicable, to exercise or refrain from
exercising such rights or to take or refrain from taking such action; provided
that the Collateral Agent shall not exercise any rights under Section 8.2(a) of
this Agreement without the request of the Majority Lenders. Each Managing Agent,
the Administrative Agent and the Collateral Agent shall incur no liability under
or in respect of this Agreement or any other Loan Document with respect to
anything which it may do or refrain from doing in the reasonable exercise of its
judgment or which may seem to it to be necessary or desirable in the
circumstances, except for its gross negligence or willful misconduct, or conduct
in breach of this Agreement as determined by a final, non-appealable judicial
order of a court having jurisdiction over the subject matter.
(b) Each Managing Agent, the Administrative Agent and the
Collateral Agent shall not be liable to the Lenders or to any Lender in acting
or refraining from acting under this Agreement in accordance with the
instructions of the Majority Lenders or all Lenders, as applicable, and any
action taken or failure to act pursuant to such instructions shall be binding on
all Lenders.
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Section 9.9 Notice of Default. In the event that any Agent or any
Lender shall acquire actual knowledge, or shall have been notified, of any
Default, such Agent or such Lender shall promptly notify the Lenders and the
other Agents, as applicable, and the Collateral Agent shall take such action and
assert such rights under this Agreement as the Majority Lenders or all Lenders,
as applicable, shall request in writing, and the Collateral Agent shall not be
subject to any liability by reason of its acting pursuant to any such request.
If the Majority Lenders or all Lenders, as applicable, shall fail to request the
Collateral Agent to take action or to assert rights under this Agreement in
respect of any Default within ten (10) days after their receipt of the notice of
any Default from the Administrative Agent or any Lender, or shall request
inconsistent action with respect to such Default, the Collateral Agent may, but
shall not be required to, take such action and assert such rights (other than
rights under Article 8 hereof) as it deems in its discretion to be advisable for
the protection of the Lenders, except that, if the Majority Lenders have
instructed the Collateral Agent not to take such action or assert such right, in
no event shall the Collateral Agent act contrary to such instructions.
Section 9.10 Responsibility Disclaimed. The Agents shall not be under
any liability or responsibility whatsoever as Agents:
(a) To the Borrower or any other Person as a consequence of
any failure or delay in performance by or any breach by, any Lender or Lenders
of any of its or their obligations under this Agreement;
(b) To any Lender or Lenders, as a consequence of any failure
or delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this Agreement or the Notes or any other Loan Document, or
(ii) any Subsidiary of the Borrower or any other obligor under any other Loan
Document; or
(c) To any Lender or Lenders for any statements,
representations or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability or sufficiency of
this Agreement, the Notes, any other Loan Document, or any other document
contemplated by this Agreement.
Section 9.11 Indemnification. The Lenders agree to indemnify each of
the Agents other than the Co-Agents (to the
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extent not reimbursed by the Borrower) pro rata according to their respective
Commitment Ratios in effect at the time indemnification is sought, from and
against any and all liabilities, obligations, losses (other than the loss of
principal and interest hereunder in the event of a bankruptcy or out-of-court
`work-out' of the Loans), damages, penalties, actions, judgments, suits, costs,
expenses (including fees and expenses of experts, agents, consultants and
counsel), or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against any of the Agents (other than the Co-Agents)
in any way relating to or arising out of this Agreement, any other Loan
Document, or any other document contemplated by this Agreement or any action
taken or omitted by such Agent under this Agreement, any other Loan Document, or
any other document contemplated by this Agreement, except that no Lender shall
be liable to any Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting from the gross negligence or willful misconduct of such Agent as
determined by a final, non-appealable judicial order of a court having
jurisdiction over the subject matter.
Section 9.12 Credit Decision. Each Lender represents and warrants to
each other and to the Agents that:
(a) In making its decision to enter into this Agreement and to
make its Advances it has independently taken whatever steps it considers
necessary to evaluate the financial condition and affairs of the Borrower and
its Subsidiaries and Affiliates and it has made an independent credit judgment,
and it has not relied upon the Agents or information provided by the Agents
(other than information provided to the Agents by the Borrower and forwarded by
the Agents to the Lenders); and
(b) So long as any portion of the Loans remains outstanding,
it will continue to make its own independent evaluation of the financial
condition and affairs of the Borrower and its Subsidiaries and Affiliates.
Section 9.13 Successor Administrative Agent, Documentation Agent and
Collateral Agent. Subject to the appointment and acceptance of a successor
Administrative Agent, Documentation Agent, Managing Agent, or Collateral Agent
as provided below, the Administrative Agent, the Documentation Agent, the
Managing Agents, and the Collateral Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time for cause by the Majority Lenders. Upon any such resignation or removal,
the Majority Lenders shall have the right to appoint a successor Administrative
Agent, Documentation
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Agent, Managing Agent or Collateral Agent, as applicable. If no such successor
Administrative Agent, Documentation Agent, Managing Agent or Collateral
Agent shall have been so appointed by the Majority Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent's, Documentation Agent's, Managing Agent's or Collateral
Agent's giving of notice of resignation or the Majority Lenders' removal of
the retiring Administrative Agent, Documentation Agent, Managing Agent or
Collateral Agent, then the retiring Administrative Agent, Collateral
Agent, Managing Agent or Documentation Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent, Collateral Agent, Managing Agent
or Documentation Agent which shall be any Lender or a commercial bank
organized under the laws of the United States of America or any political
subdivision thereof which has combined capital and reserves in excess of
$250,000,000.00. Upon the acceptance of any appointment as Administrative Agent,
Documentation Agent, Managing Agent or Collateral Agent hereunder by a successor
Administrative Agent, Documentation Agent, Managing Agent or Collateral Agent,
such successor Administrative Agent, Documentation Agent, Managing Agent or
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges, duties and obligations of the retiring
Administrative Agent, Documentation Agent, Managing Agent or Collateral Agent
and the retiring Administrative Agent, Documentation Agent, Managing Agent or
Collateral Agent shall be discharged from its duties and obligations hereunder
and under the other Loan Documents. After any retiring Administrative Agent's,
Documentation Agent's, Managing Agent's or Collateral Agent's resignation or
removal hereunder as Administrative Agent, Documentation Agent, Managing Agent
or Collateral Agent, the provisions of this Article shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Administrative Agent, Documentation Agent, Managing Agent
or Collateral Agent.
Section 9.14 Delegation of Duties. Each Agent may execute any of its
duties under the Loan Documents by or through agents or attorneys selected by it
using reasonable care and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.
Section 9.15 No Responsibilities of Co-Agents. The Co- Agents shall
have no responsibilities hereunder or under any of the other Loan Documents in
their capacities as Co-Agents.
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ARTICLE 10
Change in Circumstances
Affecting Eurodollar Advances
Section 10.1 Eurodollar Basis Determination Inadequate. If with respect
to any proposed Eurodollar Advance for any Interest Period, the Administrative
Agent determines after consultation with the Lenders that deposits in dollars
(in the applicable amount) are not being offered to each of the Lenders in the
relevant market for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Lenders, whereupon until
the Administrative Agent notifies the Borrower that the circumstances giving
rise to such situation no longer exist, the obligations of any affected Lender
to make Eurodollar Advances shall be suspended.
Section 10.2 Illegality. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law (whether adopted before or
after the Agreement Date), or any change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, shall make it unlawful or
impossible for any Lender to make, maintain or fund its Eurodollar Advances,
such Lender shall so notify the Administrative Agent, and the Administrative
Agent shall forthwith give notice thereof to the other Lenders and the Borrower.
Before giving any notice to the Administrative Agent pursuant to this Section
10.2, such Lender shall designate a different lending office if such designation
will avoid the need for giving such notice and will not, in the sole judgment of
such Lender, be otherwise materially disadvantageous to such Lender. Upon
receipt of such notice, notwithstanding anything contained in Article 2 hereof,
the Borrower shall repay in full the then outstanding principal amount of each
affected Eurodollar Advance of such Lender, together with accrued interest
thereon and any reimbursement required under Section 2.10 hereof, on either (a)
the last day of the then current Interest Period applicable to such affected
Eurodollar Advances if such Lender may lawfully continue to maintain and fund
such Eurodollar Advances to such day or (b) immediately if such Lender may not
lawfully continue to fund and maintain such affected Eurodollar Advances to such
day. Concurrently with repaying each affected Eurodollar Advance of such Lender,
notwithstanding anything contained in Article 2 or Article 3 hereof, the
Borrower shall borrow a Prime Rate Advance from such Lender, and such Lender
shall make such Advance in an amount such that the outstanding principal amount
of the
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affected Note or Notes held by such Lender shall equal the outstanding principal
amount of such Note or Notes immediately prior to such repayment.
Section 10.3 Increased Costs.
(a) If after the date hereof, the adoption of any Applicable
Law, or any change in any Applicable Law (whether adopted before or after the
Agreement Date), or any interpretation or change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof or compliance
by any Lender with any directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(1) shall subject any Lender to any tax, duty or
other charge with respect to its obligation to make Eurodollar
Advances, or its Eurodollar Advances, or shall change the basis of
taxation of payments to any Lender of the principal of or interest on
its Eurodollar Advances or in respect of any other amounts due under
this Agreement, in respect of its Eurodollar Advances or its obligation
to make Eurodollar Advances (except for changes in the rate or method
of calculation of tax on the overall net income of such Lender); or
(2) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any included in
an applicable Eurodollar Reserve Percentage), special deposit, capital
adequacy, assessment or other requirement or condition against assets
of, deposits with or for the account of, or commitments or credit
extended by, any Lender or shall impose on any Lender or the London
interbank Eurodollar market any other condition affecting its
obligation to make such Eurodollar Advances or its Eurodollar Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any such Eurodollar Advances, or to reduce the amount of
any sum received or receivable by such Lender under this Agreement or under any
of its Notes with respect thereto, then, on a date within five (5) days after
demand by such Lender, the Borrower agrees to pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased costs or
reduction. Each Lender will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date
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hereof, which will entitle such Lender to compensation pursuant to this Section
10.3 and will designate a different lending office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the sole judgment of such Lender made in good faith, be otherwise
disadvantageous to such Lender.
(b) Any Lender claiming compensation under this Section 10.3
shall provide the Borrower with a written certificate setting forth the
additional amount or amounts to be paid to it hereunder and calculations
therefor in reasonable detail. Such certificate shall be presumptively correct.
In determining such amount, such Lender may use any reasonable averaging and
attribution methods. If any Lender demands compensation under this Section 10.3,
the Borrower may at any time, upon at least five (5) Business Days' prior notice
to such Lender, prepay in full the then outstanding affected Eurodollar Advances
of such Lender, together with accrued interest thereon to the date of
prepayment, along with any reimbursement required under Section 2.10 hereof.
Concurrently with prepaying such Eurodollar Advances the Borrower shall borrow a
Prime Rate Advance, or a Eurodollar Advance not so affected, from such Lender,
and such Lender shall make such Advance in an amount such that the outstanding
principal amount of the affected Note or Notes held by such Lender shall equal
the outstanding principal amount of such Note or Notes immediately prior to such
prepayment.
Section 10.4 Effect On Other Advances. If notice has been given
pursuant to Section 10.1, 10.2 or 10.3 suspending the obligation of any Lender
to make any Eurodollar Advance, or requiring Eurodollar Advances of any Lender
to be repaid or prepaid, then, unless and until such Lender notifies the
Borrower that the circumstances giving rise to such repayment no longer apply,
all Advances which would otherwise be made by such Lender as the type of
Eurodollar Advances affected shall, at the option of the Borrower, be made
instead as Prime Rate Advances.
ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given three (3) days after
deposit in the mail, designated as certified mail, return receipt requested,
post-prepaid, or one
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(1) day after being entrusted to a reputable commercial overnight delivery
service, or when sent by telecopy addressed to the party to which such notice is
directed at its address determined as provided in this Section 11.1. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses:
(i) If to the Borrower, to it at:
Vanguard Cellular Operating Corp.
2002 Pisgah Church Road, Suite 300
Greensboro, NC 27455-3314
Attn: Stephen Holcombe, Senior Vice
President and Chief Financial
Officer
with a copy to:
Vanguard Cellular Operating Corp.
2002 Pisgah Church Rd., Suite 300
Greensboro, NC 27455-3314
Attn: Mr. Richard C. Rowlenson
Senior Vice President and
General Counsel
(ii) If to the Administrative Agent, to
it at:
The Bank of New York
One Wall Street, 16th Floor
New York, New York 10286
Attn: James W. Whitaker
Vice President
with a copy to the Administrative Agent's Office,
to the attention of Mr. Genoveso Caviness.
(iii) If to the Documentation Agent, to it at:
The Toronto-Dominion Bank
USA Division
31 West 52nd Street
New York, NY 10019-6101
Attn: Managing Director-Transactions
Communications Finance
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with a copy to:
Toronto Dominion (Texas), Inc.
c/o The Toronto-Dominion Bank
909 Fannin, Suite 900
Houston, Texas 77010
Attn: Manager-Agency
(iv) If to the Collateral Agent, to it at:
Toronto Dominion (Texas), Inc.
c/o The Toronto-Dominion Bank
909 Fannin, Suite 900
Houston, Texas 77010
Attn: Manager-Agency
(v) If to the Managing Agents, the Co-Agents and the
Lenders, to them at the addresses set forth beside
their names on the signature pages hereof.
Copies shall be provided to persons other than parties hereto only in the case
of notices under Article 8 hereof.
(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' written
notice of such change to the other parties.
Section 11.2 Expenses. The Borrower will promptly pay, or reimburse:
(a) all reasonable out-of-pocket expenses of the Managing
Agents, the Collateral Agent, the Documentation Agent and the Administrative
Agent in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Loan Documents, and the transactions contemplated
hereunder and thereunder and the making of the initial Advance hereunder
(whether or not such Advance is made), including, but not limited to, the
reasonable fees and disbursements of Powell, Goldstein, Frazer & Murphy, special
counsel for the Managing Agents;
(b) all out-of-pocket expenses of the Managing Agents, the
Collateral Agent, the Documentation Agent and the Administrative Agent in
connection with the administration of the transactions contemplated in this
Agreement and the other Loan Documents, the restructuring and "work out" of such
transactions, and the preparation, negotiation, execution and delivery of any
waiver, amendment or consent by the Agents and the Lenders relating to this
Agreement and/or the other Loan Documents, including, but not limited to, the
reasonable fees and
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disbursements of any experts, agents or consultants and of special counsel for
the Managing Agents; and
(c) all out-of-pocket costs and expenses of obtaining
performance under this Agreement and the other Loan Documents and all
out-of-pocket costs and expenses of collection if an Event of Default occurs,
which in each case shall include reasonable fees and out-of-pocket expenses of
special counsel for the Managing Agents.
Section 11.3 Waivers. The rights and remedies of the Agents and the
Lenders under this Agreement and the other Loan Documents shall be cumulative
and not exclusive of any rights or remedies which they would otherwise have. No
failure or delay by the Agents, the Majority Lenders or the Lenders, or any of
them, in exercising any right shall operate as a waiver of such right. The
Agents and the Lenders expressly reserve the right to require strict compliance
with the terms of this Agreement in connection with any future funding of a
request for an Advance. In the event the Lenders decide to fund a request for an
Advance at a time when the Borrower is not in strict compliance with the terms
of this Agreement, such decision by the Lenders shall not be deemed to
constitute an undertaking by the Lenders to fund any further requests for
Advances or preclude the Lenders or the Agents from exercising any rights
available under the Loan Documents or at law or equity. Any waiver or indulgence
granted by the Agents, the Lenders or the Majority Lenders, or any of them,
shall not constitute a modification of this Agreement, except to the extent
expressly provided in such waiver or indulgence, or constitute a course of
dealing at variance with the terms of the Agreement such as to require further
notice of their intent to require strict adherence to the terms of this
Agreement in the future.
Section 11.4 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of a Default and during the continuation thereof, each of
the Agents and each of the Lenders are hereby authorized by the Borrower at any
time or from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, time or
demand, including, but not limited to, Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other Indebtedness
at any time held or owing by any Lender or Agent, to or for the credit or the
account of the Borrower or any of its Subsidiaries, against and on account of
the obligations and liabilities of the Borrower to the Lenders and the Agents,
including, but not
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limited to, all Obligations and any other claims of any nature or description
arising out of or connected with this Agreement, the Notes or any other Loan
Document, irrespective of whether (a) any Lender or Agent shall have made any
demand hereunder or (b) any Lender or Agent shall have declared the principal of
and interest on the Loans and other amounts due hereunder to be due and payable
as permitted by Section 8.2 hereof and although such obligations and liabilities
or any of them, shall be contingent or unmatured. Upon direction by the
Collateral Agent with the consent of the Majority Lenders each Lender holding
deposits of the Borrower or any of its Subsidiaries shall exercise its set-off
rights as so directed.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its rights
or obligations hereunder or under any other Loan Document without the prior
written consent of each of the Lenders. Notwithstanding the foregoing, the
Borrower may, on or before October 1, 1996, assign all of its rights and
obligations hereunder to VCFC by execution and delivery of the VCFC Assumption
Agreement and upon satisfaction of all terms and conditions specified therein.
(b) Each Lender may enter freely into participation agreements
with respect to or otherwise grant participations in the Loans and the
Commitments to one or more banks or other lenders or financial institutions;
provided, however, that (i) such Lender's obligations hereunder shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participant shall not
be entitled by the benefit of its participation to vote or otherwise take action
under this Agreement or any other Loan Document, except with respect to items
(a), (b), (c), (d), (e), (f) and (g) of Section 11.12 hereof, (iv) the Borrower
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations hereunder and (v) each such participation
shall be in a minimum principal amount of $5,000,000.00. In addition, each
Lender (x) may also sell or assign up to one hundred percent (100%) of its
rights hereunder and under the other Loan Documents to any of its Affiliates or
any Federal Reserve Bank without limitation and (y) sell or assign up to one
hundred percent (100%) of its rights and obligations hereunder and under the
other Loan Documents on an assignment basis; provided, that, with respect to
assignments pursuant to clause (y), (A) such assignment is to another Lender, or
the Borrower (if no Event of Default has occurred and is continuing) and (in any
case) the Administrative Agent have given their prior written consent to
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the identity of any proposed assignee of a Lender hereunder, which consent shall
not be unreasonably delayed or withheld, (B) each assignment to any assignee
shall consist of an assignment of a pro rata portion of each Commitment and the
Loans thereunder, (C) the assignee assumes a pro rata share of the assignor
Lender's obligations hereunder determined by the percentage of the Commitments
assigned, for the period from the date of the assignment through the Maturity
Date and (D) each such assignment shall be in a principal amount of not less
than the lesser of the entire amount of such Lender's interest hereunder, or
$10,000,000.00 (except that assignments from one Lender to another shall have no
minimum amount). Each Lender who sells or assigns a portion of its Loans
pursuant hereto shall pay to the Administrative Agent an assignment fee of
$2,500.00 with respect to each assignment, such fee to be paid to the
Administrative Agent not later than the effective date of the assignment of the
Loans relating thereto. Each Lender agrees to provide the Administrative Agent
and the Borrower with written notice of the assignment of all or part of its
rights hereunder, and the Administrative Agent shall keep a record of all such
assignments in order to be able to calculate the Commitment Ratios of the
Lenders as of any time. All assignments by any of the Lenders of any interests
hereunder shall be made pursuant to an Assignment and Assumption Agreement
substantially in the form attached hereto as Exhibit P. Each Lender may provide
any proposed participant or assignee with confidential information provided to
such Lender regarding the Borrower and its Subsidiaries on a confidential basis,
and such participant or assignee shall agree to maintain such confidentiality.
Further, each permitted assignee of any portion of the Loans shall be entitled
to the benefits of Sections 2.10 and 2.12 and Article 10 hereof and all other
provisions hereof and of the other Loan Documents as a 'Lender' hereunder. Upon
any assignment of the Loans and the Commitments, the Commitment Ratios of the
Lenders shall be deemed to be amended to give effect thereto.
(c) Except as specifically set forth in Section 11.5(b)
hereof, nothing in this Agreement or the Notes, expressed or implied, is
intended to or shall confer on any person other than the respective parties
hereto and thereto and their successors and assignees permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other claim
under this Agreement or the Notes.
(d) The provisions of this Section 11.5 shall not apply to any
purchase of participations among the Lenders pursuant to Section 2.11 hereof.
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Section 11.6 Accounting Principles. All references in this Agreement to
GAAP shall be to such principles as in effect from time to time. All accounting
terms used herein without definition shall be used as defined under GAAP. All
references to the financial statements of the Borrower and to Cash Flow, Total
Debt, Fixed Charges, Pro Forma Debt Service, and other such terms shall be
deemed to refer to such items of the Borrower and its Subsidiaries, on a fully
consolidated basis.
Section 11.7 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.8 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK. IF ANY
ACTION OR PROCEEDING SHALL BE BROUGHT BY ANY AGENT OR ANY LENDER HEREUNDER IN
ORDER TO ENFORCE ANY RIGHT OR REMEDY UNDER THIS AGREEMENT OR UNDER ANY OTHER
LOAN DOCUMENT, THE BORROWER HEREBY CONSENTS AND WILL, AND THE BORROWER WILL
CAUSE EACH SUBSIDIARY TO, SUBMIT TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION SITTING WITHIN THE AREA COMPRISING THE SOUTHERN
DISTRICT OF NEW YORK ON THE DATE OF THIS AGREEMENT. THE BORROWER, FOR ITSELF AND
ON BEHALF OF ITS SUBSIDIARIES, HEREBY AGREES THAT SERVICE OF THE SUMMONS AND
COMPLAINT AND ALL OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING BY REGISTERED MAIL A COPY OF SUCH PROCESS
TO THE OFFICES OF THE BORROWER AT THE ADDRESS GIVEN IN SECTION 11.1 HEREOF AND
THAT PERSONAL SERVICE OF PROCESS SHALL NOT BE REQUIRED. NOTHING HEREIN SHALL BE
CONSTRUED TO PROHIBIT SERVICE OF PROCESS BY ANY OTHER METHOD PERMITTED BY LAW,
OR THE BRINGING OF ANY SUIT, ACTION OR PROCEEDING IN ANY OTHER JURISDICTION. THE
BORROWER AGREES THAT FINAL JUDGMENT IN SUCH SUIT, ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY APPLICABLE LAW. THE BORROWER, FOR ITSELF AND
ON BEHALF OF ITS SUBSIDIARIES, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND
ANY CLAIM THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 11.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction
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or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.10 Interest.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by the
Borrower or inadvertently received by the Administrative Agent or any Lender,
then such excess sum shall be credited as a payment of principal, unless the
Borrower shall notify the Administrative Agent or such Lender, in writing that
it elects to have such excess sum returned forthwith. It is the express intent
hereof that the Borrower not pay and the Administrative Agent and the Lenders
not receive, directly or indirectly in any manner whatsoever, interest in excess
of that which may legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Lenders of the Prime Rate
and the Eurodollar Rate as reference rates for the determination of interest on
the Loans, the Lenders shall be under no obligation to obtain funds from any
particular source in order to charge interest to the Borrower at interest rates
related to such reference rates.
Section 11.11 Table of Contents and Headings. The Table of Contents and
the headings of the various subdivisions used in this Agreement are for
convenience only and shall not in any way modify or amend any of the terms or
provisions hereof, nor be used in connection with the interpretation of any
provision hereof.
Section 11.12 Amendment and Waiver. Neither this Agreement nor any term
hereof may be amended orally, nor may any provision hereof be waived orally but
only by an instrument in writing signed by the Majority Lenders and, in the case
of an amendment, by the Borrower, except that in the event of (a) any increase
in the amount of either Commitment, (b) any delay or extension in the terms of
repayment of the Loans or the reduction of the Revolving Loan Commitment
provided in Section 2.4 hereof, (c) any reduction in principal, interest or fees
due hereunder or postponement of the payment thereof or any reduction in or
postponement of any scheduled reduction in the Revolving Loan Commitment (other
than, in any such case, as provided in Section 2.7 hereof), (d) any release of
any portion of the Collateral for the Loans, other than in connection with any
Permitted Asset Sale or other sale of assets permitted hereby (which release
shall require no further approval by the Lenders),
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(e) any amendment to, consent to a deviation from, or waiver of the provisions
of, this Agreement which has the effect of permitting the Borrower or any of its
Subsidiaries to incur secured Indebtedness other than as set forth in Sections
7.1 and 7.2 of this Agreement as of the Agreement Date, (f) any waiver of any
Default due to the failure by the Borrower to pay any sum due to any of the
Lenders hereunder, (g) any release of any Guaranty of all or any portion of the
Obligations, except in connection with a merger, sale or other disposition
otherwise permitted hereunder (in which case, such release shall require no
further approval by the Lenders), or (h) any amendment of this Section 11.12, or
of the definition of Majority Lenders or of any portion of Section 2.10, 2.12,
or 5.11 or Article 10 hereof as they relate to the relative priority of payment
among the Obligations or any provision which by its terms specifically requires
the consent, approval or satisfaction of all Lenders, any amendment or waiver or
consent may be made only by an instrument in writing signed by each of the
Lenders and, in the case of an amendment, by the Borrower. Any amendment to any
provision hereunder governing the rights, obligations, or liabilities of any
Agent in its capacity as such, may be made only by an instrument in writing
signed by such affected Person and by each of the Lenders. No term or provision
of any Security Document may be amended or waived orally, but only by an
instrument in writing signed by the Collateral Agent with the direction of the
Majority Banks and, in the case of an amendment, by such of the Borrower and its
Subsidiaries as are party thereto; provided, that the written consent of all of
the Lenders shall be required with respect to any amendment to or waiver of the
provisions of any Security Document which would have the effect of (i) releasing
any portion of the Collateral for the Loans, other than in connection with any
Permitted Asset Sale or other sale of assets permitted hereunder (which shall
require no further approval by the Lenders) or (ii) releasing any Guaranty of
all or any portion of the Obligations, except in connection with a merger, sale
or other disposition otherwise permitted hereunder (in which case, such release
shall require no further approval by the Lenders). The Agents and the Lenders
hereby instruct and authorize the Collateral Agent to enter into the amended and
restated Security Documents (and all other Loan Documents) referred to in
Section 3.1 hereof as of the Agreement Date and any other Security Documents
required to be entered into by the Borrower or any of its Subsidiaries
hereunder.
Section 11.13 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
embody the entire Agreement and understanding among the parties hereto and
thereto and supersede
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all prior agreements and understandings relating to the subject matter hereof
and thereof.
Section 11.14 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of each Agent
and each Lender to enter into or maintain business relationships with the
Borrower or any of its Affiliates beyond the relationships specifically
contemplated by this Agreement and the other Loan Documents.
Section 11.15 Directly or Indirectly. If any provision in this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person, whether or not
expressly specified in such provision.
Section 11.16 Reliance on and Survival of Various Provisions. All
covenants, agreements, statements, represen tations and warranties made herein
or in any certificate delivered pursuant hereto (i) shall be deemed to have been
relied upon by each of the Agents and the Lenders notwithstanding any
investigation heretofore or hereafter made by them and (ii) shall survive the
execution and delivery of the Notes and shall continue in full force and effect
so long as any Note is outstanding and unpaid. Notwithstanding anything herein
which may be construed to the contrary (including, without limitation, Article 5
hereof), any right to indemnification hereunder, including, without limitation,
rights pursuant to Sections 2.10, 2.12, 5.11, 10.3 and 11.2 hereof, shall
survive the termination of this Agreement and the payment and performance of all
other Obligations.
Section 11.17 Senior Debt. The Indebtedness of the Borrower evidenced
by the Notes is secured by the Security Documents and is intended by the parties
hereto to be in parity with the Interest Rate Hedge Agreements and senior in
right of payment to all other Indebtedness of the Borrower.
Section 11.18 Obligations Several. The obligations of each of the
Agents and the Lenders hereunder are several, not joint.
Section 11.19 Confidentiality. The Lenders shall hold all non-public,
proprietary or confidential information (which has been identified as such by
the Borrower) obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential information
of this nature and in accordance with safe and sound banking practices; however,
the Lenders may make disclosure of any such information to their
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examiners, Affiliates, outside auditors, counsel, consultants, appraisers and
other professional advisors in connection with this Agreement or as reasonably
required by any proposed syndicate member or any proposed transferee or
participant in connection with the contemplated transfer of any Note or
participation therein or as required or requested by any governmental authority
or representative thereof or in connection with the enforcement hereof or of any
Loan Document or related document or pursuant to legal process or with respect
to any litigation between or among the Borrower and any of the Lenders or
involving any Lender. In no event shall any Lender be obligated or required to
return any materials furnished to it by the Borrower. The foregoing provisions
shall not apply to a Lender with respect to information that (i) is or becomes
generally available to the public (other than through such Lender), (ii) is
already in the possession of such Lender on a nonconfidential basis, or (iii)
comes into the possession of such Lender in a manner not involving a breach of a
duty of confidentiality owing to the Borrower.
ARTICLE 12
Waiver of Jury Trial
Section 12.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON
BEHALF OF ITS SUBSIDIARIES, THE UNRESTRICTED SUBSIDIARIES AND THE VCS
SUBSIDIARY, AND EACH OF THE AGENTS AND THE LENDERS, HEREBY AGREE TO WAIVE AND
HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR
PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF THE BORROWER'S SUBSIDIARIES
OR ANY UNRESTRICTED SUBSIDIARIES, ANY OF THE LENDERS, THE AGENTS, OR ANY OF
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION
12.1.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as of
the day and year first above written.
VANGUARD CELLULAR OPERATING CORP.,
a Delaware corporation
By: (Signature of Haynes G. Griffin)
Haynes G. Griffin
President
[CORPORATE SEAL]
Attest: (Signature of Richard C. Rowlenson)
Richard C. Rowlenson
Assistant Secretary
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 1
<PAGE>
THE BANK OF NEW YORK, as Administrative
Agent, Managing Agent and Lender
By: (Signature of James W. Whitaker)
James W. Whitaker
Vice President
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 2
<PAGE>
THE TORONTO-DOMINION BANK,
as Documentation Agent, Managing Agent
and Lender
By: (Signature of Neva Nesbitt)
Neva Nesbitt
Manager, Credit Administration
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 3
<PAGE>
TORONTO DOMINION (TEXAS), INC., as
Collateral Agent
By: (Signature of Melissa B. Nigro)
Melissa B. Nigro
Manager, Syndication and
Credit Administrations
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 4
<PAGE>
CIBC, INC., as Co-Agent and Lender
By: (Signature of Marisa J. Harney)
Name: Marisa J. Harney
Title: Director
Address:
425 Lexington Avenue
6th Floor
New York, NY 10017
Second Amended and
Restated Loan Agreement
Signature Page 5
[Signatures Continued on Next Page]
<PAGE>
LTCB TRUST COMPANY,
as Co-Agent and Lender
By: (Signature of John J. Sullivan)
Name: John J. Sullivan
Title: Executive Vice President
Address:
165 Broadway
49th Floor
New York, NY 10006
Attention: Business Administration
Department
With a copy to:
The Long-Term Credit Bank of Japan,
Limited
Atlanta Representative Office
245 Peachtree Center Avenue, N.E.
Suite 2801, Marquis One Tower
Atlanta, GA 30303
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 6
<PAGE>
NATIONSBANK, N.A., as Co-Agent and Lender
By: (Signature of Jennifer O. Bishop)
Name: Jennifer O. Bishop
Title: Vice President
Address:
901 Main Street
64th Floor
Dallas, TX 75202
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 7
<PAGE>
THE BANK OF NOVA SCOTIA, as Co-Agent and
Lender
By: (Signature of Vincent L. Fitzgerald, Jr.)
Name: Vincent L. Fitzgerald, Jr.
Title: Authorized Signatory
Address:
One Liberty Plaza
26th Floor
New York, NY 10006
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 8
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON, as
Co-Agent and Lender
By: (Signature of Mary E. Meduski)
Name: Mary E. Meduski
Title: Director
Address:
100 Federal Street
Mail Stop: 01-08-08
Boston, MA 02110
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 9
<PAGE>
ABN AMRO BANK N.V., as Lender
By: (Signature of Larry Kelley)
Name: Larry Kelley
Title: Group Vice President
By: (Signature of Steven L. Hipsman)
Name: Steven Hipsman
Title: Vice President
Address:
1 Ravinia Drive
Suite 1200
Atlanta, GA 30346
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 10
<PAGE>
UNION BANK OF CALIFORNIA, N.A., as Lender
By: (Signature of John C. Lea)
Name: John C. Lea
Title: Banking Officer
Address:
400 California Street
17th Floor
San Francisco, CA 94104
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 11
<PAGE>
BANK OF HAWAII, as Lender
By: (Signature of Elizabeth O. MacLean)
Name: Elizabeth O. MacLean
Title: Vice President
Address:
130 Merchant Street
20th Floor
Honolulu, HI 96813
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 12
<PAGE>
BANK OF MONTREAL, CHICAGO BRANCH,
as Lender
By: (Signature of Michael Andres)
Name: Michael Andres
Title: Director
Address:
430 Park Avenue
16th Floor
New York, NY 10022
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 13
<PAGE>
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Lender
By: (Signature of John P. Judge)
John P. Judge
Vice President and Co-Head
Address:
U.S. Corporate Banking Division
1251 Avenue of the Americas
New York, NY 10020-1104
Telephone: (212) 782-4383
Telecopy: (212) 782-4935
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 14
<PAGE>
BANQUE NATIONALE DE PARIS, as Lender
By: (Signature of Serge Desrayaud)
Name: Serge Desrayaud
Title: Vice President & Team Leader
By: (Signature of Pamela Lucash)
Name: Pamela Lucash
Title: Assistant Treasurer
Address:
499 Park Avenue
New York, NY 10022
Attn: Serge Desrayaud
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 15
<PAGE>
BANQUE PARIBAS, as Lender
By: (Signatgure of Nicole Cawley)
Name: Nicole Cawley
Title: Vice President
By: (Signaturte of Cindy Hewitt)
Name: Cindy Hewitt
Title: Vice President
Address:
787 7th Avenue
32nd Floor
New York, NY 10019
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 16
<PAGE>
BARCLAYS BANK PLC, as Lender
By: (Signature of James Downey)
James Downey
Associate Director
Address:
388 Market Street
Suite 1700
San Francisco, CA 94114
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 17
<PAGE>
CoBANK, ACB, as Lender
By: (Signature of Ann F. Appas)
Name: Ann F. Appas
Title: Vice President
Address:
200 Galleria Parkway, N.W.
Suite 1900
Atlanta, GA 30339
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 18
<PAGE>
CORESTATES BANK, N.A., as Lender
By: (Signature of Chris Kalmbach)
Name: Chris Kalmbach
Title: Vice President
Address:
1339 Chestnut Street
Philadelphia, PA 19107
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 19
<PAGE>
CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as
Lender
By: (Signature of James E. Morris)
James E. Morris
Authorized Signature
Address:
1301 Avenue of the Americas
New York, NY 10019
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 20
<PAGE>
FIRST HAWAIIAN BANK, as Lender
By: (Signature of William B. Schink)
Name: William B. Schink
Title: Vice President
Address:
1132 Bishop Street
19th Floor
Honolulu, HI 96813
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 21
<PAGE>
THE FIRST NATIONAL BANK OF MARYLAND, as
Lender
By: (Signature of Timothy A. Knabe)
Timothy A. Knabe
Vice President
Address:
25 South Charles Street
18th Floor
Baltimore, MD 21201
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 22
<PAGE>
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Lender
By: (Signatgure of Jim Redman)
Name: Jim Redman
Title: Senior Vice President
Address:
301 South College Street
One First Union Center
TW-19
Charlotte, NC 28288-0735
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 23
<PAGE>
FLEET NATIONAL BANK, as Lender
By: (Signature of Paula H. Canb)
Name: Paula H. Canb
Title: Vice President
By: (Signature of Jeffrey R. Crane)
Name: Jeffrey R. Crane
Title: Banking Officer
Address:
Media & Communications
Mail Code MAB0F10C
75 State Street
Boston, MA 02109
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 24
<PAGE>
FLEET NATIONAL BANK f/k/a FLEET NATIONAL
BANK OF CONNECTICUT, as Lender
By: (Signature of Paula H. Lang)
Name: Paula H. Lang
Title: Vice President
By: (Signature of Jeffrey R. Crane)
Name: Jeffrey R. Crane
Title: Banking Officer
Address:
Media & Communications
Mail Code MAB0F10C
75 State Street
Boston, MA 02109
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 25
<PAGE>
MERIDIAN BANK, as Lender
By: (Signature of David W. Mills)
Name: David W. Mills
Title: Vice President
Address:
One Liberty Place
Suite 3600
1650 Market Street
Philadelphia, PA 19103
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 26
<PAGE>
NATWEST BANK N.A., as Lender
By: (Signature of Jeffrey H. Hoff)
Name: Jeffrey H. Hoff
Title: Vice President
Address:
175 Water Street
28th Floor
New York, NY 10038
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 27
<PAGE>
ROYAL BANK OF CANADA, as Lender
By: (Signature of Thomas M. Byrer)
Name: Thomas M. Bryer
Title: Manager
Address:
Grand Cayman (North America No. 1) Branch
c/o New York Branch
Financial Square, 23rd Floor
New York, NY 10005-3531
Attention: Manager, Credit
Administration
Telephone: (212) 428-6311
Telecopy: (212) 428-2372
With a copy to:
Royal Bank of Canada
Financial Square, 24th Floor
New York, NY 10005-3531
Attention: Tom Byrne
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 28
<PAGE>
SOCIETE GENERALE, as Lender
By: (Signature of John Sadik-Khan)
Name: John Sadik-Khan
Title: Vice President
Address:
1221 Avenue of the Americas
11th Floor
New York, NY 10020
[Signatures Continued on Next Page]
Second Amended and
Restated Loan Agreement
Signature Page 29
<PAGE>
THE SUMITOMO TRUST & BANKING CO., LTD.,
NEW YORK BRANCH, as Lender
By: (Signature of Suraj P. Bhatia)
Name: Suraj P. Bhatia
Title: Senior Vice President
Address:
527 Madison Avenue
6th Floor
New York, NY 10022
Second Amended and
Restated Loan Agreement
Signature Page 30
<PAGE>
<PAGE>
THIS DOCUMENT IS A COPY OF THE EXHIBIT 4(d)(2) TO FORM 10-Q
FILED ON MAY 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
VCOC SECURITY AGREEMENT
THIS VCOC SECURITY AGREEMENT (this "Agreement"), made as of the 10th
day of April, 1996 by Vanguard Cellular Operating Corp., a Delaware corporation
("VCOC"), in favor of Toronto Dominion (Texas), Inc., as collateral agent for
itself and on behalf of the Agents and the Lenders described below (the
"Collateral Agent"),
W I T N E S S E T H
IN CONSIDERATION of the execution and delivery of the Second Amended
and Restated Loan Agreement dated as of April 10, 1996 (as amended, modified or
supplemented from time to time, the "Loan Agreement") by and among VCOC, the
Lenders signatory thereto (together with any other financial institution which
subsequently becomes a `Lender' under the Loan Agreement, as such term is
defined therein, the "Lenders"), CIBC, Inc., LTCB Trust Company, NationsBank,
N.A., The Bank of Nova Scotia and The First National Bank of Boston, as
co-agents (the "Co-Agents"), The Bank of New York as administrative agent (the
"Administrative Agent"), The Toronto-Dominion Bank as documentation/review agent
(the "Documentation Agent"), The Bank of New York and The Toronto-Dominion Bank,
as managing agents (the "Managing Agents") and the Collateral Agent (the
Collateral Agent, the Co-Agents, the Administrative Agent, the Documentation
Agent and the Managing Agents are collectively referred to herein as the
"Agents"), pursuant to which and subject to the terms and conditions whereof the
Lenders have agreed as of the Agreement Date to lend to VCOC amounts not to
exceed $675,000,000 (the "Loans"), and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, VCOC hereby
unconditionally grants and assigns to the Collateral Agent a continuing security
interest in and security title to (hereinafter referred to as the "Security
Interest"), except as expressly stated herein, all of its property and assets
and all additions thereto and replacements thereof, and all other property
whether now owned or hereafter created, acquired or reacquired by VCOC,
including, without limitation:
Inventory
All of VCOC's inventory and supplies of whatsoever nature and kind and
wheresoever situated, including, without limitation, raw materials, components,
work in process, finished goods, goods in transit and packing and shipping
materials, accretions and accessions thereto, trust receipts and similar
documents covering the same products (the "Inventory");
1
<PAGE>
Accounts
All right to payment for goods sold or leased or for services rendered,
expressly including, without limitation, the provision of cellular telephone
services and cellular telephone sales and leasing, whether or not earned by
performance, including, without limiting the generality of the foregoing, all
agreements with and sums due from customers and other Persons, and all books and
records recording, evidencing or relating to such rights or any part thereof
(the "Accounts");
Equipment
All machinery, equipment and supplies (installed and uninstalled) not
included in Inventory above, including motor vehicles and accretions and
accessions thereto and expressly including, without limitation of the foregoing,
towers, antennas and equipment located at mobile telephone switching office
facilities; any distribution systems and all components thereof, including but
not limited to hardware, cables, fiber optic cables, switches, CODECs, computer
equipment, amplifiers and associated devices; and any other equipment used in
connection with VCOC's business or otherwise owned by VCOC (the "Equipment");
Contracts and Leases
All (a) construction contracts, subscriber contracts, customer service
agreements, management agreements, rights of way, easements, pole attachment
agreements, transmission capacity agreements, public utility contracts and other
agreements to which VCOC is a party, whether now existing or hereafter arising,
including without limitation those listed on Exhibit A hereto (the "Contracts");
(b) lease agreements for personal property to which VCOC is a party, whether now
existing or hereafter arising including without limitation those listed on
Exhibit B hereto (the "Leases"); and (c) other contracts and contractual rights,
remedies or provisions now existing or hereafter arising in favor of VCOC (the
"Other Contracts");
General Intangibles
All general intangibles including personal property not included above,
such as, without limitation, all goodwill, trademarks, trademark applications,
trade names, trade secrets, industrial designs, other industrial or intellectual
property or rights therein, whether under license or otherwise, claims for tax
refunds and tax refund amounts (the "Intangibles");
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Licenses
To the extent permitted by Applicable Law and subject to Sections 22
and 24 hereof, all franchises, Licenses, permits and operating rights
authorizing or relating to VCOC's rights to operate and maintain a cellular
telecommunications or similar business including, without limitation, the
Licenses, all as more particularly described on Exhibit C attached hereto (the
"Licenses");
Furniture and Fixtures
All furniture and fixtures in which VCOC has an interest
(the "Furniture and Fixtures");
Miscellaneous Items
All goods, chattel paper, documents, instruments, supplies, choses in
action, claims, money, deposits, certificates of deposit, stock or share
certificates, and licenses and other rights in intellectual property not
included above, but expressly excluding any capital stock or share certificates
of Geotek Communications, Inc., to the extent that such capital stock or share
certificates constitute "margin stock" within the meaning of Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System (the
"Miscellaneous Items"); and
Proceeds
All products and proceeds of any of the above, and all proceeds of any
loss of, damage to or destruction of the above, whether insured or not insured,
and all other proceeds of any sale, lease or other disposition of any property
or interest therein referred to above, or of any franchise, license, permit or
operating right issued by the FCC or any other governmental or regulatory body
or agency, whether or not constituting a License, including, without limitation,
the proceeds of the sale or other disposition of any License, together with all
proceeds of any policies of insurance covering any or all of the above, the
proceeds of any award in condemnation with respect to any of the property of
VCOC, any rebates or refunds, whether for taxes or otherwise, and all proceeds
of any such proceeds (the "Proceeds").
The Inventory, Accounts, Equipment, Contracts, Other
Contracts, Leases, Intangibles, Licenses, Furniture and Fixtures,
Miscellaneous Items and Proceeds, as described above, are
hereinafter collectively referred to as the "Collateral."
This Agreement and the Security Interest secure the payment
and performance of all obligations of VCOC to the Lenders and the
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<PAGE>
Agents, or any of them, under the Loan Agreement, the Notes and every other Loan
Document to which VCOC is party and any extensions, renewals or amendments
thereto, and all other Obligations (as defined in the Loan Agreement) however
created, acquired, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due (all of the
foregoing obligations being hereinafter collectively referred to as the
"Obligations").
TO HAVE AND TO HOLD UNTO the Collateral Agent, for the benefit of
itself and on behalf of the Agents and the Lenders, their successors and assigns
forever, upon and subject to the following terms and conditions:
1. For purposes of this Agreement, capitalized terms used herein, and
not otherwise defined herein, shall have the meanings ascribed thereto in the
Loan Agreement.
2. VCOC hereby authorizes the Collateral Agent to file such financing
statements and such other documents as the Collateral Agent may deem necessary
or desirable to protect or perfect the interest of the Lenders and the Agents in
the Collateral, and VCOC further irrevocably appoints the Collateral Agent as
VCOC's attorney-in-fact, with a power of attorney to execute on behalf of VCOC
such UCC financing statement forms as the Collateral Agent may from time to time
deem reasonably necessary or desirable to protect or perfect such interest in
the Collateral. Such power of attorney is coupled with an interest and shall be
irrevocable. In addition, VCOC agrees to make, execute, deliver or cause to be
done, executed and delivered all such further acts, documents and things as the
Collateral Agent may reasonably require for the purpose of perfecting or
protecting the rights of the Lenders and the Agents hereunder or otherwise
giving effect to this Agreement, all promptly upon request therefor.
3. VCOC represents and warrants to the Lenders and the
Agents that:
(a) the execution of this Agreement and the fulfillment of the
terms hereof will not result in a breach of any of the terms or
provisions of, or constitute a default under, VCOC's Articles of
Incorporation or By-Laws as presently in effect, or any order, rule or
regulation applicable to VCOC of any court or of any Federal or state
regulatory body or administrative agency or other governmental body
having jurisdiction over VCOC, or result in the termination or
cancellation or breach of any inden ture, mortgage, deed of trust, deed
to secure debt, lease or other agreement or instrument to which VCOC is
party or by which it is bound or affected;
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(b) VCOC has taken all necessary corporate action to authorize
the execution and delivery of this Agreement, and this Agreement, when
executed and delivered, will be the valid and binding obligation of
VCOC enforceable in accordance with its terms, subject only to the
following qualifications:
(i) certain equitable remedies are discretionary and, in
particular, may not be available where damages are considered
an adequate remedy at law,
(ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar
laws affecting enforcement of creditors' rights generally
(insofar as any such law relates to the bankruptcy, insolvency
or similar event of VCOC), and
(iii) enforcement as to the Licenses is limited by
FCC rules and regulations restricting the transfer of
the Licenses;
(c) Exhibit A attached hereto and incorporated herein by this
reference sets forth a complete and accurate list of the Contracts in
effect on the date hereof which provide for aggregate payments over the
life of each such Contract in excess of $250,000 or which are otherwise
material to VCOC, and VCOC will furnish copies thereof to the Lenders
and the Agents upon the request of the Collateral Agent; and
(d) Exhibit B attached hereto and incorporated herein by this
reference sets forth a complete and accurate list of all Leases
providing for aggregate payments over the life of any single Lease in
excess of $100,000, to which VCOC is party in effect on the date
hereof, and VCOC will furnish copies thereof to the Lenders and the
Agents upon the request of the Collateral Agent.
4. VCOC further represents and warrants that the Security Interest in
the Collateral granted hereunder shall constitute at all times a valid and
perfected first priority security interest (subject only to Permitted Liens),
vested in the Collateral Agent in and upon the Collateral, free of any Liens
except for Permitted Liens. VCOC shall take or cause to be taken such acts and
actions as shall be necessary or appropriate to assure that the Security
Interest in the Collateral shall not become subordinate or junior to the
security interests, liens or claims of any other Person, and that the Collateral
shall not otherwise be or become subject to any Lien, except for Permitted
Liens.
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<PAGE>
5. VCOC further represents and warrants that it now keeps all of its
records concerning its Accounts, Contracts, Leases, Other Contracts and
Intangibles at its chief executive office, which is the address set forth with
respect to VCOC in Section 11.1 of the Loan Agreement. VCOC covenants and agrees
that it shall not keep any of such records at any other address, unless written
notice thereof is given to the Collateral Agent at least thirty (30) days prior
to the creation of any new address for the keeping of such records. VCOC further
agrees that it shall promptly advise the Collateral Agent, in writing making
reference to this Section 5 of this Agreement, of the opening of any material
new place of business the closing of any existing material place of business, or
any change in the location of the place where it keeps the Collateral.
6. The parties intend that, to the extent permitted by Applicable Law,
the Collateral shall remain personal property irrespective of the manner of its
attachment or affixation to realty.
7. Any and all injury to, or loss or destruction of, the Collateral
shall be at VCOC's risk, and shall not release VCOC from its obligations
hereunder. VCOC agrees not to sell, transfer, assign, dispose of, mortgage,
grant a security interest in or encumber any of the Collateral except as
permitted under the Loan Agreement. VCOC agrees to maintain in force such
insurance with respect to the Collateral as is required under the Loan
Agreement. VCOC agrees to pay all required taxes, liens and assessments upon the
Collateral, its use or operation, as required under the Loan Agreement. VCOC
further agrees that the Collateral Agent may, but shall in no event be obligated
to, insure any of the Collateral in such form and amount as the Collateral Agent
may deem necessary or desirable if VCOC fails to obtain insurance as required by
the Loan Agreement, and that the Collateral Agent may pay or discharge any taxes
or Liens (which are not Permitted Liens) on any of the Collateral, and VCOC
agrees to pay any such sum so expended by the Collateral Agent, with interest at
the Default Rate, and such interest shall be deemed to be a part of the
Obligations secured by the Collateral under the terms of this Agreement.
8. VCOC shall (i) fulfill, perform and observe each and every material
condition and covenant contained in any of the Contracts, the Other Contracts or
the Leases, (ii) give prompt notice to the Collateral Agent of any claim of
default under any Contract, Other Contract or Lease given to VCOC or by VCOC,
(iii) at the sole cost and expense of VCOC, enforce the performance and
observance of each and every material covenant and condition of the Contracts,
the Other Contracts and the Leases and (iv) appear in and defend any action
growing out of or in any manner connected with any Contract, Other Contract or
Lease. The rights
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<PAGE>
and interests granted to the Collateral Agent hereunder include all of VCOC's
rights and title (i) to modify the Contracts, the Other Contracts and the
Leases, (ii) to terminate the Contracts, the Other Contracts and the Leases and
(iii) to waive or release the performance or observance of any obligation or
condition of the Contracts, the Other Contracts and the Leases; provided,
however, that VCOC shall have the right to exercise these rights in a fashion
consistent with this Agreement and the Loan Agreement prior to any Default (as
defined below), and that these rights shall not be exercised by the Collateral
Agent prior to a Default (as defined below).
9. Upon the occurrence and during the continuation of an Event of
Default (hereinafter, a "Default"), the Lenders and the Agents shall have such
rights and remedies as are set forth in the Loan Agreement and herein; all the
rights, powers and privileges of a secured party under the Uniform Commercial
Code of the State of New York and any other applicable jurisdiction; and all
other rights and remedies available to the Lenders and the Agents, or any of
them, at law or in equity, including, without limitation, the right to sell or
dispose of the Collateral in accordance with Applicable Law. VCOC covenants and
agrees that any notification of intended disposition of any Collateral, if such
notice is required by law, shall be deemed reasonably and properly given if
given in the manner provided for in paragraph 19 hereof at least ten (10) days
prior to such disposition. The Collateral Agent shall have the right to the
appointment of a receiver for the properties and assets of VCOC, and VCOC hereby
consents to such rights and to such appointment and hereby waives any objection
VCOC may have thereto and hereby waives the right to have a bond or other
security posted by the Collateral Agent or any other Person in connection
therewith. VCOC agrees, after the occurrence of a Default, to take any actions
that the Collateral Agent may reasonably request in order to enable the
Collateral Agent to obtain and enjoy the full rights and benefits granted to the
Collateral Agent under this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, VCOC shall, at VCOC's cost and
expense, use its best efforts to assist in obtaining all approvals of the FCC or
the State of New York Public Service Commission, as applicable, which are then
required by law for or in connection with any action or transaction contemplated
by this Agreement or Article 9 of the Uniform Commercial Code as in effect in
any applicable jurisdiction, and, at the Collateral Agent's request, prepare,
sign and file with the FCC or the State of New York Public Service Commission,
as applicable, the assignor's or transferor's portion of any application or
applications for consent to the assignment of the Licenses or transfer of
control thereof necessary or appropriate under the FCC's or the State of New
York Public Service Commission's, as applicable, rules for approval of any sale
or transfer or of the
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<PAGE>
Collateral Agent's remedies under this Agreement. The Collateral
Agent shall have the right, in connection with the issuance of
any order for relief in a bankruptcy proceeding to petition the
bankruptcy court for the transfer of control or assignment of the
Licenses to a receiver, trustee, transferee, or similar official
or to any purchaser of the Collateral pursuant to any public or
private sale, foreclosure or other exercise of remedies available
to the Collateral Agent, all as permitted by Applicable Law. All
amounts realized or collected through the exercise of remedies
hereunder shall be applied as provided in the Loan Agreement.
10. Upon the occurrence of a Default, the Collateral Agent or its
designee, may proceed to perform any and all of the obligations of VCOC
contained in any of the Contracts, Other Contracts or Leases and exercise any
and all rights of VCOC therein contained as fully as VCOC itself could. VCOC
hereby appoints the Collateral Agent its attorney-in-fact, with power of
substitution, to take such action, execute such documents, and perform such
work, as the Collateral Agent may deem appropriate in exercise of the rights and
remedies granted the Lenders and the Agents, or any of them, herein or in any
other Loan Document. The powers herein granted shall include, but not be limited
to, powers to: (i) sue on the Contracts, the Other Contracts or the Leases; (ii)
seek all governmental approvals (other than FCC approvals) required for the
operation of the business of VCOC; (iii) modify or terminate the Contracts, the
Other Contracts and the Leases; and (iv) waive or release the performance or
observance of any obligation under any of the Contracts, Other Contracts or
Leases. The power of attorney granted herein is coupled with an interest and
shall be irrevocable.
11. Upon the occurrence of a Default, should VCOC fail to perform or
observe any covenant or comply with any condition contained in any of the
Contracts, the Other Contracts or the Leases, then the Collateral Agent may, but
without obligation to do so and without releasing VCOC from its obligation to do
so, perform such covenant or condition and, to the extent that the Collateral
Agent shall incur any costs or pay any expenses in connection therewith,
including any reasonable costs or expenses of litigation associated therewith,
such costs, expenses or payments shall be included in the Obligations secured
hereby and shall bear interest from the payment of such costs or expenses by the
Collateral Agent at the Default Rate. None of the Lenders or the Agents shall be
obliged to perform or discharge any obligation of VCOC under any of the
Contracts, the Other Contracts or the Leases, and, except as may result from the
gross negligence or willful misconduct of the Person seeking indemnification as
determined by a final order of a court of competent jurisdiction, VCOC agrees to
indemnify and hold harmless each Lender and each Agent against any and all
liability, loss or damage which any such Person may incur under
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<PAGE>
any of the Contracts, the Other Contracts or the Leases or under or by reason of
this Agreement, and any and all claims and demands whatsoever which may be
asserted against VCOC by reason of an act of any Lender or any Agent under any
of the terms of this Agreement or under the Contracts, the Other Contracts or
the Leases.
12. VCOC hereby further appoints the Collateral Agent as its
attorney-in-fact, with power of substitution, with authority to collect all
Accounts, to endorse the name of VCOC on any note, acceptance, check, draft,
money order or other evidence of debt or of payment which constitutes a portion
of the Collateral and which may come into the possession of the Lenders and the
Agents, or any of them, and generally to do such other things and acts in the
name of VCOC with respect to the Collateral as are necessary or appropriate to
protect or enforce the rights hereunder of the Lenders and the Agents. VCOC
further authorizes the Collateral Agent, effective upon the occurrence of a
Default, to compromise and settle or to sell, assign or transfer or to ask,
collect, receive or issue any and all claims possessed by VCOC which constitute
a portion of the Collateral, all in the name of VCOC. After deducting all
reasonable expenses and charges (including the Collateral Agent's attorneys'
fees) of retaking, keeping, storing and selling the Collateral, the Collateral
Agent may apply the proceeds in payment of any of the Obligations in the order
of application set forth in the Loan Agreement. The power of attorney granted
herein is coupled with an interest and shall be irrevocable. VCOC agrees that if
steps are taken by the Collateral Agent to enforce its rights hereunder, or to
realize upon any of the Collateral, VCOC shall pay to the Collateral Agent the
amount of the Collateral Agent's costs, including attorneys' fees, and VCOC's
obligation to pay such amounts shall be deemed to be a part of the Obligations
secured hereunder.
13. VCOC shall indemnify and hold harmless each Lender and each Agent
and any other Person acting hereunder for all losses, costs, damages, fees and
expenses whatsoever associated with the exercise of the powers of attorney
granted herein and shall release each Lender and each Agent and any other Person
acting hereunder from all liability whatsoever for the exercise of the foregoing
powers of attorney and all actions taken pursuant thereto, except, in either
event, in the case of gross negligence or willful misconduct by the Person
seeking indemnification as determined by a final order of a court of competent
jurisdiction.
14. VCOC agrees that the rights of the Lenders and the
Agents, or any of them, under this Agreement, the Loan Agreement,
any other Loan Document, or any other contract or agreement now
or hereafter in existence among the Lenders and the Agents and
VCOC or any Subsidiary of VCOC and any other obligors thereunder,
or any of them, shall be cumulative, and that each Lender and
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<PAGE>
each Agent may from time to time exercise such rights and such remedies as such
Person or Persons may have thereunder and under the laws of the United States or
any state, as applicable, in the manner and at the time that such Person or
Persons in its or their sole discretion desire, subject to the terms of such
agreements. VCOC further expressly agrees that the Lenders and the Agents shall
in no event be under any obligation to resort to any Collateral prior to
exercising any other rights that the Lenders and the Agents, or any of them, may
have against VCOC or any Subsidiary of VCOC or any other obligor or any of their
respective properties, nor shall the Lenders and the Agents be obliged to resort
to any other collateral or security for the Obligations, other than the
Collateral, prior to any exercise of rights against VCOC and its property
hereunder.
15. VCOC hereby acknowledges that the Obligations arose out of a
commercial transaction, and agrees that if a Default shall occur, the Collateral
Agent shall have the right to immediate possession without notice or a hearing,
and hereby knowingly and intelligently waives any and all rights it may have to
any notice and posting of a bond by the Lenders and the Agents, or any of them,
prior to seizure by the Collateral Agent or any of its transferees, assigns or
successors in interest, of the Collateral or any portion thereof.
16. No transfer or renewal, extension, assignment or termination of
this Agreement or of the Loan Agreement or of any other Loan Document, or of any
instrument or document executed and delivered by VCOC or any other obligor to
the Lenders and the Agents, or any of them, nor additional advances made by the
Lenders and the Agents, or any of them, to VCOC, nor the taking of further
security, nor the retaking or re-delivery of the Collateral to VCOC by the
Lenders and the Agents, or any of them, nor any other act of the Lenders and the
Agents, or any of them, shall release VCOC from any Obligation, except a release
or discharge executed in writing by the Collateral Agent in accordance with the
Loan Agreement with respect to such Obligation or upon full payment, performance
and satisfaction of all Obligations and termination of the Commitments. None of
the Lenders or the Agents shall by any act, delay, omission or otherwise, be
deemed to have waived any of its or their rights or remedies hereunder, unless
such waiver is in writing and signed by the Collateral Agent in accordance with
the Loan Agreement and then only to the extent therein set forth. A waiver by
the Lenders and the Agents, or any of them, of any right or remedy on any
occasion shall not be construed as a bar to the exercise of any such right or
remedy which any such Person would otherwise have had on any other occasion.
17. Neither this Agreement nor any of VCOC's rights or
obligations hereunder may be assigned by VCOC to any other Person
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<PAGE>
without the consent of all the Agents and the Lenders. VCOC agrees that this
Agreement or the rights hereunder may in the discretion of the Lenders and the
Agents, as applicable, be assigned in whole or in part in connection with any
assignment of the Loan Agreement or the Indebtedness evidenced thereby, as
permitted thereunder. In the event this Agreement or the rights hereunder are so
assigned by any of the Lenders, the Co-Agents, the Agents, the Managing Agents,
the Administrative Agent, the Documentation Agent and the Collateral Agent, the
terms "Lenders", "Co-Agents", "Agents", "Managing Agents", "Administrative
Agent", "Documentation Agent" or "Collateral Agent" wherever used herein shall
be deemed, as applicable, to refer to and include any such assignee.
18. The Collateral Agent is hereby authorized to date this Agreement as
of the date signed by VCOC. This Agreement shall apply to and bind the
respective successors and assigns of VCOC and inure to the benefit of the
successors and permitted assigns of the Lenders and the Agents.
19. All notices and other communications required or permitted
hereunder shall be in writing and shall be given in the manner prescribed in
Section 11.1 of the Loan Agreement.
20. THE PROVISIONS OF THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED, AND ALL RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO DETERMINED, IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK. THIS AGREEMENT,
TOGETHER WITH ALL DOCUMENTS REFERRED TO HEREIN, CONSTITUTES THE ENTIRE AGREEMENT
AMONG VCOC, THE LENDERS AND THE AGENTS WITH RESPECT TO THE MATTERS ADDRESSED
HEREIN, AND MAY NOT BE MODIFIED EXCEPT BY A WRITING EXECUTED BY THE COLLATERAL
AGENT (WITH THE REQUISITE CONSENT OF THE LENDERS AS PROVIDED IN THE LOAN
AGREEMENT) AND VCOC AND DELIVERED BY THE COLLATERAL AGENT TO VCOC IN ACCORDANCE
WITH THE LOAN AGREEMENT.
21. If any paragraph or part thereof of this Agreement shall for any
reason be held or adjudged to be invalid, illegal or unenforceable by any court
of competent jurisdiction, such paragraph or part thereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of this Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
22. Notwithstanding anything herein which may be construed to the
contrary, no action shall be taken by the Collateral Agent with respect to the
Licenses issued by the FCC or any governmental or other authority unless and
until all requirements of Applicable Law requiring notice to, or consent or
approval of such action by, the FCC or any governmental or other authority,
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have been satisfied, including, without limitation, any required approval of the
FCC under the Federal Communications Act of 1934 as amended, and any applicable
rules and regulations thereunder, including, without limitation, the provision
for ten (10) days' notice to the FCC and to VCOC of any such action to the
extent required by 47 C.F.R. ss. 22.937(f). VCOC covenants that upon request of
the Collateral Agent it will cause to be filed such applications and take such
other action as may be requested by the Collateral Agent to obtain consent or
approval of the FCC or any governmental or other authority which has granted any
License to VCOC to any action contemplated by this Agreement and to give effect
to the Security Interest of the Collateral Agent, including, without limitation,
the execution of an application for consent by the FCC to an assignment or
transfer involving a change in ownership or control pursuant to the provisions
of the Federal Communications Act of 1934 as amended.
23. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument.
24. The parties acknowledge their intent that, upon the occurrence of a
Default, the Collateral Agent shall receive, to the fullest extent permitted by
Applicable Law and governmental policy (including, without limitation, the
rules, regulations and policies of the FCC), all rights necessary or desirable
to obtain, use or sell the Collateral, and to exercise all remedies available to
it under this Agreement, the Uniform Commercial Code as in effect in any
applicable jurisdiction, or other Applicable Law. The parties further
acknowledge and agree that, in the event of changes in law or governmental
policy occurring subsequent to the date hereof, that affect in any manner the
Collateral Agent's rights of access to, or use or sale of, the Collateral, or
the procedures necessary to enable the Collateral Agent to obtain such rights of
access, use or sale, the Collateral Agent and VCOC shall amend this Agreement in
such manner as the Collateral Agent shall reasonably request, in order to
provide the Collateral Agent such rights to the greatest extent possible
consistent with Applicable Law and governmental policy.
25. Each reference herein to any right granted to, benefit conferred
upon or power exercisable by the "Collateral Agent" shall be a reference to the
Collateral Agent for the benefit of all the Lenders and the Agents, and each
action taken or right exercised hereunder shall be deemed to have been so taken
or exercised by the Collateral Agent for the benefit of and on behalf of all the
Lenders and the Agents.
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26. Notwithstanding anything herein which may be construed to the
contrary, any right to indemnification hereunder, including, without limitation,
rights pursuant to Section 12 hereof, shall survive the termination of this
Agreement and the payment and performance of all other Obligations.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
affixed their seals, by and through their duly authorized representatives, as of
the day and year first written above.
BORROWER: VANGUARD CELLULAR OPERATING CORP.,
a Delaware corporation
By:(Signature of Haynes G. Griffin
appears here)
Haynes G. Griffin
President
[CORPORATE SEAL] Attest: (Signature of Richard C.
Rowlenson appears here)
Richard C. Rowlenson
Assistant Secretary
COLLATERAL AGENT: TORONTO DOMINION (TEXAS), INC.
By: (Signature of Sophia D. Sgarbi
appears here)
Name:Sophia D. Sgarbi
Title: Vice President
Exhibit A - Contracts
Exhibit B - Leases
Exhibit C - Licenses
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EXHIBIT A TO SECURITY AGREEMENT
CONTRACTS
<PAGE>
EXHIBIT B TO SECURITY AGREEMENT
LEASES
<PAGE>
EXHIBIT C TO SECURITY AGREEMENT
LICENSES
<PAGE>
<PAGE>
THIS DOCUMENT IS A COPY OF THE EXHIBIT 4(d)(3) TO FORM 10-Q
FILED ON MAY 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
SECOND AMENDED AND RESTATED
MASTER SUBSIDIARY SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED MASTER SECURITY AGREEMENT (this
"Agreement"), made as of the 10th day of April, 1996 by Altoona CellTelCo, a
District of Columbia general partnership; Atlantic Cellular Telephone Corp., a
North Carolina corporation; Binghamton CellTelCo, a District of Columbia general
partnership; Binghamton Cellular Telephone Corp., a North Carolina corporation;
Cellular Directory Corporation, a North Carolina corporation; Harrisburg
Cellular Telephone Company, a Pennsylvania general partnership; North Carolina
Cellular Holding Corp., a North Carolina corporation; Orange County Cellular
Telephone Corp., a North Carolina corporation; Pennsylvania Cellular Telephone
Corp., a North Carolina corporation; Piscataqua Cellular Telephone Corp., a
North Carolina corporation; PLMRS Narrowband Corp., a North Carolina
corporation; Teleflex Information Systems, Inc., a North Carolina corporation;
Vanguard Binghamton, Inc. (f/k/a Crowley Cellular Telecommunications Binghamton,
Inc.), a Delaware corporation; Vanguard Cellular Corp., a North Carolina
corporation; Vanguard Cellular Financial Corp., a North Carolina corporation;
Vanguard Cellular Holding Corp., a Delaware corporation; Vanguard Cellular
Systems of South Carolina, Inc., a North Carolina corporation; Vanguard
Communications, Inc., a Delaware corporation; Vanguard India, Inc., a Delaware
corporation; Warren and Lewis, Ltd., a Virginia corporation; West Virginia
Cellular Telephone Corp., a West Virginia corporation; and Western Florida
Cellular Telephone Corp., a North Carolina corporation (each a "Subsidiary" and,
collectively, the "Subsidiaries) in favor of Toronto Dominion (Texas), Inc., as
collateral agent for itself and on behalf of the Agents and the Lenders
described below (the "Collateral Agent"),
W I T N E S S E T H
WHEREAS, Vanguard Cellular Systems, Inc., a North Carolina corporation
("Vanguard"), the Lenders signatory thereto (together with any other financial
institution which subsequently becomes a 'Lender' under the Loan Agreement
defined below, as such term is defined therein, the "Lenders"), CIBC, Inc., LTCB
Trust Company, NationsBank, N.A., The Bank of Nova Scotia and The First National
Bank of Boston as co-agents (the "Co-Agents"), The Bank of New York as
administrative agent (the "Administrative Agent"), The Toronto-Dominion Bank as
documentation/review agent (the "Documentation Agent"), The Bank of New York and
The Toronto- Dominion Bank as managing agents (the "Managing Agents"), Toronto
Dominion (Texas), Inc. as collateral agent (the "Collateral Agent") (the
Co-Agents, the Administrative Agent, the
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Documentation Agent, the Managing Agents and the Collateral Agent are
collectively referred to as the "Agents") are parties to that certain Amended
and Restated Loan Agreement dated as of December 23, 1994, as amended by First
Amendment thereto dated as of December 19, 1995, as assigned to and assumed by
Vanguard Cellular Operating Corp. (the "Borrower") pursuant to that certain
Vanguard Assignment and Assumption Agreement dated as of April 10, 1996
(collectively, the "Prior Loan Agreement"), whereby the Lenders agreed to extend
loans to the Borrower; and
WHEREAS, in order to secure the Borrower's obligations to the Lenders
under the Prior Loan Agreement, the Subsidiaries have heretofore executed and
delivered to the Agents and the Lenders either (a) that certain Amended and
Restated Master Subsidiary Security Agreement dated as of December 23, 1994, (b)
that certain Subsidiary Security Agreement dated as of September 13, 1995 or (c)
that certain Subsidiary Security Agreement dated as of February 10, 1996
(collectively, the "Existing Subsidiary Security Agreements"); and
WHEREAS, the Borrower, the Agents and the Lenders have agreed to amend
and restate in its entirety the Prior Loan Agreement pursuant to the terms and
conditions of the Second Amended and Restated Loan Agreement dated as of April
10, 1996 (as amended, modified or supplemented from time to time, the "Loan
Agreement"); and
WHEREAS, pursuant to the Loan Agreement, the Lenders have agreed as of
the Agreement Date to lend to the Borrower amounts not exceeding $675,000,000 in
the aggregate (the "Loans") as evidenced by promissory notes from the Borrower
to the Lenders in such aggregate amount (the "Notes"); and
WHEREAS, the Subsidiaries desire to amend, restate, restructure, renew,
extend, consolidate and modify the Existing Subsidiary Security Agreements as
set forth herein; and
WHEREAS, this Agreement is intended to, and does hereby, amend,
restate, restructure, renew, extend, consolidate, supplement and modify the
Exisiting Subsidiary Security Agreements and the provisions of the Existing
Subsidiary Security Agreements are hereby superseded and replaced in their
entireties by the provisions hereof; and
WHEREAS, the Subsidiaries acknowledge and agree that the parties hereto
intend that the Existing Subsidiary Security Agreements and the collateral
furnished thereunder and hereunder shall secure, without interruption or
impairment of any kind, to the extent provided in the Master Subsidiary Guaranty
(as hereinafter defined) all existing indebtedness under the Prior Loan
Agreement as so amended, restated, restructured, renewed, extended,
consolidated, supplemented and modified under the Loan
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Agreement, the Notes and the other Loan Documents, together with all other
Obligations hereunder and the Subsidiaries, ratify, confirm and agree to
continue all Liens evidenced by the Existing Subsidiary Security Agreements;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the Subsidiaries, as a direct or indirect Subsidiary of
the Borrower, hereby unconditionally grants and assigns to the Collateral Agent
a continuing security interest in and security title to (hereinafter referred to
as the "Security Interest"), except as expressly stated herein, all of its
property and assets and all additions thereto and replacements thereof, and all
other property whether now owned or hereafter created, acquired or reacquired by
such Subsidiary, including, without limitation:
Inventory
All of such Subsidiary's inventory and supplies of whatsoever nature
and kind and wheresoever situated, including, without limitation, raw materials,
components, work in process, finished goods, goods in transit and packing and
shipping materials, accretions and accessions thereto, trust receipts and
similar documents covering the same products (the "Inventory");
Accounts
All right to payment for goods sold or leased or for services rendered,
expressly including, without limitation, the provision of cellular telephone
services and cellular telephone sales and leasing, whether or not earned by
performance, including, without limiting the generality of the foregoing, all
agreements with and sums due from customers and other Persons, and all books and
records recording, evidencing or relating to such rights or any part thereof
(the "Accounts");
Equipment
All machinery, equipment and supplies (installed and uninstalled) not
included in Inventory above, including motor vehicles and accretions and
accessions thereto and expressly including, without limitation of the foregoing,
towers, antennas and equipment located at mobile telephone switching office
facilities; any distribution systems and all components thereof, including but
not limited to hardware, cables, fiber optic cables, switches, CODECs, computer
equipment, amplifiers and associated devices; and any other equipment used in
connection with such Subsidiary's business or otherwise owned by such Subsidiary
(the "Equipment");
Contracts and Leases
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All (a) construction contracts, subscriber contracts, customer service
agreements, management agreements, rights of way, easements, pole attachment
agreements, transmission capacity agreements, public utility contracts and other
agreements to which such Subsidiary is a party, whether now existing or
hereafter arising, including without limitation those listed on Exhibit A hereto
(the "Contracts"); (b) lease agreements for personal property to which such
Subsidiary is a party, whether now existing or hereafter arising, including
without limitation those listed on Exhibit B hereto (the "Leases"); and (c)
other contracts and contractual rights, remedies or provisions now existing or
hereafter arising in favor of such Subsidiary (the "Other Contracts");
General Intangibles
All general intangibles including personal property not included above,
such as, without limitation, all goodwill, trademarks, trademark applications,
trade names, trade secrets, industrial designs, other industrial or intellectual
property or rights therein, whether under license or otherwise, claims for tax
refunds and tax refund amounts (the "Intangibles");
Licenses
To the extent permitted by Applicable Law and subject to Sections 22
and 24 hereof, all franchises, Licenses, permits and operating rights
authorizing or relating to such Subsidiary's rights to operate and maintain a
cellular telecommunications or similar business including, without limitation,
the Licenses, all as more particularly described on Exhibit C attached hereto
(the "Licenses");
Furniture and Fixtures
All furniture and fixtures in which such Subsidiary has an
interest (the "Furniture and Fixtures");
Miscellaneous Items
All goods, chattel paper, documents, instruments, supplies, choses in
action, claims, money, deposits, certificates of deposit, stock or share
certificates, and licenses and other rights in intellectual property not
included above, but expressly excluding any capital stock or share certificates
of Geotek Communications, Inc., to the extent that such capital stock or share
certificates constitute "margin stock" within the meaning of Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System (the
"Miscellaneous Items"); and
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Proceeds
All products and proceeds of any of the above, and all proceeds of any
loss of, damage to or destruction of the above, whether insured or not insured,
and all other proceeds of any sale, lease or other disposition of any property
or interest therein referred to above, or of any franchise, license, permit or
operating right issued by the FCC or any other governmental or regulatory body
or agency, whether or not constituting a License, including, without limitation,
the proceeds of the sale or other disposition of any License, together with all
proceeds of any policies of insurance covering any or all of the above, the
proceeds of any award in condemnation with respect to any of the property of
such Subsidiary, any rebates or refunds, whether for taxes or otherwise, and all
proceeds of any such proceeds (the "Proceeds").
The Inventory, Accounts, Equipment, Contracts, Other Contracts, Leases,
Intangibles, Licenses, Furniture and Fixtures, Miscellaneous Items and Proceeds,
as described above, are hereinafter collectively referred to as the
"Collateral."
This Agreement and the Security Interest secure payment and performance
of all obligations of each Subsidiary to the Lenders and the Agents, or any of
them, under the Second Amended and Restated Master Subsidiary Guaranty dated as
of April 10, 1996 amended, modified or supplemented from time to time, the
"Master Subsidiary Guaranty") given by the Subsidiaries for the benefit of the
Agents and the Lenders and the other Loan Documents entered into by the
Subsidiaries, and any extensions, renewals or amendments thereto, however
created, acquired, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due (all of the
foregoing obligations being hereinafter collectively referred to as the
"Obligations").
TO HAVE AND TO HOLD UNTO the Collateral Agent, for the benefit of
itself and on behalf of the Agents and the Lenders, their successors and assigns
forever, upon and subject to the following terms and conditions:
1. For purposes of this Agreement capitalized terms used herein, and
not otherwise defined herein, shall have the meanings ascribed thereto in the
Loan Agreement.
2. Each Subsidiary hereby authorizes the Collateral Agent to file such
financing statements and such other documents as the Collateral Agent may deem
necessary or desirable to protect or perfect the interest of the Lenders and the
Agents in the Collateral, and each Subsidiary further irrevocably appoints the
Collateral Agent as such Subsidiary's attorney-in-fact, with a power of attorney
to execute on behalf of such Subsidiary such
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UCC financing statement forms as the Collateral Agent may from time to time
reasonably deem necessary or desirable to protect or perfect such interest in
the Collateral. Such power of attorney is coupled with an interest and shall be
irrevocable. In addition, each Subsidiary agrees to make, execute, deliver or
cause to be done, executed and delivered all such further acts, documents and
things as the Collateral Agent may reasonably require for the purpose of
perfecting or protecting the rights of the Lenders and the Agents hereunder or
otherwise giving effect to this Agreement, all promptly upon request therefor.
3. Each Subsidiary represents and warrants to the Lenders
and the Agents that:
(a) the execution of this Agreement and the fulfillment of the
terms hereof will not result in a breach of any of the terms or
provisions of, or constitute a default under, such Subsidiary's
Articles of Incorporation, Certificate of Partnership, By-Laws or
Partnership Agreement, as applicable, as presently in effect, or any
order, rule or regulation applicable to such Subsidiary of any court or
of any Federal or state regulatory body or administrative agency or
other governmental body having jurisdiction over such Subsidiary, or
result in the termination or cancellation or breach of any indenture,
mortgage, deed of trust, deed to secure debt, lease or other agreement
or instrument to which such Subsidiary is a party or by which it is
bound or affected;
(b) such Subsidiary has taken all necessary corporate or
partnership action, as applicable to authorize the execution and
delivery of this Agreement, and this Agreement, when executed and
delivered, will be the valid and binding obligation of such Subsidiary
enforceable in accordance with its terms, subject only to the following
qualifications:
(i) certain equitable remedies are discretionary and, in
particular, may not be available where damages are considered
an adequate remedy at law,
(ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar
laws affecting enforcement of creditors' rights generally
(insofar as any such law relates to the bankruptcy, insolvency
or similar event of such Subsidiary), and
(iii) enforcement as to the Licenses is limited by
FCC rules and regulations restricting the transfer of
such Licenses;
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(c) Exhibit A attached hereto and incorporated herein by this
reference sets forth a complete and accurate list of the Contracts in
effect on the date hereof which provide for aggregate payments over the
life of each such Contract in excess of $100,000 or which are otherwise
material to such Subsidiary, and such Subsidiary will furnish copies
thereof to the Lenders and the Agents upon the request of the
Collateral Agent; and
(d) Exhibit B attached hereto and incorporated herein by this
reference sets forth a complete and accurate list of all Leases
providing for aggregate payments over the life of any single Lease in
excess of $250,000, to which such Subsidiary is a party in effect on
the date hereof, and such Subsidiary will furnish copies thereof to the
Lenders and the Agents upon the request of the Collateral Agent.
4. Each Subsidiary further represents and warrants that the Security
Interest in the Collateral granted hereunder shall constitute at all times a
valid and perfected first priority security interest (subject only to Permitted
Liens), vested in the Collateral Agent in and upon the Collateral, free of any
Liens except for Permitted Liens. Each Subsidiary shall take or cause to be
taken such acts and actions as shall be necessary or appropriate to assure that
the Security Interest in the Collateral shall not become subordinate or junior
to the security interests, liens or claims of any other Person, and that the
Collateral shall not otherwise be or become subject to any Lien, except for
Permitted Liens.
5. Each Subsidiary further represents and warrants that it now keeps
all of its records concerning its Accounts, Contracts, Leases, Other Contracts
and Intangibles at its chief executive office, which is as follows:
2002 Pisgah Church Road
Greensboro, North Carolina 27455-3314
Each Subsidiary covenants and agrees that it shall not keep any of such records
at any other address, unless written notice thereof is given to the Collateral
Agent at least thirty (30) days prior to the creation of any new address for the
keeping of such records. Each Subsidiary further agrees that it shall promptly
advise the Collateral Agent, in writing making reference to this Section 5 of
this Agreement, of the opening of any material new place of business, the
closing of any existing material place of business, or any change in the
location of the place where it keeps the Collateral.
6. The parties intend that, to the extent permitted by Applicable Law,
the Collateral shall remain personal property
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irrespective of the manner of its attachment or affixation to realty.
7. Any and all injury to, or loss or destruction of, the Collateral
shall be at the Subsidiaries' risk, and shall not release any Subsidiary from
its obligations hereunder. Each Subsidiary agrees not to sell, transfer, assign,
dispose of, mortgage, grant a security interest in or encumber any of the
Collateral except as permitted under the Loan Agreement. Each Subsidiary agrees
to maintain in force such insurance with respect to the Collateral as is
required under the Loan Agreement. Each Subsidiary agrees to pay all required
taxes, liens and assessments upon the Collateral, its use or operation, as
required under the Loan Agreement. Each Subsidiary further agrees that the
Collateral Agent may, but shall in no event be obligated to, insure any of the
Collateral in such form and amount as the Collateral Agent may deem necessary or
desirable if any Subsidiary fails to obtain insurance as required by the Loan
Agreement, and that the Collateral Agent may pay or discharge any taxes or Liens
(which are not Permitted Liens) on any of the Collateral, and each Subsidiary
agrees to pay any such sum so expended by the Collateral Agent, with interest at
the Default Rate, and such interest shall be deemed to be a part of the
Obligations secured by the Collateral under the terms of this Agreement.
8. Each Subsidiary shall (i) fulfill, perform and observe each and
every material condition and covenant contained in any of the Contracts, the
Other Contracts or the Leases, (ii) give prompt notice to the Collateral Agent
of any claim of default under any Contract, Other Contract or Lease given to
such Subsidiary or by such Subsidiary, (iii) at the sole cost and expense of
such Subsidiary, enforce the performance and observance of each and every
material covenant and condition of the Contracts, the Other Contracts and the
Leases and (iv) appear in and defend any action growing out of or in any manner
connected with any Contract, Other Contract or Lease. The rights and interests
granted to the Collateral Agent hereunder include all of the Subsidiaries'
rights and title (i) to modify the Contracts, the Other Contracts and the
Leases, (ii) to terminate the Contracts, the Other Contracts and the Leases and
(iii) to waive or release the performance or observance of any obligation or
condition of the Contracts, the Other Contracts and the Leases; provided,
however, that the Subsidiaries shall have the right to exercise these rights in
a fashion consistent with this Agreement and the Loan Agreement prior to any
Default (as defined below), and that these rights shall not be exercised by the
Collateral Agent prior to a Default (as defined below).
9. Upon the occurrence and during the continuation of an Event of
Default (hereinafter, a "Default"), the Lenders and the Agents shall have such
rights and remedies as are set forth in
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the Loan Agreement and herein; all the rights, powers and privileges of a
secured party under the Uniform Commercial Code of the State of New York and any
other applicable jurisdiction; and all other rights and remedies available to
the Lenders and the Agents, or any of them, at law or in equity, including,
without limitation, the right to sell or dispose of the Collateral in accordance
with Applicable Law. Each Subsidiary covenants and agrees that any notification
of intended disposition of any Collateral, if such notice is required by law,
shall be deemed reasonably and properly given if given in the manner provided
for in paragraph 19 hereof at least ten (10) days prior to such disposition. The
Collateral Agent shall have the right to the appointment of a receiver for the
properties and assets of each Subsidiary, and each Subsidiary hereby consents to
such rights and to such appointment and hereby waives any objection such
Subsidiary may have thereto and hereby waives the right to have a bond or other
security posted by the Collateral Agent or any other Person in connection
therewith. Each Subsidiary agrees, after the occurrence of a Default, to take
any actions that the Collateral Agent may reasonably request in order to enable
the Collateral Agent to obtain and enjoy the full rights and benefits granted to
the Collateral Agent under this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, each Subsidiary shall, at such
Subsidiary's cost and expense, use its best efforts to assist in obtaining all
approvals of the FCC or the New York Public Service Commission, as applicable,
which are then required by law for or in connection with any action or
transaction contemplated by this Agreement or Article 9 of the Uniform
Commercial Code as in effect in any applicable jurisdiction, and, at the
Collateral Agent's request, prepare, sign and file with the FCC or the New York
Public Service Commission, as applicable, the assignor's or transferor's portion
of any application or applications for consent to the assignment of the Licenses
or transfer of control thereof necessary or appropriate under the FCC's or the
New York Public Service Commission's, as applicable, rules for approval of any
sale or transfer or of the Collateral Agent's remedies under this Agreement. The
Collateral Agent shall have the right, in connection with the issuance of any
order for relief in a bankruptcy proceeding to petition the bankruptcy court for
the transfer of control or assignment of the Licenses to a receiver, trustee,
transferee, or similar official or to any purchaser of the Collateral pursuant
to any public or private sale, foreclosure or other exercise of remedies
available to the Collateral Agent, all as permitted by Applicable Law. All
amounts realized or collected through the exercise of remedies hereunder shall
be applied as provided in the Loan Agreement.
10. Upon the occurrence of a Default, the Collateral Agent or its
designee, may proceed to perform any and all of the obligations of any
Subsidiary contained in any of the Contracts, Other Contracts or Leases and
exercise any and all rights of any
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Subsidiary therein contained as fully as such Subsidiary itself could. Each
Subsidiary hereby appoints the Collateral Agent its attorney-in-fact, with power
of substitution, to take such action, execute such documents, and perform such
work, as the Collateral Agent may deem appropriate in exercise of the rights and
remedies granted the Lenders and the Agents, or any of them, herein or in any
other Loan Document. The powers herein granted shall include, but not be limited
to, powers to: (i) sue on the Contracts, the Other Contracts or the Leases; (ii)
seek all governmental approvals (other than FCC approvals) required for the
operation of the business of any Subsidiary; (iii) modify or terminate the
Contracts, the Other Contracts and the Leases; and (iv) waive or release the
performance or observance of any obligation under any of the Contracts, Other
Contracts or Leases. The power of attorney granted herein is coupled with an
interest and shall be irrevocable.
11. Upon the occurrence of a Default, should any Subsidiary fail to
perform or observe any covenant or comply with any condition contained in any of
the Contracts, the Other Contracts or the Leases, then the Collateral Agent may,
but without obligation to do so and without releasing such Subsidiary from its
obligation to do so, perform such covenant or condition and, to the extent that
the Collateral Agent shall incur any costs or pay any expenses in connection
therewith, including any reasonable costs or expenses of litigation associated
therewith, such costs, expenses or payments shall be included in the Obligations
secured hereby and shall bear interest from the payment of such costs or
expenses by the Collateral Agent at the Default Rate. None of the Lenders or the
Agents shall be obliged to perform or discharge any obligation of any Subsidiary
under any of the Contracts, the Other Contracts or the Leases, and, except as
may result from the gross negligence or willful misconduct of the Person seeking
indemnification as determined by a final order of a court of competent
jurisdiction, each Subsidiary agrees to indemnify and hold harmless each Lender
and each Agent against any and all liability, loss or damage which any such
Person may incur under any of the Contracts, the Other Contracts or the Leases
or under or by reason of this Agreement, and any and all claims and demands
whatsoever which may be asserted against each Subsidiary by reason of an act of
any Lender or any Agent under any of the terms of this Agreement or under the
Contracts, the Other Contracts or the Leases.
12. Each Subsidiary hereby further appoints the Collateral Agent as its
attorney-in-fact, with power of substitution, with authority to collect all
Accounts, to endorse the name of such Subsidiary on any note, acceptance, check,
draft, money order or other evidence of debt or of payment which constitutes a
portion of the Collateral and which may come into the possession of the Lenders
and the Agents, or any of them, and generally to do such other things and acts
in the name of such Subsidiary with respect
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to the Collateral as are necessary or appropriate to protect or enforce the
rights hereunder of the Lenders and the Agents. Each Subsidiary further
authorizes the Collateral Agent, effective upon the occurrence of a Default, to
compromise and settle or to sell, assign or transfer or to ask, collect, receive
or issue any and all claims possessed by any Subsidiary which constitute a
portion of the Collateral, all in the name of such Subsidiary. After deducting
all reasonable expenses and charges (including the Collateral Agent's attorneys'
fees) of retaking, keeping, storing and selling the Collateral, the Collateral
Agent may apply the proceeds in payment of any of the Obligations in the order
of application set forth in the Loan Agreement. The power of attorney granted
herein is coupled with an interest and shall be irrevocable. Each Subsidiary
agrees that if steps are taken by the Collateral Agent to enforce its rights
hereunder, or to realize upon any of the Collateral, such Subsidiary shall pay
to the Collateral Agent the amount of the Collateral Agent's costs, including
attorneys' fees, and each Subsidiary's obligation to pay such amounts shall be
deemed to be a part of the Obligations secured hereunder.
13. Each Subsidiary shall indemnify and hold harmless each Lender and
each Agent and any other Person acting hereunder for all losses, costs, damages,
fees and expenses whatsoever associated with the exercise of the powers of
attorney granted herein and shall release each Lender and each Agent and any
other Person acting hereunder from all liability whatsoever for the exercise of
the foregoing powers of attorney and all actions taken pursuant thereto, except,
in either event, in the case of gross negligence or willful misconduct by the
Person seeking indemnification as determined by a final order of a court of
competent jurisdiction.
14. Each Subsidiary agrees that the rights of the Lenders and the
Agents, or any of them, under this Agreement, the Loan Agreement, any other Loan
Document, or any other contract or agreement now or hereafter in existence among
the Lenders and the Agents and any Subsidiary and any other obligors thereunder,
or any of them, shall be cumulative, and that each Lender and each Agent may
from time to time exercise such rights and such remedies as such Person or
Persons may have thereunder and under the laws of the United States or any
state, as applicable, in the manner and at the time that such Person or Persons
in its or their sole discretion desire, subject to the terms of such agreements.
Each Subsidiary further expressly agrees that the Lenders and the Agents shall
in no event be under any obligation to resort to any Collateral prior to
exercising any other rights that the Lenders and the Agents, or any of them, may
have against the Borrower, such Subsidiary or any other obligor or its
respective property, nor shall the Lenders and the Agents be obliged to resort
to any other collateral or security for the
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Obligations, other than the Collateral, prior to any exercise of rights against
such Subsidiary and its property hereunder.
15. Each Subsidiary hereby acknowledges that the Obligations arose out
of a commercial transaction, and agrees that if a Default shall occur, the
Collateral Agent shall have the right to immediate possession without notice or
a hearing, and hereby knowingly and intelligently waives any and all rights it
may have to any notice and posting of a bond by the Lenders and the Agents, or
any of them, prior to seizure by the Collateral Agent or any of its transferees,
assigns or successors in interest, of the Collateral or any portion thereof.
16. No transfer or renewal, extension, assignment or termination of
this Agreement or of the Loan Agreement or of any other Loan Document, or of any
instrument or document executed and delivered by any Subsidiary or any other
obligor to the Lenders and the Agents, or any of them, nor additional advances
made by the Lenders and the Agents, or any of them, to the Borrower, nor the
taking of further security, nor the retaking or re-delivery of the Collateral to
any Subsidiary by the Lenders and the Agents, or any of them, nor any other act
of the Lenders and the Agents, or any of them, shall release any Subsidiary from
any Obligation, except a release or discharge executed in writing by the
Collateral Agent in accordance with the Loan Agreement with respect to such
Obligation or upon full payment, performance and satisfaction of all Obligations
and termination of the Commitments. None of the Lenders or the Agents shall by
any act, delay, omission or otherwise, be deemed to have waived any of its or
their rights or remedies hereunder, unless such waiver is in writing and signed
by the Collateral Agent in accordance with the Loan Agreement and then only to
the extent therein set forth. A waiver by the Lenders and the Agents, or any of
them, of any right or remedy on any occasion shall not be construed as a bar to
the exercise of any such right or remedy which any such Person would otherwise
have had on any other occasion.
17. Neither this Agreement nor any of the Subsidiaries' rights or
obligations hereunder may be assigned by any Subsidiary to any other Person
without the consent of all the Agents and Lenders. Each Subsidiary agrees that
this Agreement or the rights hereunder may in the discretion of the Lenders and
the Agents, as applicable, be assigned in whole or in part in connection with
any assignment of the Loan Agreement or the Indebtedness evidenced thereby, as
permitted thereunder. In the event this Agreement or the rights hereunder are so
assigned by any of the Lenders, the Co-Agents, the Agents, the Managing Agents,
the Administrative Agent, the Documentation Agent and the Collateral Agent, the
terms "Lenders", "Co-Agents", "Agents," "Managing Agents", "Administrative
Agent", "Documentation Agent" or "Collateral Agent" wherever used herein shall
be deemed, as applicable, to refer to and include any such assignee.
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18. The Collateral Agent is hereby authorized to date this Agreement as
of the date signed by the Subsidiaries. This Agreement shall apply to and bind
the respective successors and permitted assigns of each Subsidiary and inure to
the benefit of the successors and permitted assigns of the Lenders and the
Agents.
19. All notices and other communications required or permitted
hereunder shall be in writing and shall be given in a fashion prescribed in
Section 11.1 of the Loan Agreement with respect to the Lenders and the Agents,
and in the fashion prescribed in Section 11.1 of the Loan Agreement with respect
to each Subsidiary to the last known address of each Subsidiary.
20. THE PROVISIONS OF THIS AGREEMENT SHALL BE CONSTRUED AND
INTERPRETED, AND ALL RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO DETERMINED, IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK. THIS AGREEMENT,
TOGETHER WITH ALL DOCUMENTS REFERRED TO HEREIN, CONSTITUTES THE ENTIRE AGREEMENT
AMONG THE SUBSIDIARIES, THE LENDERS AND THE AGENTS WITH RESPECT TO THE MATTERS
ADDRESSED HEREIN, AND MAY NOT BE MODIFIED EXCEPT BY A WRITING EXECUTED BY THE
COLLATERAL AGENT (WITH THE REQUISITE CONSENT OF THE LENDERS AS PROVIDED IN THE
LOAN AGREEMENT) AND THE BORROWER AND DELIVERED BY THE COLLATERAL AGENT TO EACH
SUBSIDIARY IN ACCORDANCE WITH THE LOAN AGREEMENT.
21. If any paragraph or part thereof of this Agreement shall for any
reason be held or adjudged to be invalid, illegal or unenforceable by any court
of competent jurisdiction, such paragraph or part thereof so adjudicated
invalid, illegal or unenforceable shall be deemed separate, distinct and
independent, and the remainder of this Agreement shall remain in full force and
effect and shall not be affected by such holding or adjudication.
22. Notwithstanding anything herein which may be construed to the
contrary, no action shall be taken by the Collateral Agent with respect to the
Licenses issued by the FCC or any governmental or other authority unless and
until all requirements of Applicable Law requiring notice to, or consent or
approval of such action by the FCC or any governmental or other authority, have
been satisfied, including, without limitation, any required approval of the FCC
under the Federal Communications Act of 1934 as amended, and any applicable
rules and regulations thereunder, including, without limitation, the provision
for ten (10) days' notice to the FCC or the Borrower of any such action to the
extent required by 47 C.F.R. ss. 22.937(f). Each Subsidiary covenants that upon
request of the Collateral Agent it will cause to be filed such applications and
take such other action as may be requested by the Collateral Agent to obtain
consent or approval of the FCC or any governmental or other authority which
-13-
<PAGE>
has granted any License to such Subsidiary to any action contemplated by this
Agreement and to give effect to the Security Interest of the Collateral Agent,
including, without limitation, the execution of an application for consent by
the FCC to an assignment or transfer involving a change in ownership or control
pursuant to the provisions of the Federal Communications Act of 1934 as amended.
23. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument.
24. The parties acknowledge their intent that, upon the occurrence of a
Default, the Collateral Agent shall receive, to the fullest extent permitted by
Applicable Law and governmental policy (including, without limitation, the
rules, regulations and policies of the FCC), all rights necessary or desirable
to obtain, use or sell the Collateral, and to exercise all remedies available to
it under this Agreement, the Uniform Commercial Code as in effect in any
applicable jurisdiction, or other Applicable Law. The parties further
acknowledge and agree that, in the event of changes in law or governmental
policy occurring subsequent to the date hereof, that affect in any manner the
Collateral Agent's rights of access to, or use or sale of, the Collateral, or
the procedures necessary to enable the Collateral Agent to obtain such rights of
access, use or sale, the Collateral Agent and the Subsidiaries shall amend this
Agreement in such manner as the Collateral Agent shall reasonably request, in
order to provide the Collateral Agent such rights to the greatest extent
possible consistent with Applicable Law and governmental policy.
25. Each reference herein to any right granted to, benefit conferred
upon or power exercisable by the "Collateral Agent" shall be a reference to the
Collateral Agent for the benefit of all the Lenders and the Agents, and each
action taken or right exercised hereunder shall be deemed to have been so taken
or exercised by the Collateral Agent for the benefit of and on behalf of all the
Lenders and the Agents.
26. Notwithstanding anything herein which may be construed to the
contrary, any right to indemnification hereunder, including, without limitation,
rights pursuant to Section 11 hereof, shall survive the termination of this
Agreement and the payment and performance of all other Obligations.
-14-
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
affixed their seals, by and through their duly authorized representatives, as of
the day and year first written above.
SUBSIDIARIES: ATLANTIC CELLULAR TELEPHONE CORP., a
North Carolina corporation; BINGHAMTON
CELLULAR TELEPHONE CORP., a North
Carolina corporation; CELLULAR DIRECTORY
CORPORATION, a North Carolina
corporation; NORTH CAROLINA CELLULAR
HOLDING CORP., a North Carolina
corporation; ORANGE COUNTY CELLULAR
TELEPHONE CORP., a North Carolina
corporation; PENNSYLVANIA CELLULAR
TELEPHONE CORP., a North Carolina
corporation; PISCATAQUA CELLULAR
TELEPHONE CORP., a North Carolina
corporation; PLMRS NARROWBAND CORP., a
North Carolina corporation; TELEFLEX
INFORMATION SYSTEMS, INC., a North
Carolina corporation; VANGUARD
BINGHAMTON, INC. (f/k/a CROWLEY CELLULAR
TELECOMMUNICATIONS BINGHAMTON, INC.), a
Delaware corporation; VANGUARD CELLULAR
CORP., a North Carolina corporation;
VANGUARD CELLULAR FINANCIAL CORP., a
North Carolina corporation; VANGUARD
CELLULAR HOLDING CORP., a Delaware
corporation; VANGUARD CELLULAR SYSTEMS
OF SOUTH CAROLINA, INC., a North
Carolina corporation; VANGUARD
COMMUNICATIONS, INC., a Delaware
corporation; VANGUARD INDIA, INC., a
Delaware corporation; WARREN AND LEWIS,
LTD., a Virginia corporation; and
WESTERN FLORIDA CELLULAR TELEPHONE
CORP., a North Carolina corporation
By: (signature of Haynes G. Griffin)
Haynes G. Griffin
[CORPORATE SEALS President
ON ATTACHED PAGE]
Attest: (signature of Richard C. Rowlenson)
Richard C. Rowlenson
Assistant Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-15-
<PAGE>
[CORPORATE SEALS FOR SECOND AMENDED AND RESTATED
MASTER SUBSIDIARY SECURITY AGREEMENT]
ATLANTIC CELLULAR TELEPHONE CORP.
BINGHAMTON CELLULAR TELEPHONE
CORP.
CELLULAR DIRECTORY CORPORATION
NORTH CAROLINA CELLULAR HOLDING
CORP.
ORANGE COUNTY CELLULAR TELEPHONE
CORP.
PENNSYLVANIA CELLULAR TELEPHONE
CORP.
PISCATAQUA CELLULAR TELEPHONE
CORP.
PLMRS NARROWBAND CORP.
TELEFLEX INFORMATION SYSTEMS,INC.
VANGUARD BINGHAMTON, INC.
(f/k/a CROWLEY CELLULAR
TELECOMMUNICATIONS BINGHAMTON,
INC.)
VANGUARD CELLULAR CORP.
VANGUARD CELLULAR FINANCIAL CORP.
VANGUARD CELLULAR HOLDING CORP.
VANGUARD CELLULAR SYSTEMS OF SOUTH
CAROLINA, INC.
VANGUARD COMMUNICATIONS, INC.
VANGUARD INDIA, INC.
WARREN AND LEWIS, LTD.
WESTERN FLORIDA CELLULAR TELEPHONE
CORP.
-15-A-
<PAGE>
[SIGNATURES FOR SECOND AMENDED AND RESTATED
MASTER SUBSIDIARY SECURITY AGREEMENT]
WEST VIRGINIA CELLULAR TELEPHONE CORP.,
a West Virginia corporation
By:(signature of Haynes G. Griffin)
Haynes G. Griffin
Executive Vice President
[CORPORATE SEAL]
Attest:(signature of Richard C. Rowlenson)
Richard C. Rowlenson
Assistant Secretary
ALTOONA CELLTELCO, a District of
Columbia general partnership; and
HARRISBURG CELLULAR TELEPHONE
COMPANY, a Pennsylvania general
partnership
By: PENNSYLVANIA CELLULAR TELEPHONE
CORP., a North Carolina
corporation, its General Partner
By: (signature of Haynes G. Griffin)
Haynes G. Griffin
President
[CORPORATE SEAL]
Attest: (signature of Richard C. Rowlenson)
Richard C. Rowlenson
Assistant Secretary
BINGHAMTON CELLTELCO, a District of
Columbia general partnership
By: VANGUARD BINGHAMTON, INC. (f/k/a
CROWLEY CELLULAR TELECOMMUNICATIONS
BINGHAMTON, INC.), a Delaware
corporation, its General Partner
By: (signature of Haynes G. Griffin)
Haynes G. Griffin
President
[CORPORATE SEAL]
Attest: (signature of Richard C. Rowlenson)
Richard C. Rowlenson
Assistant Secretary
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
-16-
<PAGE>
[SIGNATURES FOR SECOND AMENDED AND RESTATED
MASTER SUBSIDIARY SECURITY AGREEMENT]
COLLATERAL AGENT: TORONTO DOMINION (TEXAS), INC.
By: (signature of Sophia D. Sgarbi)
Name: SOPHIA D. SGARBI
Title: VICE PRESIDENT
Exhibit A - Contracts
Exhibit B - Leases
Exhibit C - Licenses
-17-
<PAGE>
THIS DOCUMENT IS A COPY OF THE EXHIBIT 4(D)(1) TO FORM 10-Q
FILED ON MAY 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
ASSIGNMENT, BILL OF SALE, AND ASSUMPTION AGREEMENT
THIS AGREEMENT, BILL OF SALE, AND ASSUMPTION AGREEMENT is made and
entered into by and between Vanguard Cellular Systems, Inc., a North Carolina
corporation (the "Parent Company"), and Vanguard Cellular Financial Corp., a
North Carolina corporation and a subsidiary of the Parent Company (the
"Financial Corp."), to evidence the transfer, effective on April 9, 1996, by the
Parent Company to the Financial Corp. of all of the Parent Company's assets,
subject to the Financial Corp.'s assumption of the Parent Company's current
liabilities and of its liabilities for deferred taxes and deferred compensation.
1. Definitions. As used herein, the following terms have the following
meanings unless the context otherwise required:
(a) "Assets" means all of the Parent Company's right, title
and interest in and to any and all of its corporate assets of every
kind and description, real, personal and mixed, tangible and
intangible, known and unknown, contingent or otherwise, including,
without limitation, all of its land, buildings, equipment, furniture
and fixtures, appliances, motor vehicles, agreements, leases, accounts
receivable and other evidences of indebtedness, securities, cash, cash
equivalents, bank accounts, deposits, refunds, claims, causes of
action, contract rights, customer orders, purchase orders, permits and
licenses. Without limiting the generality of the foregoing, Assets
shall include the machinery, equipment, furniture, fixtures and other
items of personal property described in the personal property list
attached hereto as Schedule A and the certain contractual rights
included in these assigned agreements on Schedule B.
(b) "Liabilities" means all of the Parent Company's current
liabilities as of the Effective Time, as determined in accordance with
generally accepted accounting principles, whether known or unknown and
whether accrued or contingent, and all of the Parent Company's
liabilities for deferred taxes and deferred compensation as of the
Effective Time.
(c) "Effective Time" means 12:01 a.m. on April 9, 1996.
2. Conveyances. The Parent Company hereby grants, bargains, sells,
- 1 -
<PAGE>
conveys, assigns, transfers and deliveries all of the Assets to the Financial
Corp., at and as of the Effective Time. TO HAVE AND TO HOLD all and singular the
said Assets hereby granted, bargained, sold, conveyed, assigned, transferred and
delivered unto the Financial Corp., its successors and assigns forever.
Notwithstanding the foregoing, if the conveyance and assignment attempted to be
made hereunder of any agreement, lease, permit, license, right, claim or other
Asset would be ineffective as between the Parent Company and the Financial Corp.
without the consent of a third party, or would serve as a cause for terminating
or invalidating any such agreement, lease, permit, license, right, claim or
other Asset or would cause or serve as a cause for the loss of ownership
thereof, then such Asset is excluded from the aforesaid conveyance and
assignment, and the Parent Company, shall, to the greatest extend permitted,
hold such Asset for the exclusive use and benefit of the Financial Corp. until
such consent has been obtained. Upon the obtaining of such consent, no further
conveyance or assignment shall be required, but full and complete title to such
Asset shall automatically become vested in the Financial Corp. by virtue of this
instrument.
3. Acceptance of Assets. The Financial Corp. accepts the Assets at and
as of the Effective Time and in consideration of the transfer thereof.
4. Assumption of Liabilities. The Financial Corp. hereby assumes and
agrees to pay, perform and fully discharge all of the Liabilities and to
indemnify, defend and hold harmless the Parent Company, its successors and
assigns, of and from any and all liabilities, costs and expenses, including
court costs and attorneys' fees, incurred by the Parent Company from and after
the Effective Time and based upon or arising out of the Liabilities hereby
assumed.
5. No Warranties. The Assets are conveyed to the Financial Corp. "AS
IS", and THE PARENT COMPANY EXPRESSLY DISCLAIMS ANY WARRANTY OF ANY KIND,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF TITLE, CONDITION, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
6. Sales Taxes and Recording Fees. The parties agree that the Financial
Corp. shall pay all sales, use and similar taxes, if any, arising out of the
sales, conveyances, assignments, transfers and deliveries made hereunder or
pursuant hereto and shall pay all documentary, filing and recording fees
required in connection therewith.
- 2 -
<PAGE>
7. Employees. At and as of the Effective Time, all employees employed
by the Parent Company shall cease being employees of the Parent Company and
shall become employees of the Financial Corp. In connection therewith, the
Parent Company and the Financial Corp. shall take such action as may be
necessary in order for the Financial Corp. to adopt and continue in effect all
of the employee benefit plans and programs sponsored by the Parent Company
immediately prior to the Effective Time.
8. Further Assurances. From time to time after the Effective Time, and
without any further consideration, the Parent Company will execute and deliver
such instruments of conveyance, assignment, transfer and delivery, and take such
other action , as the Financial Corp. may reasonably request in order more
effectively to vest in the Financial Corp. beneficial and record title to the
Assets.
9. Power of Attorney. The Parent Company does hereby constitute and
appoint the Financial Corp., its successors and assigns, the true and lawful
attorney of the Parent Company with full power of substitution for it and in its
name, place and stead or otherwise but on behalf of the Parent Company, its
successors an assigns, and for the benefit of the Financial Corp., its
successors and assigns, to demand and receive from time to time any and all
property and assets, real, personal, and mixed, tangible and intangible, hereby
conveyed and assigned (or intended to be conveyed and assigned) and to execute
in the name of the Parent Company, its successors and assigns, deeds,
assignments and other instruments of further assurance and to give receipts and
releases in respect of the same, and from time to time to institute and
prosecute in the name of the Parent Company for the benefit of the Financial
Corp. any and all proceedings at law, in equity or otherwise which the Financial
Corp., its successors and assigns, may deem proper in order to collect, assert
or enforce any claims, rights or title of any kind in and to the Assets hereby
conveyed and assigned (or intended to be conveyed and assigned) and to defend
and compromise any and all actions, suits or proceedings in respect of any of
said Assets and to do any and all such other acts and things in furtherance of
this Assignment, Bill of Sale, and Assumption Agreement as the Financial Corp.,
its successors or assigns, shall deem advisable. The Parent Company hereby
declares that the appointment hereby made and the powers hereby granted are
coupled with an interest and are and shall be irrevocable and perpetual and
shall not be terminated by any act of the Parent Company or its successors or
assigns or by operation of law.
- 3 -
<PAGE>
10. Binding Effect. This Assignment, Bill of Sale, and Assumption
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
11. Integration. This instrument constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings with respect thereto.
12. Applicable Law. This instrument shall be governed by and construed
and enforced in accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Parent Company and the Financial Corp. have
caused this instrument to be executed under seal by their duly authorized
officers.
ATTEST: VANGUARD CELLULAR SYSTEMS, INC.
By: /s/ Richard C. Rowlenson By: /s/ Haynes G. Griffin
Title: Assistant Secretary Title: President
ATTEST: VANGUARD CELLULAR FINANCIAL
CORP.
By: /s/ Richard C. Rowlenson By: /s/ Haynes G. Griffin
Title: Assistant Secretary Title: President
- 4 -
<PAGE>
<PAGE>
THIS DOCUMENT IS A COPY OF THE EXHIBIT 4(e)(1) TO FORM 10-Q
FILED ON MAY 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
- --------------------------------------------------------------------------------
VANGUARD CELLULAR SYSTEMS, INC.
AND
THE BANK OF NEW YORK, Trustee
INDENTURE
Dated as of April 1, 1996
Senior Debentures
- --------------------------------------------------------------------------------
<PAGE>
VANGUARD CELLULAR SYSTEMS, INC.
INDENTURE
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Parties ..........................................................................................................1
Recitals..........................................................................................................1
Consideration ....................................................................................................1
ARTICLE I
DEFINITIONS; TRUST INDENTURE ACT CONTROLLING
SECTION 1.1. Definitions............................................................................1
Affiliate.............................................................1
Authenticating Agent..................................................1
Authorized Newspaper..................................................2
Bankruptcy Law........................................................2
Board; Board of Directors.............................................2
Business day..........................................................2
Capital Stock.........................................................2
Certified Resolution..................................................2
Class A Common Stock..................................................3
Class B Common Stock..................................................3
Closing Price.........................................................3
Code..................................................................3
Company...............................................................3
Company Order.........................................................3
Debenture.............................................................4
Debentureholder; holder of Debentures.................................4
Depositary............................................................4
Event of Default......................................................4
Global Debenture......................................................4
Indenture.............................................................4
Officers' Certificate.................................................4
Opinion of Counsel....................................................5
Original issue discount...............................................5
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<PAGE>
Original Issue Discount Debenture.....................................5
Outstanding...........................................................5
Paying Agent..........................................................5
Person................................................................6
Principal.............................................................6
Principal amount......................................................6
Responsible Officer...................................................6
Securities Exchange Act...............................................6
Trustee; principal office.............................................6
U.S. Government Obligations...........................................7
SECTION 1.2. Trust Indenture Act definitions controlling............................................7
ARTICLE II
FORM, ISSUE AND REGISTRATION OF DEBENTURES
SECTION 2.1. Forms generally and dating.............................................................7
SECTION 2.2. Amount unlimited; Issuable in series...................................................8
SECTION 2.3. Denominations.........................................................................11
SECTION 2.4. Execution of Debentures; Authentication...............................................11
SECTION 2.5. Issue of Debentures...................................................................14
SECTION 2.6. Transfer of Debentures................................................................14
SECTION 2.7. Persons deemed owners of Debentures...................................................14
SECTION 2.8. Provisions for Debentures in temporary form...........................................14
SECTION 2.9. Mutilated, destroyed, lost or stolen Debentures.......................................15
SECTION 2.10. Exchanges of Debentures...............................................................16
SECTION 2.11. Cancellation of Surrendered Debentures................................................16
SECTION 2.12. Payment of interest; Defaulted interest...............................................17
SECTION 2.13. Global Debentures; Depository.........................................................17
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Rights under Indenture limited to the parties and holders of
Debentures............................................................................19
SECTION 3.2. Certificate of independent accountants conclusive.....................................19
SECTION 3.3. Treatment of Debentures owned or held by the Company in
determining required percentages......................................................19
SECTION 3.4. Remaining provisions not affected by invalidity of any other
provisions-required provisions of Trust Indenture Act of 1939 to
control...............................................................................20
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<PAGE>
SECTION 3.5. Company released from Indenture requirements if entitled to have
Indenture canceled....................................................................20
SECTION 3.6. Date of execution.....................................................................20
SECTION 3.7. Execution of documents furnished under the Indenture..................................20
SECTION 3.8. Officers' Certificates and Opinions of Counsel to be furnished
Trustee...............................................................................20
SECTION 3.9. Presentation of notices and demands...................................................21
SECTION 3.10. Successors and assigns bound by Indenture.............................................22
SECTION 3.11 Descriptive headings for convenience only.............................................22
SECTION 3.12. North Carolina law to govern..........................................................22
SECTION 3.13. Indenture may be executed in counterparts.............................................22
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.1. Payment of Principal and interest.....................................................22
SECTION 4.2. Maintenance of office or agency.......................................................23
SECTION 4.3. Corporate existence...................................................................23
SECTION 4.4. Restrictions on mergers, sales and consolidations.....................................23
SECTION 4.5. Further assurances....................................................................23
SECTION 4.6. File certain reports and information with the Trustee and the
Securities and Exchange Commission - transmit to
Debentureholders summaries of certain documents filed with the
Trustee - furnish list of Debentureholders to the Trustee.............................23
SECTION 4.7. File statement by officers annually with the Trustee..................................24
SECTION 4.8. Duties of Paying Agent................................................................25
ARTICLE V
REDEMPTION OF DEBENTURES; SINKING FUND
SECTION 5.1. Applicability of Article..............................................................26
SECTION 5.2. Notice of redemption to be given to Trustee - deposit of cash (or
other form of payment) with Trustee - selection by Trustee of
Debentures to be redeemed.............................................................26
SECTION 5.3. Debentures called for redemption to become due - rights of holders
of redeemed Debentures - return of funds on conversion................................28
SECTION 5.4. Credits against sinking fund..........................................................28
SECTION 5.5. Redemption through sinking fund.......................................................29
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<PAGE>
SECTION 5.6. Debentures no longer Outstanding after notice to Trustee and
deposit of cash.......................................................................30
SECTION 5.7. Conversion arrangement on call for redemption.........................................30
ARTICLE VI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 6.1. Satisfaction and discharge of Indenture with respect to Debentures
of any series.........................................................................31
SECTION 6.2. Deposits for payment or redemption of Debentures to be held in
trust.................................................................................32
SECTION 6.3. Repayment of moneys...................................................................32
ARTICLE VII
REMEDIES UPON DEFAULT
SECTION 7.1. Events of Default defined-acceleration of maturity upon default-
waiver of default after acceleration..................................................33
SECTION 7.2. Covenant of Company to pay to Trustee whole amount due on
default in payment of Principal or interest-Trustee may recover
judgment for whole amount due-application of moneys received by
the Trustee...........................................................................35
SECTION 7.3. Trustee may enforce rights of action without possession of
Debentures............................................................................38
SECTION 7.4. Delays or omissions not to impair any rights or powers accruing
upon default..........................................................................38
SECTION 7.5. In Event of Default Trustee may protect and enforce its rights by
appropriate proceedings-holders of majority in aggregate Principal
amount of Debentures of a series may waive default....................................38
SECTION 7.6. Holders of majority in aggregate Principal amount of Debentures of
any series may direct exercise of remedies............................................38
SECTION 7.7. Limitation on suits by Debentureholders...............................................39
SECTION 7.8. No Debentures owned or held by, for the account of or for the
benefit of the Company to be deemed Outstanding for purpose of
payment or distribution...............................................................40
SECTION 7.9. Company and Trustee restored to former position on discontinuance
or abandonment of proceedings.........................................................40
iv
<PAGE>
ARTICLE VIII
EVIDENCE OF ACTION BY DEBENTUREHOLDERS
SECTION 8.1. Evidence of action by Debentureholders................................................40
ARTICLE IX
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 9.1. Immunity of incorporators, stockholders, officers, directors and
employees.............................................................................41
ARTICLE X
MERGER, CONSOLIDATION, SALE OR LEASE
SECTION 10.1. Documents required to be filed with the Trustee upon consolidation,
merger, sale, transfer or lease - execution or supplemental
indentures - acts of successor corporation............................................42
SECTION 10.2. Trustee may rely upon Opinion of Counsel..............................................43
ARTICLE XI
CONCERNING THE TRUSTEE
SECTION 11.1. Acceptance of Trust - responsibilities of Trustee.....................................43
SECTION 11.2. Trustee to be entitled to compensation - Trustee not to be
accountable for application of proceeds - moneys held by Trustee
to be trust funds.....................................................................46
SECTION 11.3. Trustee to give Debentureholders notice of default....................................47
SECTION 11.4. Trustee acquiring conflicting interest must eliminate it or resign....................47
SECTION 11.5. Eligibility of Trustee................................................................47
SECTION 11.6. Resignation or removal of Trustee.....................................................48
SECTION 11.7. Acceptance by successor Trustee.......................................................49
SECTION 11.8. Successor to Trustee by merger or consolidation, etc..................................50
SECTION 11.9. Limitations on right of Trustee as a creditor to obtain payment of
certain claims........................................................................51
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<PAGE>
SECTION 11.10. Trustee to make annual report to Debentureholders - Trustee to
make other reports to Debentureholders - Debentureholders to
whom reports to be transmitted...............................................51
SECTION 11.11. Preservation of information by Trustee - Trustee to give certain
information to Debentureholders upon application.............................52
SECTION 11.12. Trustee may hold Debentures and otherwise deal
with Company.................................................................53
SECTION 11.13. Trustee may comply with any rule, regulation or order of the
Securities and Exchange Commission...........................................54
SECTION 11.14. Appointment of Authenticating Agent..........................................54
ARTICLE XII
SUPPLEMENTAL INDENTURES
SECTION 12.1. Company and Trustee may enter into supplemental indenture for
special purposes......................................................................56
SECTION 12.2. Modification of Indenture with consent of Debentureholders............................57
SECTION 12.3. Effect of supplemental indentures.....................................................58
SECTION 12.4. Supplemental indentures to conform to Trust Indenture Act.............................59
SECTION 12.5. Notation on or exchange of Debentures.................................................59
ARTICLE XIII
CONVERSION OF DEBENTURES
SECTION 13.1. Applicability of Article..............................................................59
SECTION 13.2. Right of Debentureholders to convert Debentures.......................................59
SECTION 13.3. Issuance of shares of Capital Stock on conversion.....................................60
SECTION 13.4. No payment or adjustment for interest or dividends....................................61
SECTION 13.5. Adjustment of conversion rate.........................................................61
SECTION 13.6. No fractional shares to be issued.....................................................65
SECTION 13.7. Preservation of conversion rights upon consolidation, merger, sale
or conveyance.........................................................................65
SECTION 13.8. Notice to Debentureholders of a series prior to taking certain types
of action.............................................................................66
SECTION 13.9. Covenant to reserve shares for issuance on conversion of
Debentures............................................................................67
SECTION 13.10. Compliance with governmental requirements.............................................67
SECTION 13.11. Payment of taxes upon certificates for shares issued upon
conversion............................................................................67
SECTION 13.12. Trustee's duties with respect to conversion provisions................................68
</TABLE>
vi
<PAGE>
INDENTURE dated as of the 1st day of April, 1996, between Vanguard
Cellular Systems, Inc., a corporation organized and existing under the laws of
the State of North Carolina (hereinafter called the "Company"), and The Bank of
New York, a New York banking corporation with its principal offices in New York,
New York, as Trustee hereunder (hereinafter called the "Trustee").
WHEREAS, the Company for its lawful corporate purposes has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of its debentures, notes or other evidences of
indebtedness (hereinafter called the "Debentures"), to be issued in one or more
series, the amount and terms of each series to be determined as hereinafter
provided.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
THAT, in consideration of the premises and of the mutual covenants
herein contained and of the purchase and acceptance of the Debentures by the
holders thereof, and for other valuable consideration the receipt whereof is
hereby acknowledged, and intending to be legally bound hereby, it is hereby
agreed between the Company and the Trustee, for the benefit of those who shall
hold the Debentures, as follows:
ARTICLE I
DEFINITIONS; TRUST INDENTURE ACT CONTROLLING
SECTION 1.1. Definitions. Unless otherwise specified or the context
otherwise requires, the terms defined in this Article I shall for all purposes
of this Indenture and of any indenture supplemental hereto have the meanings
herein specified, the following definitions to be equally applicable to both the
singular and plural forms of any of the terms herein defined. All accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles in the United States of
America, and the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Affiliate
An "Affiliate" shall mean any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any other obligor under this Indenture.
Authenticating Agent
The term "Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 11.14 to act on behalf of the Trustee to
authenticate Debentures of one or more series.
<PAGE>
Authorized Newspaper
The term "Authorized Newspaper" shall mean a newspaper in the English
language or in an official language of the country of publication, customarily
printed on each Business day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in the place in connection with which the
term is used or in the financial community of such place. If, because of
temporary suspension of publication or general circulation of any newspaper or
for any other reason, it is impossible or, in the opinion of the Trustee,
impracticable to make any publication of any notice required by this Indenture
in the manner herein provided, such publication or other notice in lieu thereof
which is made at the written direction of the Company by the Trustee shall
constitute a sufficient publication of such notice. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
place meeting the foregoing requirements and in each case on any Business day.
Bankruptcy Law
The term "Bankruptcy Law" means Title 11 of the United States Code, as
now constituted or hereafter in effect, or any other applicable Federal or State
bankruptcy, insolvency or other similar law.
Board; Board of Directors
The term "Board" or "Board of Directors" shall mean the Board of
Directors of the Company or the Executive Committee, if any, of such Board or
any other committee of such Board duly authorized to act hereunder.
Business day
The term "Business day" shall mean, with respect to any Debenture, a
day that, in the city (or in any of the cities, if more than one) in which
amounts are payable, as specified in the terms of such Debentures, is not a day
upon which banking institutions are authorized or required by law, or by
executive order issued by a governmental authority or agency regulating such
banking institutions, to close.
Capital Stock
The term "Capital Stock" shall mean stock of any class of the Company.
Certified Resolution
The term "Certified Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
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Class A Common Stock
The term "Class A Common Stock" shall mean the Class A Common Stock,
$.01 par value, of the Company.
Class B Common Stock
The term "Class B Common Stock" shall mean the Class B Common Stock,
$.01 par value, of the Company.
Closing Price
The term "Closing Price" on any day when used with respect to any class
of Capital Stock shall mean (i) if the stock is then listed or admitted to
trading on a national securities exchange in the United States, the last
reported sale price, regular way, for the stock as reported in the consolidated
transaction or other reporting system for securities listed or traded on such
exchange, or (ii) if the stock is listed on the National Association of
Securities Dealers', Inc. Automated Quotations System National Market System
(the "NASDAQ National Market System"), the last reported sale price, regular
way, for the stock, as reported on such list, or (iii) if the stock is not so
admitted for trading on any national securities exchange or the NASDAQ National
Market System, the average of the last reported closing bid and asked prices
reported by the National Association of Securities Dealers', Inc. Automated
Quotations System as furnished by any member in good standing of the National
Association of Securities Dealers', Inc., selected from time to time by the
Company for that purpose or as quoted by the National Quotation Bureau
Incorporated. In the event that no such quotation is available for any day, the
Board of Directors shall be entitled to determine the current market price on
the basis of such quotations as it considers appropriate.
Code
The term "the Code" means the Internal Revenue Code of 1986, as
amended.
Company
The term "Company" shall mean Vanguard Cellular Systems, Inc., a North
Carolina corporation, and, subject to the provisions of Article X, shall include
its successors and assigns.
Company Order
The term "Company Order" means a written order signed in the name of
the Company by its Chairman of the Board, President, any Vice Chairman of the
Board or any Vice President, and by its Treasurer, any Assistant Treasurer,
Secretary or any Assistant Secretary and delivered to the Trustee.
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Debenture
The term "Debenture" shall mean one of the debentures, notes or other
evidences of indebtedness that are issued from time to time in one or more
series under this Indenture and, more particularly, any Debenture authenticated
and delivered under this Indenture.
Debentureholder; holder of Debentures
The term "Debentureholder" or "holder of Debentures" or other similar
term shall mean any person who shall at the time be the registered holder of any
Debenture or Debentures as shown by the register or registers kept by the
Company or its agent for that purpose in accordance with the terms of this
Indenture.
Depositary
The term "Depositary" has the meaning specified in Section 2.13.
Event of Default
The term "Event of Default" shall mean an event listed in Section 7.1,
continued for the period of time, if any, and after the required notices, if
any, therein designated.
Global Debenture
The term "Global Debenture" has the meaning specified in Section 2.13.
Indenture
The term "Indenture" shall mean this instrument as originally executed
or, if amended or supplemented as herein provided, as so amended or supplemented
and, unless the context otherwise indicates, shall include the form and terms of
each particular series of Debentures established as contemplated hereunder.
Officers' Certificate
The term "Officers' Certificate" shall mean a certificate signed by the
Chairman of the Board, President, any Vice Chairman of the Board or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary of the Company, in their capacities as such officers of
the Company and delivered to the Trustee. Each such certificate shall include
the statements provided for in Section 3.8, if and to the extent required by the
provisions thereof.
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Opinion of Counsel
The term "Opinion of Counsel" shall mean an opinion in writing signed
by Schell Bray Aycock Abel & Livingston L.L.P. or other legal counsel (who may
be an employee of the Company) acceptable in form and substance to the Trustee
and delivered to the Trustee. Such opinion shall include the statements provided
for in Section 3.8, if and to the extent required by the provisions thereof.
Original issue discount
The term "original issue discount" with respect to any debt security,
including an Original Issue Discount Debenture, has the same meaning as set
forth in Section 1273 of the Code, or any successor provision, and the
applicable Treasury Regulations thereunder.
Original Issue Discount Debenture
The term "Original Issue Discount Debenture" means any Debenture which
provides for an amount less than the principal amount thereof to be due and
payable upon acceleration of the maturity thereof pursuant to Section 7.1.
Outstanding
The term "Outstanding", when used with respect to the Debentures,
shall, subject to Section 3.3, mean, as of the date of determination, all
Debentures theretofore authenticated and delivered under this Indenture, except:
(a) Debentures for the payment or redemption of which cash (or other form of
payment if permitted by the terms of such Debentures) in the necessary amount
shall have been deposited in trust with the Trustee or any paying agent (other
than the Company) provided that, if such Debentures are to be redeemed prior to
the maturity thereof, notice of such redemption shall have been duly given or
provision satisfactory to the Trustee shall have been made for giving such
notice; (b) Debentures converted into Capital Stock in accordance with Article
XIII hereof, if the terms of such Debentures provide for convertibility pursuant
to Section 2.2; (c) Debentures paid or in lieu of or in substitution for which
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.9, unless proof satisfactory to the Trustee is presented that
any such Debentures are held by persons in whose hands such Debentures are
valid, binding and legal obligations; and (d) Debentures which have been
canceled by the Trustee or delivered to the Trustee for cancellation.
Paying Agent
The term "Paying Agent" shall mean any person authorized by the Company
to pay the principal of, premium, if any, and interest on any Debentures.
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Person
The term "Person" shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, any unincorporated
organization, or a government or political subdivision thereof.
Principal
The term "principal" of a debt security, including any Debenture, on
any day and for any purpose means the amount (including, without limitation, in
the case of an Original Issue Discount Debenture, any accrued original issue
discount, but excluding interest) that is payable with respect to such debt
security as of such date and for such purpose (including, without limitation, in
connection with any sinking fund, upon any redemption at the option of the
Company upon any purchase or exchange at the option of the Company or the holder
of such debt security and upon any acceleration of the maturity of such debt
security).
Principal amount
The term "principal amount" of a debt security, including any
Debenture, means the principal amount as set forth on the face of such debt
security.
Responsible Officer
The term "Responsible Officer", when used with respect to the Trustee,
shall mean any officer of the Trustee assigned by the Trustee to administer its
corporate trust matters.
Securities Exchange Act
The term "Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
Trustee; principal office
The term "Trustee" shall mean the trustee or trustees hereunder for the
time being, whether original or successor. "Trustee" as used with respect to the
Debentures of any series shall mean the Trustee with respect to Debentures of
such series. The term "principal office" of the Trustee shall mean the principal
office of the Trustee at which, at any particular time, the corporate trust
business of the Trustee shall be administered, which office as of the date
hereof is 101 Barclay Street, 21st Floor, New York, New York 10286.
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U.S. Government Obligations
The term "U.S. Government Obligations" means direct obligations of, or
obligations entitled to the full faith and credit of, the United States of
America.
SECTION 1.2. Trust Indenture Act definitions controlling. All terms
used in this Indenture which are defined in the Trust Indenture Act of 1939, as
amended, or which are by reference therein defined in the Securities Act of 1933
(except as herein otherwise expressly provided or unless the context otherwise
requires) shall have the meanings assigned to such terms in such Trust Indenture
Act and such Securities Act as they were respectively in force at the date of
this Indenture, except as otherwise provided in Section 12.3.
ARTICLE II
FORM, ISSUE AND REGISTRATION OF DEBENTURES
SECTION 2.1. Forms generally and dating. The Debentures of each series
shall be in the form or forms (including temporary or permanent global form)
established from time to time by or pursuant to a resolution of the Board of
Directors or in one or more indentures supplemental hereto which shall set forth
the information required by Section 2.2. The Debentures and the Trustee's
certificate of authentication shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or by a resolution of the Board of Directors and may have such
notations, legends or endorsements as the Company may deem appropriate and as
are not inconsistent with the provisions of this Indenture or as may be required
by law, stock exchange rule or usage. The Company shall approve and provide the
form of the Debentures and any notation, legend or endorsement on them. If the
form of Debentures of any series is established by action taken pursuant to a
resolution of the Board of Directors, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 2.5 for the authentication and delivery of such
Debentures.
Each Debenture shall be dated the date of its authentication. The form
of the Trustee's certificate of authentication to be borne by the Debentures
shall be substantially as follows:
(FORM OF TRUSTEE'S CERTIFICATE)
This is one of the Debentures of the series referred to on the reverse
hereof.
THE BANK OF NEW YORK
as Trustee
By:
Authorized Officer
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SECTION 2.2. Amount unlimited; Issuable in series.
The aggregate principal amount of the Debentures which may be
authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series. There shall be
established in or pursuant to one or more resolutions of the Board of Directors,
or established in or pursuant to one or more indentures supplemental hereto,
prior to the issuance of the Debentures of any series:
(1) the title of the Debentures of the series (which shall
distinguish Debentures of the series from all other Debentures);
(2) any limit upon the aggregate principal amount of the
Debentures of the series which may be authenticated and delivered under
this Indenture (except for the Debentures authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of,
other Debentures of the series pursuant to Section 2.6, 2.8, 2.9, 2.10,
2.11, 5.2 or 12.5) and except for any Debentures which pursuant to
Section 2.4 are deemed not to have been authenticated and delivered
hereunder;
(3) the date or dates (and whether fixed or extendable) on
which the principal of the Debentures of the series is payable or the
method of determination thereof;
(4) the rate or rates at which the Debentures of the series
shall bear interest, if any, the method of calculating such rates, the
date or dates from which such interest shall accrue or the manner of
determining such dates, the interest payment dates on which such
interest shall be payable and the record dates for the determination of
Debentureholders to whom interest is payable;
(5) the place or places where the principal of and premium, if
any, and interest on the Debentures, if any, of the series shall be
payable;
(6) if other than 100% of their principal amount, the
percentage of the principal amount at which the Debentures will be
issued;
(7) any provisions relating to the issuance of the Debentures
of such series at an original issue discount;
(8) the price or prices at which, the period or periods within
which and the terms and conditions upon which the Debentures of the
series may be redeemed, in whole or in part, at the option of the
Company, pursuant to any sinking fund or otherwise (including, without
limitation, the form or method of payment thereof if other than in
cash);
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(9) the obligation, if any, of the Company to redeem, purchase
or repay the Debentures of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of a
Debentureholder thereof and the price or prices at which and the period
or periods within which and the terms and conditions upon which the
Debentures of the series shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligation (including, without
limitation, the form or method of payment thereof if other than in
cash), and any provisions for the remarketing of such Debentures;
(10) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Debentures of the
series shall be issuable;
(11) if other than the principal amount thereof, the portion
of the principal amount of the Debentures of the series which shall be
payable upon declaration of acceleration of the maturity thereof
pursuant to Section 7.1 or provable in bankruptcy pursuant to Section
7.2, or, if applicable, which is convertible in accordance with Article
XIII;
(12) any Events of Default with respect to the Debentures of a
particular series, in lieu of or in addition to those set forth herein
and the remedies therefor;
(13) the obligation, if any, of the Company to permit the
conversion or exchange of the Debentures of such series and, if any,
the securities or rights into which the Debentures of the series are
convertible or exchangeable (which may include other debentures,
Capital Stock or other securities or rights of the Company (including
rights to receive payment in cash or securities based on the value,
rate or price of one or more specified commodities, currencies or
indices) or exchangeable for securities of other series or a
combination of the foregoing), and the terms and conditions upon which
such conversion or exchange shall be effected (including, without
limitation, the initial conversion price or rate, the conversion period
and any other provision in addition to or in lieu of those set forth in
this Indenture relative to such obligation);
(14) any trustees, authenticating or paying agents, transfer
agents or registrars or any other agents with respect to the Debentures
of such series;
(15) the currency or currencies, including composite
currencies, in which the Debentures of the series shall be denominated
if other than the currency of the United States of America, and, if so,
whether the Debentures of the series may be satisfied and discharged
other than as provided in Article VI;
(16) if other than the coin or currency in which the
Debentures of that series are denominated, the coin or currency in
which payment of the principal of, premium, if any, or interest on the
Debentures of such series shall be payable;
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(17) if the principal of, premium, if any, or interest on the
Debentures of such series are to be payable, at the election of the
Company or a Debentureholder thereof, in a coin or currency other than
that in which the Debentures are denominated, the period or periods
within which, and the terms and conditions upon which, such election
may be made;
(18) if the amount of payments of principal of, premium, if
any, and interest on the Debentures of the series may be determined
with reference to an index, the manner in which such amounts shall be
determined;
(19) whether and under what circumstances the Company will pay
additional amounts on the Debentures of the series held by a person who
is not a United States of America person in respect of any tax,
assessment or governmental charge withheld or deducted and, if so,
whether the Company will have the option to redeem such Debentures
rather than pay such additional amounts;
(20) if receipt of certain certificates or other documents or
satisfaction of other conditions will be necessary for any purpose,
including, without limitation, as a condition to the issuance of the
Debentures of such series in definitive form (whether upon original
issue or upon exchange of a temporary Debenture of such series), the
form and terms of such certificates, documents or conditions;
(21) any other affirmative or negative covenants with respect
to the Debentures of such series;
(22) whether the Debentures of such series shall be issued in
whole or in part in the form of one or more Global Debentures and in
such case (i) the Depositary for such Global Debenture or Debentures,
which Depositary must be a clearing agency registered under the
Securities Exchange Act, (ii) the circumstances under which any such
Global Debenture may be exchanged for Debentures registered in the name
of, and under which any transfer of such Global Debenture may be
registered in the name of, any Person other than such Depositary or its
nominee, if other than as set forth in Section 2.13 and (iii) any other
provisions regarding such Global Debentures which provisions may be in
addition to or in lieu of, in whole or in part, the provisions of
Section 2.13; and
(23) any other terms of a particular series and any other
provisions expressing or referring to the terms and conditions upon
which the Debentures of such series are to be issued under the
Indenture, which terms and provisions are not in conflict with the
provisions of this Indenture; provided, however, that the addition to
or subtraction from or variation of Articles IV, V, VI, VII, and X (and
Section 1.1, insofar as it relates to the definition of certain terms
as used in such Articles) with regard to the Debentures of a particular
series shall not be deemed to constitute a conflict with the provisions
of those Articles.
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All Debentures of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors or in any such indenture
supplemental hereto. Not all Debentures of any one series need be issued at the
same time, and, unless otherwise so provided, a series may be reopened for
issuances of additional Debentures of such series.
If any of the terms of the Debentures of a series are established by
action taken pursuant to a resolution of the Board of Directors, a copy of any
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee with an
Officers' Certificate setting forth the terms of the Debentures of such series.
With respect to Debentures of a series which are not to be issued at one time,
such resolution of the Board of Directors or action may provide general terms or
parameters for Debentures of such series and provide either that the specific
terms of particular Debentures of such series shall be specified in a Company
Order or that such terms shall be determined by the Company or its agents in
accordance with a Company Order as contemplated by the proviso clause of Section
2.5.
SECTION 2.3. Denominations. The Debentures of each series shall be
registered Debentures without coupons, in such denominations as shall be
specified as contemplated by Section 2.2. In the absence of any such provisions
with respect to the Debentures of any series, the Debentures of such series
shall be issuable in denominations of $1,000 or of any integral multiple of
$1,000.
SECTION 2.4. Execution of Debentures; Authentication. The Debentures
shall be executed on behalf of the Company by its President or one of its Vice
Chairmen or Vice Presidents, whose signatures may be manual or facsimile, and
its corporate seal shall be thereunto affixed (or a facsimile thereof shall be
engraved, printed, or otherwise reproduced thereon) and attested by the manual
or facsimile signature of its Secretary or one of its Assistant Secretaries. In
case any officer of the Company who shall have signed any of the Debentures
shall cease to be such officer before the Debentures so signed and attested
shall actually have been authenticated and delivered by the Trustee or the
Authenticating Agent or disposed of by the Company, such Debentures nevertheless
may be authenticated, issued and delivered or disposed of with the same force
and effect as though the person or persons who signed or attested such
Debentures had not ceased to be such officer of the Company; and any such
Debenture may be signed and attested on behalf of the Company by such persons,
as at the actual date of the execution of such Debenture, shall be the proper
officers of the Company, although at the date of such Debenture or the date of
execution of this Indenture any such person was not such officer.
No Debenture of any series shall be entitled to the benefits hereof or
shall be or become valid or obligatory for any purpose unless there shall appear
on the Debenture a certificate of authentication, substantially in the form
hereinbefore recited, manually executed by the Trustee for such series or an
Authenticating Agent; and such certificate on any Debenture issued by the
Company shall be conclusive evidence that it has been duly authenticated and
delivered hereunder.
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Notwithstanding the foregoing, if any Debenture shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Debenture to the Trustee for cancellation as
provided in Section 2.11 together with a written statement (which need not be
accompanied by an Opinion of Counsel) stating that such Debenture has not been
issued and sold by the Company, for all purposes of this Indenture such
Debenture shall be deemed not to have been authenticated and delivered hereunder
and shall not be entitled to the benefits of this Indenture.
If the form or forms or terms of the Debentures of any series have been
established in or pursuant to one or more resolutions of the Board of Directors
or indentures supplemental hereto as permitted by Sections 2.1 and 2.2, in
authenticating such Debentures, and accepting the additional responsibilities
under this Indenture in relation to such Debentures, the Trustee and the
Authenticating Agent shall be entitled to receive, and (subject to Section 11.2)
shall be fully protected in relying upon, a copy of such resolution or
resolutions delivered to the Trustee and the Authenticating Agent and certified
by the Secretary or Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and an Opinion of Counsel stating:
(1) if the form or forms of such Debentures have been
established by or pursuant to a resolution of the Board of Directors or
indenture supplemental hereto, that such form or forms have been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Debentures have been established by
or pursuant to a resolution of the Board of Directors or indenture
supplemental hereto, that such terms have been established in
conformity with the provisions of this Indenture; and
(3) that such Debentures, when authenticated and delivered by
the Trustee or an Authenticating Agent and issued by the Company in the
manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization and other
laws of general applicability relating to or affecting the enforcement
of creditors' rights and to general equity principles (or such other
similar matters as in the opinion of such counsel shall not materially
adversely affect such enforceability);
provided, however, that, with respect to Debentures of a series which are not to
be issued at one time, the Trustee and the Authenticating Agent shall be
entitled to receive such Opinion of Counsel only once at or prior to the time of
the first authentication of Debentures of such series and that the opinions
described in clauses (2) and (3) above may state, respectively:
(a) that, when the terms of such Debentures shall
have been established pursuant to a Company Order or pursuant
to such procedures as may be specified
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from time to time by a Company Order, all as contemplated by
and in accordance with a resolution of the Board of Directors
or an Officers' Certificate pursuant to a resolution of the
Board of Directors or indenture supplemental hereto, as the
case may be, such terms will have been established in
conformity with the provisions of this Indenture; and
(b) that such Debentures, when (i) executed by the
Company, (ii) completed, authenticated and delivered by the
Trustee or the Authenticating Agent in accordance with this
Indenture, (iii) issued and delivered by the Company, and (iv)
paid for, all as contemplated by and in accordance with the
aforesaid Company Order or specified procedures, as the case
may be, will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization and other laws of general applicability
relating to or affecting the enforcement of creditors' rights
and to general equitable principles (or such other similar
matters as in the opinion of such counsel shall not materially
adversely affect such enforceability).
Notwithstanding the provisions of Sections 2.1, 2.2, 3.8 and this
Section, if all the Debentures of a series are not to be originally issued at
one time, the resolution of the Board of Directors or indenture supplemental
hereto, the certified copy of the record of action taken pursuant to such
resolution or supplemental indenture, the Officers' Certificate, the Company
Order and any other documents otherwise required pursuant to such Sections need
not be delivered at or prior to the time of authentication of each Debenture of
such series if such documents are delivered at or prior to the authentication
upon original issuance of the first Debenture of such series to be issued;
provided, however, that any subsequent request by the Company to the Trustee or
the Authenticating Agent to authenticate Debentures of such series shall
constitute a representation and warranty by the Company that, as of the date of
such request, the statements made in the Officers' Certificate delivered
pursuant to Section 3.8 at or prior to authentication of the first such
Debenture shall be true and correct on the date thereof as if made on and as of
the date hereof.
The Trustee or the Authenticating Agent shall not be required to
authenticate such Debentures if the issue of such Debentures pursuant to this
Indenture will adversely affect the Trustee's or the Authenticating Agent's own
rights, duties or immunities under the Debentures and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee or the
Authenticating Agent.
With respect to Debentures of a series which are not all issued at one
time, the Trustee and the Authenticating Agent may conclusively rely, as to the
authorization by the Company of any such Debentures, the form and terms thereof
and the legality, validity, binding effect and enforceability thereof, upon the
Opinion of Counsel, Officers' Certificate and other documents delivered pursuant
to Sections 2.1, 2.2, 3.8 and this Section, as applicable, at or prior to the
time of the first authentication of Debentures of such series unless and until
such opinion, certificate
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or other documents have been superseded or revoked in a writing delivered to the
Trustee. In connection with the authentication and delivery of Debentures of a
series which are not all issued at one time, the Trustee and the Authenticating
Agent shall be entitled to assume that the Company's instructions to
authenticate and deliver such Debentures do not violate any rules, regulations
or orders of any governmental agency or commission having jurisdiction over the
Company.
SECTION 2.5. Issue of Debentures. The Trustee and the Authenticating
Agent, forthwith upon the execution and delivery of this Indenture and from time
to time thereafter, upon the execution and delivery to it of Debentures of any
series by the Company as herein provided, and without further action on the part
of the Company, shall authenticate such Debentures up to a maximum amount, if
any, designated for such series pursuant to Section 2.2 and deliver them to or
upon the receipt of a Company Order; provided, however, that if not all the
Debentures of a series are to be issued at one time and if the resolution of the
Board of Directors or indenture supplemental hereto establishing such series as
contemplated by Sections 2.1 and 2.2 shall so permit, such Company Order may set
forth procedures acceptable to the Trustee for the issuance of such Debentures
and for determining the form or forms or terms of particular Debentures of such
series including, but not limited to, interest rate, if any, maturity date, date
of issuance and date from which interest, if any, shall accrue.
SECTION 2.6. Transfer of Debentures. The transfer of any Debenture of
any series may be registered by the registered owner thereof, in person or by
his attorney duly authorized in writing, at the office or agency of the Company
to be maintained by it as provided in Section 4.2, by delivering such Debenture
for cancellation, accompanied by delivery of a duly executed instrument of
transfer, in a form approved by the Company and satisfactory to the Trustee, and
thereupon the Company shall execute in the name of the transferee or
transferees, and the Trustee or the Authenticating Agent shall authenticate and
deliver, a new Debenture or Debentures of the same series and of like form for
the same aggregate principal amount.
SECTION 2.7. Persons deemed owners of Debentures. Prior to due
presentation of any Debenture for registration of transfer, the person in whose
name a Debenture of any series shall be registered, on books kept for such
purpose in accordance with Section 4.2, shall be deemed the absolute owner
thereof for all purposes of this Indenture, whether or not such Debenture is
overdue, and neither the Company, the Trustee nor any Paying Agent or conversion
agent nor any Debenture registrar shall be affected by notice to the contrary.
Subject to the provisions of Section 2.12, payment of or on account of the
principal, premium, if any, and interest shall be made only to or upon the order
in writing of such registered owner thereof, but such registration may be
changed as above provided. All such payments shall be valid and effectual to
satisfy and discharge the liability upon such Debenture to the extent of the sum
or sums so paid.
SECTION 2.8. Provisions for Debentures in temporary form. Until
Debentures of any series in definitive form are ready for delivery, the Company
may execute and, upon its
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request in writing, the Trustee or the Authenticating Agent shall authenticate
and deliver, in lieu thereof and subject to the same conditions, one or more
printed or lithographed Debentures in temporary form, substantially of the tenor
of Debentures of the same series, without a recital of specific redemption
prices and with such other appropriate omissions, variations and insertions, all
as may be determined by the Board of Directors. Until exchanged for Debentures
of the same series in definitive form such Debentures in temporary form shall be
entitled to the benefits of this Indenture. The Company shall, without
unreasonable delay after the issue of Debentures in temporary form, prepare,
execute and deliver definitive Debentures of the same series to the Trustee, and
upon the presentation and surrender of Debentures in temporary form, the Trustee
or the Authenticating Agent shall authenticate and deliver, in exchange
therefor, Debentures of the same series in definitive form for the same
aggregate principal amount as the Debentures in temporary form surrendered. Such
exchange shall be made by the Company at its own expense and without any charge
therefor.
SECTION 2.9. Mutilated, destroyed, lost or stolen Debentures. Upon
receipt by the Company, the Trustee and the Authenticating Agent of evidence
satisfactory to them that any Debenture of any series has been mutilated,
destroyed, lost or stolen, and upon receipt of indemnity (and in case of a
destroyed, lost or stolen Debenture, proof of ownership) satisfactory to them,
the Company shall, in the case of a mutilated Debenture, and may in the case of
a lost, stolen or destroyed Debenture, execute, and thereupon the Trustee or the
Authenticating Agent shall authenticate and deliver, a new Debenture of the same
series of like tenor bearing a serial number not contemporaneously outstanding
(bearing such notation, if any, as may be required by the rules of any stock
exchange upon which the Debentures of the same series are listed or are to be
listed), in exchange and substitution for, and upon surrender and cancellation
of, the mutilated Debenture, or in lieu of and in substitution for the Debenture
so destroyed, lost or stolen; or, if any mutilated, destroyed, lost or stolen
Debenture of any series shall have matured or be about to mature, instead of
issuing a new Debenture, the Company, upon written notice to the Trustee or the
Authenticating Agent, may pay the same without surrender of the destroyed, lost
or stolen Debenture. The Company may require payment of the expenses which may
be incurred by the Company or any agent thereof and the charges and expenses of
the Trustee and the Authenticating Agent in the premises. Any Debenture issued
under the provisions of this Section 2.9 in lieu of any Debenture alleged to
have been destroyed, lost or stolen, shall constitute an additional contractual
obligation of the Company, whether or not the Debenture alleged to have been
destroyed, lost or stolen shall be found at any time, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other
Debentures of the same series issued under this Indenture.
All Debentures shall be held and owned upon the express condition that
the foregoing provisions are exclusive with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures, and shall preclude,
to the extent lawful, any and all other rights or remedies, notwithstanding any
law or statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.
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SECTION 2.10. Exchanges of Debentures. Debentures of any series may,
upon surrender thereof as hereinafter provided in this Section 2.10, be
exchanged for one or more Debentures of the same series of the same aggregate
principal amount, in authorized denominations. The Debentures to be exchanged
shall be surrendered at the office or agency of the Company to be maintained by
it as provided in Section 4.2, accompanied by duly executed instruments of
transfer in a form acceptable to the Company and the Trustee, and the Company
shall execute and the Trustee or the Authenticating Agent shall authenticate and
deliver, in exchange therefor, the Debenture or Debentures of the same series,
bearing numbers not contemporaneously outstanding, which the Debentureholder
making the exchange shall be entitled to receive. Every exchange of Debentures
of any series shall be effected in such manner as may be prescribed by the
Company with the approval of the Trustee, and as may be necessary to comply with
the regulations of any stock exchange upon which Debentures of such series are
listed or are to be listed or to conform to usage in respect thereof.
Upon every exchange or registration of transfer of Debentures, no
service charge shall be made but the Company may require the payment of any
taxes or other governmental charges required to be paid with respect to such
exchange or registration, as a condition precedent to the exercise of the
privilege of such exchange or registration.
All Debentures executed, authenticated and delivered in exchange or
upon registration of transfer shall be the valid obligations of the Company,
evidencing the same debt as the Debentures surrendered, and shall be entitled to
the benefits of this Indenture to the same extent as the Debentures in exchange
for which they were authenticated and delivered.
The Company shall not be required to make exchanges or registrations of
transfer under any provision of this Article II of: (a) the Debentures of any
series for the period of 15 days next preceding the date of any designation of
Debentures of such series to be redeemed, as provided in Article V, or (b) any
Debenture or portion thereof called or to be called for redemption.
SECTION 2.11. Cancellation of Surrendered Debentures. All Debentures of
any series surrendered for the purpose of payment, exchange, conversion or
cancellation (including Debentures authenticated which the Company has not
issued and sold) shall, if surrendered to the Company or any Paying Agent or
conversion agent, be delivered to the Trustee and canceled by it, or, if
surrendered to the Trustee, shall be canceled by it, and no Debentures shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Indenture or as otherwise provided in the resolution of the Board of
Directors or indenture supplemental hereto establishing such series as
contemplated by Section 2.2. All Debentures of any series surrendered for the
purpose of redemption or credit against any sinking fund shall similarly be
delivered to the Trustee for cancellation, and no Debentures shall be issued in
lieu thereof except Debentures of the same series in the case of redemption of a
Debenture in part only. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation. Unless otherwise directed in writing
by the Company, the Trustee shall
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destroy all canceled Debentures and furnish to the Company a certificate
evidencing such destruction.
SECTION 2.12. Payment of interest; Defaulted interest. Except as
provided in Section 13.4, interest (except defaulted interest) on the Debentures
of any series which is payable on any interest payment date shall be paid to the
persons who are Debentureholders of such series at the close of business on the
record date specified for that purpose as contemplated by Section 2.2. At the
option of the Company, payment of interest on any Debenture may be made by check
mailed to the holder's registered address.
If the Company defaults in a payment of interest on the Debentures of
any series, it shall pay the defaulted interest to the persons who are
Debentureholders of such series at the close of business on a subsequent special
record date. The Company shall fix the record date (which shall be not less than
five Business days prior to the date of payment of such defaulted interest) and
payment date. At least 15 days before the record date, the Company shall mail to
each Debentureholder of such series a notice that states the record date, the
payment date and the amount of defaulted interest to be paid. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Debenture of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee or any paying agent
for such series an amount of money in immediately available funds by 10:00 a.m.
New York time on the payment date equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to any Paying Agent for such series for such deposit prior to the
date of the proposed payment. The Company may pay defaulted interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debenture may be listed, and upon notice as may be
required by such exchange if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such payment shall be deemed
practicable by the Trustee.
SECTION 2.13. Global Debentures; Depositary. For the purposes of this
Section, the term "Agent Member" means a member of, or participant in, a
Depositary; the term "Depositary" means, with respect to Debentures issuable or
issued in whole or in part in the form of one or more Global Debentures, the
entity designated as Depositary by the Company pursuant to Section 2.2, and, if
at any time there is more than one such person, "Depositary" as used with
respect to the Debentures shall mean the respective Depositary with respect to
particular series of Debentures; and the term "Global Debenture" means a global
certificate evidencing all or part of the series of Debentures as shall be
specified herein, issued to the Depositary for the series or such portion of the
series, and registered in the name of such Depositary or its nominee. The Global
Debenture may provide that it shall represent the aggregate amount of
Outstanding Debentures from time to time endorsed thereon which may from time to
time be reduced to reflect exchanges. Any endorsement to reflect the amount, or
any increase or decrease in the amount, of Outstanding Debentures shall be made
by the Trustee.
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Notwithstanding Section 2.10, except as otherwise specified as
contemplated by Section 2.2., hereof, any Global Debenture shall be exchangeable
only as provided in this paragraph. A Global Debenture shall be exchangeable
pursuant to this Section 2.13 if (i) the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary for such Global Debenture or if
at any time the Depositary ceases to be a clearing agency registered under the
Securities Exchange Act, (ii) the Company in its sole discretion determines that
all Global Debentures of any series then outstanding under the Indenture shall
be exchangeable for definitive Debentures of such series in registered form or
(iii) an Event of Default with respect to the Debentures of the series
represented by such Global Debenture has occurred and is continuing. Any Global
Debenture of such series exchangeable pursuant to the preceding sentence shall
be exchangeable for definitive Debentures of such series in registered form,
bearing interest (if any) at the same rate or pursuant to the same formula,
having the same date of issuance, redemption, conversion (if any) and other
provisions, and of differing denominations aggregating a like amount. Such
definitive Debentures of such series shall be registered in the names of the
owners of the beneficial interests in such Global Debentures of such series as
such names are from time to time provided by the relevant participants in the
Depositary holding such Global Debentures (as such participants are identified
from time to time by such Depositary).
No Global Debenture may be transferred except as a whole by a nominee
of the Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee or a successor of the Depositary or a nominee
of such successor. Except as provided above, owners solely of beneficial
interests in a Global Debenture shall not be entitled to receive physical
delivery of Debentures of such series in definitive form and will not be
considered the Debentureholders thereof for any purpose under this Indenture.
Any Global Debenture that is exchangeable pursuant to the preceding
paragraph shall be exchangeable for Debentures of such series in authorized
denominations and registered in such names as the Depositary that is the
Debentureholder of such Global Debentures of such series shall direct.
In the event that a Global Debenture is surrendered for redemption in
part pursuant to Section 5.2 or 5.5, the Company shall execute, and the Trustee
or the Authenticating Agent shall authenticate and delivery to the Depositary
for such Global Debenture, without service charge, a new Global Debenture in a
denomination and tenor equal to and in exchange for the unredeemed portion of
the principal for the Global Debenture so surrendered.
The Agent Members shall have no rights under this Indenture with
respect to any Global Debenture held on their behalf by a Depositary, and such
Depositary may be treated by the Company, the Trustee, and any agent of the
Company or the Trustee as the owner of such Global Debenture for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee, or any agent of the Company or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by a
Depositary or impair, as between a Depositary and its Agent Members, the
operation of customary practices
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governing the exercise of the rights of a holder of a Debenture of any series,
including without limitation, the granting of proxies or other authorization of
participants to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a Debentureholder is entitled to
give or take under the Indenture.
The Trustee shall not be required to authenticate Global Debentures
until it has received documentation satisfactory to it.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Rights under Indenture limited to the parties and holders
of Debentures. Nothing in this Indenture or the Debentures, express or implied,
is intended or shall be construed to confer upon, or to give to, any person or
corporation, other than the parties hereto, their successors and assigns, and
the holders of the Debentures, any right, remedy or claim under or by reason of
this Indenture or any provision hereof; and the provisions of this Indenture are
for the exclusive benefit of the parties hereto, their successors and assigns,
and the holders of the Debentures.
SECTION 3.2. Certificate of independent accountants conclusive. Unless
otherwise specifically provided, the certificate or opinion of Arthur Andersen &
Co., or of any other independent firm of public accountants of recognized
standing selected by the Board of Directors and acceptable to the Trustee in the
exercise of reasonable care (which firm may be regular independent accountants
to the Company), shall be conclusive evidence of the correctness of any
computation made under the provisions of this Indenture, and wherever reference
is made in this Indenture to "generally accepted accounting principles" the
certificate or opinion of such a firm shall be conclusive evidence thereof. The
Company shall furnish to the Trustee upon its request a copy of any such
certificate or opinion.
SECTION 3.3. Treatment of Debentures owned or held by the Company in
determining required percentages. For all purposes of this Indenture, in
determining whether the holders of a required percentage or proportion of the
principal amount of Debentures of one or more series have concurred in any
request, waiver, vote, direction or consent, Debentures owned or held by or for
the account or for the benefit of the Company or any other obligor under this
Indenture or any Affiliate shall be disregarded and deemed not Outstanding,
except that, for the purposes of determining whether the Trustee shall be
protected in relying on any such request, waiver, direction or consent, only
Debentures which the Trustee knows to be so owned or held shall be so
disregarded. Debentures so owned which have been pledged in good faith to secure
an obligation may be regarded as Outstanding for all such purposes, if the
Trustee receives an Officers' Certificate stating that said Debentures have been
so pledged, that the pledgee is entitled to vote with respect to such Debentures
and that the pledgee is not the Company or any other obligor on the Debentures,
an Affiliate of the Company or an Affiliate of such other obligor. In
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case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be conclusive, and, subject to the provisions of Section
11.1 of this Indenture, shall afford full protection to the Trustee.
SECTION 3.4. Remaining provisions not affected by invalidity of any
other provisions-required provisions of Trust Indenture Act of 1939 to control.
In case anyone or more of the provisions contained in this Indenture or in the
Debentures of any series shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Indenture, but this Indenture shall
be construed as if such invalid, illegal or unenforceable provisions had never
been contained herein.
If any provision of this Indenture limits, qualifies or conflicts with
any other provision of this Indenture which is required to be included in an
indenture qualified under the Trust Indenture Act of 1939, as amended, such
provision which is so required to be included shall control.
SECTION 3.5. Company released from Indenture requirements if entitled
to have Indenture canceled. Whenever by the terms of this Indenture the Company
shall be required to do or not to do anything so long as any of the Debentures
shall be Outstanding of any series, the Company shall, notwithstanding any such
provision, not be required to comply with such provision with respect to such
series if it shall be entitled to have this Indenture satisfied and discharged
pursuant to the provisions hereof, even though in either case the holders of any
of the Debentures of such series shall have failed to present and surrender such
Debentures for payment pursuant to the terms of this Indenture.
SECTION 3.6. Date of execution. Although this Indenture, for
convenience and for the purpose of reference, is dated as of the date first
above written, the actual date of execution by the Company and by the Trustee is
as indicated by their respective acknowledgments hereto annexed.
SECTION 3.7. Execution of documents furnished under the Indenture.
Unless otherwise expressly provided, any order, notice, request, demand,
certificate or statement of the Company required or permitted to be made or
given under any provision hereof shall be sufficiently executed if signed by its
Chairman of the Board, President, any Vice Chairman of the Board or any Vice
President, and by its Treasurer, any Assistant Treasurer, Secretary or any
Assistant Secretary.
SECTION 3.8. Officers' Certificates and Opinions of Counsel to be
furnished Trustee. Upon any application, demand or request by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent have been complied
with and that such action is in compliance with applicable law.
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Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include (a) a statement that
the person making such certificate or opinion has read such covenant or
condition; (b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; (c) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (d) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of
the Company, upon the certificate, statement or opinion of or representations by
an officer or officers of the Company, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous. Any certificate or
opinion of any independent firm of public accountants filed with the Trustee
shall contain a statement that such firm is independent.
SECTION 3.9. Presentation of notices and demands. All notices to or
demands upon the Trustee shall be in writing and may be served or presented at
the principal office of the Trustee. Any notice to or demand upon the Company
shall be deemed to have been sufficiently given or served by the Trustee or the
Debentureholders, for all purposes, by being mailed by first class mail
addressed to the Company, attention of the President, at 2002 Pisgah Church
Road, Suite 300, Greensboro, North Carolina 27455, and to Schell Bray Aycock
Abel & Livingston L.L.P., 230 North Elm Street, Suite 1500, Greensboro, North
Carolina 27401, Attention: Kenneth N. Shelton, Esq., or at such other address or
to such other counsel, as may be filed in writing by the Company with the
Trustee.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to holders of Debentures of any event, such notice shall be
sufficiently given to holders of Debentures if in writing and mailed,
first-class postage prepaid, to each holder of a Debenture
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affected by such event, at the address of such holder as it appears in the
Debenture register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
holders of Debentures by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for every
purpose hereunder. In any case where notice to holders of Debentures is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular holder of a Debenture shall affect the sufficiency of
such notice with respect to other holders of Debentures.
SECTION 3.10. Successors and assigns bound by Indenture. All the
covenants, promises and agreements in this Indenture contained by or on behalf
of the Company, or by or on behalf of the Trustee, shall bind and inure to the
benefit of their respective successors and assigns, whether so expressed or not.
SECTION 3.11 Descriptive headings for convenience only. The descriptive
headings of the several Articles of this Indenture are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 3.12. North Carolina law to govern. This Indenture and each
Debenture shall be deemed to be a contract made under the laws of the State of
North Carolina, and for all purposes shall be construed in accordance with the
laws of said jurisdiction, except that the rights, obligations, duties,
immunities and limitations of rights of the Trustee shall be construed in
accordance with the laws of the State of New York.
SECTION 3.13. Indenture may be executed in counterparts. This Indenture
may be simultaneously executed in any number of counterparts, each of which when
so executed and delivered shall be an original, but such counterparts shall
together constitute but one and the same instrument. The Bank of New York, as
Trustee, hereby accepts the trusts in this Indenture declared and provided upon
the terms and conditions hereinbefore set forth.
ARTICLE IV
COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
SECTION 4.1. Payment of Principal and interest. The Company will for
the benefit of each series of Debentures duly and punctually pay or cause to be
paid the principal of, premium, if any, and interest on the Debentures of such
series at the times and place and in the manner specified in this Indenture and
in the Debentures of such series. At the option of the
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Company, interest on the Debentures shall be payable without presentation of
such Debentures by a check to the registered holder.
SECTION 4.2. Maintenance of office or agency. So long as any of the
Debentures of any series remain unpaid, the Company will at all times keep an
office or agency in New York, New York, where Debentures of such series may be
presented for registration of transfer and exchange as in this Indenture
provided, where notices and demands with respect to the Debentures and this
Indenture may be served and where the Debentures may be presented for payment
or, for Debentures of each series that is convertible, for conversion. The
principal office of the Trustee shall be the office or agency for all of the
aforesaid purposes, unless the Company shall maintain some other office or
agency with respect to the Debentures of any series for such purposes and shall
give the Trustee written notice of the location thereof. In case the Company
shall fail to maintain such office or agency, presentations may be made and
notices and demands may be served at the principal office of the Trustee.
The Company shall keep, at said office or agency, a register or
registers in which, subject to such reasonable regulations as it may prescribe,
the Company shall register or cause to be registered Debentures of each series
and shall register or cause to be registered the transfer or exchange of
Debentures of each series as in Article II provided. Such register or registers
shall be in written form in the English language or any other form capable of
being converted into written form within a reasonable time. At all reasonable
times, such register or registers shall be open for inspection by the Trustee.
SECTION 4.3. Corporate existence. So long as any of the Debentures
remain unpaid, the Company will at all times (except as otherwise provided or
permitted elsewhere in this Indenture) do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
SECTION 4.4. Restrictions on mergers, sales and consolidations. So long
as any of the Debentures remain unpaid, the Company will not consolidate or
merge with or sell, convey or lease all or substantially all of its property to
any other corporation except as permitted in Article X hereof.
SECTION 4.5. Further assurances. From time to time whenever requested
by the Trustee, the Company will execute and deliver such further instruments
and assurances and do such further acts as may be reasonably necessary or proper
to carry out more effectually the purposes of this Indenture or to secure the
rights and remedies hereunder of the holders of the Debentures of any series.
SECTION 4.6. File certain reports and information with the Trustee and
the Securities and Exchange Commission - transmit to Debentureholders summaries
of certain documents filed with the Trustee - furnish list of Debentureholders
to the Trustee. The Company will:
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(a) file with the Trustee, within 15 days after the Company
files the same with the Securities and Exchange Commission, copies of
the annual reports and of the information, documents and other reports
which the Company may be required to file with the Securities and
Exchange Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (or copies of such portions thereof as
may be prescribed by the Securities and Exchange Commission); or, if
the Company is not required to file with the Securities and Exchange
Commission information, documents or reports pursuant to either Section
13 or Section 15(d) of the Securities Exchange Act of 1934, then the
Company will file with the Trustee and will file with the Securities
and Exchange Commission, in accordance with rules and regulations
prescribed by the Securities and Exchange Commission, such of the
supplementary and periodic information, documents and reports required
pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities
exchange as may be prescribed in such rules and regulations;
(b) file with the Trustee and the Securities and Exchange
Commission, in accordance with the rules and regulations prescribed
from time to time by the Securities and Exchange Commission, such
additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required by such rules and regulations;
(c) transmit to the Debentureholders, in the manner and to the
extent provided in subdivision (c) of Section 11.10, such summaries of
any information, documents and reports required to be filed with the
Trustee pursuant to the provisions of subdivisions (a) and (b) of this
Section 4.6 as may be required by the rules and regulations of the
Securities and Exchange Commission; and
(d) furnish or cause to be furnished to the Trustee, not more
than 15 days after each record date (but in no event less frequently
than every six months) for the payment of interest with respect to
Debentures of any series, and at such other times as the Trustee may
request in writing, within 30 days after receipt by the Company of any
such request, a list in such form as the Trustee may reasonably require
containing all information in the possession or control of the Company
or of any paying agent, other than the Trustee, as to the names and
addresses of the holders of Debentures of such series obtained since
the date as of which the next previous list, if any, was furnished;
provided, that so long as the Trustee is Debenture registrar for such
series, no such list need be furnished. Any such list may be dated as
of a date not more than 15 days prior to the time such information is
furnished or caused to be furnished, and need not include information
received after such date (excluding from any such list names and
addresses received by the Trustee in its capacity as Debenture
registrar).
SECTION 4.7. File statement by officers annually with the Trustee.
Within 120 days after the close of the fiscal year ending December 31, 1996 and
within 120 days after the
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close of each fiscal year thereafter, the Company will file with the Trustee a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this Indenture. For
purposes of this paragraph, such compliance shall be determined without regard
to any period of grace or requirement of notice provided under this Indenture.
At the time such Officers' Certificate is filed, the Company will also
file with the Trustee a letter or statement of the independent accountants who
shall have certified the financial statements of the Company for its preceding
fiscal year in connection with the annual report of the Company to its
shareholders for such year to the effect that, in making the examination
necessary for certification of such financial statements, they have obtained no
knowledge of any default by the Company in the performance or fulfillment of any
covenant, agreement or condition contained in this Indenture, which default
remains uncured at the date of such letter or statement, or, if they shall have
obtained knowledge of any such uncured default, specifying in such letter or
statement such default or defaults and the nature and status thereof, it being
understood that such accountants shall not be liable directly or indirectly for
failure to obtain knowledge of any such default or defaults, and that nothing
contained in this Section 4.7 shall be construed to require such accountants to
make any investigation beyond the scope required in connection with such
examination.
SECTION 4.8. Duties of Paying Agent. The Company will cause each Paying
Agent for the Debentures of any series other than the Trustee to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee:
(a) that it will hold all sums held by it as such agent for
the payment of the principal of, premium, if any, or interest on the
Debentures of such series (whether such sums have been paid to it by
the Company or by any other obligor on the Debentures of such series)
in trust for the benefit of the holders of the Debentures of such
series;
(b) that it will give the Trustee written notice of any
failure by the Company (or by any other obligor on the Debentures of
such series) to make any payment of the principal of, premium, if any,
or interest on the Debentures of such series when the same shall be due
and payable; and
(c) that it will, at any time during the continuance of any
Event of Default with respect to such series, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust
by such Paying Agent.
If the Company acts as its own paying Agent for the Debentures of any
series, it will, on or before each due date of the principal of, premium, if
any, or interest on the Debentures of such series, set aside and segregate and
hold in trust for the benefit of the holders of the Debentures of such series a
sum sufficient to pay such principal, premium, if any, or interest and will
notify the Trustee of such action or any failure to take such action.
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Whenever the Company shall have one or more Paying Agents for any
series of Debentures, it will, on or before each due date of the principal of,
premium, if any, or interest on any Debentures of such series, deposit with the
Paying Agent or Agents for the Debentures of such series a sum, by 10:00 a.m.
New York time in immediately available funds on the payment date, sufficient to
pay the principal, premium, if any, or interest so becoming due with respect to
the Debentures of such series, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee in writing of any failure so to act.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to the Debentures of
one or more series or for any other purpose, pay, or by Company order direct any
Paying Agent for such series to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
payment.
Anything in this Section 4.8 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.8 shall be subject
to the provisions of Section 6.3.
ARTICLE V
REDEMPTION OF DEBENTURES; SINKING FUND
SECTION 5.1. Applicability of Article. Debentures of any series which
are redeemable before their stated maturity at the election of the Company or
through the operation of any sinking fund for the retirement of Debentures of
such series shall be redeemable in accordance with their terms established
pursuant to Section 2.2 and (except as otherwise established pursuant to Section
2.2 for Debentures of such series) in accordance with this Article.
SECTION 5.2. Notice of redemption to be given to Trustee - deposit of
cash (or other form of payment) with Trustee - selection by Trustee of
Debentures to be redeemed. Not less than 30 days (or such lesser number of days
as the Trustee shall approve) nor more than 60 days (or such greater number of
days as the Trustee shall approve) prior to the date fixed by the Company for
the redemption at the option of the Company of any Debentures of any series
which are subject to redemption or portions thereof, the Company shall give
written notice, by delivering a Company Order to the Trustee, stating the
aggregate principal amount of Debentures of such series which the Company elects
to redeem and the date and place fixed for redemption, that the Company, in the
case of any redemption of Debentures subject to any restrictions on such
redemption provided in the terms of Debentures of such series established
pursuant to Section 2.2 or elsewhere in this Indenture, is in compliance with
such restrictions. On or before 10:00 a.m. New York time of the date fixed for
redemption, the Company shall deposit with the Trustee or the Paying Agent money
in immediately available funds on such redemption date (or other form of payment
if permitted by the terms of such Debentures) an amount sufficient to redeem on
the
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date fixed for redemption all the Debentures of such series or portions thereof
to be redeemed, other than any Debentures of such series called for redemption
on such date which have been converted prior to the date of such deposit, at the
appropriate redemption price, together with any accrued interest to the date
fixed for redemption. If less than all the Debentures then Outstanding of such
series are to be redeemed, the Trustee shall select, substantially pro rata or
by lot, in such manner as it shall deem appropriate and fair, in its sole
discretion, the numbers of the Debentures to be redeemed as a whole or in part,
and shall thereafter promptly notify the Company in writing of the numbers of
the Debentures to be redeemed; provided, however, that Debentures of such series
registered in the name of the Company shall be excluded from any such selection
for redemption until all Debentures of such series not so registered shall have
been previously selected for redemption. For the purpose of such selection in
case of redemption of less than all of the Debentures of any series, the Trustee
and the Company shall have the option to treat as Outstanding Debentures any
Debentures of such series which are surrendered for conversion after the
fifteenth day immediately preceding the mailing of the notice of such
redemption, and need not treat as Outstanding Debentures any Debentures
authenticated and delivered during such period in exchange for the unconverted
portion of any Debentures converted in part during such period. In case any
Debenture shall be redeemed in part only, the notice of redemption shall specify
the principal amount thereof to be redeemed and shall state that, upon surrender
thereof for redemption, a new Debenture or new Debentures of the same series of
an aggregate principal amount equal to the unredeemed portion of such Debenture
will be issued in lieu thereof; and in such case the Company shall execute and
the Trustee or the Authenticating Agent shall authenticate and deliver such new
Debenture or Debentures of such series to or upon the written order of the
Debentureholder at the expense of the Company. Provisions of this Indenture that
apply to Debentures called for redemption also apply to portions of Debentures
called for redemption.
Upon or after the receipt of such notice, the Trustee, in the name of
the Company and as its agent, shall mail by first-class mail, postage prepaid,
to each registered holder of a Debenture to be redeemed in whole or in part at
his last address appearing on the registration books of the Company, a notice of
redemption. Such notice of redemption shall identify the Debentures to be so
redeemed in whole or in part and whether such Debentures are to be redeemed in
whole or in part and shall state: (i) the date fixed for redemption; (ii) the
redemption price at which Debentures are to be redeemed and method of payment,
if other than in cash; (iii) if applicable, the current conversion price or
rate; (iv) if applicable, that the right of the Debentureholder to convert
Debentures called for redemption shall terminate at the close of business on the
date fixed for redemption (or such other day as may be specified as contemplated
by Section 2.2 for Debentures of any series); (v) if applicable, that
Debentureholders who want to convert Debentures called for redemption must
satisfy the requirements for conversion contained in such Debentures; (vi) that,
subject to Section 13.4, interest, if any, accrued to the date fixed for
redemption will be paid as specified in said notice and that on and after said
date interest thereon shall cease to accrue; (vii) the provision of the
Debenture or this Indenture under which the redemption is being made; and (viii)
that the Company so elects to redeem such Debentures or portions thereof at the
place or places specified in such notice. Such notice shall be mailed not
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later than the tenth, and not earlier than the sixtieth, day before the date
fixed for redemption. Any notice which is mailed in the manner herein provided
shall be conclusively presumed to have been duly given, whether or not the
holder receives such notice; and failure duly to give such notice by mail, or
any defect in such notice, to the holder of any Debenture designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debenture.
The Company shall pay to the Trustee the cost of mailing notices of
redemption and any other necessary expenses incurred by the Trustee in
connection therewith.
SECTION 5.3. Debentures called for redemption to become due - rights of
holders of redeemed Debentures - return of funds on conversion. The notice of
election to redeem having been mailed as hereinbefore provided, the Debentures
or portions thereof called for redemption shall become due and payable on the
redemption date at the applicable redemption price, together with interest
accrued to the date fixed for redemption, at the place or places specified in
such notice, and if cash (or other form of payment if permitted by the terms of
such Debentures) in the amount necessary to redeem such Debentures or portions
thereof has been deposited with the Trustee, interest on such Debentures or
portions thereof shall cease to accrue from and after the date fixed for
redemption (unless the Company shall default in the payment of the redemption
price, plus accrued interest, if any) and the right to convert such Debentures
or portions thereof, if the terms of such Debentures provide for conversion
pursuant to Section 2.2, shall terminate at the close of business on the date
fixed for redemption or such other day as may be specified as contemplated by
Section 2.2 for Debentures of such series. The respective registered holders of
Debentures or portions thereof so called for redemption shall be entitled to
receive payment of the applicable redemption price, together with interest
accrued to the date fixed for redemption on or after the date fixed for
redemption (unless the Company shall default in the payment of the redemption
price, plus accrued interest, if any), upon presentation and surrender at the
place or places of payment specified in such notice. Notwithstanding the
foregoing, subject to Section 13.4, if the record date for payment or interest
is on or prior to the redemption date, such interest shall be payable to the
persons who are holders of such Debentures on such record date according to the
terms of such Debentures and Section 2.12.
If any Debenture called for redemption pursuant to Section 5.1 is
converted pursuant to Article XIII, any monies deposited with the Trustee for
the purpose of paying or redeeming any such Debenture shall be promptly paid to
the Company.
SECTION 5.4. Credits against sinking fund. Against any one or more
sinking fund payments to be made pursuant to the terms of the Debentures of any
series providing for a sinking fund, the Company may elect, by delivery of an
Officers' Certificate to the Trustee, at least 45 days prior to the sinking fund
payment date (or such shorter period as may be acceptable to the Trustee or is
otherwise specified as contemplated by Section 2.2 for Debentures of any
series), to take credit for any Debentures of such series or portions thereof
acquired or redeemed by the Company, pursuant to the terms of such Debentures or
through the application of permitted
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optional sinking fund payments pursuant to the terms of such Debentures, which
have not previously been used by the Company for the purposes permitted in this
Section 5.4 and for any Debentures which have been converted pursuant to the
terms of such Debentures. Such Debentures shall be received and credited for
such purpose by the Trustee at the redemption price specified in such Debentures
for redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly. Upon any such election the
Company shall receive credit against such sinking fund payments required to be
made in the order in which they are to be made. Any Debenture for which credit
is elected to be taken which shall not theretofore have been delivered to the
Trustee for cancellation shall at the time of such election be delivered to the
Trustee for cancellation by the Trustee.
SECTION 5.5. Redemption through sinking fund. Each sinking fund payment
made under the terms of the Debentures of any series established pursuant to
Section 2.2 shall be applied to the redemption of Debentures of such series on
the date for redemption specified in the Debentures of such series next
succeeding such sinking fund payment date; provided, however, if at any time the
amount of cash to be paid into the sinking fund for such series on the next
succeeding sinking fund payment date, together with any unused balance of any
preceding sinking fund payment or payments for such series, shall not exceed in
the aggregate $10,000, the Trustee, unless requested by the Company, shall not
give notice of the redemption of Debentures of such series through the operation
of the sinking fund on the succeeding date for redemption specified in the
Debentures of such series. At least 45 days (or such lesser number of days as
the Trustee shall approve) prior to the date on which a sinking fund payment
with respect to the Debentures of any series is due, the Company shall give
written notice to the Trustee of the principal amount of Debentures of such
series registered in the name of the Company (which shall be excluded from such
redemption) and the Trustee shall select, substantially pro rata or by lot, in
such manner as it shall deem appropriate and fair, the principal amount of
Debentures of such series to be redeemed in accordance with the terms of the
Debentures of such series after allowance for any credit elected under Section
5.4 and shall, in the name and at the expense of the Company and as its agent,
give notice of such redemption, all in the manner provided for in Section 5.2,
except that such notice shall state that the Debentures of such series are being
redeemed for the sinking fund. The notice of redemption having been mailed as
hereinbefore provided, the Debentures or portions thereof called for redemption
shall become due and payable on the next succeeding date for redemption
specified in the Debentures of such series at the sinking fund redemption price
thereof, all in the manner and with the effect provided for in Section 5.3.
Any sinking fund payment not so required to be applied to the
redemption of Debentures of any series on the date for redemption specified in
the Debentures of such series next succeeding any sinking fund payment date may,
at the direction of the Company as evidenced by a Company Order, be applied by
the Trustee prior to the forty-fifth day preceding the next following sinking
fund payment date for such series, in such manner and from time to time, in such
amount as the Company may direct the Trustee in writing, so far as such moneys
shall be adequate, to the purchase for the sinking fund of Debentures of such
series or portions thereof, in the open market, from the Company or otherwise,
at prices (exclusive of accrued interest and brokerage
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commissions) not in excess of the sinking fund redemption price for such series.
The Company agrees to pay to the Trustee, upon request, accrued interest and
brokerage commissions paid by the Trustee with respect to any Debentures of such
series so purchased by the Trustee and such accrued interest and brokerage
commissions shall not be charged against the sinking fund for such series.
Any unused balance of sinking fund moneys with respect to Debentures of
any series remaining in the hands of the Trustee on the forty-fifth day
preceding the sinking fund payment date for such series in any year shall be
added to any sinking fund payment for such series to be made in cash in such
year, and together with such payment, if any, shall be applied to the redemption
or purchase of Debentures of such series in accordance with the provisions of
this Section 5.5, provided that any sinking fund moneys so remaining in the
hands of the Trustee after the date specified in the Debentures of such series
and not utilized in the purchase of Debentures of such series as provided in
this Section 5.5 shall be applied by the Trustee to the payment of Debentures at
maturity.
SECTION 5.6. Debentures no longer Outstanding after notice to Trustee
and deposit of cash. If the Company, having given notice to the Trustee as
provided in Section 5.1 or 5.2, shall have deposited with the Trustee or the
Paying Agent, for the benefit of the holders of any Debentures of any series or
portions thereof called for redemption in whole or in part cash or other form of
payment if permitted by the terms of such Debentures (which amount shall be
immediately due and payable to the holders of such Debentures or portions
thereof) in the amount necessary so to redeem all such Debentures or portions
thereof on the date fixed for redemption and provision satisfactory to the
Trustee shall have been made for the giving of notice of such redemption, such
Debentures, or portions thereof, shall thereupon, for all purposes of this
Indenture, be deemed to be no longer Outstanding, and the holders thereof shall
be entitled to no rights thereunder or hereunder, except the right to receive
payment of the applicable redemption price, together with interest accrued to
the date fixed for redemption, on or after the date fixed for redemption of such
Debentures or portions thereof and the right to convert such Debentures or
portions thereof, if the terms of such Debentures provide for convertibility
pursuant to Section 2.2, at or prior to the close of business on the date fixed
for redemption.
SECTION 5.7. Conversion arrangement on call for redemption. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures called for redemption by an agreement
with one or more investment bankers or other purchasers to purchase such
Debentures by paying to the Trustee or the Paying Agent in trust for the
Debentureholders, on or before 10:00 a.m., New York time, on the redemption
date, an amount no less than the redemption price, together with interest, if
any, accrued to the redemption date of such Debentures, in immediately available
funds. Notwithstanding anything to the contrary contained in this Article V, the
obligation of the Company to pay the redemption price of such Debentures,
including all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into, any Debentures not duly surrendered for conversion by
the holders thereof may, at
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the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such holders and (notwithstanding anything to
the contrary contained in Article XIII) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the last day
on which Debentures of such series called for redemption may be converted in
accordance with this Indenture and the terms of such Debentures, subject to
payment of the above amount aforesaid. The Trustee or the Paying Agent shall
hold and pay to the Debentureholders whose Debentures are selected for
redemption any such amount paid to it in the same manner as it would moneys
deposited with it by the Company for the redemption of Debentures. Without the
Trustee's and the Paying Agent's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Debentures shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture,
and the Company agrees to indemnify the Trustee from, and hold it harmless
against, any loss, liability or expense arising out of or in connection with any
such arrangement for the purchase and conversion of any Debentures between the
Company and such purchasers, including the costs and expenses incurred by the
Trustee and the Paying Agent in the defense of any claim or liability arising
out of or in connection with the exercise or performance of any of its powers,
duties, responsibilities or obligations under this Indenture.
ARTICLE VI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 6.1. Satisfaction and discharge of Indenture with respect to
Debentures of any series. If (a) the Company shall deliver to the Trustee for
cancellation all Debentures of any series theretofore authenticated (other than
any such Debentures which shall have been destroyed, lost or stolen and in lieu
of or in substitution for which other such Debentures shall have been
authenticated and delivered or Debentures for whose payment money (or other form
of payment if permitted by the terms of such Debentures) has theretofore been
held in trust and thereafter repaid to the Company, as provided in Section 6.3)
and not theretofore canceled, or (b) the Company shall irrevocably deposit
(subject to Section 6.3) with the Trustee or Paying Agent as trust funds the
entire amount in cash or U.S. Government Obligations sufficient to pay at
maturity or upon redemption all of the Debentures of such series (other than any
Debentures which shall have been destroyed, lost or stolen and in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered or Debentures for whose payment money (or other form of payment if
permitted by the terms of such Debentures) has theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 6.3) not
theretofore paid, surrendered or delivered to the Trustee for cancellation,
including the principal, premium, if any, and interest due or to become due to
such date of maturity or redemption date, as the case may be, and if in either
case the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company and the Company shall deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that in the
opinion of the signers all conditions precedent to the satisfaction and
discharge of this Indenture with respect to the Debentures of such series have
been complied with (and, in the event that such deposit shall be made more than
one year
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prior to the maturity of the Debentures of such series, such Opinion of Counsel
shall also state that such deposit will not result in an obligation of the
Company, the Trustee or the trust fund created by such deposit to register as an
investment company under the Investment Company Act of 1940, as amended) and a
certificate (upon which the Trustee may rely) of a firm of independent public
accountants of recognized national standing selected by the Board of Directors
(who may be the regular accountants employed by the Company) stating that the
cash, if any, and U.S. Government Obligations, if any, deposited as set forth
above are sufficient to pay at maturity or upon redemption all of the Debentures
of such series as set forth above, then, except with respect to the remaining
rights of conversion of any Debentures the terms of which provide for conversion
(which shall continue in full force and effect pursuant to the terms set forth
in Article XIII to the extent provided for in such terms) or to rights of
exchange or registration of transfer or of the Company's right of optional
redemption of any Debentures of such series, this Indenture shall cease to be of
further effect with respect to the Debentures of such series, and the Trustee,
on demand of and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture with
respect to the Debentures of such series. Notwithstanding the satisfaction and
discharge of this Indenture with respect to the Debentures of such series, the
obligations of the Company to the Trustee under Section 11.2 shall survive, and
if moneys or U.S. Government Obligations shall have been irrevocably deposited
with the Trustee or Paying Agent pursuant to clause (b) of this Section, the
obligations of the Trustee under Section 6.2 and the first paragraph of Section
6.3 shall survive.
In order to have money available on a payment date to pay the principal
of, premium, if any, or interest, if any, on the Debentures, the U.S. Government
Obligations shall be payable as to principal or interest on or before such
payment date in such amounts as will provide the necessary money. Such U.S.
Government Obligations shall not be callable at the issuer's option.
SECTION 6.2. Deposits for payment or redemption of Debentures to be
held in trust. Subject to the provisions hereinafter contained in this Article
VI, any moneys or U.S. Government Obligations (or other form of payments if
permitted by the terms of such Debenture) which at any time shall be deposited
by the Company, or on its behalf with the Trustee or the Paying Agent, for the
purpose of paying or redeeming any of the Debentures of any series shall be held
in trust and applied by the Trustee to the payment to the holders of the
particular Debentures for the payment or redemption of which such moneys (or
other form of payments if permitted by the terms of such Debenture) have been
deposited, of all sums due and to become due thereon for principal, premium, if
any, and interest, upon presentation and surrender of such Debentures at the
office or agency of the Company maintained as provided in this Indenture.
Neither the Company nor the Trustee (except as provided in Section 11.2) nor any
Paying Agent shall be required to pay interest on any moneys so deposited.
SECTION 6.3. Repayment of moneys. Any moneys or U.S. Government
Obligations deposited with the Trustee or any Paying Agent remaining unclaimed
by the holders of Debentures for two years after the date upon which the
principal of or interest on such Debentures shall have become due and payable,
shall (unless otherwise required by mandatory
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provisions of applicable escheat or abandoned or unclaimed property law) be
repaid to the Company by the Trustee or Paying Agent and such holders shall
(unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law) thereafter be entitled to look to the
Company only for payment thereof; provided, however, that, before being required
to make any such payment to the Company, the Trustee or Paying Agent may, at the
expense and written direction of the Company, cause to be published once, in an
Authorized Newspaper, a notice that such moneys remain unclaimed and that, after
the date set forth in said notice, the balance of such moneys then unclaimed
will be returned to the Company.
Upon the satisfaction and discharge of this Indenture, all moneys then
held by any Paying Agent other than the Trustee hereunder shall, upon demand of
the Company, be repaid to it and thereupon such paying agent shall be released
from all further liability with respect to such moneys.
The Trustee or any Paying Agent shall deliver or pay to the Company
from time to time upon a request in writing by the Company any moneys or U.S.
Government Obligations (or the principal or interest on such U.S. Government
Obligations) held by it as provided in Section 6.1 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof to the Trustee, are then in excess of the amount
thereof which then would have been required to be deposited for the purpose for
which such money or U.S. Government Obligations were deposited or received.
ARTICLE VII
REMEDIES UPON DEFAULT
SECTION 7.1. Events of Default defined-acceleration of maturity upon
default-waiver of default after acceleration. The following events are hereby
defined for all purposes of this Indenture (except where the term is otherwise
defined for specific purposes) as Events of Default with respect to Debentures
of a particular series, unless it is either inapplicable to a particular series
or is specifically deleted or modified as contemplated by Section 2.2 for the
Debentures of such series, in addition to any other events as may be defined as
Events of Default pursuant to Section 2.2 for the Debentures of such series:
(a) Failure of the Company to pay or provide for payment of
the principal of or premium, if any, on any of the Debentures of such
series, when and as the same shall become due and payable, whether at
maturity thereof, by call for redemption, through any mandatory sinking
fund, by redemption at the option of the holder of any Debenture
pursuant to the terms of such Debenture, by declaration of acceleration
or otherwise; or
(b) Failure of the Company to pay or provide for payment of
any installment of interest on any of the Debentures of such series,
when and as the same shall become due and payable, which failure shall
have continued for a period of 30 days; or
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(c) Failure of the Company to perform or observe any other of
the covenants or agreements on the part of the Company in this
Indenture or in the Debentures of such series (other than a covenant or
agreement which has expressly been included in this Indenture solely
for the benefit of Debentures of any series other than that series or
is expressly made inapplicable to the Debentures of such series
pursuant to by Section 2.2), which failure shall have continued for a
period of 90 days after written notice by certified or registered mail
given to the Company by the Trustee hereunder or to the Company and to
the Trustee from the holders of not less than 25% of the aggregate
principal amount of Debentures then Outstanding of such series under
this Indenture specifying such Event of Default or failure and
requesting that it be remedied and stating that such notice is a notice
of an event which, if continued for 90 days after such written notice,
will become an Event of Default; or
(d) The institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking relief under
any Bankruptcy Law or the consent by it to the institution of
proceedings thereunder or the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or the making by the Company of an
assignment for the benefit of creditors, or the admission by the
Company in writing of its inability to pay its debts generally as they
become due; or
(e) The entry of a decree or order by a court having
jurisdiction for relief in respect of the Company, or adjudging the
Company a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any Bankruptcy Law or appointing
a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 180 consecutive days.
If one or more Events of Default shall happen and be continuing with
respect to Debentures then outstanding of any series, then, and in each and
every such case, either the Trustee, by notice in writing to the Company, or the
holders of not less than 25% in aggregate principal amount of the Debentures
then Outstanding of such series, by notice in writing to the Company and to the
Trustee, may declare the principal amount (or, if the Debentures of such series
are Original Issue Discount Debentures, such portion of the principal amount as
may be specified in the terms of the Debentures of such series) of all
Debentures of such series and/or such other amount or amounts as the Debentures
or supplemental indenture with respect to such series may provide, if not
already due and payable, to be immediately due and payable; and upon any such
declaration all Debentures of such series shall become and be immediately due
and payable, anything in this Indenture or in any of the Debentures of such
series contained to the
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contrary notwithstanding. This provision, however, is subject to the condition
that if, at any time after the principal of (and/or such other specified amount
on) the Debentures of such series shall so become due and payable, and before
any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Debentures of such series and the principal of (and/or
such other specified amount) and premium, if any, on any and all Debentures of
such series which shall have become due otherwise than by acceleration, with
interest on such principal (and/or such other specified amount) and premium, if
any, and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest, at the rate specified in
the Debentures of such series (or, if no such rate is specified, at the rate
borne by the Debentures of such series), to the date of such payment or deposit,
and the reasonable compensation and expenses of the Trustee, and any and all
defaults under this Indenture with respect to the Debentures or such series,
other than the nonpayment of principal of (and/or such other specified amount)
or premium, if any, and accrued interest on Debentures of such series which
shall have become due by acceleration, shall have been remedied, then and in
every such case the Trustee shall, upon written request or consent of the
holders of a majority in aggregate principal amount of the Debentures then
Outstanding of such series delivered to the Company and to the Trustee, waive
such default and its consequences and rescind or annul such declaration and its
consequences, but no such waiver, rescission or annulment shall extend to or
affect any subsequent default, or impair any right consequent thereon.
For all purposes under this Indenture, if the portion of the principal
amount as may be specified in the terms of any Original Issue Discount
Debentures shall have been accelerated and declared due and payable pursuant to
the provisions hereof, then, from and after such declaration, unless such
declaration has been rescinded and annulled, payment of such portion of the
principal amount thereof, together with interest, if any, thereon and all other
amounts owing thereunder, shall constitute payment in full of such Original
Issue Discount Debentures.
SECTION 7.2. Covenant of Company to pay to Trustee whole amount due on
default in payment of Principal or interest-Trustee may recover judgment for
whole amount due-application of moneys received by the Trustee. In case the
Company shall commit an Event of Default with respect to the Debentures of any
series described in Section 7.1(a) or (b), then upon demand of the Trustee, the
Company shall pay to the Trustee, for the benefit of the holders of the
Debentures then Outstanding of such series, the whole amount which then shall
have become due on all such Debentures of such series for principal, premium, if
any, and interest, with interest on the overdue principal and premium, if any,
and (to the extent that payment of such interest is enforceable under applicable
law) upon overdue installments of interest, at the rate specified in the
Debentures of such series (or, if no such rate is specified, at the rate borne
by the Debentures of such series), and in addition thereto, such additional
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, liabilities, disbursements and
advances of the Trustee, any predecessor Trustee, their agents and counsel. In
case the Company shall pay the same in accordance with the provision of this
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Section 7.2 and, prior to such payment neither the Trustee nor the holders of
the Debentures then Outstanding of such series shall have taken any steps to
begin enforcing their rights under this Indenture and so long as no additional
Event of Default with respect to the Debentures of such series shall have
occurred, from and after such payment, the Event of Default giving rise to the
demand by the Trustee pursuant to this Section 7.2 shall be deemed to be no
longer continuing and shall be deemed to have thereupon been remedied, cured or
waived without further action upon the part of either the Trustee or any of the
Debentureholders. In case the Company shall fail to pay the same forthwith upon
such demand, the Trustee, in its own name and as trustee of an express trust,
may institute any judicial proceedings at law or in equity for the collection of
the sums so due and unpaid and may prosecute such proceedings to judgment or
final decree, and may enforce the same against the Company or any other obligor
upon the Debentures of such series and collect the moneys adjudged or decreed to
be payable in the manner provided by law out of the property of the Company or
any other obligor upon the Debentures of such series, wherever situated. The
right of the Trustee to recover such judgment shall not be affected by the
exercise of any other right, power or remedy for the enforcement of the
provisions of this Indenture.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debentures or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of any Debentures
shall then be due and payable as therein expressed or by declaration of
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered to file and prove a claim for the whole amount
of principal, premium, if any, and interest owing and unpaid in respect of the
Debentures of any series for which it serves as Trustee and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, any predecessor Trustee, their agents
and counsel) and of the Debentureholders of such series allowed in such judicial
proceeding, and to receive payment of or on account of such claims and to
distribute the same after the deduction of its charges and expenses; and any
receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any judicial proceeding is hereby irrevocably authorized and
instructed by each of the Debentureholders of such series to make such payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of such payments directly to the Debentureholders of such series, to pay to the
Trustee any amount due it or any predecessor Trustee, for compensation and
expenses, including counsel fees incurred up to the date of such distribution.
Nothing contained in this Indenture shall be deemed to give to the Trustee any
right to accept or consent to any plan or reorganization, arrangement,
adjustment or composition affecting the Debentureholders or the rights of any
Debentureholder, or to authorize the Trustee to vote in respect of the claim of
any Debentureholder in any such proceeding.
Any moneys or property received by the Trustee under this Section 7.2
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of
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such moneys or property on account or principal, premium, if any, or interest,
upon presentation of the several Debentures of the series in respect of which
such moneys were received, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collections,
and reasonable compensation to the Trustee, its agents, attorneys and
counsel, and all advances made and expenses and liabilities incurred by
the Trustee, except as a result of its negligence or bad faith and all
other amounts owing to the Trustee or any predecessor Trustee pursuant
to Section 11.2 hereof;
Second: In case the principal of the Outstanding Debentures in
respect of which such moneys were received shall not have become due
and be unpaid, to the payment of interest on such Debentures, in the
order of the maturity of the installments of such interest, with
interest (so far as may be lawful) upon the overdue installments of
interest at the rate specified in such Debentures (or, if no such rate
is specified, at the rate borne by the Debentures of such series), such
payments to be made ratably to the persons entitled thereto;
Third: In case the principal of the Outstanding Debentures in
respect of which such moneys were received and/or such other amount or
amounts as the Debentures or supplemental indenture with respect to
such series shall provide, shall have become due, by declaration or
otherwise, to the payment of the whole amount then owing and unpaid
upon such Debentures for principal (and/or such other specified
amount), premium, if any, and interest, with interest on the overdue
principal (and/or such other specified amount), premium, if any, and
(so far as may be lawful) upon overdue installments of interest, at the
rate specified in such Debentures (or, if no such rate is specified, at
the rate borne by the Debentures of such series), and in case such
moneys shall be insufficient to pay in full the whole amount so due and
unpaid upon such Debentures, then to the payment of such principal
(and/or such other specified amount), premium, if any, and interest,
with interest on the overdue principal (and/or such other specified
amount), premium, if any, and (so far as may be lawful) upon overdue
installments of interest, at the rate specified in such Debentures (or,
if no such rate is specified, at the rate borne by the Debentures of
such series), without preference or priority of principal (and/or such
other specified amount) and premium, if any, over interest, or of
interest over principal (and/or specified amount) and premium, if any,
or of any installment of interest over any other installment of
interest, or of any such Debenture over any other such Debenture,
ratably to the aggregate of such principal (and/or such other specified
amount), premium, if any, and accrued and unpaid interest;
Fourth: To the payment of the remainder, if any, to the
Company, its successors or assigns, or to whomever may be so lawfully
entitled to receive the same, or as a court of competent jurisdiction
may direct.
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SECTION 7.3. Trustee may enforce rights of action without possession of
Debentures. All rights of action under this Indenture or any of the Debentures
Outstanding of any series hereunder enforceable by the Trustee may be enforced
by the Trustee without the possession of any of the Debentures or the production
thereof at the trial or other proceedings relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought for the ratable benefit of
the holders of the Debentures with respect to which the rights are being
exercised, subject to the provisions of this Indenture.
SECTION 7.4. Delays or omissions not to impair any rights or powers
accruing upon default. No delay or omission of the Trustee or of the
Debentureholders to exercise any rights or powers accruing upon any default
which shall not have been remedied shall impair any such right or power, or
shall be construed to be a waiver of any such default or acquiescence therein;
and every power and remedy given by this Article VII to the Trustee and the
holders of the Debentures of any series may be exercised from time to time and
as often as may be deemed expedient by the Trustee or by the holders of the
Debentures of such series.
SECTION 7.5. In Event of Default Trustee may protect and enforce its
rights by appropriate proceedings-holders of majority in aggregate Principal
amount of Debentures of a series may waive default. If any one or more Events of
Default shall happen and be continuing, the Trustee may, in its discretion,
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee, being advised by its counsel,
shall deem most effectual to protect and enforce any of said rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific performance of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Provided the Debentures of any series shall not then be due and payable
by reason of a declaration pursuant to Section 7.1 hereof, the holders of a
majority in aggregate principal amount of the Debentures of such series then
Outstanding may on behalf of the holders of all of the Debentures of such series
waive by written notice any past default hereunder and its consequences, except
a default in the payment of interest on or principal and premium, if any, of any
of the Debentures of such series. In the case of any such waiver, the Company,
the Trustee and the holders of the Debentures of such series shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 7.6. Holders of majority in aggregate Principal amount of
Debentures of any series may direct exercise of remedies. The holders of a
majority in aggregate principal amount of the Debentures then Outstanding of any
series shall have the right, by an instrument in writing executed and delivered
to the Trustee, to direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee, or of exercising any power
or trust conferred upon the Trustee under this Indenture, with respect to the
Debentures of such
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series; provided, however, that subject to the provisions of Section 11.1 of
this Indenture, the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the action
or proceedings so directed may not lawfully be taken or if the Trustee in good
faith shall, by Responsible Officers, determine that the action or proceedings
so directed would involve the Trustee in personal liability, or would be unduly
prejudicial to the holders of the Debentures of such series not joining in such
direction, and the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 7.7. Limitation on suits by Debentureholders. No holder of any
Debenture of any series shall have the right to institute any suit, action or
proceeding, in equity or at law, for the execution of any trust or power hereof,
or for the enforcement of any other remedy under or upon this Indenture or the
Debentures of such series, unless the holders of a majority in aggregate
principal amount of the Debentures then Outstanding of such series shall have
made written request upon the Trustee and shall have afforded to it a reasonable
opportunity either to proceed to exercise the powers hereinbefore granted or to
institute such suit, action or proceeding in its own name, as Trustee hereunder,
and shall have offered to the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee
shall have refused or neglected to comply with such request for 60 days after
its receipt of such request and no direction inconsistent with such request
shall have been given to the Trustee pursuant to Section 7.6; it being
understood and intended that no one or more holders of Debentures of any series
shall have any right under this Indenture or under the Debentures, by his or
their action, to enforce any right hereunder except in the manner herein
provided, and that all proceedings hereunder, at law or in equity, shall be
instituted, had and maintained in the manner herein provided and for the ratable
benefit of all holders of the Debentures of such series. Notwithstanding any
provision of this Indenture to the contrary, the right, which is absolute and
unconditional, of any Debentureholder to receive the payment of the principal
of, premium, if any, and interest on his Debentures at and after the respective
due dates (including maturity by call for redemption, through any sinking fund,
declaration unless annulled pursuant to Section 7.1 hereof, or otherwise), of
such principal, premium, if any, or interest, or the right, which is also
absolute and unconditional, of any Debentureholder to require conversion of his
Debentures pursuant to Article XIII hereof if the terms of such Debentures
provide for convertibility pursuant to Section 2.2, or the right to institute
suit for the enforcement of any such payment at or after such due dates or of
such right to convert, shall not be impaired or affected without the consent of
such holder, and the obligation of the Company, which is also absolute and
unconditional, to pay the principal of, premium, if any, and interest on each of
the Debentures to the respective holders thereof at the times and places in the
Debentures expressed shall not be impaired or affected.
Notwithstanding anything to the contrary contained in this Section 7.7,
the parties to this Indenture and the Debentureholders agree as follows:
Any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or
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omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided, however, that the
provisions of this paragraph shall not apply to any suit instituted, directly or
through an agent or agents, by the Trustee, to any suit instituted by any
Debentureholder of any series, or group of Debentureholders of any series,
holding in the aggregate more than 10% in aggregate principal amount of the
Debentures then Outstanding of such series or to any suit instituted by any
Debentureholder of any series for the enforcement of the payment of the
principal of, premium, if any, or interest on, any Debenture of such series at
or after the respective due dates of such principal, premium, if any, or
interest expressed in his Debenture of such series.
SECTION 7.8. No Debentures owned or held by, for the account of or for
the benefit of the Company to be deemed Outstanding for purpose of payment or
distribution. No Debentures owned or held by, for the account of or for the
benefit of the Company or any Affiliate (other than Debentures pledged in good
faith which would be deemed Outstanding under the provisions of Section 3.3)
shall be deemed Outstanding for the purpose of any payment or distribution
provided for in this Article VII.
SECTION 7.9. Company and Trustee restored to former position on
discontinuance or abandonment of proceedings. If the Trustee shall have
proceeded to enforce any right under this Indenture with respect to the
Debentures of any series, and such proceedings shall have been discontinued or
abandoned because of waiver, or for any other reason, or shall have been
determined adversely to the Trustee, then, and in any such case, the Company,
the Trustee and the Debentureholders of such series shall each be restored to
their former positions and rights hereunder, and all rights, remedies and powers
of the Trustee shall continue as though no such proceeding had been taken.
ARTICLE VIII
EVIDENCE OF ACTION BY DEBENTUREHOLDERS
SECTION 8.1. Evidence of action by Debentureholders. Any demand,
request, consent, proxy or other instrument which this Indenture may require or
permit to be signed and executed by the Debentureholders of any series may be in
any number of concurrent instruments of similar tenor, and may be signed or
executed by such Debentureholders in person or by an attorney duly authorized in
writing. Proof of the execution of any such demand, request, consent, proxy or
other instrument, or of a writing appointing any such attorney, shall be
sufficient for any purpose of this Indenture if made in the following manner:
the fact and date of the execution by any person of such demand, request,
consent, proxy or other instrument or writing may be proved by the certificate
of any notary public, or other officer authorized to take acknowledgments of
deeds to be recorded in any state or country, that the person signing such
request or other instrument or writing acknowledged to him the execution
thereof, or by an affidavit of a witness
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of such execution. Where such execution is by an officer of a corporation or
association or a member of a partnership on behalf of such corporation,
association or partnership, or by a trustee or other fiduciary, such certificate
or affidavit shall also constitute sufficient proof of his authority. The
Trustee may nevertheless in its discretion accept such other proof or require
further proof of any matter referred to in this Section 8.1 as it shall deem
reasonable. The ownership of Debentures shall be proved by the registry books or
by a certificate of the registrar thereof.
The Trustee shall not be bound to recognize any person as a
Debentureholder of any series unless and until his title to the Debentures of
such series held by him is proved in the manner in this Article VIII provided.
Any demand, request, direction, waiver, consent, vote or other action
of the holder of any Debenture shall be conclusive and shall bind all future
holders of the same Debenture and of any Debenture issued in exchange or
substitution therefor irrespective of whether or not any notation in regard
thereto is made upon such Debenture. Any such holder, however, may revoke the
consent as to his Debenture or portion thereof. Such revocation shall be
effective only if the Trustee receives the notice of revocation before the date
the amendment, supplement, waiver or other action becomes effective. An
amendment, supplement, waiver or other action shall become effective on receipt
by the Trustee of written consents from the Debentureholders of the requisite
percentage in aggregate principal amount of the Outstanding Debentures of the
relevant series. After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Debentureholder of each series of Debentures so
affected.
The Company or the Trustee, as applicable, may set a date for the
purpose of determining the Debentureholders entitled to consent, vote or take
any other action referred to in this Section 8.1, which date shall be not less
than 10 days nor more than 60 days prior to the taking of the consent, vote or
other action.
ARTICLE IX
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 9.1. Immunity of incorporators, stockholders, officers,
directors and employees. No recourse shall be had for the payment of the
principal of, premium, if any, or interest on any Debenture or for any claim
based thereon or otherwise in any manner in respect thereof, or in respect of
this Indenture, to or against any subsidiary, incorporator, stockholder,
officer, director or employee, as such, past, present or future, of the Company
or any subsidiary, incorporator, stockholder, officer, director or employee, as
such, past, present or future, of any predecessor or successor corporation,
either directly or through the Company or such predecessor or successor
corporation, whether by virtue of any constitutional provision or statute or
rule of law, or by the enforcement of any assessment or penalty, or in any other
manner, all such liability
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being expressly waived and released by the acceptance of any Debenture and as
part of the consideration for the issue thereof.
ARTICLE X
MERGER, CONSOLIDATION, SALE OR LEASE
SECTION 10.1. Documents required to be filed with the Trustee upon
consolidation, merger, sale, transfer or lease - execution or supplemental
indentures - acts of successor corporation. Nothing in this Indenture or in the
Debentures shall prevent any consolidation or merger of the Company with or into
any other corporation, or any consolidation or merger of any other corporation
with or into the Company, or any sale, transfer or lease of all or substantially
all of the property and assets of the Company to any other corporation lawfully
entitled to acquire the same; provided, however, and the Company hereby
covenants and agrees, that any such consolidation, merger, sale, transfer or
lease shall be upon the condition that (a) the due and punctual payment of the
principal of, premium, if any, and interest on all the Debentures according to
their tenor, and the due and punctual performance and observance of all the
terms, covenants and conditions of this Indenture to be kept or performed by the
Company shall, by an indenture supplemental hereto complying with the provisions
of Section 12.1, executed and delivered to the Trustee, be expressly assumed by
the corporation (other than the Company) formed by or resulting from any such
consolidation or merger, or which shall have received the transfer or lease of
all or substantially all of the property and assets of the Company, just as
fully and effectually as if such successor corporation had been an original
party hereto; and (b) the Company or such successor corporation, as the case may
be, shall not, immediately after such consolidation, merger, sale, transfer or
lease be in default in the performance of any such covenant or condition.
Thereafter, unless otherwise specified pursuant to Section 2.2 for the
Debentures of any series, all obligations of the predecessor corporation under
the Debentures of such series shall terminate. In the event of any such sale,
transfer or lease, the predecessor Company may be dissolved, wound up and
liquidated at any time thereafter.
Every such successor corporation, upon executing an indenture
supplemental hereto as provided in this Section 10.1 in form satisfactory to the
Trustee, shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company; and any order, certificate
or resolution of the Board or officers of the Company provided for in this
Indenture may be made by like officials of such successor corporation. Such
successor corporation may thereupon cause to be signed, either in its own name
or in the name of the Company, with such suitable reference, if any, to such
consolidation, merger, sale, transfer or lease as may be required by the
Trustee, any or all of the Debentures which shall not theretofore have been
signed by the Company and authenticated by the Trustee or any Authenticating
Agent; and upon the written order of such successor corporation in lieu of the
Company, signed by the President or any Vice President and Treasurer or any
Assistant Treasurer of such successor corporation, and subject to all the terms,
conditions and restrictions herein prescribed with respect to the authentication
and delivery of the Debentures, the Trustee or any Authenticating Agent shall
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authenticate and deliver any and all Debentures which shall have been previously
signed by the proper officers of the Company and delivered to the Trustee or any
Authenticating Agent for authentication and any of such Debentures which such
successor corporation shall thereafter, in accordance with the provisions of
this Indenture, cause to be signed and delivered to the Trustee or any
Authenticating Agent for such purpose. All Debentures of any series so
authenticated and delivered shall in all respects have the same rank as the
Debentures of such series theretofore or thereafter authenticated and delivered
in accordance with the terms of this Indenture.
SECTION 10.2. Trustee may rely upon Opinion of Counsel. The Trustee may
receive and shall, subject to the provisions of Section 11.1 of this Indenture,
be fully protected in relying upon an Officers' Certificate and Opinion of
Counsel as conclusive evidence that any supplemental indenture executed under
the foregoing Section 10.1 complies with the foregoing conditions and provisions
of this Article X.
ARTICLE XI
CONCERNING THE TRUSTEE
SECTION 11.1. Acceptance of Trust - responsibilities of Trustee.
(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiving of all Events of Default which
may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture or in the Trust
Indenture Act of 1939, and no implied covenants or conditions shall be
read into this Indenture against the Trustee. In case an Event of
Default with respect to the Debentures of a particular series has
occurred (but only during the continuance thereof), the Trustee shall
exercise with respect to the Debentures of such series such of the
rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee pursuant to any provision of this Indenture,
shall examine them to determine whether they conform to the
requirements of this Indenture.
(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that
(i) prior to the occurrence of an Event of Default
with respect to the Debentures of any series hereunder and
after the curing or waiving of all Events of Default with
respect to the Debentures of such series which may have
occurred,
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the Trustee shall not be liable with respect to the Debentures
of such series except for the performance of such duties as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee, but the duties and obligations of the
Trustee with respect to the Debentures of such series, prior
to the occurrence of an Event of Default with respect to the
Debentures of such series and after the curing or waiving of
all Events of Default with respect to the Debentures of such
series which may have occurred, shall be determined solely by
the express provisions of this Indenture;
(ii) Subject to the limitations contained in
subsection (a) of this Section 11.1, prior to the occurrence
of an Event of Default with respect to the Debentures of any
series hereunder and after the curing or waiving of all events
of Default with respect to the Debentures of such series which
may have occurred, and in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed herein, upon certificates or opinions conforming to
the requirements of this Indenture;
(iii) the Trustee shall not be personally liable for
any error of judgment made in good faith by a Responsible
Officer or Officers of the Trustee unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(iv) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
holders of not less than a majority in aggregate principal
amount of the Debentures then Outstanding of any series
relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Debentures of such
series.
(c) Subject to the limitations contained in subsections (a)
and (b) of this Section 11.1, the recitals contained herein and in the
Debentures (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee
makes no representations as to the validity or sufficiency of this
Indenture or of the Debentures except that the Trustee represents that
it is duly authorized to execute and deliver this Indenture and to
perform its obligations hereunder.
(d) Subject to the limitations contained in subsections (a)
and (b) of this Section 11.1:
(i) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
certificate, opinion, notice, consent, request, order,
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appraisal, report, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) the Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of
Counsel;
(iii) whenever in the administration of the trusts of
this Indenture, prior to an Event of Default hereunder and
after the curing or waiving of all Events of Default which may
have occurred, the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by an Officers' Certificate delivered
to the Trustee, and such certificate shall be full warrant to
the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof;
(iv) the Trustee shall be under no obligation to
exercise any of the trusts or powers hereof at the request,
order or direction of any of the Debentureholders, pursuant to
the provisions of this Indenture, unless such Debentureholders
shall have offered to the Trustee reasonable indemnity against
all the costs, expenses and liabilities which might be
incurred therein;
(v) the Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith and believed
by it to be authorized or within the discretion or power
conferred upon it by this Indenture;
(vi) prior to the occurrence of an Event of Default
with respect to the Debentures of any series hereunder and
after the curing or waiving of all Events of Default with
respect to the Debentures of such series which may have
occurred, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, opinion, notice, consent, request,
order, appraisal, report, bond or other document or instrument
concerning such series, unless requested in writing to do so
by the holders of not less than a majority in aggregate
principal amount of the Debentures then Outstanding of such
series; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee (subject to
the limitations contained in subsections (a) and (b) of this
Section 11.1), not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expense
or liability as a condition to so proceeding; and provided,
further, that nothing in this subdivision (d)(vi) shall
require the Trustee to give the Debentureholders any notice
other than that
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required by Section 11.3 hereof. The reasonable expense of
every such investigation shall be paid by the Company or, if
paid by the Trustee, shall be repaid by the Company upon
demand;
(vii) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder; and
(viii) none of the provisions of this Indenture shall
require the Trustee to expend or risk its own funds or
otherwise incur any personal financial liability in the
performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured to it.
SECTION 11.2. Trustee to be entitled to compensation - Trustee not to
be accountable for application of proceeds - moneys held by Trustee to be trust
funds. The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for services rendered by it in the execution of the trusts hereby
created, and shall also be entitled to payment of reasonable expenses and
disbursements actually made or incurred hereunder, including the reasonable fees
and expenses of counsel, accountants and of all persons not regularly in its
employ, and all taxes which may have been assessed against the Trustee as such
on any funds on deposit with the Trustee. The Company also agrees to indemnify
each of the Trustee and any predecessor Trustee for and hold it harmless against
loss, liability or expense incurred arising out of or in connection with the
acceptance or administration of this trust or performance of its duties
hereunder, including the cost and expenses of defending itself against any claim
of liability in the premises, except to the extent that such loss, liability or
expense is incurred due to the negligence or bad faith of the Trustee or
predecessor Trustee. If any property other than cash shall at any time be
subject to a lien in favor of the Debentureholders, the Trustee, if and to the
extent authorized by a receivership or bankruptcy court of competent
jurisdiction or by the supplemental instrument subjecting such property to such
lien, shall be entitled to make advances for the purpose of preserving such
property or of discharging tax liens or other prior liens or encumbrances
thereon. The obligations of the Company under this Section 11.2 to compensate
the Trustee and to indemnify, pay or reimburse the Trustee or any predecessor
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge or any
other termination pursuant to any Bankruptcy Law hereof. Such additional
indebtedness shall be secured by a lien prior to that of the Debentures of all
series with respect to which the Trustee acts as Trustee upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the holders of particular Debentures.
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The Trustee shall not be accountable for the use or application by the
Company of any Debentures authenticated and delivered hereunder or of the
proceeds of such Debentures, or for the use or application of any moneys paid
over by the Trustee in accordance with any provision of this Indenture, or for
the use or application of any moneys received by any paying agent.
All moneys received by the Trustee in trust under or pursuant to any
provision of this Indenture shall constitute trust funds for the purposes for
which they were paid or were held, but need not be segregated in any manner from
any other moneys and may be deposited by the Trustee, under such conditions as
may be prescribed by law, in its general banking department, and the Trustee
shall not be liable for any interest thereon, except as otherwise agreed with
the Company.
The parties hereto, and the Debentureholders by their acceptance of
their Debentures, hereby agree, that when the Trustee incurs expenses and
renders services after an Event of Default occurs, such expenses and the
compensation for such services are intended by the holders of the Debentures and
Company to constitute expenses of administration under any Bankruptcy Law.
SECTION 11.3. Trustee to give Debentureholders notice of default. The
Trustee shall give to the Debentureholders of any series notice of the happening
of all defaults with respect to the Debentures of such series known to it,
within 90 days after the occurrence thereof unless such defaults shall have been
cured before the giving of such notice; provided, however, that, except in the
case of a default resulting from the failure to make any payment of principal
of, premium, if any, or interest on the Debentures of any series, or in the
payment of any mandatory sinking fund installment with respect to the Debentures
of such series, the Trustee may withhold the giving of such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Debentureholders
of such series. For the purpose of this Section 11.3, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default. Such notice shall be given to the Debentureholders of such
series in the manner and to the extent provided in subsection (c) of Section
11.10.
SECTION 11.4. Trustee acquiring conflicting interest must eliminate it
or resign. Reference is made to Section 310(b) of the Trust Indenture Act of
1939, as amended, and with respect to the Debentures of each series, the Trustee
shall comply therewith. To the extent permitted under Section 310(b)(1) thereof,
the Trustee shall not be deemed to have a conflicting interest by virtue of
being a trustee under this Indenture with respect to Debentures of more than one
series.
SECTION 11.5. Eligibility of Trustee. There shall at all times be a
corporate Trustee under this Indenture which shall be a bank or trust company
organized and doing business under the laws of the United States or of any State
or the District of Columbia and having a combined capital and surplus of not
less than $50,000,000 which is authorized under the laws of its
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jurisdiction of incorporation to exercise corporate trust powers and is subject
to supervision or examination by Federal, State or District of Columbia
authority and which has an office or agency in New York, New York. If the
Trustee publishes reports of conditions at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority, the
combined capital of the Trustee shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If the
Trustee shall at any time cease to meet the foregoing standards of eligibility,
then such Trustee shall resign immediately in the manner and with the effect
specified in Section 11.6.
SECTION 11.6. Resignation or removal of Trustee.
(a) Subject to the limitations contained in subsection (d) of
this Section 11.6, the Trustee may resign and be discharged from the
trust hereby created with respect to the Debentures of one or more
series by giving notice thereof to the Company and by giving notice
thereof to the Debentureholders of such series, in the manner and to
the extent provided in subsection (c) of Section 11.10. Upon receiving
such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees (it being understood that any such
successor trustee may be appointed with respect to the Debentures of
one or more or all of such series with respect to which the resigning
trustee has resigned and that at any time there shall be only one
trustee with respect to the Debentures of any particular series) by
written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the
resigning trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted
appointment within 60 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Debentureholder of such series who has been a bona fide holder of a
Debenture or Debentures of such series for at least six months may on
behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 11.4 with respect to the Debentures of
any series after written request therefor by the Company or by
any Debentureholder of such series who has been a bona fide
holder of a Debenture or Debentures of such series for at
least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.5 with respect to
the Debentures of any series and shall fail to resign after
written request therefor by the Company or by any such
Debentureholder; or
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(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or
of its property or affairs
then, in such case, the Company may remove the Trustee with respect to
all Debentures of such series and appoint a duly qualified successor
trustee by written instrument, in duplicate, executed by order of the
Board of Directors of the Company, one copy of which instrument shall
be delivered to the Trustee so removed and one copy to the successor
trustee so appointed, or, subject to the provisions of Section 7.7, any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to
all Debentures of such series and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, remove the Trustee and appoint a duly
qualified successor trustee with respect to the Debentures of such
series.
(c) The holders of a majority in aggregate principal amount of
the Debentures then Outstanding of any series may at any time remove
the Trustee and appoint a duly qualified successor trustee with respect
to such series by delivery to the Trustee so removed, to the successor
trustee and to the Company of the evidence provided for in Section 8.1
of the action in that regard taken by Debentureholders.
(d) Any resignation or removal of the Trustee and any
appointment of a duly qualified successor trustee pursuant to any of
the provisions of this Section shall become effective upon acceptance
of appointment by the successor trustee as provided in Section 11.7.
SECTION 11.7. Acceptance by successor Trustee.
(a) In case of the appointment hereunder of a successor
trustee with respect to all Debentures, every duly qualified successor
trustee so appointed under any of the methods herein provided shall
execute, acknowledge and deliver to its predecessor trustee and to the
Company an instrument in writing accepting such appointment hereunder
and thereupon such successor trustee, without any further act, deed or
conveyance, shall become fully vested with the rights, powers, trusts,
duties and obligations of its predecessor in the trust hereunder with
like effect as if originally named as Trustee herein. The predecessor
trustee shall, nevertheless, at the written request of the successor
trustee, pay over to the successor trustee all moneys at the time held
by it herein; and the Company and the predecessor trustee upon payment
or provision therefor of any amounts then due the predecessor trustee
pursuant to the provisions of Section 11.2, shall execute and deliver
such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor
trustee all such rights,
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powers, trusts, duties and obligations. The Company shall promptly give
notice of the appointment of such successor trustee to the
Debentureholders in the manner and to the extent provided in subsection
(c) of Section 11.10.
(b) In the case of the appointment hereunder of a successor
trustee with respect to the Debentures of one or more (but not all)
series, the Company, the predecessor trustee and each successor trustee
with respect to the Debentures of such series shall execute and deliver
an indenture supplemental hereto wherein each successor trustee shall
accept such appointment and which (i) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest
in, each successor trustee all the rights, powers, trusts and duties of
the predecessor trustee with respect to the Debentures of such series
to which the appointment of such successor trustee relates, (ii) if the
predecessor trustee is not retiring with respect to all Debentures of
such series, shall contain such provisions as shall be deemed necessary
or desirable to confirm that all the rights, powers, trusts and duties
of the predecessor trustee with respect to the Debentures of such
series as to which the predecessor trustee is not retiring shall
continue to be vested in the predecessor trustee, and (iii) shall add
to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of such supplemental indenture the
resignation or removal of the predecessor trustee shall become
effective to the extent provided therein and each such successor
trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the
predecessor trustee with respect to the Debentures of such series to
which the appointment of such successor trustee relates; but, on
request of the Company or any successor trustee, such predecessor
trustee upon payment of its charges shall duly assign, transfer and
deliver to such successor trustee all property and money held by such
predecessor trustee hereunder with respect to the Debentures of such
series to which the appointment of such successor trustee relates. Upon
request of any such successor trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, powers and trusts
referred to in this subsection (b) of this Section.
SECTION 11.8. Successor to Trustee by merger or consolidation, etc. Any
corporation or national banking association into which the Trustee may be
merged, or with which it may be consolidated, or to which the Trustee transfers
all or substantially all of its corporate trust assets, or any corporation or
national banking association resulting from any merger or consolidation or
conversion to which the Trustee shall be a party, shall be the successor trustee
under this Indenture without the execution or filing of any instruments or any
further act on the part of any of the parties hereto.
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In case at the time such successor trustee shall succeed to the trusts
created by this Indenture any of the Debentures shall have been authenticated
but not delivered, any such successor trustee may adopt the certificate of
authentication of its predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor trustee may authenticate such Debentures
either in the name of any predecessor hereunder or in the name of the successor
trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Debentures or in this Indenture provided that the
certificate of authentication of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any predecessor trustee
or authenticate Debentures in the name of any predecessor trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
SECTION 11.9. Limitations on right of Trustee as a creditor to obtain
payment of certain claims. Reference is made to Section 311 of the Trust
Indenture Act of 1939, as amended, for purposes of which the following terms
shall have the following meanings:
(i) the term "cash transaction" shall mean any
transaction in which full payment for goods or securities sold
is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and
(ii) the term "self-liquidating paper" shall mean any
draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession
of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security,
provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship
with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or
obligation.
SECTION 11.10. Trustee to make annual report to Debentureholders -
Trustee to make other reports to Debentureholders - Debentureholders to whom
reports to be transmitted.
(a) The Trustee shall, so long as any Debentures are
Outstanding of any series with respect to which it acts as Trustee,
transmit to the Debentureholders of such series, within 60 days after
January 31 of each year beginning with the year 1997, a brief report as
of such January 31 that complies with Section 313(a) of the Trust
Indenture Act of 1939, as amended, to the extent any such report is
required pursuant to such Section.
(b) The Trustee shall, so long as any Debentures of any series
with respect to which it acts as Trustee shall be Outstanding, also
transmit to the Debentureholders of
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such series, as hereinafter provided, within the times hereinafter
specified, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state the circumstances
surrounding the making thereof) made by the Trustee, as such, since the
date of the last report transmitted pursuant to the provisions of
subsection (a) of this Section 11.10 (or if no such report has been so
transmitted, since the date of the execution of this Indenture), for
the reimbursement of which it claims or may claim a lien or charge
prior to that of the Debentures of such series, on property or funds
held or collected by the Trustee, as such, and which it has not
previously reported pursuant to this subsection (b), if such advances
remaining unpaid at any time aggregate more than 10% of the principal
amount of the Debentures of such series then Outstanding, such report
to be so transmitted within 90 days after such time.
(c) All reports required by this Section 11.10, and all other
reports or notices which are required by any other provision of this
Indenture to be transmitted in accordance with the provisions of this
Section 11.10, shall be transmitted by mail; (i) to all registered
holders of Debentures of such series, as the names and addresses of
such holders appear upon the Debenture register; (ii) to such holders
of Debentures of such series as have, within the two years preceding
such transmission, filed their names and addresses with the Trustee for
that purpose; and (iii) except in the case of reports pursuant to
subsection (b) of this Section 11.10, to all holders of Debentures of
such series whose names and addresses have been furnished to or
received by the Trustee pursuant to Section 4.6(d).
(d) The Trustee shall, at the time of the transmission to the
Debentureholders of any report or notice pursuant to this Section
11.10, file a copy thereof with the Securities and Exchange Commission.
The Company will notify the Trustee if and when the Debentures of any
series become listed on any stock exchange and the Trustee will
thereafter file a copy of any such report or notice with such stock
exchange.
SECTION 11.11. Preservation of information by Trustee - Trustee to give
certain information to Debentureholders upon application. The Trustee shall
preserve, in as current a form as is reasonably practicable, all information
furnished it pursuant to subsection (d) of Section 4.6 hereof or received by it
as Debenture registrar hereunder. The Trustee may destroy such information upon
receipt of new information updating information previously furnished.
Within five Business days after receipt by the Trustee of a written
application by any three or more Debentureholders stating that the applicants
desire to communicate with other Debentureholders with respect to their rights
under this Indenture or under the Debentures, and accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
and by reasonable proof that each such applicant has owned a Debenture or
Debentures for a period of at least six months preceding such application, the
Trustee shall, at its election, either (a) afford to such applicants access to
all information so furnished to or received by the Trustee and not destroyed
pursuant to the provisions of this Section 11.11, or (b) inform such applicants
as to the approximate number of Debentureholders according to the most recent
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information so furnished to or received by the Trustee, and as to the
approximate cost of mailing to the Debentureholders the form of proxy or other
communication, if any, specified in such application. If the Trustee shall elect
not to afford to such applicants access to such information, the Trustee shall,
upon the written request of such applicants, mail to all Debentureholders whose
names and addresses are contained in the then current information filed with the
Trustee as aforesaid copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and the payment, or provision for the
payment, of the reasonable expenses of such mailing, unless within five business
days after such tender, the Trustee shall mail to such applicants, and file with
the Securities and Exchange Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the
Debentureholders or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Securities and
Exchange Commission, after granting opportunity for a hearing upon the
objections specified in said written statement and on notice to the Trustee,
shall enter an order refusing to sustain any of such objections, or, if, after
the entry of an order sustaining one or more of such objections, the Securities
and Exchange Commission shall find, after notice and opportunity for a hearing,
that all objections sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such
Debentureholders with reasonable promptness after such determination and the
renewal of the aforesaid tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
Neither the Company, the Trustee nor any person acting as Debenture
registrar or paying agent shall be liable or accountable to the Company or to
any Debentureholder by reason of the disclosure of any such information as to
the names and addresses of Debentureholders in accordance with the provisions of
this Section 11.11, regardless of the source from which such information was
derived, nor by reason of the mailing of any material pursuant to a request made
under this Section 11.11.
SECTION 11.12. Trustee may hold Debentures and otherwise deal with
Company. The Trustee, the Debenture registrar, any paying agent or any other
agent of the Company in its individual or any other capacity may buy, own, hold
and sell any of the Debentures or any other evidences of indebtedness or other
securities, whether heretofore or hereafter created or issued, of the Company or
any subsidiary or Affiliate with the same rights it would have it if were not
Trustee, Debenture registrar, paying agent or such other agent; and subject to
the provisions of this Article XI, the Trustee may engage or be interested in
any financial or other transaction with the Company or any subsidiary or
Affiliate, including without limitation, secured and unsecured loans to the
Company or any subsidiary or Affiliate; and may maintain any and all other
general banking and business relations with the Company and any subsidiary or
Affiliate with like effect and in the same manner and to the same extent as if
the Trustee were not a party to this Indenture; and no implied covenant shall be
read into this Indenture against the Trustee in respect of any such matters.
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SECTION 11.13. Trustee may comply with any rule, regulation or order of
the Securities and Exchange Commission. The Trustee may comply in good faith
with any rule, regulation or order of the Securities and Exchange Commission
made pursuant to the terms and provisions of the Trust Indenture Act of 1939 and
shall be fully protected in so doing notwithstanding that such rule, regulation
or order may thereafter be amended or rescinded or determined by judicial or
other authority to be invalid for any reason, but nothing herein contained shall
require the Trustee to take any action or omit to take any action in accordance
with such rule, regulation or order, except as is in this Indenture otherwise
required.
SECTION 11.14. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Debentures which shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series upon exchange, registration of transfer
or partial redemption or partial conversion thereof or pursuant to Section 2.9,
and if the Trustee is required to appoint one or more Authenticating Agents with
respect to any series of Debentures, to authenticate Debentures of such series
and to take such other actions as are specified in Sections 2.4, 2.8, 2.11, 5.2
and 13.3 and Debentures so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Whenever reference is made in this
Indenture to the authentication and delivery of Debentures by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent (except in respect to an original issue).
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $1,000,000 and subject to supervision or examination by
Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 11.14,
the combined capital and surplus of such Authenticating Agent shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 11.14, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 11.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 11.14, without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice or
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 11.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall provide
notice to the holders of the Debentures of the series as to which the
Authenticating Agent will serve as provided in Section 3.9. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 11.14.
The Trustee agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 11.2.
If an appointment with respect to one or more series is made pursuant
to this Section 11.14, the Debentures of such series may have endorsed thereon,
in addition to the Trustee's certificate of authentication, as alternative
certificate of authentication in the following form:
This is one of the Debentures of the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK
As Trustee
By
As Authenticating Agent
By
Authorized Officer
If all of the Debentures of a series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Debentures upon original issuance located where the Company wishes to have
Debentures of such series authenticated upon original issuance, the Trustee, if
so requested by the Company in writing (which writing need not comply with
Section 3.8 and need not be accompanied by an Opinion of Counsel), shall appoint
in accordance with this Section 11.14 an Authenticating Agent having an office
in a place designated by the Company with respect to such series of Debentures.
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ARTICLE XII
SUPPLEMENTAL INDENTURES
SECTION 12.1. Company and Trustee may enter into supplemental indenture
for special purposes. Without the consent of any of the Debentureholders, the
Company, when authorized by resolution of its Board of Directors, and the
Trustee from time to time and at any time, subject to the conditions and
restrictions in this Indenture contained, may enter into an indenture or
indentures supplemental hereto in form satisfactory to the Trustee, which
thereafter shall form a part hereof, for any one or more of the following
purposes:
(a) to add to the covenants and agreements of the Company in
this Indenture contained, other covenants and agreements thereafter to
be observed for the benefit of the Holders of all or any series of
Debentures (and if such covenants and agreements are to be for the
benefit of less than all series of Debentures, stating that such
covenants and agreements are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
reserved to or conferred upon the Company; or
(b) to cure any ambiguity or to cure, correct or supplement
any defect or inconsistent provision contained in this Indenture or in
any supplemental indenture; or
(c) to make sure provisions in regard to matters or questions
arising under this Indenture which may be necessary or desirable, or
otherwise change this Indenture in any manner, which shall not
adversely affect the interests of the Debentureholders of any series;
or
(d) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article X and to provide for the adjustment of conversion
rights pursuant to Section 13.7; or
(e) to establish the form or terms of the Debentures of any
series as permitted by Sections 2.1 and 2.2; or
(f) to change or eliminate any of the provisions of this
Indenture, provided that, except as otherwise contemplated by Section
2.2(23), any such change or elimination shall become effective only
when there is no Debenture outstanding of any series created prior
thereto which is entitled to the benefit of such provision; or
(g) to add or change any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
issuance of Debentures in bearer form, registrable or not registrable
as to principal, and with or without interest coupons, or to provide
for uncertificated Debentures in addition to certificated Debentures
(so long as any
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"registration-required obligation" within the meaning of Section
163(f)(2) of the Code is in registered form for purposes of the Code);
or
(h) to amend or supplement any provision contained herein,
which was required to be contained herein in order for this Indenture
to be qualified under the Trust Indenture Act of 1939, if the Trust
Indenture Act of 1939 or regulations thereunder change what is so
required to be included in qualified indentures, in any manner not
inconsistent with what then may be required for such qualification; or
(i) to add any additional Events of Default (and if such
Events of Default are to be applicable to less than all series of
Securities, stating that such Events of Default are expressly being
included solely to be applicable to such series); or
(j) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Debentures of one or more series any
property or assets; or
(k) to add to or change any of the provisions of this
Indenture as contemplated in Section 11.7(b)
and the Company hereby covenants that it will fully perform all the requirements
of any such supplemental indenture which may be in effect from time to time.
Nothing in this Article XII contained shall affect or limit the right or
obligation of the Company to execute and deliver to the Trustee any instrument
of further assurance or other instrument which elsewhere in this Indenture it is
provided shall be delivered to the Trustee.
The Trustee shall join with the Company in the execution of any such
supplemental indenture, make any further appropriate agreements and stipulations
which may be therein contained and accept the conveyance, transfer, assignment,
mortgage or pledge of any property thereunder, but the Trustee shall not be
obligated to enter into any such supplemental indenture which adversely affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Any supplemental indenture authorized by the provisions of this Section
12.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time Outstanding, notwithstanding any of
the provisions of Section 12.2.
SECTION 12.2. Modification of Indenture with consent of
Debentureholders. With the consent (evidenced as provided in Section 8.1) of the
holders of not less than 66 2/3% in aggregate principal amount of the Debentures
at the time Outstanding of each series affected by such supplement, the Company,
when authorized by a resolution of its Board of Directors, and the Trustee may
from time to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provision to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of
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modifying in any manner the rights of the holders of such series of the
Debentures; provided, however, that no such supplemental indenture shall (i)
extend the time or times of payment of the principal of, premium, if any, or the
interest on, any Debenture, or reduce the principal amount of, premium, if any,
or the rate of interest on, any Debenture (and/or such other amount or amounts
as any Debentures or supplemental indentures with respect thereto may provide to
be due and payable upon declaration of acceleration of the maturity thereof
pursuant to Section 7.1) or change the currency of payment of principal of,
premium, if any, or interest on, any Debenture or reduce any amount payable on
redemption thereof or alter or impair the right to convert the same at the rate
and upon the terms provided in the Indenture or alter or impair the right to
require redemption at the option of the holder, without the consent of the
holder of each Debenture so affected, or (ii) reduce the percentage of
Debentures of any series, the vote or consent of the holders of which is
required for such modifications and alterations, without the consent of the
holders of all Debentures then Outstanding of such series under the Indenture.
Notwithstanding the foregoing, no consent of the Debentureholders shall be
necessary to permit the execution of supplemental indentures pursuant to Section
13.7.
Upon the request of the Company, accompanied by a copy of a resolution
of its Board of Directors certified by the Secretary or an Assistant Secretary
of the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debentureholders
as aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may, in its discretion, but shall not be obligated, to enter
into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders under
this Section 12.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
A supplemental indenture which changes or eliminates any provision of
this Indenture which has expressly been included solely for the benefit of one
or more particular series of Debentures, or which modifies the rights of the
holders of Debentures of such series with respect to such provision, shall be
deemed not to affect the rights under this Indenture of the holders of
Debentures of any other series.
SECTION 12.3. Effect of supplemental indentures. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article XII, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the holders
of Debentures shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
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The Trustee, subject to the provisions of Section 11.1 may receive an
Opinion of Counsel as conclusive evidence that any such supplemental indenture
complies with the provisions of this Article XII.
SECTION 12.4. Supplemental indentures to conform to Trust Indenture
Act. Any supplemental indenture executed and delivered pursuant to the
provisions of this Article XII shall conform in all respects to the requirements
of the Trust Indenture Act of 1939, as amended, as then in effect.
SECTION 12.5. Notation on or exchange of Debentures. If an amendment,
supplement or waiver changes the terms of a Debenture of any series, the Trustee
may require the Holder of the Debenture to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Debenture about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Debenture of any series shall
issue and the Trustee shall authenticate a new Debenture of such series that
reflects the changed terms.
ARTICLE XIII
CONVERSION OF DEBENTURES
SECTION 13.1. Applicability of Article. Debentures of any series which
are convertible into Capital Stock at the option of the Debentureholder shall be
convertible in accordance with their terms and (unless otherwise specified as
contemplated by Section 2.2. for Debentures of any series) in accordance with
this Article. Each reference in this Article XIII to "a Debenture" or "the
Debentures" refers to the Debentures of the particular series that is
convertible into Capital Stock. Each reference in this Article to "Capital
Stock" into which Debentures of any series are convertible refers to the class
of Capital Stock into which the Debentures of such series are convertible in
accordance with their terms (as specified as contemplated by Section 2.2). If
more than one series of Debentures with conversion privileges are outstanding at
any time, the provisions of this Article XIII shall be applied separately to
each such series.
SECTION 13.2. Right of Debentureholders to convert Debentures. Subject
to and upon compliance with the terms of the Debentures and the provisions of
Section 5.7 and this Article XIII, at the option of the holder thereof, any
Debenture of any series of any authorized denomination, or any portion of the
principal amount thereof which is $1,000 or any integral multiple of $1,000,
may, at any time during the period specified in the Debentures of such series,
or in case such Debenture or portion thereof shall have been called for
redemption, then in respect of such Debenture or portion thereof until and
including, but not after (unless the Company shall default in payment due upon
the redemption thereof) the close of business on the date fixed for redemption
except that in the case of redemption at the option of the Debentureholder, if
specified in the terms of such Debentures, such right shall terminate upon
receipt of written notice of the
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exercise of such option, be converted into duly authorized, validly issued,
fully paid and nonassessable shares of the class of Capital Stock, or
combination thereof, as specified in such Debenture, at the conversion rate for
each $1,000 principal amount of Debentures (such initial conversion rate
reflecting an initial conversion price specified in such Debenture) in effect on
the conversion date, or, in case an adjustment in the conversion rate has taken
place pursuant to the provisions of Section 13.5, then at the applicable
conversion rate as so adjusted, upon surrender of the Debenture or Debentures,
the principal amount of which is so to be converted, to the Company at any time
during usual business hours at the office or agency to be maintained by it in
accordance with the provisions of Section 4.2, accompanied by a written notice
of election to convert as provided in Section 13.3 and, if so required by the
Company and the Trustee, by a written instrument or instruments of transfer in
form satisfactory to the Company and the Trustee duly executed by the registered
holder or his attorney duly authorized in writing. All Debentures surrendered
for conversion shall, if surrendered to the Company or any conversion agent, be
delivered to the Trustee for cancellation and cancelled by it, or shall, if
surrendered to the Trustee, be cancelled by it, as provided in Section 2.11.
The initial conversion price or conversion rate in respect of a series
of Debentures shall be specified on the Debentures of such series. The
conversion price or conversion rate will be subject to adjustment on the terms
set forth in Section 13.5 or such other or different terms, if any, as may be
specified by Section 2.2 for Debentures of such series. Provisions of this
Indenture that apply to conversion of all of a Debenture also apply to
conversion of a portion of it.
SECTION 13.3. Issuance of shares of Capital Stock on conversion. As
promptly as practicable after the surrender, as herein provided, of any
Debenture or Debentures for conversion, the Company shall deliver or cause to be
delivered at its said office or agency to or upon the written order of the
holder of the Debenture or Debentures so surrendered a certificate or
certificates representing the number of duly authorized, validly issued, fully
paid and nonassessable shares of Capital Stock into which such Debenture or
Debentures may be converted in accordance with the terms thereof and the
provisions of this Article XIII. Prior to delivery of such certificate or
certificates, the Company shall require a written notice at its said office or
agency from the holder of the Debenture or Debentures so surrendered stating
that the holder irrevocably elects to convert such Debenture or Debentures, or,
if less than the entire principal amount thereof is to be converted, stating the
portion thereof to be converted. Such notice shall also state the name or names
(with address and social security or other taxpayer identification number) in
which said certificate or certificates are to be issued. Such conversion shall
be deemed to have been made at the time that such Debenture or Debentures shall
have been surrendered for conversion and such notice shall have been received by
the Company or the Trustee, the rights of the holder of such Debenture or
Debentures as a Debentureholder shall cease at such time, the person or persons
entitled to receive the shares of Capital Stock upon conversion of such
Debenture or Debentures shall be treated for all purposes as having become the
record holder or holders of such shares of Capital Stock at such time and such
conversion shall be at the conversion rate in effect at such time. In the case
of any Debenture of any series which is converted in part
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only, upon such conversion, the Company shall execute and the Trustee or any
Authenticating Agent shall authenticate and deliver to the holder thereof, as
requested by such holder, a new Debenture or Debentures of such series of
authorized denominations in aggregate principal amount equal to the unconverted
portion of such Debenture.
If the last day on which a Debenture may be converted is not a Business
day in a place where a conversion agent is located, the Debenture may be
surrendered to that conversion agent on the next succeeding day that is a
Business day.
The Company will not be required to deliver certificates for shares of
Capital Stock upon conversion while its stock transfer books are closed for a
meeting of shareholders or for the payment of dividends or for any other
purpose, but certificates for shares of Capital Stock shall be delivered as soon
as the stock transfer books shall again be opened.
SECTION 13.4. No payment or adjustment for interest or dividends.
Unless otherwise specified as contemplated by Section 2.2 for Debentures of such
series, Debentures surrendered for conversion during the period from the close
of business on any regular record date (or special record date for payment of
defaulted interest) next preceding any interest payment date to the opening of
business on such interest payment date (except Debentures called for redemption
on a redemption date within such period) when surrendered for conversion must be
accompanied by payment of an amount equal to the interest thereon which the
registered holder is to receive on such interest payment date. Payment of
interest shall be made as of such interest payment date or such date, as the
case may be, to the holder of record of the Debentures as of such regular, or
special record date, as applicable. Except where Debentures surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Debentures will be payable by the Company on any interest payment date
subsequent to the date of conversion. No other payment or adjustment for
interest or dividends is to be made upon conversion. Notwithstanding the
foregoing, upon conversion of any Debentures with original issue discount, the
fixed number of shares of Capital Stock into which such Debenture is convertible
delivered by the Company to the holder thereof shall be applied, first, to pay
the accrued original issue discount attributable to the period from the date of
issuance to the date of conversion of such Debenture, and, second, to pay the
balance of the principal amount of such Debenture.
SECTION 13.5. Adjustment of conversion rate. Unless otherwise specified
as contemplated by Section 2.2 for Debentures of such series, the conversion
rate for Debentures in effect at any time shall be subject to adjustment as
follows:
(a) In case the Company shall (i) declare a dividend or make a
distribution on the class of Capital Stock into which Debentures of
such series are convertible in shares of its Capital Stock, (ii)
subdivide the outstanding shares of the class of Capital Stock into
which Debentures of such series are convertible into a greater number
of shares, (iii) combine the outstanding shares of the class of Capital
Stock into which Debentures of such series are convertible into a
smaller number of shares, or (iv) issue by reclassification of the
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shares of the class of Capital Stock into which Debentures of such
series are convertible (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation) any shares, the conversion rate for the
Debentures of such series in effect at the time of the record date for
such dividend or distribution, or the effective date of such
subdivision, combination or reclassification, shall be proportionately
adjusted so that the holder of any Debenture of such series surrendered
for conversion after such time shall be entitled to receive the number
and kind of shares which he would have owned or have been entitled to
receive had such Debenture been converted immediately prior to such
time. Similar adjustments shall be made whenever any event listed above
shall occur.
(b) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of the class of Capital
Stock into which Debentures of such series are convertible entitling
them (for a period expiring within 45 days after such record date) to
subscribe for or purchase shares of such class of Capital Stock (or
securities convertible into shares of such class of Capital Stock ) at
a price per share (or, in the case of a right or warrant to purchase
securities convertible into such class of Capital Stock, having a
conversion price per share, after adding thereto the exercise price,
computed on the basis of the maximum number of shares of such class of
Capital Stock issuable upon conversion of such convertible securities,
per share of such class of Capital Stock, so issuable) less than the
current market price per share of such class of Capital Stock (as
defined in subsection (d) below) on the date on which such issuance was
declared or otherwise announced by the Company (the "Determination
Date"), the number of shares of such class of Capital Stock into which
each $1,000 principal amount of Debentures shall be convertible after
such record date shall be determined by multiplying the number of
shares of such class of Capital Stock into which such principal amount
of Debentures was convertible immediately prior to such record date by
a fraction, of which the numerator shall be the number of shares of
such class of Capital Stock outstanding on the Determination Date plus
the number of additional shares of such class of Capital Stock offered
for subscription or purchase (or in the case of a right or warrant to
purchase securities convertible into such class of Capital Stock, the
aggregate number of additional shares of such class of Capital Stock
into which the convertible securities so offered are initially
convertible), and of which the denominator shall be the number of
shares of such class of Capital Stock outstanding on the Determination
Date plus the number of shares of such class of Capital Stock obtained
by dividing the aggregate offering price of the total number of shares
so offered (or, in the case of a right or warrant to purchase
securities convertible into such class of Capital Stock, the aggregate
initial conversion price of the convertible securities so offered,
after adding thereto the aggregate exercise price of such rights or
warrants computed on the basis of the maximum number of shares of such
class of Capital Stock issuable upon conversion of such convertible
securities) by such current market price. Shares of such class of
Capital Stock of the Company owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is
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fixed; and to the extent that shares of such class of Capital Stock are
not delivered (or securities convertible into shares of such class of
Capital Stock are not delivered) after the expiration of such rights or
warrants (or, in the case of rights or warrants to purchase securities
convertible into such class of Capital Stock once exercised, the
expiration of the conversion right of such securities) the conversion
rate shall be readjusted to the conversion rate which would then be in
effect had the adjustments made upon the issuance of such rights or
warrants (or securities convertible into shares) been made upon the
basis of delivery of only the number of shares actually delivered. In
the event that such rights or warrants are not so issued, the
conversion rate shall again be adjusted to be the conversion rate which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the class of Capital Stock into
which Debentures of such series are convertible (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of its
indebtedness or assets (excluding any cash dividends paid from retained
earnings and dividends payable in Capital Stock for which adjustment is
made pursuant to subsection (a) above) or subscription rights or
warrants (excluding subscription rights or warrants to purchase the
class of Capital Stock into which Debentures of such series are
convertible), the number of shares of such class of Capital Stock into
which each $1,000 principal amount of Debentures of such series shall
be convertible after such record date shall be determined by
multiplying the number of shares of such class of Capital Stock into
which such principal amount of Debentures was convertible immediately
prior to such record date by a fraction, of which the numerator shall
be the fair market value of the assets of the Company, after deducting
therefrom all liabilities of the Company and all preferences (including
accrued but unpaid dividends) in respect of classes of Capital Stock
having a preference with respect to the assets of the Company over such
class of Capital Stock (all as determined by the Board of Directors,
whose determination shall be conclusive, and described in a certificate
signed by any Vice Chairmen of the Board, Vice President or Assistant
Vice President and Treasurer of the Company, filed with the Trustee and
each conversion agent) on such record date, and of which the
denominator shall be such fair market value after deducting therefrom
such liabilities and preferences, less the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive, and described in a statement filed with the Trustee and
each conversion agent) of the assets or evidences of indebtedness, so
distributed or of such subscription rights or warrants applicable, so
distributed. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so
made, the conversion rate shall again be adjusted to the conversion
rate which would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation under subsection (b)
above and Section 13.6, the current market price per share of the
Capital Stock on any date as of
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which such price is to be computed shall mean the average of the
Closing Prices for the 30 consecutive Business days commencing 45
Business days before such date.
(e) No adjustment in the conversion rate shall be required
unless such adjustment would require a cumulative increase or decrease
of at least 1% in such rate; provided, however, that any adjustments
which by reason of this subsection (e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment, and provided, further, that adjustments shall be required
and made in accordance with the provisions of this Article XIII (other
than this subsection (e)) not later than such time as may be required
in order to preserve the tax-free nature of a distribution for United
States income tax purposes to the holders of Debentures or the class of
Capital Stock into which such Debentures are convertible. All
calculations under this Article XIII shall be made to the nearest cent
or to the nearest one-thousandth of a share, as the case may be.
Anything in this Section 13.5 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the conversion
rate, in addition to those required by this Section 13.5, as it in its
discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights to purchase
stock or securities, or distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its
shareholders shall not be taxable for United States income tax
purposes.
(f) Whenever the conversion rate is adjusted, as herein
provided, the Company shall promptly file with the Trustee and with the
office or agency maintained by the Company for the conversion of
Debentures of such series pursuant to Section 4.2, a certificate of a
firm of independent public accountants of recognized national standing
selected by the Board of Directors (who may be the regular accountants
employed by the Company) setting forth the conversion rate after such
adjustment and setting forth a brief statement of the facts requiring
such adjustment and a computation thereof. Such certificate shall be
conclusive evidence of the correctness of such adjustment. Neither the
Trustee nor any conversion agent shall be under any duty or
responsibility with respect to any such certificate or any facts or
computations set forth therein, except to exhibit said certificate from
time to time to any Debentureholder of such series desiring to inspect
the same. The Company shall promptly cause a notice setting forth the
adjusted conversion rate to be mailed to the holders of Debentures of
such series, as their names and addresses appear upon the registration
books of the Company.
(g) In the event that at any time, as a result of shares of
any other class of Capital Stock becoming issuable in exchange or
substitution for or in lieu of shares of the class of Capital Stock
into which such Debentures are convertible or as a result of an
adjustment made pursuant to subsection (a) above, the holder of any
Debenture of such series thereafter surrendered for conversion shall
become entitled to receive any shares of the Company other than shares
of the class of Capital Stock into which the Debentures of such series
are convertible, thereafter the number of such other shares so
receivable upon
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conversion of any Debenture shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the class of Capital Stock into which
the Debentures of such series are convertible contained in subsections
(a) to (f), inclusive, above, and the provisions of this Article XIII
with respect to the class of Capital Stock into which the Debentures of
such series are convertible shall apply on like terms to any such other
shares.
(h) The conversion rate with respect to any Debentures with
original issue discount, the terms of which provide for convertibility,
shall not be adjusted during the term of such Original Issue Discount
Debentures for accrued original issue discount.
(i) In the event that the Debentures of any series are
convertible into more than one class of Capital Stock, the provisions
of this Section 13.5 shall apply separately to events affecting each
such class.
SECTION 13.6. No fractional shares to be issued. No fractional shares
of Capital Stock shall be issued upon conversions of Debentures. If more than
one Debenture of any series shall be surrendered for conversion at one time by
the same holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Debentures of such series (or specified portions thereof to the
extent permitted hereby) so surrendered. Instead of a fraction of a share of
Capital Stock which would otherwise be issuable upon conversion of any Debenture
or Debentures (or specified portions thereof), the Company shall pay a cash
adjustment in respect of such fraction of a share in an amount equal to the same
fractional interest of the current market price (as defined in Section 13.5) per
share of Capital Stock on the Business day next preceding the day of conversion.
SECTION 13.7. Preservation of conversion rights upon consolidation,
merger, sale or conveyance. In case of any consolidation of the Company with, or
merger of the Company into, any other corporation (other than a consolidation or
merger in which the Company is the continuing corporation), or in the case of
any sale or transfer of all or substantially all of the assets of the Company,
the corporation formed by such consolidation or the corporation into which the
Company shall have been merged or the corporation which shall have acquired such
assets, as the case may be, shall execute and deliver to the Trustee, a
supplemental indenture, subject to the provisions of Article X and XII as they
relate to supplemental indentures, providing that the holder of each Debenture
then Outstanding of a series which was convertible into Capital Stock shall have
the right thereafter to convert such Debenture into the kind and amount of
shares of stock and other securities and property, including cash, receivable
upon such consolidation, merger, sale or transfer by a holder of the number of
shares of Capital Stock of the Company into which such Debentures might have
been converted immediately prior to such consolidation, merger, sale or
transfer. Such supplemental indenture shall conform to the provisions of the
Trust Indenture Act of 1939 as then in effect and shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article XIII. Neither the Trustee nor any conversion agent
shall be under any responsibility to determine the correctness
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of any provision contained in any such supplemental indenture relating either to
the kind or amount of shares of stock or other securities or property receivable
by Debentureholders upon the conversion of their Debentures after any such
consolidation, merger, sale or transfer, or to any adjustment to be made with
respect thereto and, subject to the provisions of Section 11.1, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, an Opinion of Counsel with respect thereto. If in the
case of any such consolidation, merger, sale or transfer, the stock or other
securities and property receivable by a holder of the Debentures includes stock
or other securities and property of a corporation other than the successor or
purchasing corporation, then such supplemental indenture shall also be executed
by such other corporation and shall contain such additional provisions to
protect the interests of the holders of the Debentures as the Board of Directors
shall reasonably consider necessary. The above provisions of this Section 13.7
shall similarly apply to successive consolidations, mergers, sales or transfers.
SECTION 13.8. Notice to Debentureholders of a series prior to taking
certain types of action. With respect to the Debentures of any series, in case:
(a) the Company shall authorize the issuance to all holders of
the class of Capital Stock into which Debentures of such series are
convertible of rights or warrants to subscribe for or purchase shares
of its Capital Stock or of any other right;
(b) the Company shall authorize the distribution to all
holders of the class of Capital Stock into which Debentures of such
series are convertible of evidences of its indebtedness or assets
(except for the exclusions with respect to certain dividends set forth
in Section 13.5(c);
(c) of any subdivision, combination or reclassification of the
class of Capital Stock into which Debentures of such series are
convertible or of any consolidation or merger to which the Company is a
party and for which approval by the shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
the Company shall cause to be filed with the Trustee and at the office or agency
maintained for the purpose of conversion of Debentures of such series pursuant
to Section 4.2, and shall cause to be mailed to the holders of Debentures of
such series, at their last addresses as they shall appear upon the registration
books of the Company, at least ten days prior to the applicable record date
hereinafter specified, a notice stating (i) the date as of which the holders of
such class of Capital Stock to be entitled to receive any such rights, warrants
or distributions are to be determined, or (ii) the date on which any such
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation, winding up or other action is expected to
become effective,
66
<PAGE>
and the date as of which it is expected that holders of record of such class of
Capital Stock shall be entitled to exchange their Capital Stock of such class
for securities or other property, if any, deliverable upon such subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation, winding up or other action. The failure to give the
notice required by this Section 13.8 or any defect therein shall not affect the
legality or validity of any distribution, right, warrant, subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation, winding up or other action, or the vote upon any of
the foregoing. Such notice shall also be published by and at the expense of the
Company not later than the aforesaid filing date at least once in an Authorized
Newspaper.
SECTION 13.9. Covenant to reserve shares for issuance on conversion of
Debentures. The Company covenants that at all times it will reserve and keep
available out of each class of its authorized Capital Stock, free from
preemptive rights, solely for the purpose of issue upon conversion of Debentures
of any series as herein provided, such number of shares of Capital Stock of such
class as shall then be issuable upon the conversion of all Outstanding
Debentures of such series. The Company covenants that all shares of Capital
Stock which shall be so issuable shall, when issued or delivered, be duly and
validly issued shares of the class of authorized Capital Stock into which
Debentures of such series are convertible, and shall be fully paid and
nonassessable, free of all liens and charges and not subject to preemptive
rights and that, upon conversion, the appropriate capital stock accounts of the
Company will be duly credited.
SECTION 13.10. Compliance with governmental requirements. The Company
covenants that if any shares of Capital Stock required to be reserved for
purposes of conversion of Debentures hereunder require registration or listing
with or approval of any governmental authority under any Federal or State law,
pursuant to the Securities Act of 1933, as amended, or the Securities Exchange
Act, or any national or regional securities exchange on which such Capital Stock
is listed at the time of delivery of any shares of such Capital Stock, before
such shares may be issued upon conversion, the Company will use its best efforts
to cause such shares to be duly registered, listed or approved, as the case may
be.
SECTION 13.11. Payment of taxes upon certificates for shares issued
upon conversion. The issuance of certificates for shares of Capital Stock upon
the conversion of Debentures shall be made without charge to the converting
Debentureholders for any tax (including, without limitation, all documentary and
stamp taxes) in respect of the issuance and delivery of such certificates, and
such certificates shall be issued in the respective names of, or in such names
as may be directed by, the holders of the Debentures converted; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
such certificate in a name other than that of the holder of the Debenture
converted, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
67
<PAGE>
SECTION 13.12. Trustee's duties with respect to conversion provisions.
The Trustee and any conversion agent shall not at any time be under any duty or
responsibility to any Debentureholder to determine whether any facts exist which
may require any adjustment of the conversion rate, or with respect to the nature
or extent of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor any conversion agent shall be
accountable with respect to the registration under securities laws, listing,
validity or value (or the kind or amount) of any shares of Capital Stock, or of
any other securities or property, which may at any time be issued or delivered
upon the conversion of any Debenture; and neither the Trustee nor any conversion
agent makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any shares of stock or stock
certificates or other securities or property upon the surrender of any Debenture
for the purpose of conversion; and the Trustee, subject to the provisions of
Section 11.1, and any conversion agent shall not be responsible for any failure
of the Company to comply with any of the covenants of the Company contained in
this Article XIII.
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IN WITNESS WHEREOF, VANGUARD CELLULAR SYSTEMS, INC. has caused this
Indenture to be signed in its corporate name, and THE BANK OF NEW YORK, as
Trustee, has caused this Indenture to be signed in its corporate name, all as of
the day and year first above written.
VANGUARD CELLULAR SYSTEMS, INC.
By: /s/Haynes G. Griffin
Title: President
ATTEST:
/s/Richard C. Rowlenson
Assistant Secretary
(CORPORATE SEAL)
THE BANK OF NEW YORK, as Trustee
By: Byron Merino
Title:Assistant Treasurer
ATTEST:
/s/Dorothy J. Shaw
Assistant Treasurer
(CORPORATE SEAL)
<PAGE>
STATE OF NEW YORK
COUNTY OF NEW YORK ss.
On this tenth day of April, before me personally came Haynes G.
Griffin, to me known, who, being by me duly sworn, did depose and say the he
resides at Greensboro, N.C., that he is the President of Vanguard Cellular
Systems, Inc., a North Carolina corporation, the corporation described in and
which executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to the said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
Johnathan Cole
JONATHAN COLE
Notary Public, State of New York
(NOTARIAL SEAL)
STATE OF NEW YORK
COUNTY OF NEW YORK ss.
On this tenth day of April, before me personally came Byron Merino, to
me known, who, being by me duly sworn, did depose and say that he resides at The
Bank of New York; that he is an Assistant Treasurer of The Bank of New York, the
New York banking corporation described in and which executed the above
instrument; that he knows the seal of said New York banking corporation; that
the seal affixed to the said instrument is such seal; that it was so affixed by
authority of the Board of Directors of said New York banking corporation; and
that he signed his name thereto by like authority.
William J. Cassels
WILLIAM J. CASSELS
Notary Public, State of New York
(NOTARIAL SEAL)
<PAGE>
THIS DOCUMENT IS A COPY OF THE EXHIBIT 4(e)(2) TO FORM 10-Q
FILED ON MAY 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION.
FIRST SUPPLEMENTAL INDENTURE, dated as of
April 1, 1996 (the "Supplement"), between VANGUARD
CELLULAR SYSTEMS, INC., a North Carolina corporation
(the "Company"), and THE BANK OF NEW YORK, a New York
banking corporation (the "Trustee"), as Trustee under
an Indenture, dated as of April 1, 1996 (the
"Indenture").
RECITALS OF THE COMPANY
The Company has previously executed and delivered to the
Trustee the Indenture. Sections 2.1, 2.2 and 12.1 of the Indenture provide,
among other things, that the Company, when authorized by its Board of Directors,
and the Trustee may at any time and from time to time enter into an indenture
supplemental to the Indenture for the purpose of authorizing a series of
Debentures and specifying the terms and form of each series of Debentures. The
Board of Directors of the Company has duly authorized the creation, issuance,
execution and delivery of a series of Debentures consisting of the 9-3/8% Senior
Debentures Due 2006 (the "9- 3/8% Debentures") in the aggregate principal amount
of $200,000,000. The Company and the Trustee are executing and delivering this
Supplement in order to provide for the 9- 3/8% Debentures.
All things necessary to make this Supplement a valid and
legally binding agreement of the Company have been done.
I. ADDITIONAL PROVISIONS RELATING TO THE 9-3/8% DEBENTURES
The additional terms provided for herein apply only to the
9-3/8% Debentures and do not apply to any other series of Debentures previously
issued or to be issued under the Indenture. Except as otherwise set forth
herein, all provisions of the Indenture apply to the 9-3/8% Debentures.
1. Provisions Supplemental to Article I of the Indenture.
A. Terms Defined in the Indenture.
All capitalized terms used in this Supplement that are defined
in the Indenture have the meanings assigned to them in the Indenture, except to
the extent that such terms
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2
are otherwise defined in this Supplement. To the extent that a term is defined
both in the Indenture and this Supplement, the definition appearing in this
Supplement shall govern with respect to the 9-3/8% Debentures.
B. Additional Definitions.
Section 1.1 of the Indenture is hereby supplemented for
purposes of the 9-3/8% Debentures to provide additional definitions in the
appropriate alphabetical sequence, as follows:
"Additional Assets" means (i) any Property (other than cash,
cash equivalents or securities) to be owned by the Company or a Restricted
Subsidiary and used in a Related Business, (ii) the costs of improving or
developing any Property owned by the Company or a Restricted Subsidiary which is
used in a Related Business and (iii) Investments in any other Person engaged
primarily in a Related Business (including the acquisition from third parties of
Capital Stock of such Person) as a result of which such other Person becomes a
Restricted Subsidiary or is merged or consolidated with or into the Company or
any Restricted Subsidiary.
"Affiliate" of any specified Person means (i) any other
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any other Person who
is a director or executive officer (a) of such specified Person, (b) of any
Subsidiary of such specified Person or (c) of any Person described in clause (i)
above. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. "Affiliate" shall also mean any
beneficial owner of shares representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Annualized Pro Forma EBITDA" means, with respect to any
Person, the product of such Person's Pro Forma EBITDA for the two most recent
full fiscal quarters for which financial statements are available multiplied by
two.
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3
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation or merger or a Sale and Leaseback
Transaction) by such Person or any of its Restricted Subsidiaries in any single
transaction or series of transactions of (a) shares of Capital Stock or other
ownership interests in another Person (including, with respect to the Company
and its Restricted Subsidiaries, Capital Stock of Unrestricted Subsidiaries) or
(b) any other Property of such Person or any of its Restricted Subsidiaries;
provided, however, that the term "Asset Sale" shall not include: (i) the sale or
transfer of Temporary Cash Investments, inventory, accounts receivable or other
Property in the ordinary course of business; (ii) the liquidation of Property
received in settlement of debts owing to such Person or any of its Restricted
Subsidiaries as a result of foreclosure, perfection or enforcement of any Lien
or debt, which debts were owing to such Person or any of its Restricted
Subsidiaries in the ordinary course of business; (iii) when used with respect to
the Company, any asset disposition permitted pursuant to Section 10.1 which
constitutes a disposition of all or substantially all of the Company's Property;
(iv) the sale or transfer of any Property by such Person or any of its
Restricted Subsidiaries to such Person or any of its Restricted Subsidiaries;
(v) a disposition in the form of a Restricted Payment permitted to be made
pursuant to Section 4.10 or (vi) a disposition with a Fair Market Value and a
sale price of less than $5 million.
"Attributable Indebtedness" means (i) Indebtedness deemed to
be incurred in respect of a Sale and Leaseback Transaction and shall be, at the
date of determination, the present value (discounted at the actual rate of
interest implicit in such transaction, compounded annually), of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale and Leaseback Transaction (including any period for
which such lease has been extended) and (ii) the amount of any Indebtedness
incurred by any special purpose company or trust in connection with any
Permitted Receivables Facility.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years (rounded to the
nearest one-twelfth of one year) from the date of determination to the dates of
each successive scheduled principal payment of
<PAGE>
4
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of all
such payments.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors, to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Capital Expenditure Indebtedness" means Indebtedness Incurred
by any Person to finance a capital expenditure so long as (i) such capital
expenditure is or should be included as an addition to "Property and Equipment,
at cost" in accordance with GAAP, and (ii) such Indebtedness is Incurred within
180 days of the date such capital expenditure is made.
"Capital Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP. For purposes of Section 4.11, a Capital Lease Obligation shall be
deemed secured by a Lien on the property being leased.
"Capital Stock" means, with respect to any Person, any and all
shares or other equivalents (however designated) of corporate stock, partnership
interests or any other participation, right, warrant, option or other interest
in the nature of an equity interest in such Person, but excluding any debt
security convertible or exchangeable into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate Net Cash
Proceeds received by the Company from the issue or sale (other than to a
Subsidiary or an employee stock ownership plan or trust established by the
Company or any Subsidiary) by the Company of any class of its Capital Stock
(other than Redeemable Stock) after the Issue Date.
"Change of Control" means the occurrence of any of the
following events: (i) any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the
<PAGE>
5
meaning of Rule 13d-5(b)(1) under the Exchange Act) other than one or more of
the Permitted Holders is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 40% or more of the
total voting power of the Voting Stock (on a fully diluted basis) of the
Company, (ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by the Board of Directors of the
Company or whose nomination for election by the shareholders of the Company was
approved by a vote of 66 2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company then in
office, (iii) the Company consolidates or merges with or into any other Person
(other than one or more Permitted Holders) or any other Person (other than one
or more Permitted Holders) consolidates or merges with or into the Company, in
either case, other than a consolidation or merger (a) with a Wholly Owned
Subsidiary in which all of the Voting Stock of the Company outstanding
immediately prior to the effectiveness thereof is changed into or exchanged for
substantially the same consideration or (b) pursuant to a transaction in which
the outstanding Voting Stock of the Company is changed into or exchanged for
cash, securities or other Property with the effect that the "beneficial owners"
(as defined in Rule 13d- 3 under the Exchange Act) of the outstanding Voting
Stock immediately prior to such transaction, beneficially own, directly or
indirectly, more than 50% of the total voting power of the fully diluted Voting
Stock of the Surviving Corporation immediately following such transaction in
substantially the same proportions as owned prior to such transaction or (iv)
the Company sells, conveys, transfers or leases, directly or indirectly, all or
substantially all of its assets (other than a transfer of such assets as an
entirety or virtually as an entirety to a Wholly Owned Subsidiary or one or more
Permitted Holders).
"Change of Control Triggering Event" means the occurrence of
both a Change of Control and a Rating Decline with respect to the 9-3/8%
Debentures.
"Consolidated Interest Expense" means, for any Person (or in
the case of the Company, the Company and its Restricted Subsidiaries), for any
period, the amount of interest in respect of Indebtedness (including
amortization
<PAGE>
6
of original issue discount, fees payable in connection with financings,
including commitment, availability and similar fees, and amortization of debt
issuance costs, non-cash interest payments on any Indebtedness and the interest
portion of any deferred payment obligation and after taking into account the
effect of elections made under, and the net costs associated with, any Interest
Rate Agreement, however denominated, with respect to such Indebtedness), the
amount of Redeemable Dividends, the amount of Preferred Stock dividends in
respect of all Preferred Stock of Subsidiaries of such Person held other than by
such Person or a Subsidiary of such Person, commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, and the interest component of rentals in respect of any Capital Lease
Obligation or Sale and Leaseback Transaction paid, accrued or scheduled to be
paid or accrued by such Person during such period, determined on a consolidated
basis in accordance with GAAP. For purposes of this definition, interest on a
Capital Lease Obligation or a Sale and Leaseback Transaction shall be deemed to
accrue at an interest rate reasonably determined by such Person to be the rate
of interest implicit in such Capital Lease Obligation or Sale and Leaseback
Transaction in accordance with GAAP consistently applied.
"Consolidated Net Income" of a Person means for any period,
the net income (loss) of such Person and its Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income (i) with
respect to the Company, any net income (loss) of any Person if such Person is
not a Restricted Subsidiary, except that (a) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income of any
such Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Person during such
period to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(b) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any Person acquired by
such Person or a Subsidiary of such Person in a pooling of interests transaction
for any period prior to the date of such acquisition, (iii) with respect to the
Company, any net income (loss) of any Restricted Subsidiary if such
<PAGE>
7
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Restricted Subsidiary, directly
or indirectly, to the Company, except that (a) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income of any
such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash that could have been
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend (subject, in the case of a dividend
to another Restricted Subsidiary, to the limitation contained in this clause)
and (b) the Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income, (iv)
any gain (but not loss) realized upon the sale or other disposition of any
Property of such Person or its consolidated Subsidiaries (including pursuant to
any Sale and Leaseback Transaction) which is not sold or otherwise disposed of
in the ordinary course of business, (v) any extraordinary gain or loss and (vi)
the cumulative effect of a change in accounting principles.
Notwithstanding the provisions of clause (iii) in the
proceeding paragraph, in the event that Consolidated Net Income is being
calculated with respect to the Company or any Surviving Entity (a) for purposes
of determining whether the Company or any Surviving Entity could incur at least
$1.00 of additional Indebtedness pursuant to clause (i) of Section 4.9(a) for
purposes of (i) clause (ii) of the first sentence of Section 4.10(a), (ii)
clause (iv) under Section 10.01 or (iii) the definition of "Unrestricted
Subsidiary" or (b) for purposes of calculating Cumulative EBITDA pursuant to
clause (iii) of the first sentence of Section 4.10(a), restrictions on the
payment of dividends or the making of distributions to the Company by Vanguard
Cellular Financial Corp. referred to in clause (1)(iii) of the second sentence
of Section 4.13 shall be disregarded.
Notwithstanding the provisions of clause (iii) in the first
paragraph of this definition, in the event that Consolidated Net Income is being
calculated with respect to the Company for purposes of determining whether the
Incurrence of Indebtedness proposed to be Incurred is permissible under clause
(i) of Section 4.9(a), then (i) if such proposed Indebtedness is proposed to be
Incurred by Vanguard Cellular Financial Corp. or any Subsidiary thereof that is
a Restricted Subsidiary, restrictions on the payment
<PAGE>
8
of dividends or the making of distributions to the Company by Vanguard Cellular
Financial Corp. referred to in clause (1)(iii) of the second sentence of
Section 4.13 shall be disregarded and (ii) if such proposed Indebtedness is
proposed to be Incurred by the Company or any Subsidiary of the Company (other
than Vanguard Cellular Financial Corp. and its Subsidiaries) that is a
Restricted Subsidiary, restrictions on the payment of dividends or the making
of distributions to the Company by Vanguard Cellular Financial Corp. referred
to in clause (1)(iii) of the second sentence of Section 4.13 shall be
disregarded, provided that the lenders pursuant to the Credit Facility modify
the Credit Facility to allow for the payment of dividends or the making of
distributions to the Company in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due
and payable or, in the case of a proposed Incurrence of Indebtedness by a
Subsidiary, in an amount sufficient to fund capital contributions or other
Investments to or in such Subsidiary in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due and
payable so long as there does not exist an event which after notice or passage
of time or both would permit the lenders under the Credit Facility to declare
all amounts thereunder due and payable.
"Credit Facility" means the $675 million credit facility
pursuant to the Amended and Restated Loan Agreement dated as of December 23,
1994 among the Company, various lenders, and The Toronto-Dominion Bank and The
Bank of New York and any extensions, revisions, refinancings or replacements
thereof by a lender or syndicate of lenders.
"Cumulative EBITDA" means at any date of determination the
cumulative EBITDA of the Company from and after the last day of the fiscal
quarter of the Company immediately preceding the Issue Date to the end of the
fiscal quarter immediately preceding the date of determination or, if such
cumulative EBITDA for such period is negative, the amount (expressed as a
negative number) by which such cumulative EBITDA is less than zero.
"Cumulative Interest Expense" means at any date of
determination the aggregate amount of Consolidated Interest Expense paid,
accrued or scheduled to be paid or accrued by the Company and its Restricted
Subsidiaries from the last day of the fiscal quarter of the Company immediately
preceding the Issue Date to the end of the fiscal quarter immediately preceding
the date of determination.
<PAGE>
9
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Dollar Equivalent" means, with respect to any monetary amount
in a currency other than U.S. dollars, at any time for the determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars at the spot rate for the purchase
of U.S. dollars with the applicable foreign currency as quoted by Bankers Trust
Company in New York City at approximately 11:00 a.m. (New York time) on the date
two Business days prior to such determination.
"EBITDA" means, for any Person, for any period, an amount
equal to (A) the sum of (i) Consolidated Net Income for such period, plus (ii)
the provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof,
plus (iii) Consolidated Interest Expense for such period, plus (iv) depreciation
for such period on a consolidated basis, plus (v) amortization of intangibles
for such period on a consolidated basis, plus (vi) any other non-cash items
reducing Consolidated Net Income for such period, minus (B) all non-cash items
increasing Consolidated Net Income for such period, all for such Person and its
Subsidiaries determined in accordance with GAAP consistently applied, except
that with respect to the Company each of the foregoing items shall be determined
on a consolidated basis with respect to the Company and its Restricted
Subsidiaries only.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended.
"Fair Market Value" means with respect to any Property, the
price which could be negotiated in an arm's- length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value will
be determined, except as otherwise provided, (i) if such property or asset has a
Fair Market Value of less than $15 million, by any Officer of the Company or
(ii) if such property or asset has a Fair Market Value in excess of $15 million,
by a majority of the Board of Directors of the Company and evidenced by a Board
<PAGE>
10
Resolution, dated within 30 days of the relevant transaction.
"GAAP" means United States generally accepted accounting
principles as in effect on the Issue Date, unless stated otherwise.
"Geotek Management Consulting Agreement" means the management
consulting agreement between the Company and Geotek Communications, Inc. as in
effect on the Issue Date and renewals or extensions thereof on terms no less
favorable to the Company and its Restricted Subsidiaries.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligation" of any Person means any obligation of
such Person pursuant to any Interest Rate Agreement, foreign exchange contract,
currency swap agreement, currency option or any other similar agreement or
arrangement.
"Holder" or "Debentureholder" means the Person in whose name a
9-3/8% Debenture is registered on the Registrar's books.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by merger, conversion,
exchange or otherwise), extend, assume, Guarantee or become liable in respect of
such Indebtedness or other obligation or the recording, as required pursuant to
GAAP or otherwise, of any such Indebtedness or obligation on the balance sheet
of such Person (and "Incurrence", "Incurred", "Incurrable" and "Incurring" shall
have meanings
<PAGE>
11
correlative to the foregoing); provided, however, that a change in
GAAP that results in an obligation of such Person that exists at such time, and
is not theretofore classified as Indebtedness, becoming Indebtedness shall not
be deemed an Incurrence of such Indebtedness; provided further, that solely for
purposes of determining compliance with Section 4.9, amortization of debt
discount shall not be deemed to be the Incurrence of Indebtedness, provided that
in the case of Indebtedness sold at a discount, the amount of such Indebtedness
Incurred shall at all times be the aggregate principal amount at Stated
Maturity.
"Indebtedness" means (without duplication), with respect to
any Person, any indebtedness, secured or unsecured, contingent or otherwise,
which is for borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), or evidenced
by bonds, notes, debentures or similar instruments or representing the balance
deferred and unpaid of the purchase price of any property (excluding any
balances that constitute customer advance payments and deposits, accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and shall also include, to the extent not otherwise included (i) any
Capital Lease Obligations, (ii) Indebtedness of other Persons secured by a Lien
to which the Property owned or held by such first Person is subject, whether or
not the obligation or obligation secured thereby shall have been assumed (the
amount of such Indebtedness being deemed to be the lesser of the value of such
property or assets or the amount of the Indebtedness so secured), (iii)
Guarantees of Indebtedness of other Persons, (iv) any Redeemable Stock
(provided, however, that Redeemable Stock of the Company shall not constitute
Indebtedness if such Redeemable Stock may not be redeemed prior to the first
anniversary of the Stated Maturity of the 9-3/8% Debentures), (v) any
Attributable Indebtedness, (vi) all reimbursement obligations of such Person in
respect of letters of credit, bankers' acceptances or other similar instruments
or credit transactions issued for the account of such Person, (vii) in the case
of the Company, Preferred Stock of its Restricted Subsidiaries and (viii) to the
extent not otherwise included in clauses (i) through (vii) of this paragraph,
any payment obligations of any such Person at the time of determination under
any Hedging Obligation. For purposes of this
<PAGE>
12
definition, the maximum fixed repurchase price of any Redeemable Stock that does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Redeemable Stock as if such Redeemable Stock were repurchased on
any date on which Indebtedness shall be required to be determined pursuant to
the Indenture; provided, however, that if such Redeemable Stock is not then
permitted to be repurchased, the repurchase price shall be the book value of
such Redeemable Stock. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability of any contingent obligations in
respect thereof at such date. For purposes of this definition, the amount of the
payment obligation with respect to any Hedging Obligation shall be an amount
equal to (i) zero, if such obligation is an Interest Rate Obligation permitted
pursuant to clause (vi) of Section 4.9(b) or (ii) the notional amount of such
Hedging Obligation, if such Hedging Obligation is not an Interest Rate Agreement
so permitted.
"Interest Rate Agreement" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement.
"Investment" by any Person means any direct or indirect loan,
advance or other extension of credit or capital contribution (by means of
transfers of cash or other Property to others or payments for Property or
services for the account or use of others, or otherwise) to, or Incurrence of a
Guarantee of any obligation of, or purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities or evidence of Indebtedness issued
by, any other Person. In determining the amount of any Investment made by
transfer of any Property other than cash, such Property shall be valued at its
Fair Market Value at the time of such Investment.
"Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's Investors Service, Inc. (or any
successor to the rating agency business thereof) and BBB- (or the equivalent) by
Standard & Poor's Ratings Group (or any successor to the rating agency business
thereof).
"Issue Date" means the date on which the 9-3/8% Debentures are
initially issued.
<PAGE>
13
"Leverage Ratio" is defined as the ratio of (i) the
outstanding Indebtedness of a Person and its Subsidiaries (or in the case of the
Company, its Restricted Subsidiaries) divided by (ii) the Annualized Pro Forma
EBITDA of such Person.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction).
"Net Available Cash" from an Asset Sale means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring person of Indebtedness or other
obligations relating to such Properties or assets or received in any other
noncash form) in each case net of all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability
under GAAP, as a consequence of such Asset Sale, and in each case net of all
payments made on any Indebtedness which is secured by any assets subject to
such Asset Sale, in accordance with the terms of any Lien upon or other
security agreement of any kind with respect to such assets, or which must by
its terms, or in order to obtain a necessary consent to such Asset Sale, or by
applicable law be repaid out of the proceeds from such Asset Sale, and net of
all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Sale.
"Net Cash Proceeds" with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale, net of
attorney's fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees
<PAGE>
14
actually incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Officer" means the Chief Executive Officer, the
President, the Chief Financial Officer or any Executive Vice
President of the Company.
"Permitted Holders" means Haynes G. Griffin, Stephen R.
Leeolou, L. Richardson Preyer, Jr., Stuart S. Richardson, their estates,
spouses, ancestors, and lineal descendants, the legal representatives of any of
the foregoing and the trustee of any bona fide trust of which the foregoing are
the sole beneficiaries or the grantors, or any Person of which the foregoing
"beneficially owns" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
voting securities representing at least 662/3% of the total voting power of all
classes of Capital Stock of such Person (exclusive of any matters as to which
class voting rights exist) and the Richardson Family.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) Temporary Cash Investments; (iv) receivables owing to the Company or any
Restricted Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms; (v)
payroll, travel and similar advances to cover matters that are expected at the
time of such advances ultimately to be treated as expenses for accounting
purposes and that are made in the ordinary course of business; (vi) loans and
advances to employees made in the ordinary course of business consistent with
past practice of the Company or such Restricted Subsidiary, as the case may be,
provided that such loans and advances do not exceed $15 million at any one time
outstanding; and (vii) stock, obligations or securities received in settlement
of debts created in the ordinary course of business and owing to the Company or
any Restricted Subsidiary or in satisfaction of judgments.
<PAGE>
15
"Permitted Liens" means (i) Liens on the Property of the
Company or any Restricted Subsidiary existing on the Issue Date; (ii) Liens to
secure Indebtedness permitted to be Incurred under clause (ii) of Section
4.9(b); (iii) Liens on the Property of the Company or any Restricted Subsidiary
to secure any extension, renewal, refinancing, replacement or refunding (or
successive extensions, renewals, refinancings, replacements or refundings), in
whole or in part, of any Indebtedness secured by Liens referred to in any of
clauses (i), (ii), (vii) or (x); provided, however, that any such Lien will be
limited to all or part of the same Property that secured the original Lien (plus
improvements on such Property) and the aggregate principal amount of
Indebtedness that is secured by such Lien will not be increased to an amount
greater than the sum of (A) the outstanding principal amount, or, if greater,
the committed amount, of the Indebtedness secured by Liens described under
clauses (i), (ii), (vii) or (x) at the time the original Lien became a Permitted
Lien under the Indenture and (B) an amount necessary to pay any premiums, fees
and other expenses incurred by the Company in connection with such refinancing,
refunding, extension, renewal or replacement; (iv) Liens for taxes, assessments
or governmental charges or levies on the Property of the Company or any
Restricted Subsidiary if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in good faith and
by appropriate proceedings; (v) Liens imposed by law, such as carriers',
warehousemen's and mechanics' Liens and other similar Liens on the Property of
the Company or any Restricted Subsidiary arising in the ordinary course of
business and securing payment of obligations which are not more than 60 days
past due or are being contested in good faith and by appropriate proceedings;
(vi) Liens on the Property of the Company or any Restricted Subsidiary Incurred
in the ordinary course of business to secure performance of obligations with
respect to statutory or regulatory requirements, performance or return-of-money
bonds, surety bonds or other obligations of a like nature and Incurred in a
manner consistent with industry practice; (vii) Liens on Property at the time
the Company or any Restricted Subsidiary acquired such Property, including any
acquisition by means of a merger or consolidation with or into the Company or
any Restricted Subsidiary; provided, however, that such Lien shall not have been
Incurred in anticipation or in connection with such transaction or series of
related transactions pursuant to which such Property was acquired by the Company
or any Restricted Subsidiary; (viii) other Liens on the Property of
<PAGE>
16
the Company or any Restricted Subsidiary incidental to the conduct of their
respective businesses or the ownership of their respective Properties which were
not created in connection with the Incurrence of Indebtedness or the obtaining
of advances or credit and which do not in the aggregate materially detract from
the value of their respective Properties or materially impair the use thereof in
the operation of their respective businesses; (ix) pledges or deposits by the
Company or any Restricted Subsidiary under workmen's compensation laws,
unemployment insurance laws or similar legislation, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which the Company or any Restricted Subsidiary is
party, or deposits to secure public or statutory obligations of the Company, or
deposits for the payment of rent, in each case Incurred in the ordinary course
of business; (x) Liens on the Property of a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, that any such Lien may not
extend to any other Property of the Company or any other Restricted Subsidiary
which is not a direct Subsidiary of such Person; provided further, however, that
any such Lien was not Incurred in anticipation of or in connection with the
transaction or series of related transactions pursuant to which such Person
became a Restricted Subsidiary, or (xi) utility easements, building restrictions
and such other encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character.
"Permitted Receivables Facility" means a receivables financing
facility pursuant to which any Restricted Subsidiary sells accounts receivable
to a special purpose company or trust and in connection therewith such company
or trust incurs Indebtedness secured by, or issues interests supported by, such
accounts receivable.
"Permitted Refinancing Indebtedness" means any renewals,
extensions, substitutions, refinancings or replacements of any Indebtedness,
including any successive extensions, renewals, substitutions, refinancings or
replacements so long as (i) the aggregate amount of Indebtedness represented
thereby is not increased by such renewal, extension, substitution, refinancing
or replacement (other than to finance fees and expenses, including any premium
and defeasance costs), (ii) the Average Life of such Indebtedness is equal to or
greater than the Average Life of the Indebtedness being refinanced, (iii) the
Stated Maturity
<PAGE>
17
of such Indebtedness is no earlier than the Stated Maturity of the Indebtedness
being refinanced and (iv) the new Indebtedness shall not be senior in right of
payment to the Indebtedness that is being extended, renewed, substituted,
refinanced or replaced; provided that Permitted Refinancing Indebtedness shall
not include (a) Indebtedness of a Subsidiary that refinances Indebtedness of the
Company or (b) Indebtedness of the Company or a Restricted Subsidiary that
refinances Indebtedness of an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including
any limited liability company), partnership, joint venture, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"Pro Forma EBITDA" means for any Person, for any period, the
EBITDA of such Person as determined on a consolidated basis in accordance with
GAAP consistently applied after giving effect to the following: (i) if, during
or after such period, such Person or any of its Subsidiaries shall have made any
disposition of any Person or business, Pro Forma EBITDA of such Person and its
Subsidiaries shall be computed so as to give pro forma effect to such
disposition and (ii) if, during or after such period, such Person or any of its
Subsidiaries completes an acquisition of any Person or business which
immediately after such acquisition is a Subsidiary of such Person or whose
assets are held directly by such Person or a Subsidiary of such Person, Pro
Forma EBITDA shall be computed so as to give pro forma effect to the acquisition
of such Person or business; provided, however, that, with respect to the
Company, all of the foregoing references to "Subsidiary" or "Subsidiaries" shall
be deemed to refer only to the "Restricted Subsidiaries" of the Company.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including, without limitation, Capital Stock in, and
other securities of, any other Person (but excluding Capital Stock or other
securities issued by such first mentioned Person).
<PAGE>
18
"Rating Agencies" mean Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc., and Moody's Investors Service, Inc. or any
successor to the respective rating agency businesses thereof.
"Rating Date" means the date which is 90 days prior to the
earlier of (i) a Change of Control and (ii) public notice of the occurrence of a
Change of Control or of the intention of the Company to effect a Change of
Control.
"Rating Decline" means, with respect to the 9-3/8% Debentures,
the occurrence of the following on, or within 90 days after, the date of public
notice of the occurrence of a Change of Control or of the intention by the
Company to effect a Change of Control (which period shall be extended so long as
the rating of such 9-3/8% Debentures is under publicly announced consideration
for possible downgrade by any of the Rating Agencies): (a) in the event the
9-3/8% Debentures are assigned an Investment Grade Rating by both Rating
Agencies on the Rating Date, the rating of the 9-3/8% Debentures by one of the
Rating Agencies shall be below an Investment Grade Rating; or (b) in the event
the 9-3/8% Debentures are rated below an Investment Grade Rating by at least one
of the Rating Agencies on the Rating Date, the rating of the 9-3/8% Debentures
by at least one of the Rating Agencies shall be decreased by one or more
gradations (including gradations within rating categories as well as between
rating categories).
"Redeemable Dividend" means, for any dividend with regard to
Redeemable Stock, the quotient of the dividend divided by the difference between
one and the maximum statutory federal income tax rate (expressed as a decimal
number between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any Person, any
Capital Stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or otherwise (i) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii)
is or may become redeemable or repurchaseable at the option of the holder
thereof, in whole or in part, or (iii) is convertible or exchangeable for
Indebtedness.
<PAGE>
19
"Registrar" means the office or agency established pursuant to
Section 4.2 where 9-3/8% Debentures may be presented for registration of
transfer or for exchange.
"Related Business" means any business directly related to the
ownership, development, operation and acquisition of telecommunications systems.
"Related Entity" means a Person substantially all of whose
Property consists of Subsidiaries and Investments in Persons, the primary
businesses of which are Related Businesses.
"Restricted Payment" means (i) any dividend or distribution
(whether made in cash, property or securities) declared or paid on or with
respect to any shares of Capital Stock of the Company or Capital Stock of any
Restricted Subsidiary except for any dividend or distribution which is made
solely to the Company or a Restricted Subsidiary (and, if such Restricted
Subsidiary is not a Wholly Owned Subsidiary, to the other shareholders of such
Restricted Subsidiary on a pro rata basis) or dividends or distributions payable
solely in shares of Capital Stock (other than Redeemable Stock) of the Company;
(ii) a payment made by the Company or any Restricted Subsidiary to purchase,
redeem, acquire or retire any Capital Stock of the Company or Capital Stock of
any Affiliate of the Company (other than a Restricted Subsidiary) or any
warrants, rights or options to directly or indirectly purchase or acquire any
such Capital Stock or any securities exchangeable for or convertible into any
such Capital Stock; (iii) a payment made by the Company or any Restricted
Subsidiary to redeem, repurchase, defease or otherwise acquire or retire for
value, prior to any scheduled maturity, scheduled sinking fund or mandatory
redemption payment (other than the purchase, repurchase, or other acquisition of
any Indebtedness subordinate in right of payment to the 9-3/8% Debentures
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
acquisition), Indebtedness of the Company which is subordinate (whether pursuant
to its terms or by operation of law) in right of payment to the 9-3/8%
Debentures; or (iv) an Investment (other than Permitted Investments) in any
Person.
"Restricted Subsidiary" means (i) any Subsidiary of the
Company after the Issue Date unless such Subsidiary shall have been designated
an Unrestricted Subsidiary as
<PAGE>
20
permitted or required pursuant to the definition of "Unrestricted Subsidiary"
and (ii) an Unrestricted Subsidiary which is redesignated as a Restricted
Subsidiary as permitted pursuant to the definition of "Unrestricted
Subsidiary".
"Richardson Family" means, collectively, the descendants of
Lunsford Richardson, Sr., and any of their respective spouses, estates, lineal
descendants, heirs, executors, personal representatives, administrators, trusts
for any of their benefit and charitable foundations to which shares of the
Company's Capital Stock beneficially owned by any of the foregoing have been
transferred.
"Sale and Leaseback Transaction" means, with respect to any
Person, any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a Subsidiary of such Person and is thereafter
leased back from the purchaser or transferee thereof by such Person or one of
its Subsidiaries.
"SEC" means the Securities and Exchange Commission.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which at least 50% of the total voting power of the Voting Stock is held by
such first-named Person or any of its Subsidiaries and such first-named Person
or any of its Subsidiaries has the power to direct the management, policies and
affairs thereof; or (ii) in the case of a partnership, joint venture,
association, or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise if in
accordance with generally accepted accounting principles such entity is
consolidated
<PAGE>
21
with the first-named Person for financial statement purposes.
"Temporary Cash Investments" means any of the following: (i)
Investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) Investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America or any state thereof having capital,
surplus and undivided profits aggregating in excess of $500,000,000 and whose
long-term debt is rate "A-3" or "A-" or higher according to Moody's Investors
Service, Inc. or Standard & Poor's Ratings Group (or such similar equivalent
rating by at least one "nationally recognized statistical rating organization"
(as defined in Rule 436 under the Securities Act)), (iii) repurchase obligations
with a term of not more than 7 days for underlying securities of the types
described in clause (i) entered into with a bank meeting the qualifications
described in clause (ii) above, and (iv) Investments in commercial paper,
maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America with a rating at the time as of
which any Investment therein is made of "P-1" (or higher) according to Moody's
Investors Service, Inc. or "A-1" (or higher) according to Standard & Poor's
Ratings Group (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436 under the
Securities Act)).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and, thereafter, means the successor.
"Unrestricted Subsidiary" means (a) Vanguard Cellular
Services, Inc. and any other Subsidiary of the Company in existence on the Issue
Date that is not a
<PAGE>
22
Restricted Subsidiary and (b) any Subsidiary of an Unrestricted Subsidiary.
The Company's Board of Directors may designate any Subsidiary of the Company
or any Restricted Subsidiary to be an Unrestricted Subsidiary if (i) the
Subsidiary to be so designated does not own any Capital Stock or Indebtedness
of, or own or hold any Lien on any Property of, the Company or any other
Restricted Subsidiary, (ii) the Subsidiary to be so designated is not obligated
under any Indebtedness or other obligation that, if in default, would result
(with the passage of time or notice or otherwise) in a default on any
Indebtedness of the Company or any Restricted Subsidiary and (iii) either (A)
the Subsidiary to be so designated has total assets of $1,000 or less or (B)
such designation is effective immediately upon such entity becoming a Subsidiary
of the Company or any Restricted Subsidiary. Unless so designated as an
Unrestricted Subsidiary, any Person that becomes a Subsidiary of the Company
or of any Restricted Subsidiary will be classified as a Restricted Subsidiary;
provided, however, that such Subsidiary shall not be designated a Restricted
Subsidiary and shall be automatically classified as an Unrestricted Subsidiary
if the Company would be unable to Incur at least $1.00 of additional
Indebtedness pursuant to clause (i) of Section 4.9(a). Except as provided in
the second sentence of this paragraph, no Restricted Subsidiary may be
redesignated as an Unrestricted Subsidiary. The Company's Board of Directors
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary if,
immediately after giving pro forma effect to such designation, (x) the Company
could Incur at least $1.00 of additional indebtedness pursuant to clause (i) of
Section 4.9(a) and (y) no Default or Event of Default shall have occurred and be
continuing or would result therefrom. Any such designation by the Company's
Board of Directors will be evidenced to the Trustee by filing with the Trustee a
copy of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying (i) that such designation complies with the foregoing
provisions and (ii) giving the effective date of such designation, such filing
with the Trustee to occur within 75 days after the end of the fiscal quarter of
the Company in which such designation is made (or in the case of a designation
made during the last fiscal quarter of the Company's fiscal year, within 120
days after the end of such fiscal year).
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of
<PAGE>
23
America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company and/or one or more other Wholly Owned Subsidiaries.
C. Other Definitions.
The following terms are defined in this Supplement in the
Sections indicated:
<TABLE>
<CAPTION>
Defined in
Term Section
<S> <C>
Affiliate Transaction 4.14
Bankruptcy Law 7.1
covenant defeasance option 6.1(b)
Custodian 7.1
9-3/8% Debentures Recitals
Depository I2E
DTC I2E
Event of Default 7.1
Excess Proceeds 4.12(c)
Global Securities I2E
Indenture Preliminary Statement
Interest Payment Date I2E
legal defeasance option 6.1(b)
Notice of Default 7.1
Prepayment Date 4.12(c)
Purchase Offer 4.12(c)
Record Date I2F
Successor Company 10.1
</TABLE>
<PAGE>
24
2. Terms of the 9-3/8% Debentures.
A. Designation.
The 9-3/8% Debentures are hereby created and shall be issuable
in one series. The 9-3/8% Debentures shall be designated as the "9-3/8% Senior
Debentures Due 2006".
B. Dating of the 9-3/8% Debentures.
All 9-3/8% Debentures shall be dated the date of
authentication.
C. Maximum Aggregate Outstanding Amount.
The maximum aggregate principal amount of the 9- 3/8%
Debentures that may be authenticated and delivered under this Supplement is
limited to $200,000,000, except for 9-3/8% Debentures authenticated and
delivered upon transfer of, or in exchange for, or in lieu of, other 9-3/8%
Debentures pursuant to Sections 2.6, 2.8, 2.9, 2.10, 2.11, 2.17, 5.2 or 12.5 of
the Indenture.
D. Stated Maturity.
The principal amount of the 9-3/8% Debentures shall be due and
payable on April 15, 2006.
E. Denomination of 9-3/8% Debentures.
The 9-3/8% Debentures shall initially be represented by one or
more global securities (the "Global Securities") deposited with The Depository
Trust Company ("DTC"), as depositary, and registered in the name of a nominee of
DTC. Except as set forth in the Indenture, the 9-3/8% Debentures will be
available for purchase in denominations of $1,000 and integral multiples thereof
in book-entry form only. The term "Depository" refers to DTC or any successor
depository, as depositary.
F. Payments of Principal and Interest, Record Dates
Each 9-3/8% Debenture shall bear interest on its outstanding
principal balance from April 10, 1996 at 9-3/8% per annum until payment of the
principal thereof has been made or duly provided for. Interest on the 9-3/8%
Debentures shall be paid semi-annually on October 15 and April 15, commencing on
October 15, 1996 (each an "Interest
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25
Payment Date"). Interest on the 9-3/8% Debentures shall be computed on the
basis of a 360-day year of twelve 30-day months, from the later of: (1) April
10, 1996 or (2) the most recent Interest Payment Date to which interest has
been paid or duly provided for to the end of the next Interest Payment Date.
Interest on the 9-3/8% Debentures shall be payable in lawful money of the
United States of America.
The principal of each 9-3/8% Debenture shall be payable on the
date due upon delivery and surrender of such 9-3/8% Debenture to the Trustee at
the principal office of the Trustee in lawful money of the United States of
America by check or by wire transfer of immediately available funds.
The record date ("Record Date") for each Interest Payment Date
shall be the close of business on the October 1 and April 1 next preceding each
Interest Payment Date, whether or not such date shall be a Business day.
G. Form of 9-3/8% Debentures.
The 9-3/8% Debentures shall all be issued in global form. The
form of the 9-3/8% Debentures and the Trustee's certificate of authentication
are attached hereto as Exhibit A, which is hereby incorporated in and expressly
made a part of the Indenture. Each of the 9-3/8% Debentures shall be numbered
consecutively from A-1 upward. The 9-3/8% Debentures shall bear a CUSIP number,
but any failure to indicate or any error in such CUSIP number shall not in any
way affect the validity of the 9-3/8% Debentures. The terms of the 9-3/8%
Debentures set forth in Exhibit A are part of the terms of this Indenture.
H. Ranking.
The 9-3/8% Debentures shall constitute unsecured and
unsubordinated indebtedness of the Company and shall rank pari passu with any
other unsecured and unsubordinated indebtedness of the Company.
I. Sinking Fund.
There will be no mandatory sinking fund payments for the
9-3/8% Debentures.
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26
3. Provisions Supplemental to Article II of Indenture.
A. For purposes of the 9-3/8% Debentures only, the
word "and" at the end of the fourth paragraph of Section 2.4
is hereby deleted.
B. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final word of the fifth paragraph of
Section 2.4, the following:
and; (4) neither the execution and delivery of the Indenture
nor the issue and sale of the Debentures will conflict with, result in
a breach or violation of, or constitute a default under the Articles of
Incorporation or Bylaws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or any law,
judgment, order or decree known to us to be applicable to the Company
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries.
C. For purposes of the 9-3/8% Debentures only, the phrase "deliver
them" in the first sentence of Section 2.5 of the Indenture is hereby superseded
in its entirety and replaced by the phrase "make available to them".
D. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the first sentence of Section 2.6 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "authenticate and make
available for delivery".
E. For purposes of the 9-3/8% Debentures only, the phrase
"authenticate and deliver" in the first sentence of Section 2.7 of the Indenture
is hereby superseded in its entirety and replaced by the phrase "authenticate
and make available for delivery".
F. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the second and last sentences of Section 2.8 of the Indenture is
hereby superseded in its entirety and replaced by the phrase "authenticate and
make available for delivery".
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27
G. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the first sentence of Section 2.9 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "authenticate and make
available for delivery".
H. For purposes of the 9-3/8% Debentures only, the phrase "authenticate
and deliver" in the second sentence of Section 2.10 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "authenticate and make
available for delivery".
I. For purposes of the 9-3/8% Debentures only, the
final sentence of Section 2.11 of the Indenture is hereby
superseded in its entirety and replaced by the following:
Unless otherwise directed in writing by the Company, the
Trustee shall return all cancelled Debentures to the Company.
J. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 2.6, the following:
The 9-3/8% Debentures shall be issued in registered form and
shall be transferable only upon the surrender of a 9-3/8% Debenture for
registration of transfer. When a 9-3/8% Debenture is presented to the
Registrar or a co-registrar with a request to register a transfer, the
Registrar shall register the transfer as requested if the requirements
of Section 8-401(1) of the Uniform Commercial Code are met. When 9-3/8%
Debentures are presented to the Registrar or a co-registrar with a
request to exchange them for an equal principal amount of 9-3/8%
Debentures of other denominations, the Registrar shall make the
exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate 9-3/8% Debentures at the Registrar's or
co-registrar's request.
K. Article II of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "of evidence" in the
first sentence of Section 2.9, the phrase "that the requirements of Section 8-
405 of the Uniform Commercial Code have been met and evidence".
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28
L. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the first sentence of Section 2.11, the following:
The Company may not issue new 9-3/8% Debentures to replace
9-3/8% Debentures it has redeemed, paid or delivered to the Trustee for
cancellation.
M. Article II of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 2.13, the following:
SECTION 2.14. Registrar and Paying Agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provi sions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Regis trar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation therefor pursuant to Section
11.2. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the 9-3/8% De bentures.
SECTION 2.15. Debentureholder Lists. The Trustee shall
preserve in as current a form as is reasonably prac ticable the most recent list
available to it of the names and addresses of Debentureholders. If the Trustee
is not the Registrar, the Company shall furnish to the Trustee, in writing at
least five Business days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Debentureholders.
SECTION 2.16. Outstanding 9-3/8% Debentures. 9- 3/8%
Debentures outstanding at any time are all 9-3/8% Debentures authenticated by
the Trustee except for those canceled by it, those paid pursuant to Section 2.9,
those delivered to it for cancellation and those described in this
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29
Section as not outstanding. A 9-3/8% Debenture does not cease to be outstanding
because the Company or an Affiliate of the Company holds the 9-3/8% Debenture.
If a 9-3/8% Debenture is replaced pursuant to Section 2.9, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced 9-3/8% Debenture is held by a bona fide
purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the 9-3/8% Debentures (or portions thereof) to be redeemed or maturing,
as the case may be, then on and after that date such 9-3/8% Debentures (or
portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.17. Temporary 9-3/8% Debentures. Until definitive
9-3/8% Debentures are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary 9-3/8% Debentures. Temporary 9-3/8%
Debentures shall be substantially in the form of definitive 9-3/8% Debentures
but may have variations that the Company considers appropriate for temporary
9-3/8% Debentures. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive 9-3/8% Debentures and deliver them in
exchange for temporary 9-3/8% Debentures.
SECTION 2.18. Record Date. The Company may set a record date
for purposes of determining the identity of Debentureholders entitled to vote or
to consent to any action by vote of consent authorized or permitted by Sections
3.15, 7.5 and 7.6. Unless this Indenture provides otherwise, such record date
shall be the later of 30 days prior to the first solicitation of such consent or
the date of the most recent list of Holders furnished to the Trustee pursuant to
Section 2.15 prior to such solicitation.
SECTION 2.19. CUSIP Numbers. The Company in issuing the 9-3/8%
Debentures may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption and that reliance may
be
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30
placed only on the other identification numbers printed on the Debentures, and
any such redemption shall not be affected by any defect in or omission of such
numbers. The Company will promptly notify the Trustee of any change in the CUSIP
numbers.
4. Provisions Supplemental to Article III of the
Indenture.
A. For purposes of the 9-3/8% Debentures only, the
phrase "and acceptable to the Trustee in the exercise of
reasonable care" in the first sentence of Section 3.2 is
hereby deleted.
B. For purposes of the 9-3/8% Debentures only, the phrase "which the
Trustee knows" in the first sentence of Section 3.3 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "which the Trustee
actually knows".
C. Article III of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "to take any action" in
the first sentence of Section 3.8, the phrase "(other than with respect to the
initial issuance of the Debentures)".
D. Article III of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final word of the first sentence of
Section 3.9, the following:
, Attention: Corporate Trust Trustee
Administration
E. For purposes of the 9-3/8% Debentures only,
Section 3.12 of the Indenture is hereby superseded in its
entirety and replaced by the following:
SECTION 3.12. Governing Law. The Indenture and each 9-3/8%
Debenture issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
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31
F. Article III of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section
3.13, the following:
SECTION 3.14. Communication by Holders with Other Holders.
Debentureholders may communicate pursuant to TIA ss. 312(b) with other
Debentureholders with respect to their rights under this Indenture or the 9-3/8%
Debentures. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).
SECTION 3.15. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Debentureholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
5. Provisions Supplemental to Article IV of the Indenture.
A. For purposes of the 9-3/8% Debentures, Section 4.4
of the Indenture is hereby superseded in its entirety and
shall not apply to the 9-3/8% Debentures.
B. Article IV of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 4.6, the following:
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein,
including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
C. Article IV of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 4.8, the following:
SECTION 4.9. Limitation on Indebtedness. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
Incur any Indebtedness unless after giving pro forma effect to the application
of the proceeds thereof, no Default or Event of Default would occur as a
consequence of such Incurrence or be continuing following such Incurrence and
either (i) after
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32
giving effect to the Incurrence of such Indebtedness and the receipt and
application of the proceeds thereof, the Leverage Ratio of the Company and the
Restricted Subsidiaries (on a consolidated basis) would not exceed (1) 8.5 from
the Issue Date until March 31, 1998 and (2) 7.5 after March 31, 1998 or (ii)
such Indebtedness is Permitted Indebtedness.
(b) Permitted Indebtedness is defined to include any and all
of the following: (i) Indebtedness pursuant to the revolving loan portion of the
Credit Facility in an aggregate amount outstanding at any time not to exceed $75
million; (ii) Indebtedness in respect of Capital Lease Obligations and/or
Capital Expenditure Indebtedness, provided, that (a) the aggregate principal
amount of such Indebtedness does not exceed the Fair Market Value (on the date
of such Incurrence) of the property or asset acquired or constructed and (b) the
aggregate principal amount of all Indebtedness Incurred under this clause (ii)
during any calendar year does not exceed $25 million; (iii) Indebtedness of the
Company evidenced by the 9-3/8% Debentures; (iv) Indebtedness of the Company
owing to and held by a Restricted Subsidiary and Indebtedness of a Restricted
Subsidiary owing to and held by the Company or any Restricted Subsidiary;
provided, however, that any event that results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or a Restricted Subsidiary) shall be deemed,
in each case, to constitute the Incurrence of such Indebtedness by the issuer
thereof; (v) Indebtedness (other than Indebtedness permitted by the immediately
preceding paragraph or elsewhere in this paragraph) in an aggregate principal
amount outstanding at any time not to exceed $25 million; (vi) Indebtedness
under Interest Rate Agreements entered into for the purpose of limiting interest
rate risks, provided, that the obligations under such agreements are related to
payment obligations on Indebtedness otherwise permitted by the terms of this
covenant; (vii) Indebtedness in connection with one or more standby letters of
credit or performance bonds issued in the ordinary course of business or
pursuant to self-insurance obligations and not in connection with the borrowing
of money or the obtaining of advances or credit; (viii) Indebtedness outstanding
on the Issue Date not otherwise described in clauses (i) through (vii) above;
and (ix) Permitted Refinancing Indebtedness Incurred in respect of Indebtedness
Incurred pursuant to clause (i) of
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33
Section 4.9(a) and clauses (ii), (iii) and (viii) of this Section 4.9(b).
SECTION 4.10. Limitation on Restricted Payments. (a) The
Company shall not make, and shall not permit any Restricted Subsidiary to make,
any Restricted Payment if at the time of, and after giving effect to, such
proposed Restricted Payment, (i) a Default or Event of Default shall have
occurred and be continuing, (ii) the Company could not Incur at least $1.00 of
additional Indebtedness pursuant to clause (i) of Section 4.9(a) or (iii) the
aggregate amount of such Restricted Payment and all other Restricted Payments
made since the Issue Date (the amount of any Restricted Payment, if made other
than in cash, to be based upon Fair Market Value) would exceed an amount equal
to the sum of (1) the excess of (A) Cumulative EBITDA over (B) the product of
1.5 and Cumulative Interest Expense, (2) Capital Stock Sale Proceeds, (3) the
amount by which Indebtedness of the Company or any Restricted Subsidiary is
reduced on the Company's balance sheet upon the conversion or exchange (other
than by a Subsidiary) subsequent to the Issue Date of any Indebtedness of the
Company or any Restricted Subsidiary convertible or exchangeable for Capital
Stock (other than Redeemable Stock) of the Company (less the amount of any cash
or other Property distributed by the Company or any Restricted Subsidiary upon
conversion or exchange) and (4) an amount equal to the net reduction in
Investments made by the Company and its Restricted Subsidiaries subsequent to
the Issue Date in any Person resulting from (A) dividends, repayment of loans or
advances, or other transfers or distributions of Property (but only to the
extent the Company excludes such transfers or distributions from the calculation
of EBITDA for purposes of clause (iii)(1) above), in each case to the Company or
any Restricted Subsidiary from any Person or (B) the redesignation of any
Unrestricted Subsidiary as a Restricted Subsidiary, not to exceed, in the case
of (A) or (B), the amount of such Investments previously made by the Company and
its Restricted Subsidiaries in such Person or such Unrestricted Subsidiary, as
the case may be, which were treated as Restricted Payments.
(b) Notwithstanding Section 4.10(a), the Company may (i) pay
dividends on its Capital Stock within 60 days of the declaration thereof if, on
the declaration date, such dividends could have been paid in compliance with the
Indenture, (ii) redeem, repurchase, defease, acquire or retire for value, any
Indebtedness subordinate (whether
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34
pursuant to its terms or by operation of law) in right of payment to the 9-3/8%
Debentures with the proceeds of any Permitted Refinancing Indebtedness, (iii)
acquire, redeem or retire Capital Stock of the Company or Indebtedness
subordinate (whether pursuant to its terms or by operation of law) in right of
payment to the 9-3/8% Debentures in exchange for, or in connection with a
substantially concurrent issuance of, Capital Stock of the Company (other than
Redeemable Stock and other than Capital Stock issued or sold to a Subsidiary or
an employee stock ownership plan or other trust established by the Company or
any Subsidiary), (iv) consummate an exchange of Investments in Persons, the
primary businesses of which are Related Businesses, but only if such exchange
complies with clauses (i) and (ii)(B) of Section 4.12(a), (v) receive Capital
Stock of Geotek Communications, Inc. pursuant to the Geotek Management
Consulting Agreement and (vi) make Investments in Persons the primary businesses
of which are Related Businesses (other than Investments in the Capital Stock of
the Company) in an amount at any time outstanding not to exceed in the aggregate
for all such Investments made in reliance upon this clause (vi), the sum of (1)
$50 million and (2) an amount equal to the net reduction in Investments made by
the Company and its Restricted Subsidiaries subsequent to the Issue Date in any
Person resulting from payments of dividends, repayment of loans or advances, or
other transfers or distributions of Property to the Company or any Restricted
Subsidiary from any Person (but only to the extent such net reduction in
Investments has not been utilized to permit a Restricted Payment pursuant to
clause (iii)(1) or (iii)(4) in Section 4.10(a)) not to exceed, in the case of
clause (vi)(2), the amount of such Investments previously made by the Company
and its Restricted Subsidiaries in such Person which were treated as Restricted
Payments; provided, however, that no more than $25 million of the aggregate
Investments permitted to be made pursuant to this clause (vi) may be utilized to
make Investments in Inter(Bullet)Act Systems, Inc.
(c) Any payments made pursuant to clauses (ii), (iii), (iv)
and (v) of Section 4.10(b) shall be excluded from the calculation of the
aggregate amount of Restricted Payments made after the Issue Date; provided,
however, that the proceeds from the issuance of Capital Stock pursuant to clause
(iii) of Section 4.10(b) shall not constitute Capital Stock Sale Proceeds for
purposes of clause (iii)(2) of Section 4.10(a).
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35
SECTION 4.11. Limitation on Liens. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or
suffer to exist, any Lien (other than Permitted Liens) upon any of its Property,
whether now owned or hereafter acquired, including any Lien on any interest in,
or any income or profits from, its Property unless (a) with respect to any
Restricted Subsidiary, such Lien secures Indebtedness other than Guarantees of
Indebtedness of the Company or (b) effective provision has been or will be made
whereby the 9-3/8% Debentures will be secured by such Lien; provided, however,
that no Lien may be granted with respect to Indebtedness of the Company that is
subordinated to the 9-3/8% Debentures.
SECTION 4.12. Limitation on Asset Sales. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Sale after the Issue Date unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the Property subject
to such Asset Sale and (ii) (A) at least 80% of the consideration paid to the
Company or such Restricted Subsidiary in connection with such Asset Sale is in
the form of cash or cash equivalents or (B) the consideration paid to the
Company or such Restricted Subsidiary is determined in good faith by the Board
of Directors of the Company, as evidenced by a Board Resolution, to be
substantially comparable in type to the assets being sold.
(b) The Net Available Cash (or any portion thereof) from Asset
Sales may be applied by the Company or a Restricted Subsidiary, to the extent
the Company or such Restricted Subsidiary elects, (i) to prepay, repay or
purchase Indebtedness under the Credit Facility or Indebtedness of a Restricted
Subsidiary (excluding Indebtedness owed to the Company or an Affiliate of the
Company); or (ii) to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Company or another Restricted Subsidiary). Any Net
Available Cash from an Asset Sale not applied in accordance with the first
sentence of this Section 4.12(b) within one year from the date of such Asset
Sale or the receipt of such Net Available Cash shall constitute "Excess
Proceeds". When the aggregate amount of Excess Proceeds exceeds $15 million
(taking into account income earned on such Excess Proceeds), the Company will be
required to make an offer to purchase
<PAGE>
36
(the "Prepayment Offer") the 9-3/8% Debentures, on a pro rata basis according to
principal amount, at a purchase price equal to 100% of the principal amount
thereof plus accrued and unpaid interest thereon (if any) to the date of
purchase in accordance with the procedures (including prorating in the event of
oversubscription) set forth in the Indenture. If the aggregate principal amount
of 9-3/8% Debentures surrendered for purchase by holders thereof exceeds the
amount of Excess Proceeds, then the Trustee shall select the 9-3/8% Debentures
to be purchased pro rata according to principal amount or by lot with such
adjustments as may be deemed appropriate by the Company so that only 9-3/8%
Debentures in denominations of $1,000, or integral multiples thereof, shall be
purchased. To the extent that any portion of the amount of Net Available Cash
remains after compliance with the preceding sentence and provided that all
holders of 9-3/8% Debentures have been given the opportunity to tender their
9-3/8% Debentures for purchase as described in Section 4.12(c), the Company or
such Restricted Subsidiary may use such remaining amount for general corporate
purposes and the amount of Excess Proceeds will be reset to zero.
(c) Within five Business days after one year from the date of
an Asset Sale or the receipt of Net Available Cash therefrom, the Company shall,
if it is obligated to make a Prepayment Offer, send a written notice, by
first-class mail, to the holders of the 9-3/8% Debentures (the "Prepayment Offer
Notice"), accompanied by such information regarding the Company and its
Subsidiaries as the Company in good faith believes will enable such holders of
the 9-3/8% Debentures to make an informed decision with respect to the
Prepayment Offer. The Prepayment Offer Notice will state, among other things,
(i) that the Company is offering to purchase 9-3/8% Debentures pursuant to the
provisions of this Section 4.12, (ii) that any Debenture (or any portion
thereof) accepted for payment (and duly paid on the Purchase Date) pursuant to
the Prepayment Offer shall cease to accrue interest after the Purchase Date,
(iii) the purchase price and purchase date, which shall be, subject to any
contrary requirements of applicable law, no less than 30 days nor more than 60
days from the date the Prepayment Offer Notice is mailed (the "Purchase Date"),
(iv) the aggregate principal amount of 9-3/8% Debentures (or portions thereof)
to be purchased and (v) a description of the procedure which holders of 9-3/8%
Debentures must follow in order to tender their 9-3/8% Debentures (or portions
thereof) and the procedures that holders of 9-3/8% Debentures must follow in
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37
order to withdraw an election to tender their 9-3/8% Debentures (or portions
thereof) for payment.
SECTION 4.13 Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective, or enter into any agreement with
any Person that would cause to become effective, any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) pay dividends, in
cash or otherwise, or make any other distributions on or in respect of its
Capital Stock, or pay any Indebtedness or other obligation owed, to the Company
or any other Restricted Subsidiary, (b) make any loans or advances to the
Company or any other Restricted Subsidiary or (c) transfer any of its Property
to the Company or any other Restricted Subsidiary. Such limitation will not
apply (1) with respect to clauses (a), (b) and (c), to encumbrances and
restrictions (i) in existence under or by reason of any agreements (not
otherwise described in clause (iii)) in effect on the Issue Date, (ii) relating
to Indebtedness of a Restricted Subsidiary and existing at such Restricted
Subsidiary at the time it became a Restricted Subsidiary if such encumbrance or
restriction was not created in connection with or in anticipation of the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Company,
(iii)(a) any encumbrance or restriction pursuant to the Credit Facility,
provided that such restrictions or encumbrances are no less favorable to the
holders of the 9-3/8% Debentures than those restrictions or encumbrances
pursuant to the Credit Facility as in effect on the date of the Indenture;
provided further, however, that the provisions of the Credit Facility permit
distributions to the Company for the purpose of, and in an amount sufficient to
fund, the payment of principal due at maturity and interest in respect of the
9-3/8% Debentures (provided, in either case, that such payment is due or to
become due within 30 days from the date of such distribution) at a time when
there does not exist an event which after notice or passage of time or both
would permit the lenders under the Credit Facility to declare all amounts
thereunder due and payable or (iv) which result from the renewal, refinancing,
extension or amendment of an agreement referred to in the immediately preceding
clauses (1)(i) and (ii) above and in clauses (2)(i) and (ii) below, provided,
such encumbrance or restriction is no more restrictive to
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38
such Restricted Subsidiary and is not materially less favorable to the holders
of 9-3/8% Debentures than those under or pursuant to the agreement evidencing
the Indebtedness so extended, renewed, refinanced or replaced, and (2) with
respect to clause (c) only, to (i) any encum brance or restriction relating to
Indebtedness that is permitted to be Incurred and secured pursuant to the
provisions under Section 4.9 and Section 4.11 that limits the right of the
debtor to dispose of the assets or Property securing such debt, (ii) any
encumbrance or restriction in connection with an acquisition of Property, so
long as such encumbrance or restriction relates solely to the Property so
acquired and was not created in connection with or in anticipation of such
acquisition, (iii) customary provisions restricting subletting or assignment of
leases and customary provisions in other agreements that restrict assignment of
such agreements or rights thereunder or (iv) customary restrictions contained in
asset sale agreements limiting the transfer of such assets pending the closing
of such sale.
SECTION 4.14. Limitation on Transactions with Affiliates. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into or suffer to exist
any transaction or series of transactions (including the purchase, sale,
transfer, lease or exchange of any Property or the rendering of any service)
with, or for the benefit of, any Affiliate of the Company (an "Affiliate
Transaction") unless (i) the terms of such Affiliate Transaction are (1) set
forth in writing, (2) in the best interest of the Company or such Restricted
Subsidiary, as the case may be, and (3) no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained in
a comparable arm's-length transaction with a Person that is not an Affiliate of
the Company or such Restricted Subsidiary, (ii) with respect to an Affiliate
Transaction involving aggregate payments or value in excess of $15 million, the
Board of Directors of the Company (including a majority of the disinterested
members of the Board of Directors of the Company) approves such Affiliate
Transaction and, in its good faith judgment, believes that such Affiliate
Transaction complies with clauses (i)(2) and (3) of this paragraph as evidenced
by a Board Resolution and (iii) with respect to an Affiliate Transaction
involving aggregate payments or value in excess of $25 million, the Company
obtains a written opinion from an independent appraisal firm to the effect that
such
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39
Affiliate Transaction is fair, from a financial point of view.
(b) Notwithstanding Section 4.14(a), the Company may enter
into or suffer to exist the following: (i) any transaction pursuant to any
contract in existence on the Issue Date; (ii) any transaction or series of
transactions between the Company and one or more of its Restricted Subsidiaries
or between two or more of its Restricted Subsidiaries; (iii) any Restricted
Payment permitted to be made pursuant to Section 4.10; (iv) the payment of
compensation (including, amounts paid pursuant to employee benefit plans) for
the personal services of officers, directors and employees of the Company or any
of its Restricted Subsidiaries, so long as the Board of Directors of the Company
in good faith shall have approved the terms thereof and deemed the services
theretofore or thereafter to be performed for such compensation or fees to be
fair consideration therefor; and (v) loans and advances to employees made in the
ordinary course of business and consistent with past practice of the Company or
such Restricted Subsidiary, as the case may be, provided that such loans and
advances do not exceed $15 million at any one time outstanding.
SECTION 4.15. Ownership of Vanguard Cellular Financial Corp.
The Company will at all times maintain its direct 100% ownership of the Capital
Stock of Vanguard Cellular Financial Corp., the primary obligor with respect to
the Credit Facility, and any other Subsidiary serving as primary obligor with
respect to the Credit Facility prior to the assumption of the Credit Facility by
Vanguard Cellular Financial Corp.
SECTION 4.16. SEC Reports. The Company shall file with the
Trustee and provide Debentureholders, within 15 days after it files them with
the SEC, copies of its annual report and the information, documents and other
reports which the Company is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company shall continue to file with the SEC and provide
the Trustee and Debentureholders with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Exchange Act. The Company also shall comply with the other provisions of TIA ss.
314(a).
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40
6. Provisions Supplemental to Article V of the Indenture.
A. Article V of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the first appearance of the word
"Debentures" in the second sentence of the second paragraph of Section 5.2, the
phrase "(including CUSIP number)".
B. Article V of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section 5.7,
the following (which, to the extent inconsistent therewith, shall supersede
Section 5.2 of the Indenture with respect to the 9-3/8% Debentures):
SECTION 5.8. Notices to Trustee. If the Company elects to
redeem 9-3/8% Debentures pursuant to paragraph 5 of the 9-3/8% Debentures, it
shall notify the Trustee in writing of the redemption date, the principal amount
of 9- 3/8% Debentures to be redeemed and the paragraph of the 9- 3/8% Debentures
pursuant to which the redemption will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the 9-3/8%
Debentures are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not less than 15 days after the date of notice to the Trustee.
7. Provisions Supplemental to Article VI of the Indenture.
A. For purposes of the 9-3/8% Debentures only,
Section 6.1 of the Indenture is hereby superseded in its
entirety and replaced by the following:
SECTION 6.1. Discharge of Liability on 9-3/8% Debentures;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
9-3/8% Debentures (other than 9-3/8% Debentures replaced pursuant to Section
2.9) for
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41
cancellation or (ii) all outstanding 9-3/8% Debentures have become due and
payable, whether at maturity or as a result of the mailing of a notice of
redemption pursuant to Article V of the Indenture, and the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity or upon redemption
all outstanding 9-3/8% Debentures, including interest thereon (other than 9-3/8%
Debentures replaced pursuant to Section 2.9), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Sections 6.1(c) and 6.5, cease to be of further effect with respect
to the 9-3/8% Debentures. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company.
(b) Subject to Sections 6.1(c), 6.1A and 6.5, the Company at
any time may terminate (i) all its obligations under the 9-3/8% Debentures and
this Indenture with respect to the 9-3/8% Debentures ("legal defeasance option")
or (ii) its obligations under Sections 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15,
4.16 (to the extent that failure to comply with such Section 4.16 shall not
violate the TIA), and Section 10.1(a)(iv) and the related operation of Section
7.1(4) and the operation of Sections 7.1(6), 7.1(7) (with respect to Restricted
Subsidiaries), 7.1(8) (with respect to Restricted Subsidiaries) and 7.1(9)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the 9-3/8% Debentures may not be accelerated because of an Event of Default.
If the Company exercises its covenant defeasance option, payment of the 9- 3/8%
Debentures may not be accelerated because of an Event of Default specified in
Sections 7.1(4), 7.1(5) (with respect to Section 10.1(a)(iv)), 7.1(6), 7.1(7)
(with respect to Restricted Subsidiaries), 7.1(8) (with respect to Restricted
Subsidiaries) and 7.1(9) (except to the extent covenants or agreements
referenced in such Sections remain applicable).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
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42
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.7, 2.9, 2.10, 2.14, 2.15, 4.8, 6.2, 6.4, 6.5, 11.2 and
11.6 shall survive until the 9-3/8% Debentures have been paid in full.
Thereafter, the Company's obligations in Sections 6.2, 6.4 and 11.2 shall
survive.
SECTION 6.1A. Conditions to Defeasance. The
Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal and
interest on the 9-3/8% Debentures to maturity or redemption, as the
case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the 9-3/8% Debentures to maturity or redemption, as the
case may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Section 7.1(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) no Default has occurred and is continuing on the date of
such deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(7) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an
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43
Opinion of Counsel stating that (i) the Company has received from the
Internal Revenue Service a ruling, or (ii) since the date of this
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 Debentureholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will 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 defeasance had not occurred;
(8) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Debentureholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will 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; and
(9) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the 9-3/8% Debentures as
contemplated by this Article VI have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of 9-3/8% Debentures at a future
date in accordance with Article V.
B. Article VI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 6.3, the following:
SECTION 6.4. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 6.5. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article VI by reason of
<PAGE>
44
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the 9-3/8%
Debentures shall be revived and reinstated as though no deposit had occurred
pursuant to this Article VI until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article VI.
8. Provisions Supplemental to Article VII of the
Indenture.
A. For purposes of the 9-3/8% Debentures only,
Section 7.1 of the Indenture is hereby superseded in its
entirety and replaced by the following:
SECTION 7.1. Events of Default. An "Event of
Default" occurs if:
(1) the Company fails to make any payment of interest on any
9-3/8% Debenture when the same becomes due and payable, and such
failure continues for a period of 30 days;
(2) the Company (i) fails to make the payment of the principal
of any 9-3/8% Debenture when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration, or otherwise, or
(ii) fails to redeem or purchase 9-3/8% Debentures when
required pursuant to this Indenture or the 9-3/8%
Debentures;
(3) the Company fails to comply with Section 10.1;
(4) the Company fails to comply with Section 4.2, 4.3, 4.5,
4.6, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 or 4.16 (other
than a failure to purchase 9- 3/8% Debentures when required under
Section 4.12 or 14.1) and such failure continues for 30 days after the
notice specified below, or the Company fails to give the notice
specified below;
(5) the Company fails to comply with any of its agreements in
the 9-3/8% Debentures or this Indenture (other than those referred to
in (1), (2), (3) or (4) above) and such failure continues for 60 days
after the
<PAGE>
45
notice specified below or the Company fails to give the notice
specified below;
(6) Indebtedness for borrowed money of the Company or any
Restricted Subsidiary is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof, the
total amount of such Indebtedness unpaid or accelerated exceeds
$15,000,000 or its Dollar Equivalent at the time and such default or
acceleration continues for 10 days after notice specified below;
(7) the Company or any Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for
relief against it in an involuntary case;
(C) consents to the appointment of a
Custodian of it or for any substantial part of its
property; or
(D) makes a general assignment for the
benefit of is creditors;
or takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Restricted Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or
any Restricted Subsidiary or for any substantial
part of its property; or
(C) orders the winding up or liquidation of
the Company or any Restricted Subsidiary;
or any similar relief is granted under any foreign laws, and any order
or decree described in this Section 7.1(8) remains unstayed and in
effect for 60 days; or
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46
(9) any judgment or decree for the payment of money in excess
of $15,000,000 or its Dollar Equivalent at the time is entered against
the Company or any Restricted Subsidiary and is not discharged and
either (A) an enforcement proceeding has been commenced by any creditor
upon such judgment or decree or (B) there is a period of 30 consecutive
days following the entry of such judgment or decree during which, in
the case of (A) or (B), such enforcement proceeding, judgment or decree
is not discharged, waived or the execution thereof stayed and such
default continues for 10 days after the notice specified below.
The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4), (5), (6) or (9) is not an Event of
Default until the Trustee or the Holders of at least 25% in principal amount of
the 9-3/8% Debentures notify the Company of the Default and the Company does not
cure such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of (a) any event which with the giving of notice and the lapse of time would
become an Event of Default under clause (4), (5), (6) or (9), or (b) any other
Event of Default or Default, and, in either case, its status and what action the
Company is taking or proposes to take with respect thereto.
B. For purposes of the 9-3/8% Debentures only, the
first two sentences of Section 7.2 of the Indenture are
hereby superseded in their entirety and replaced by the
following:
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47
If an Event of Default (other than an Event of Default
specified in Section 7.1(7) or (8) with respect to the Company) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the 9-3/8% Debentures by notice to the Company and
the Trustee, may declare the principal of and accrued interest on all the 9-3/8%
Debentures to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 7.1(7) or (8) with respect to the Company occurs, the principal of
and interest on all the 9-3/8% Debentures shall become and be immediately due
and payable without any declaration or other action the part of the Trustee or
any Debentureholders. The Holders of a majority in principal amount of the
9-3/8% Debentures by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
C. Article VII of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final sentence of Section 7.2, the
following:
The Trustee may fix a record date and payment date for any payment to
Debentureholders pursuant to this Section. At least 15 days before such
record date, the Company shall mail to each Debentureholder and the
Trustee a notice that states the record date, the payment date and
amount to be paid.
D. Article VII of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final word of the first sentence of
the second paragraph of Section 7.5, the following:
or a Default in respect of a provision that under
Section 12.2 cannot be amended without the consent of
each Debentureholder affected
E. For purposes of the 9-3/8% Debentures only, the
term "a majority" in the first sentence of Section 7.7 of the Indenture is
hereby superseded and replaced by the phrase "at least 25%".
<PAGE>
48
F. Article VII of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "attorneys' fees" in
the first sentence of the third paragraph of Section 7.7, the phrase "and
expenses".
G. Article VII of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section 7.9,
the following:
SECTION 7.10. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.7
or a suit by Holders of more than 10% in principal amount of the 9-3/8%
Debentures.
SECTION 7.11. Waiver or Stay or Extension Laws. The Company
(to the extent it may lawfully refrain from doing so) shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
9. Provisions Supplemental to Article X of the Indenture.
A. For purposes of the 9-3/8% Debentures only,
Section 10.1 of the Indenture is hereby superseded in its
entirety and replaced by the following:
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49
SECTION 10.1. When Company May Merge or Transfer Property. (a)
The Company shall not consolidate with or merge with or into any Person, or
convey, transfer or lease all or substantially all its Property, unless: (i)
either (a) the Company shall be the continuing Person in the case of a merger or
consolidation or (b) the resulting, surviving or transferee Person if other than
the Company (the "Successor Company") shall be a corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia and the Successor Company shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the 9-3/8%
Debentures and this Indenture; (ii) in the case of a sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially all of the
Company's Property, such Property shall have been transferred as an entirety or
virtually as an entirety to the Successor Company; (iii) immediately before and
after giving effect to such transaction on a pro forma basis (and treating any
Indebtedness which becomes an obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been Incurred by
the Successor Company or such Restricted Subsidiary at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such transaction on a pro
forma basis (and treating any Indebtedness which becomes an obligation of the
Company, the Successor Company or any Restricted Subsidiary as a result of such
transaction as having been Incurred by the Company, the Successor Company or
such Restricted Subsidiary at the time of such transaction), the Company or the
Successor Company, as the case may be, could incur an additional $1.00 of
Indebtedness pursuant to clause (i) of Section 4.9(a); and (v) the Company shall
have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture.
(b) The Successor Company shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture, but the predecessor Company in the case of a lease shall not be
released from the obligation to pay the principal of and interest on the 9-3/8%
Debentures.
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50
(c) Notwithstanding clauses (ii), (iii) and (iv) of Section
10.1(a), any Restricted Subsidiary may consolidate with, merge into or transfer
all or part of its Property to the Company.
10. Provisions Supplemental to Article XI of the Indenture.
A. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting, following the final sentence
of the first paragraph of Section 11.1, the following:
Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the
TIA.
B. For purposes of the 9-3/8% Debentures only, the
second paragraph of Section 11.1 of the Indenture is hereby
superseded in its entirety and replaced by the following:
In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether they conform to the requirements of this Indenture
(but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
C. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the phrase "may consult with counsel" in
Section 11.1(d)(ii), the phrase "of its selection".
D. For purposes of the 9-3/8% Debentures only, the phrase "reasonable
compensation" in the first sentence of Section 11.2 of the Indenture is hereby
superseded in its entirety and replaced by the phrase "such compensation as the
Company and the Trustee shall agree in writing".
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51
E. For purposes of the 9-3/8% Debentures only, the phrase "harmless
against loss, liability or expense" in the second sentence of Section 11.2 of
the Indenture is hereby superseded in its entirety and replaced by the phrase
"harmless against any and all loss, liability, damage, claim or expense
(including taxes (other than taxes based on the income of the Trustee))".
F. Article XI of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "shall be entitled" in
the third sentence of Section 11.2, the phrase ",but not obligated".
G. Article XI of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the phrase "as otherwise agreed"
in the third paragraph of Section 11.2, the phrase "in writing".
H. For purposes of the 9-3/8% Debentures only, the phrase "and by
giving notice thereof to the Debentureholders of such series" in the first
sentence of Section 11.6(a) of the Indenture is hereby superseded in its
entirety and shall be of no effect with respect to the 9-3/8% Debentures.
I. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the penultimate sentence of Section 11.1(b), the
following:
If no successor trustee shall have been so appointed and
accepted appointment within 60 days after the removal of such trustee,
the removed trustee may petition any court of competent jurisdiction
for the appointment of a successor trustee.
J. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the penultimate sentence of Section 11.5, the
following:
The Trustee shall at all times satisfy the requirements of TIA
ss. 310(a). No obligor upon the 9- 3/8% Debentures or Person directly
controlling, controlled by, or under common control with such obligor
shall serve as Trustee upon the 9-3/8% Debentures. The Trustee shall
comply with TIA ss. 310(b); provided, however, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any
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52
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
K. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting, following the first
appearance of the word "will" in the second sentence of Section 11.10(d), the
word "promptly".
L. For purposes of the 9-3/8% Debentures only, the
fourth paragraph of Section 11.14 of the Indenture is hereby
superseded in its entirety replaced by the following"
The Company agrees to pay each Authenticating Agent from time
to time reasonable compensation for its services under this Section.
M. Article XI of the Indenture is hereby supplemented
with respect to the 9-3/8% Debentures by inserting,
following the final sentence of Section 11.14, the
following:
SECTION 11.15. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
11. Provisions Supplemental to Article XII of the
Indenture.
A. Article XII of the Indenture is hereby
supplemented with respect to the 9-3/8% Debentures by
inserting, following the final sentence of Section 12.1, the
following:
After an amendment under this Section becomes effective, the Company
shall mail to Debentureholders a notice briefly describing such
amendment. The failure to give such notice to all Debentureholders, or
any defect therein, shall not impair or affect the validity of an
amendment under this Section.
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53
B. For purposes of the 9-3/8% Debentures only, Section 12.2 of the
Indenture is hereby superseded in its entirety and replaced by the following:
SECTION 12.2. Modification of Indenture With Consent of
Holders. The Company and the Trustee may amend this Indenture or the 9-3/8%
Debentures without notice to any Debentureholders but with the written consent
of the Holders of at least a majority in principal amount of the 9- 3/8%
Debentures. However, without the consent of each Debentureholder affected, an
amendment may not:
(1) reduce the amount of 9-3/8% Debentures whose
Holders must consent to an amendment;
(2) reduce the rate of or extend the time for
payment of interest on any 9-3/8% Debenture;
(3) reduce the principal of or extend the Stated
Maturity of any 9-3/8% Debenture;
(4) reduce the premium payable upon the redemption of any
9-3/8% Debenture or change the time at which any 9-3/8% Debenture may
be redeemed in accordance with Article V;
(5) make any 9-3/8% Debenture payable in money
other than that stated in the 9-3/8% Debenture;
(6) subordinate in right of payment, or otherwise
subordinate, the 9-3/8% Debentures to any other
obligation of the Company; or
(7) make any change in Section 7.5, 7.6 or 7.7 or
the second sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Debentureholders a notice briefly describing such
amendment. The failure to give such notice to all Debentureholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.
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54
C. Article XII of the Indenture is hereby supplemented with respect to
the 9-3/8% Debentures by inserting, following the final sentence of Section
12.5, the following:
SECTION 12.6. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a 9-3/8% Debenture shall bind
the Holder and every subsequent Holder of that 9-3/8% Debenture or portion of
the 9-3/8% Debenture that evidences the same debt as the consenting Holder's
9-3/8% Debenture, even if notation of the consent or waiver is not made on the
9-3/8% Debenture. However, any such Holder or subsequent Holder may revoke the
consent or waiver as to such Holder's 9-3/8% Debenture or portion of the 9-3/8%
Debenture if the Trustee receives the notice of revocation before the date the
amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Debentureholder.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Debentureholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons, who were
Debentureholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 12.7. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article XII if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 11.1) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such (i) amendment is authorized or permitted by this Indenture and
that all conditions precedent to execution, delivery and performance of such
amendment have been satisfied; (ii) the Company has all necessary corporate
power and authority to execute and
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55
deliver the amendment and that the execution, delivery and performance of such
amendment has been duly authorized by all necessary corporate action; (iii) such
amendment has been duly and validly executed and delivered by the Company; and
(iv) the Indenture together with such amendment complies with the TIA. Any
opinion of counsel with respect to the foregoing may (i) be based upon such
counsel's knowledge of the Company, (ii) be limited to the laws of the State of
North Carolina and the Federal laws of the United States of America and (iii)
contain such other qualifications as shall be reasonably acceptable to the
Trustee.
SECTION 12.8. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the 9-3/8% Debentures unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
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56
D. The Indenture is hereby supplemented with respect
to the 9-3/8% Debentures by inserting, following the final
sentence of Section 13.12, the following:
ARTICLE XIV
Right to Require Repurchase
SECTION 14.1. Purchase of the Option of Holders Upon a Change
of Control. (a) Upon a Change of Control Triggering Event, each Holder shall
have the right to require that the Company repurchase such Holder's 9-3/8%
Debentures at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date), in accordance with
the terms contemplated in Section 14.1(b).
(b) Within 30 days following any Change of Control Triggering
Event, the Company shall cause a notice of the offer required by this Section
14.1 to be sent at least once to the Dow Jones News Service or similar business
news service in the United States and send, by first-class mail to each Holder,
a notice to each Holder with a copy to the Trustee stating:
(1) that a Change of Control Triggering Event has occurred and
that such Holder has the right to require the Company to purchase such
Holder's 9-3/8% Debentures at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase;
(2) the circumstances and relevant facts regarding such Change
of Control Triggering Event which the Company in good faith believes
will enable Holders to make an informed decision (which at a minimum
will include (i) the most recently filed Annual Report on
Form 10-K (including audited financial statements) of the Company, the
most recent subsequently filed Quarterly Report on Form 10-Q and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, (ii) a description of material business developments
in the Company's business subsequent to the date of the latest of such
Reports and (iii) information with respect to pro forma
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57
historical income, cash flow and capitalization, each after giving
effect to the Change of Control;
(3) the date such Change of Control Triggering
Event is deemed to have occurred;
(4) the purchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(5) the instructions determined by the Company, consistent
with this Section, that a Holder must follow in order to have its
9-3/8% Debentures purchased, together with the information contained in
Section 14.1(c) (and including any related materials).
(c) Not later than the date upon which written notice required
by Section 14.1(b) is delivered to the Trustee, the Company shall irrevocably
deposit with the Trustee or with a paying agent (or, if the Company is acting as
its own paying agent, segregate and hold in trust) in Temporary Cash Investments
an amount equal to the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto, to be held for payment in accordance with the
provisions of this Section. Holders electing to have a 9-3/8% Debenture
purchased will be required to surrender the 9-3/8% Debenture, with an appro
priate form duly completed, to the Company at the address specified in the
notice at least five Business days prior to the purchase date. Holders will be
entitled to withdraw their election if the Trustee or the Company receives not
later than three Business days prior to the purchase date, a facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the 9-3/8% Debenture which was delivered for purchase by the Holder,
the certificate number of such 9-3/8% Debenture and a statement that such Holder
is withdrawing his election to have such 9- 3/8% Debenture purchased.
(d) On the purchase date, the Company shall deliver to the
Trustee the 9-3/8% Debentures or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Trustee shall, on the
purchase date, mail or deliver payment of the purchase price to each tendering
Holder. In the event that the aggregate purchase price of the 9-3/8% Debentures
delivered by the Company to the Trustee is less than the amount deposited with
the
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58
Trustee, the Trustee shall deliver the excess to the Company immediately
after the end of the payment date.
SECTION 14.2. Covenant to Comply with Securities Laws upon
Purchase of 9-3/8% Debentures. In connection with any purchase of securities
under Section 4.12 or Section 14.1 by the Company, the Company shall, to the
extent then applicable and required by law, (i) comply with Rule 14e-1 (which
term, as used herein, includes any successor provisions thereto) under the
Exchange Act and (ii) otherwise comply with all Federal and state securities
laws so as to permit the rights and obligations under Section 4.12 or Section
14.1 to be exercised in the time and in the manner specified in such Sections.
To the extent that the provisions of any such securities laws or regulations
conflict with the provisions of Section 4.12 or Section 14.1, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations described in such Section 4.12 or
Section 14.1 by virtue thereof.
II. GENERAL PROVISIONS OF THIS SUPPLEMENT
A. Governing Law
THIS SUPPLEMENT AND EACH 9-3/8% DEBENTURE ISSUED HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
B. Counterparts
This Supplement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but both of which
shall together constitute but one and the same instrument.
C. Miscellaneous
(a) Except as expressly supplemented by this Supplement, the
Indenture shall remain unchanged and in full force and effect.
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59
(b) This Supplement shall be construed as supplemental to the
Indenture and shall form a part thereof with respect to the 9-3/8% Debentures.
(c) All references in the Indenture to any Section of the
Indenture shall be deemed, for purposes of the 9-3/8% Debentures, to refer to
such Section of the Indenture as supplemented by the relevant provisions of this
Supplement.
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60
IN WITNESS WHEREOF, the Company and the Trustee have caused
this Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
VANGUARD CELLULAR SYSTEMS, INC.,
by
/s/ Haynes G. Griffin
Name: Haynes G. Griffin
Title: President
by
/s/ Richard C. Rowlenson
Name: Richard C. Rowlenson
Title: Assistant Secretary
THE BANK OF NEW YORK,
AS TRUSTEE
by
/s/Byron Merino
Name: Byron Merino
Title: Assistant Treasurer
<PAGE>
